UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-10183
MET INVESTORS SERIES TRUST
(Exact name of registrant as specified in charter)
5 Park Plaza, Suite 1900
Irvine, CA 92614
(Address of principal executive offices)(Zip code)
Elizabeth M. Forget
President
Met Investors Series Trust
5 Park Plaza, Suite 1900 Irvine, CA 92614
(Name and Address of Agent for Service)
Copy to:
Robert N. Hickey, Esq.
Sullivan & Worcester LLP
1666 K Street, N.W.
Washington, D.C. 20006
Registrant’s telephone number, including area code: (800) 848-3854
Date of fiscal year end: December 31
Date of reporting period: June 30, 2009
Item 1: Report to Shareholders.
| | |
| American Funds Balanced Allocation Portfolio | | For the period ended 6/30/09 |
| Managed by MetLife Advisers, LLC | | |
Portfolio Manager Commentary
Performance
For the six-month period ended June 30, 2009, the Class B and C shares of the Portfolio returned 9.68% and 9.68%, respectively, compared to the 7.11% return of its primary index, the Dow Jones Moderate Index.
Market Environment/Conditions
The worst economic downturn since the 1930s—dubbed “The Great Recession” by some pundits—showed few signs of sustained improvement; although at least the rapid rate of descent appeared to have slowed during the first half of 2009. The Unemployment Rate reached 9.5% in June as more than six million jobs were lost over the past twelve months. Other economic statistics were more ambiguous: Consumer Confidence, although still well below its level of two years ago, recovered from the level reached in March and Existing Home Sales improved modestly in response to lower house prices and improved availability of credit.
The Barclays Capital U.S. Aggregate Bond Index produced a modest, but positive total return of 1.9% for the first six months of 2009. The increase in Treasury yields that lowered the price of Treasury bonds was offset by a narrowing of yield spreads, which boosted credit based securities as investors became more positive on the prospects for the economy. The Barclays Capital U.S. Treasury Index was down 4.3% for the six months ending June, while the Barclays Capital U.S. Corporate Investment Grade Index was up 8.3%. Although the Barclays U.S. Corporate High Yield Index was up over 30% for the six-month period, it was still down 2.4% over the previous twelve months. The yield on Three Month Treasury Bills stayed close to 0.2% as the Federal Reserve kept their target rate in the 0.00% to 0.25% range.
The Standard & Poor’s 500 Index, buoyed by a robust 15.9% return for the second quarter, returned 3.2% for the six months ending in June. The rout in stocks that began last summer continued into the first quarter of this year as the severity of the recession became apparent. A turnaround began in early March on improving sentiment and stocks surged over 35% from the low in early March to the end of June. Although small cap stocks had better performance in the second quarter, they were up slightly less than large cap stocks for the full six-month period as measured by the 2.6% rise of the Russell 2000® Index. Growth outperformed Value stocks during the first half of 2009 primarily due to the strength of technology companies compared to the relative weakness in traditional value stocks such as those in the Financials sector. Technology and Basic Materials were the best performing sectors over the six-month period. The Financials sector, despite a nearly 100% return from the middle of March to the end of June, was still among the worst performing sectors for the six-month period (-3.4%). The MSCI EAFE® Index was up nearly 8% for the six months ending in June, slightly more than the local return due to a weaker dollar that made foreign securities more valuable to the U.S. dollar based investor. Emerging Market equities and international small cap equities were both up more than the large cap stocks from developed countries.
Portfolio Review/Current Positioning
The Portfolio is structured to be broadly diversified across and within a wide variety of fixed income and equity asset classes to add value and control risk over the long term. The Portfolio strives to achieve its objectives through investment in the various funds of the American Funds Insurance Series (AFIS). Although the Portfolio’s broad asset allocation goal of 35% to fixed income and 65% to equities did not change, there were several very modest changes to the narrower asset class goals. These changes included the elimination of a formal goal for cash, although we still expect the Portfolio will hold some residual cash through the underlying portfolios, and a slight reduction in the goals for the riskier, non-core fixed income securities, such as high-yield bonds. To achieve these new asset class goals and to improve the overall diversification of the Portfolio, several adjustments to the underlying portfolio targets were made as part of the May 1, 2009 restructuring.
In the first quarter, the cumulatively high cash position (approximately 10%) of the Portfolio served as a buffer to the turbulent capital markets and helped both relative and absolute returns. However, the cash position hurt relative performance during the second quarter when both stocks and corporate bonds posted strong positive returns. Overall, the cash position was a detractor from performance during the first six months of 2009. While the percentage held in high yield bonds was slightly below the stated goal of 5%, the Portfolio’s higher overall exposure to credit based bonds (including investment grade corporate bonds) helped relative performance, especially in the second quarter. Among the fixed income underlying portfolios, the six month returns were directly related to the level of credit exposure: the higher the credit exposure and less held in the safety of U.S. Treasury Securities, the better the performance. The AFIS High Income Bond Fund was the best absolute performer among the underlying bond portfolios, while the AFIS Government/AAA Securities Fund posted a nearly flat return in response to the rise in treasury yields.
The underlying equity portfolios that invest primarily in foreign securities were the best absolute performers over the first six months of 2009, they benefitted from both good local returns and a weaker dollar that made foreign securities more valuable to a U.S. based investor. The Portfolio especially benefitted from its foreign equity exposure outside of the large cap, developed market universe that makes up the MSCI EAFE Index: small cap foreign stocks and emerging market stocks. Within domestic equities, a modest overall tilt to growth style stocks helped both absolute and relative performance. The AFIS Growth Fund had the biggest contribution to relative performance due to a large weighting and very good relative performance. It bettered the broad equity market despite its significant cash position because of its growth style, exposure to foreign stocks and overall good stock selection, particularly in the Energy sector. Because of the Portfolio’s 65% goal for equities, the benefits attributable to the equity segment of the Portfolio was more important than the benefits that came from the fixed income segment of the Portfolio.
1
| | |
| American Funds Balanced Allocation Portfolio | | For the period ended 6/30/09 |
| Managed by MetLife Advisers, LLC | | |
Portfolio Manager Commentary (continued)
MetLife Advisers, LLC
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the advisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
American Funds Growth-Income Fund (Class 1) | | 38.99% |
American Funds Growth Fund (Class 1) | | 21.26% |
American Funds U.S. Government /AAA—Rated Securities Fund (Class 1) | | 12.17% |
American Funds Bond Fund (Class 1) | | 6.80% |
American Funds International Fund (Class 1) | | 6.29% |
American Funds High-Income Bond Fund (Class 1) | | 6.18% |
American Funds Global Small Capitalization Fund (Class 1) | | 3.24% |
American Funds New World Fund (Class 1) | | 3.18% |
American Funds Global Bond Fund (Class 1) | | 1.98% |
2
| | |
| American Funds Balanced Allocation Portfolio | | For the period ended 6/30/09 |
| Managed by MetLife Advisers, LLC | | |
Portfolio Manager Commentary (continued)
American Funds Balanced Allocation Portfolio managed by
MetLife Advisers, LLC vs. Dow Jones Moderate Index1 and
Balanced Blended Benchmark2
Growth Based on $10,000+
| | | | | | | | |
| | | | | Average Annual Return
(for the period ended 6/30/09)3 |
| | | | | 6 Months | | 1 Year | | Since
Inception4 |
| — | | American Funds Balanced Allocation
Portfolio—Class B | | 9.68% | | -18.86% | | -19.36% |
| | Class C | | 9.68% | | -18.86% | | -19.37% |
| — | | Dow Jones Moderate Index1 | | 7.11% | | -14.71% | | -15.80% |
| - - | | Balanced Blended Benchmark2 | | 5.32% | | -16.60% | | -17.59% |
+The chart reflects the performance of Class B shares of the Portfolio. The performance of Class B shares will differ from that of the other class because of the difference in expenses paid by policyholders investing in the different share classes.
1The Dow Jones Moderate Index is a benchmark designed for asset allocation strategists who are willing to take 60% of the risk of an all equity portfolio. It is a total returns index that is a time-varying weighted average of stocks, bonds, and cash using a combination of various indices (both domestic and foreign) from Barclays and Dow Jones. The index has held an average of 58% in equities over the past three years ending in June 2009.
2The Balanced Blended Benchmark is comprised of 48% Dow Jones U.S. Total Full Cap Index, 35% Barclays Capital U.S. Universal Index, and 17% Morgan Stanley Capital International Europe Australasia and Far East Index.
The Dow Jones U.S. Total Full Cap Index measures the performance of all U.S. equity securities with readily available price data.
The Barclays Capital U.S. Universal Index represents the union of the U.S. Aggregate Bond Index, the U.S. High-Yield Corporate Index, the Investment Grade 144A Index, the Eurodollar Index, the U.S. Emerging Markets Index and the non-EIRSA portion of the Commercial Mortgage Backed Securities Index.
The Morgan Stanley Capital International Europe, Australasia and Far East Index (“MSCI EAFE® Index”) is an unmanaged free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the U.S. and Canada.
3“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
4Inception of the Class B and Class C shares is 4/28/08. Index returns are based on an inception date of 4/28/08.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Indexes do not include fees or expenses and are not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| American Funds Balanced Allocation Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class B(a)(b) | | | | | | | | | | | |
Actual | | 0.74% | | $ | 1,000.00 | | $ | 1,096.80 | | $ | 1.82 |
Hypothetical | | 0.74% | | | 1,000.00 | | | 1,023.06 | | | 1.76 |
| | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class C(a)(b) | | | | | | | | | | | |
Actual | | 1.04% | | $ | 1,000.00 | | $ | 1,096.80 | | $ | 3.38 |
Hypothetical | | 1.04% | | | 1,000.00 | | | 1,021.57 | | | 3.26 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
(a) The annualized expense ratio shown reflects an expense limitation agreement between MetLife Advisers, LLC and the Portfolio as described in Note 3 of the Notes to Financial Statements.
(b) The annualized expense ratio reflects the expenses of both the Portfolio and the Underlying Portfolios in which it invests.
4
Met Investors Series Trust
American Funds Balanced Allocation Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Shares | | Value | |
| | | | | | |
|
| Investment Company Securities - 100.1% | |
American Funds Bond Fund (Class 1)(a) | | 8,041,587 | | $ | 80,013,790 | |
American Funds Global Bond Fund (Class 1)(a) | | 2,119,061 | | | 23,182,529 | |
American Funds Global Small Capitalization Fund (Class 1)(a) | | 2,675,972 | | | 38,052,315 | |
American Funds Growth Fund (Class 1)(a) | | 6,615,251 | | | 249,990,344 | |
American Funds Growth-Income Fund (Class 1)(a) | | 17,583,607 | | | 458,404,627 | |
American Funds High-Income Bond Fund (Class 1)(a) | | 7,723,269 | | | 72,598,726 | |
American Funds International Fund (Class 1)(a) | | 5,288,376 | | | 73,931,504 | |
American Funds New World Fund (Class 1)(a) | | 2,298,658 | | | 37,330,208 | |
American Funds U.S. Government/AAA - Rated Securities Fund (Class 1)(a) | | 11,723,404 | | | 143,025,533 | |
| | | | | | |
Total Investment Company Securities (Cost $1,197,006,348) | | | | | 1,176,529,576 | |
| | | | | | |
| | |
TOTAL INVESTMENTS - 100.1%
(Cost $1,197,006,348) | | | | | 1,176,529,576 | |
| | | | | | |
| | |
| Other Assets and Liabilities (net) - (0.1)% | | | | | (654,316 | ) |
| | | | | | |
| | |
| NET ASSETS - 100.0% | | | | $ | 1,175,875,260 | |
| | | | | | |
| | | | | | |
Portfolio Footnotes:
| (a) | | A Portfolio of the American Funds Insurance Series. |
See accompanying notes to financial statements
5
Met Investors Series Trust
American Funds Balanced Allocation Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
| Level 1—quoted | | prices in active markets for identical securities |
| Level 2—other | | significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.) |
| Level 3—significant | | unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments) |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Investment Company Securities | | $ | 1,176,529,576 | | $ | — | | $ | — | | $ | 1,176,529,576 |
TOTAL INVESTMENTS | | $ | 1,176,529,576 | | $ | — | | $ | — | | $ | 1,176,529,576 |
See accompanying notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| American Funds Balanced Allocation Portfolio | | | |
| Assets | | | | |
Investments, at value (a) | | $ | 1,176,529,576 | |
Receivable for Trust shares sold | | | 1,603,465 | |
Receivable from Manager | | | 12,993 | |
| | | | |
Total assets | | | 1,178,146,034 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 1,578,140 | |
Trust shares redeemed | | | 25,325 | |
Distribution and services fees—Class B | | | 46 | |
Distribution and services fees—Class C | | | 511,322 | |
Management fee | | | 92,986 | |
Administration fee | | | 2,000 | |
Custodian and accounting fees | | | 3,720 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 53,808 | |
| | | | |
Total liabilities | | | 2,270,774 | |
| | | | |
| Net Assets | | $ | 1,175,875,260 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 1,205,509,301 | |
Accumulated net realized loss | | | (11,680,380 | ) |
Unrealized depreciation on investments | | | (20,476,772 | ) |
Undistributed net investment income | | | 2,523,111 | |
| | | | |
Total | | $ | 1,175,875,260 | |
| | | | |
| Net Assets | | | | |
Class B | | $ | 233,605 | |
| | | | |
Class C | | | 1,175,641,655 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class B | | | 31,216 | |
| | | | |
Class C | | | 157,269,841 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class B | | $ | 7.48 | |
| | | | |
Class C | | | 7.48 | |
| | | | |
| | | | | |
(a) Investments at cost | | $ | 1,197,006,348 | |
See accompanying notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| American Funds Balanced Allocation Portfolio | | | |
| Investment Income | | | | |
Dividends from Underlying Portfolios | | $ | 5,124,912 | |
| | | | |
Total investment income | | | 5,124,912 | |
| | | | |
| Expenses | | | | |
Management fee | | | 398,922 | |
Administration fees | | | 11,985 | |
Custodian and accounting fees | | | 12,138 | |
Distribution and services fees—Class B | | | 207 | |
Distribution and services fees—Class C | | | 2,193,616 | |
Audit and tax services | | | 13,890 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,299 | |
Shareholder reporting | | | 24,058 | |
Insurance | | | 1,526 | |
Other | | | 2,241 | |
| | | | |
Total expenses | | | 2,684,616 | |
Less expenses reimbursed by the Manager | | | (82,815 | ) |
| | | | |
Net expenses | | | 2,601,801 | |
| | | | |
Net investment income | | | 2,523,111 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | (9,725,655 | ) |
Capital gain distributions from Underlying Portfolios | | | 1,598,752 | |
| | | | |
Net realized loss on investments and capital gain distributions from Underlying Portfolios | | | (8,126,903 | ) |
| | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 105,258,705 | |
| | | | |
Net change in unrealized appreciation on investments | | | 105,258,705 | |
| | | | |
Net realized and unrealized gain on investments | | | 97,131,802 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 99,654,913 | |
| | | | |
See accompanying notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| American Funds Balanced Allocation Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Period Ended
December 31,
2008* | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 2,523,111 | | | $ | 12,565,377 | |
Net realized gain (loss) on investments and capital gain distribution from Underlying Portfolios | | | (8,126,903 | ) | | | 3,478,867 | |
Net change in unrealized appreciation (depreciation) on investments | | | 105,258,705 | | | | (125,735,477 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 99,654,913 | | | | (109,691,233 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class B | | | — | | | | (4,914 | ) |
Class C | | | — | | | | (19,689,491 | ) |
From net realized gains | | | | | | | | |
Class B | | | — | | | | (8 | ) |
Class C | | | — | | | | (30,709 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | — | | | | (19,725,122 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class B | | | 111,514 | | | | 1,153,811 | |
Class C | | | 558,328,503 | | | | 691,107,710 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class B | | | — | | | | 4,922 | |
Class C | | | — | | | | 19,720,200 | |
Cost of shares repurchased | | | | | | | | |
Class B | | | (30,727 | ) | | | (875,467 | ) |
Class C | | | (27,739,817 | ) | | | (36,143,947 | ) |
| | | | | | | | |
Net increase in net assets from capital share transactions | | | 530,669,473 | | | | 674,967,229 | |
| | | | | | | | |
| Net Increase in Net Assets | | | 630,324,386 | | | | 545,550,874 | |
Net assets at beginning of period | | | 545,550,874 | | | | — | |
| | | | | | | | |
Net assets at end of period | | $ | 1,175,875,260 | | | $ | 545,550,874 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 2,523,111 | | | $ | — | |
| | | | | | | | |
| * | | For the period 4/28/08 (Commencement of operations) through 12/31/08. |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | |
| | |
| Selected Per Share Data for the Period Ended: | | | | | | |
| | |
| | | | | | | |
| American Funds Balanced Allocation Portfolio | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the
Period Ended
December 31,
2008(b) | |
| | | |
| Net Asset Value, Beginning of Period | | $ | 6.82 | | | $ | 10.00 | |
| | | | | | | | |
| Income (Loss) from Investment Operations: | | | | | | | | |
Net Investment Income(a) | | | 0.03 | | | | 0.08 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.63 | | | | (3.00 | ) |
| | | | | | | | |
Total From Investment Operations | | | 0.66 | | | | (2.92 | ) |
| | | | | | | | |
| Less Distributions | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | (0.26 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (0.00 | )+ |
| | | | | | | | |
Total Distributions | | | — | | | | (0.26 | ) |
| | | | | | | | |
| Net Asset Value, End of Period | | $ | 7.48 | | | $ | 6.82 | |
| | | | | | | | |
| Total Return | | | 9.68 | % | | | (29.20 | )% |
Ratio of Expenses to Average Net Assets After Reimbursement(c) | | | 0.35 | %* | | | 0.35 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates(d) | | | 0.37 | %* | | | 0.78 | %* |
Ratio of Net Investment Income to Average Net Assets(e) | | | 0.86 | %* | | | 1.32 | %* |
Portfolio Turnover Rate | | | 4.9 | % | | | 12.1 | % |
Net Assets, End of Period (in millions) | | $ | 0.2 | | | $ | 0.1 | |
| |
| | | Class C | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the
Period Ended
December 31,
2008(b) | |
| | | |
| Net Asset Value, Beginning of Period | | $ | 6.82 | | | $ | 10.00 | |
| | | | | | | | |
| Income (Loss) from Investment Operations: | | | | | | | | |
Net Investment Income(a) | | | 0.02 | | | | 0.36 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.64 | | | | (3.28 | ) |
| | | | | | | | |
Total From Investment Operations | | | 0.66 | | | | (2.92 | ) |
| | | | | | | | |
| Less Distributions | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | (0.26 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (0.00 | )+ |
| | | | | | | | |
Total Distributions | | | — | | | | (0.26 | ) |
| | | | | | | | |
| Net Asset Value, End of Period | | $ | 7.48 | | | $ | 6.82 | |
| | | | | | | | |
| Total Return | | | 9.68 | % | | | (29.20 | )% |
Ratio of Expenses to Average Net Assets After Reimbursement(c) | | | 0.65 | %* | | | 0.65 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates(d) | | | 0.67 | %* | | | 0.70 | %* |
Ratio of Net Investment Income to Average Net Assets(e) | | | 0.63 | %* | | | 6.70 | %* |
Portfolio Turnover Rate | | | 4.9 | % | | | 12.1 | % |
Net Assets, End of Period (in millions) | | $ | 1,176 | | | $ | 545.4 | |
| + | | Rounds to less than $0.005 per share. |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—04/28/2008. |
| (c) | | The ratio of operating expenses to average net assets does not include expenses of the Underlying Portfolios in which the Portfolio invests. |
| (d) | | See Note 3 of the Notes to Financial Statements. |
| (e) | | Recognition of net investment income by the Portfolio is affected by the timing of the declaration of dividends by the Underlying Portfolios in which it invests. |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is American Funds Balanced Allocation Portfolio (the “Portfolio”), which is non-diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class B and C Shares are currently offered by the Portfolio. Class A and E Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
The Portfolio is designed on established principles of asset allocation and risk tolerance. The Portfolio will invest substantially all of its assets in certain funds of the American Funds Insurance Series (“AFIS”), which invest either in equity securities or fixed income securities, as applicable (“Underlying Portfolios”). AFIS is an open-end diversified investment management company advised by Capital Research and Management Company (“CRMC”), an indirect, wholly owned subsidiary of The Capital Group Companies, Inc.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Investments in the Underlying Portfolios are valued at their closing daily net asset value. The net asset value of the Portfolio is calculated based on the net asset values of the Underlying Portfolios in which the Portfolio invests. For information about the use of fair value pricing by the Underlying Portfolios that are funds of AFIS, please refer to the prospectus of the Underlying Portfolios.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes.
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Income and capital gain distributions from the Underlying Portfolios are recorded on the ex-dividend date.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2008 tax year remains subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement (the “Management Agreement”) with the Manager for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board of Trustees (the “Board”) and has overall responsibility for the general management and administration of the Trust.
11
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $398,922 | | 0.10 | % | | ALL |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Manager has entered into an expense limitation agreement with the Trust (“Expense Limitation Agreement”) in the interest of limiting expenses of the Portfolio of the Trust. The Expense Limitation Agreement shall continue in effect with respect to the Portfolio until April 30, 2010. Pursuant to that Expense Limitation Agreement, the Manager has agreed to waive or limit its fees and to assume other expenses so that the total annual operating expenses of the Portfolio other than interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with accounting principles generally accepted in the United States of America, other extraordinary expenses not incurred in the ordinary course of the Portfolio’s business, and Underlying Portfolios’ fees and expenses, but including amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act, are limited to the following expense ratios as a percentage of the Portfolio’s average daily net assets:
| | | | | | | | | | |
Maximum Expense Ratio under current
Expense Limitation Agreement | | | Expenses Deferred in |
| | 2008 | | 2009 |
| | Subject to repayment until
December 31, |
| Class B | | | Class C | | | 2013 | | 2014 |
| | | |
| 0.35 | % | | 0.65 | % | | $ | 100,635 | | $ | 82,815 |
The expenses reimbursed for the period ended June 30, 2009 are shown as expenses reimbursed in the Statement of Operations of the Portfolio.
If in any year in which the Management Agreement is still in effect, the estimated aggregate portfolio operating expenses of the Portfolio for the fiscal year are less than the Maximum Expense Ratios for that year, subject to approval by the Trust’s Board, the Manager shall be entitled to reimbursement by the Portfolio to the extent that the charge does not cause the expenses in such subsequent year to exceed the Maximum Expense Ratios as stated above. The Portfolio is not obligated to repay any expense paid by the Manager more than five years after the end of the fiscal year in which such expense was incurred.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class B and Class C Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B and Class C distribution plans provide that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 1.00%, respectively, of the average net assets of the Portfolio attributable to its Class B and Class C Shares in respect to activities primarily intended to result in the sale of Class B and Class C Shares. However, under the Class B and Class C distribution agreements, payments to the Distributor for activities pursuant to the Class B and Class C distribution plans are currently limited to payments at an annual rate equal to 0.25% and 0.55% of average daily net assets of the Portfolio, attributable to its Class B and Class C Shares, respectively.
Under terms of the Class B and Class C distribution plans and distribution agreements, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B and Class C Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
12
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
in Shares
Outstanding | | Ending
Shares |
| | | | | | |
Class B | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 19,873 | | 15,932 | | — | | (4,589 | ) | | 11,343 | | 31,216 |
| | | | | | |
04/28/2008-12/31/2008 | | — | | 117,726 | | 727 | | (98,580 | ) | | 19,873 | | 19,873 |
| | | | | | |
Class C | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 79,942,996 | | 81,418,980 | | — | | (4,092,135 | ) | | 77,326,845 | | 157,269,841 |
| | | | | | |
04/28/2008-12/31/2008 | | — | | 81,432,735 | | 2,908,584 | | (4,398,323 | ) | | 79,942,996 | | 79,942,996 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 574,991,382 | | $ | — | | $ | 39,858,779 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $1,197,006,348 | | $ | 9,850,730 | | $ | (30,327,502 | ) | | $ | (20,476,772 | ) |
6. Distributions to Shareholders
The tax character of distributions paid for the year ended December 31, 2008 was as follows:
| | | | | | |
Ordinary Income | | Long-Term Capital Gains | | Total |
2008 | | 2008 | | 2008 |
| | |
| $13,532,500 | | $ | 6,192,622 | | $ | 19,725,122 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Total | |
| | | |
| $ | — | | $ | — | | $ | (129,288,954 | ) | | $ | (129,288,954 | ) |
7. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
8. Market, Credit and Counterparty Risk
In the normal course of business, the Underlying Portfolios, in which the Portfolio invests, invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
8. Market, Credit and Counterparty Risk - continued
securities held by the Underlying Portfolios may decline in response to certain events, including those directly involving the companies whose securities are owned by the Underlying Portfolios; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Underlying Portfolios may be exposed to counterparty risk, or the risk that an entity with which the Underlying Portfolios have unsettled or open transactions may default. Financial assets, which potentially expose the Underlying Portfolios to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Underlying Portfolios’ exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Underlying Portfolios’ Statements of Assets and Liabilities.
9. Transactions in Securities of Affiliated Issuers
Transactions in the Underlying Portfolios during the period ended June 30, 2009 in which the Portfolio had ownership of at least 5% of the outstanding voting securities at the end of the period are as follows:
| | | | | | | | | |
Security Description | | Number of shares
held at December 31,
2008 | | Shares purchased
during the period | | Shares sold
during the period | | | Number of shares
held at June 30,
2009 |
| | | | |
American Funds Global Bond Fund (Class1) | | 1,609,077 | | 1,315,695 | | (805,711 | ) | | 2,119,061 |
| | | | |
American Funds Global Small Capitalization Fund (Class 1) | | 1,442,273 | | 1,371,318 | | (137,619 | ) | | 2,675,972 |
| | | | |
American Funds Growth-Income Fund (Class 1) | | 8,268,900 | | 9,314,707 | | — | | | 17,583,607 |
| | | | |
American Funds High-Income Bond Fund (Class 1) | | 4,492,743 | | 4,118,313 | | (887,787 | ) | | 7,723,269 |
| | | | |
American Funds New World Fund (Class 1) | | 1,246,738 | | 1,116,600 | | (64,680 | ) | | 2,298,658 |
| | | | |
American Funds U.S. Government/AAA—Rated Securities Fund (Class 1) | | 6,729,277 | | 6,182,150 | | (1,188,023 | ) | | 11,723,404 |
| | | | | | | | | | | | | |
Security Description | | Net Realized Loss on
Investments during
the period | | | Net Realized Gain
on Capital Gain
Distributions from
Affiliates during the
period | | Income earned from
affiliate during the
period | | Ending Value |
| | | | |
American Funds Global Bond Fund (Class1) | | $ | (558,104 | ) | | $ | — | | $ | 74,114 | | $ | 23,182,529 |
| | | | |
American Funds Global Small Capitalization Fund (Class 1) | | | (1,747,743 | ) | | | — | | | — | | | 38,052,315 |
| | | | |
American Funds Growth-Income Fund (Class 1) | | | (2,946,449 | ) | | | — | | | 1,860,561 | | | 458,404,627 |
| | | | |
American Funds High-Income Bond Fund (Class 1) | | | (2,424,332 | ) | | | — | | | 863,439 | | | 72,598,726 |
| | | | |
American Funds New World Fund (Class 1) | | | (719,012 | ) | | | — | | | 116,304 | | | 37,330,208 |
| | | | |
American Funds U.S. Government/AAA—Rated Securities Fund (Class 1) | | | — | | | | 1,266,128 | | | 713,605 | | | 143,025,533 |
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
15
| | |
| American Funds Bond Portfolio | | For the period ended 6/30/09 |
| Managed by MetLife Advisers, LLC | | |
Performance Summary
During the period ended June 30, 2009, the Portfolio had a return of 5.83% for Class C versus 1.90% for its benchmark, the Barclays Capital U.S. Aggregate Bond Index1.
American Funds Bond Portfolio managed by
MetLife Advisers, LLC vs. Barclays Capital U.S. Aggregate Bond Index1
Growth Based on $10,000+
| | | | | | | | | | | | |
| | | | | Average Annual Return2 (for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | 3 Year | | 5 Year | | 10 Year |
| — | | American Funds Bond
Portfolio—Class C | | 5.83% | | -3.97% | | 1.14% | | 2.14% | | 4.00% |
| - - | | Barclays Capital U.S. Aggregate Bond Index1 | | 1.90% | | 6.05% | | 6.43% | | 5.01%
| | 5.98% |
+The chart reflects the performance of Class C shares of the Portfolio.
1The Barclays Capital U.S. Aggregate Bond Index includes most obligations of the U.S. Treasury, agencies and quasi-federal corporations, most publicly issued investment grade corporate bonds and most bonds backed by mortgage pools of GNMA, FNMA and FHLMC.
2“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
The Portfolio and its corresponding Master Fund have essentially the same investment objectives, policies, and strategies. Since the Portfolio commenced operations on April 28, 2008, it does not have a significant operating history. However, hypothetical performance information regarding the Portfolio is presented because the Portfolio’s performance is based on the performance of the Master Fund for the period ended June 30, 2009, adjusted to reflect the Portfolio’s expenses for the period ended June 30, 2009 (including contractual expense waivers).
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Index does not include fees or expenses and is not available for direct investment.
1
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| American Funds Bond Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class C | | | | | | | | | | | |
Actual | | 0.65% | | $ | 1,000.00 | | $ | 1,057.10 | | $ | 3.32 |
Hypothetical | | 0.65% | | | 1,000.00 | | | 1,021.57 | | | 3.26 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
2
Met Investors Series Trust
American Funds Bond Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Shares | | Value | |
| | | | | | |
| | | | | | |
|
| Investment Company Security - 100.1% | |
American Funds Bond Fund (Class 1)(a) (Cost $101,980,793) | | 10,246,835 | | $ | 101,956,013 | |
| | | | | | |
| | |
TOTAL INVESTMENTS - 100.1%
(Cost $101,980,793) | | | | | 101,956,013 | |
| | | | | | |
| | |
| Other Assets and Liabilities (net) - (0.1)% | | | | | (60,797 | ) |
| | | | | | |
| | |
| NET ASSETS - 100.0% | | | | $ | 101,895,216 | |
| | | | | | |
Portfolio Footnotes:
| (a) | | A Portfolio of the American Funds Insurance Series. |
See accompanying notes to financial statements
3
Met Investors Series Trust
American Funds Bond Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
| Level 1—quoted | prices in active markets for identical securities |
| Level 2—other | significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.) |
| Level 3—significant | unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments) |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Investment Company Security | | $ | 101,956,013 | | $ | — | | $ | — | | $ | 101,956,013 |
TOTAL INVESTMENTS | | $ | 101,956,013 | | $ | — | | $ | — | | $ | 101,956,013 |
See accompanying notes to financial statements
4
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| American Funds Bond Portfolio | | | |
| Assets | | | | |
Investments, at value (a) | | $ | 101,956,013 | |
Receivable for Trust shares sold | | | 174,297 | |
Receivable from Manager | | | 1,369 | |
| | | | |
Total assets | | | 102,131,679 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 162,598 | |
Trust shares redeemed | | | 11,699 | |
Distribution and services fees—Class C | | | 42,201 | |
Administration fee | | | 2,000 | |
Custodian and accounting fees | | | 3,720 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 10,818 | |
| | | | |
Total liabilities | | | 236,463 | |
| | | | |
| Net Assets | | $ | 101,895,216 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 101,393,293 | |
Accumulated net realized loss | | | (78,639 | ) |
Unrealized depreciation on investments | | | (24,780 | ) |
Undistributed net investment income | | | 605,342 | |
| | | | |
Total | | $ | 101,895,216 | |
| | | | |
| Net Assets | | | | |
Class C | | $ | 101,895,216 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class C | | | 11,227,953 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class C | | $ | 9.08 | |
| | | | |
| | | | | |
(a) Investments at cost | | $ | 101,980,793 | |
See accompanying notes to financial statements
5
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| American Funds Bond Portfolio | | | |
| Investment Income | | | | |
Dividends from Master Fund | | $ | 804,220 | |
| | | | |
Total investment income | | | 804,220 | |
| | | | |
| Expenses | | | | |
Administration fees | | | 11,985 | |
Custodian and accounting fees | | | 12,138 | |
Distribution and services fees—Class C | | | 168,277 | |
Audit and tax services | | | 13,890 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 444 | |
Shareholder reporting | | | 3,525 | |
Insurance | | | 3,119 | |
Other | | | 2,255 | |
| | | | |
Total expenses | | | 232,367 | |
Less expenses reimbursed by the Manager | | | (33,493 | ) |
| | | | |
Net expenses | | | 198,874 | |
| | | | |
Net investment income | | | 605,346 | |
| | | | |
| Net Realized and Unrealized Gain on Investments | | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 3,809,821 | |
| | | | |
Net change in unrealized appreciation on investments | | | 3,809,821 | |
| | | | |
Net realized and unrealized gain on investments | | | 3,809,821 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 4,415,167 | |
| | | | |
See accompanying notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| American Funds Bond Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Period Ended
December 31,
2008* | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 605,346 | | | $ | 1,797,336 | |
Net realized loss on investments and capital gain distribution from Master Fund | | | — | | | | (56,697 | ) |
Net change in unrealized appreciation (depreciation) on investments | | | 3,809,821 | | | | (3,834,601 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 4,415,167 | | | | (2,093,962 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class C | | | (8 | ) | | | (1,828,551 | ) |
From net realized gains | | | | | | | | |
Class C | | | — | | | | — | |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (8 | ) | | | (1,828,551 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class C | | | 66,042,253 | | | | 44,951,952 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class C | | | 8 | | | | 1,828,551 | |
Cost of shares repurchased | | | | | | | | |
Class C | | | (4,671,517 | ) | | | (6,748,677 | ) |
| | | | | | | | |
Net increase in net assets from capital share transactions | | | 61,370,744 | | | | 40,031,826 | |
| | | | | | | | |
| Net Increase in Net Assets | | | 65,785,903 | | | | 36,109,313 | |
Net assets at beginning of period | | | 36,109,313 | | | | — | |
| | | | | | | | |
Net assets at end of period | | $ | 101,895,216 | | | $ | 36,109,313 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 605,342 | | | $ | 4 | |
| | | | | | | | |
| * | | For the period 4/28/08 (Commencement of Operations) through 12/31/2008. |
See accompanying notes to financial statements
7
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | |
| | |
| Selected Per Share Data for the Period Ended: | | | | | | |
| | |
| | | | | | | |
| American Funds Bond Portfolio | | Class C | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the
Period Ended
December 31,
2008(b) | |
| | | |
| Net Asset Value, Beginning of Period | | $ | 8.58 | | | $ | 10.00 | |
| | | | | | | | |
| Income from Investment Operations: | | | | | | | | |
Net Investment Income(a) | | | 0.09 | | | | 0.87 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.41 | | | | (1.83 | ) |
| | | | | | | | |
Total From Investment Operations | | | 0.50 | | | | (0.96 | ) |
| | | | | | | | |
| Less Distributions | | | | | | | | |
Dividends from Net Investment Income | | | (0.00 | )+ | | | (0.46 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | — | |
| | | | | | | | |
Total Distributions | | | (0.00 | )+ | | | (0.46 | ) |
| | | | | | | | |
| Net Asset Value, End of Period | | $ | 9.08 | | | $ | 8.58 | |
| | | | | | | | |
| Total Return | | | 5.83 | % | | | (9.61 | )% |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.65 | %* | | | 0.65 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.76 | %* | | | 1.05 | %* |
Ratio of Net Investment Income to Average Net Assets | | | 1.98 | %* | | | 13.82 | %* |
Portfolio Turnover Rate | | | 0.0 | %(c) | | | 6.3 | % |
Net Assets, End of Period (in millions) | | $ | 101.9 | | | $ | 36.1 | |
| + | | Rounds to less than $0.005 per share. |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—4/28/08. |
| (c) | | For the period ended 6/30/2009, the portfolio turnover is zero, due to no sales activity. |
See accompanying notes to financial statements
8
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is American Funds Bond Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc. (“MetLife”).
The Trust has registered four classes of shares: Class C Shares are currently offered by the Portfolio. Class A, B and E Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
The Portfolio, a feeder fund, seeks to achieve its investment objective by investing all of its investable assets in a master fund, the Bond Fund (the “Master Fund”), a fund of the American Funds Insurance Series (“AFIS”). AFIS is an open-end diversified investment management company advised by Capital Research and Management Company (“CRMC"), an indirect, wholly owned subsidiary of The Capital Group Companies, Inc. The financial statements of the Master Fund, including the summary investment portfolio, are included elsewhere in this report and should be read with the Portfolio’s financial statements. As of June 30, 2009, the Portfolio owned approximately 1.47% of the Master Fund.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Investments in the Master Fund are valued at its closing daily net asset value. The net asset value of the Portfolio is calculated based on the net asset value of the Master Fund in which the Portfolio invests. For information about the use of fair value pricing by the Master Fund, please refer to the prospectus for the Master Fund.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes.
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Income and capital gain distributions from the Master Fund are recorded on the ex-dividend date.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2008 tax year remains subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
9
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board of Trustees (the “Board”) and has overall responsibility for the general management and administration of the Trust. The Manager selects the Master Fund in which the Portfolio will invest and monitors the Master Fund investment program. The Manager is an affiliate of MetLife. The Manager currently receives no compensation for its services to the Portfolio. In the event that the Portfolio were to withdraw from the Master Fund and invest its assets directly in investment securities, the Manager would retain the services of an investment adviser and would receive a management fee at an annual rate of percentage of the assets of the Portfolio as follows:
| | |
% per annum | | Average Daily Net Assets |
| |
| 0.55% | | ALL |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Manager has entered into an expense limitation agreement with the Trust (“Expense Limitation Agreement”) in the interest of limiting expenses of the Portfolio of the Trust. The Expense Limitation Agreement shall continue in effect with respect to the Portfolio until April 30, 2010. Pursuant to that Expense Limitation Agreement, the Manager has agreed to waive or limit its fees and to assume other expenses so that the total annual operating expenses of the Portfolio other than interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with accounting principles generally accepted in the United States of America, other extraordinary expenses not incurred in the ordinary course of the Portfolio’s business, and Master Fund fees and expenses, but including amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act, are limited to the following expense ratio as a percentage of the Portfolio’s average daily net assets:
| | | | | | | |
Maximum Expense Ratio under current
Expense Limitation Agreement | | | Expenses Deferred in |
| | 2008 | | 2009 |
| | Subject to repayment until
December 31, |
Class C | | | 2013 | | 2014 |
| | |
| 0.65 | % | | $ | 51,953 | | $ | 33,493 |
The expenses reimbursed for the period ended June 30, 2009 are shown as expenses reimbursed in the Statement of Operations of the Portfolio.
If in any year in which the Management Agreement is still in effect, the estimated aggregate portfolio operating expenses of the Portfolio for the fiscal year are less than the Maximum Expense Ratio for that year, subject to approval by the Trust’s Board, the Manager shall be entitled to reimbursement by the Portfolio to the extent that the charge does not cause the expenses in such subsequent year to exceed the Maximum Expense Ratio as stated above. The Portfolio is not obligated to repay any expense paid by the Manager more than five years after the end of the fiscal year in which such expense was incurred.
The Trust has a distribution agreement with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class C Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class C distribution plan provides that the Trust, on behalf of the Portfolio, may pay annually up to 1.00% of the average net assets of the Portfolio attributable to its Class C Shares in respect to activities primarily intended to result in the sale of Class C Shares. However, under the Class C distribution agreement, payments to the Distributor for activities pursuant to the Class C distribution plan are currently limited to payments at an annual rate equal to 0.55% of average daily net assets of the Portfolio, attributable to its Class C Shares.
Under terms of the Class C distribution plan and distribution agreement, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class C Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
10
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
in Shares
Outstanding | | Ending
Shares |
| | | | | | |
Class C | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 4,206,415 | | 7,556,687 | | 1 | | (535,150 | ) | | 7,021,538 | | 11,227,953 |
| | | | | | |
4/28/08-12/31/2008 | | — | | 4,718,491 | | 213,118 | | (725,194 | ) | | 4,206,415 | | 4,206,415 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 61,998,354 | | $ | — | | $ | — |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $101,980,793 | | $ | — | | $ | (24,780 | ) | | $ | (24,780 | ) |
6. Distributions to Shareholders
The tax character of distributions paid for the year ended December 31, 2008 was as follows:
| | | | | | |
Ordinary Income | | Long-Term Capital Gains | | Total |
2008 | | 2008 | | 2008 |
| | |
| $1,821,237 | | $ | 7,314 | | $ | 1,828,551 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards | | Total | |
| | | | |
| $4 | | $ | — | | $ | (3,913,240 | ) | | $ | — | | $ | (3,913,236 | ) |
7. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
8. Market, Credit and Counterparty Risk
In the normal course of business, the Master Fund, in which the Portfolio invests, invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Master Fund may decline in response to certain events, including those directly involving the companies whose securities are owned by
11
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
8. Market, Credit and Counterparty Risk - continued
the Master Fund; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Master Fund may be exposed to counterparty risk, or the risk that an entity with which the Master Fund has unsettled or open transactions may default. Financial assets, which potentially expose the Master Fund to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Master Fund’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Master Fund’s Statement of Assets and Liabilities.
9. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
10. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
12
| | |
| American Funds Growth Allocation Portfolio | | For the period ended 6/30/09 |
| Managed by MetLife Advisers, LLC | | |
Portfolio Manager Commentary
Performance
For the six-month period ended June 30, 2009, the Class B and C shares of the Portfolio returned 10.86% and 10.75%, respectively, compared to the 9.13% return of its primary index, the Dow Jones Moderately Aggressive Index.
Market Environment/Conditions
The worst economic downturn since the 1930s—dubbed “The Great Recession” by some pundits—showed few signs of sustained improvement; although at least the rapid rate of descent appeared to have slowed during the first half of 2009. The Unemployment Rate reached 9.5% in June as more than six million jobs were lost over the past twelve months. Other economic statistics were more ambiguous: Consumer Confidence, although still well below its level two years ago, recovered from the level reached in March and Existing Home Sales improved modestly in response to lower house prices and improved availability of credit.
The Barclays Capital U.S. Aggregate Bond Index produced a modest, but positive total return of 1.9% for the first six months of 2009. The increase in Treasury yields that lowered the price of Treasury bonds was offset by a narrowing of yield spreads, which boosted credit based securities as investors became more positive on the prospects for the economy. The Barclays Capital U.S. Treasury Index was down 4.3% for the six months ending June, while the Barclays Capital U.S. Corporate Investment Grade Index was up 8.3%. Although the Barclays U.S. Corporate High Yield Index was up over 30% for the six-month period, it was still down 2.4% over the previous twelve months. The yield on Three Month Treasury Bills stayed close to 0.2% as the Federal Reserve kept their target rate in the 0.00% to 0.25% range.
The Standard & Poor’s 500 Index, buoyed by a robust 15.9% return for the second quarter, returned 3.2% for the six months ending in June. The rout in stocks that began last summer continued into the first quarter of this year as the severity of the recession became apparent. A turnaround began in early March on improving sentiment and stocks surged over 35% from the low in early March to the end of the June. Although small cap stocks had better performance in the second quarter, they were up slightly less than large cap stocks for the full six-month period as measured by the 2.6% rise of the Russell 2000® Index. Growth outperformed Value stocks during the first half of 2009 primarily due to the strength of technology companies compared to the relative weakness in traditional value stocks such as those in the Financials sector. Technology and Basic Materials were the best performing sectors over the six-month period. The Financials sector, despite a nearly 100% return from the middle of March to the end of June, was still among the worst performing sectors for the six-month period (-3.4%). The MSCI EAFE® Index was up nearly 8% for the six months ending in June, slightly more than the local return due to a weaker dollar that made foreign securities more valuable to the U.S. dollar based investor. Emerging Market equities and international small cap were both up more than the large cap stocks from developed countries.
Portfolio Review/Current Positioning
The Portfolio is structured to be broadly diversified across and within a wide variety of fixed income and equity asset classes to add value and control risk over the long term. The Portfolio strives to achieve its objectives through investment in the various funds of the American Funds Insurance Series (AFIS). Although the Portfolio’s broad asset allocation goal of 15% to fixed income and 85% to equities did not change, there were several very modest changes to the narrower asset class goals. These changes included the elimination of a formal goal for cash, although we still expect the Portfolio will hold some residual cash from the underlying portfolios, and a slight increase in the goal for foreign equities. To achieve these new asset class goals and to improve the overall diversification of the Portfolio, several adjustments to the underlying portfolio targets were made as part of the May 1, 2009 restructuring.
In the first quarter, the cumulatively high cash position (approximately 10%) of the Portfolio served as a buffer to the turbulent capital markets and helped both relative and absolute returns. However, the cash position hurt relative performance during the second quarter when both stocks and corporate bonds posted strong positive returns. Overall, the cash position was a detractor from performance during the first six months of 2009. While the percentage held in high yield bonds was slightly below the stated goal of 2%, the Portfolio’s higher overall exposure to credit based bonds (including investment grade corporate bonds) helped relative performance, especially in the second quarter. Among the fixed income underlying portfolios, the six month returns were directly related to the level of credit exposure: the higher the credit exposure and less held in the safety of U.S. Treasury Securities, the better the performance. The AFIS High Income Bond Fund was the best absolute performer among the underlying bond portfolios, while the AFIS Government/AAA Securities Fund posted a nearly flat return in response to the rise in treasury yields.
The underlying equity portfolios that invest primarily in foreign securities were the best absolute performers over the first six months of 2009, they benefitted from both good local returns and a weaker dollar that made foreign securities more valuable to a U.S. based investor. The Portfolio especially benefitted from its foreign equity exposure outside of the large cap, developed market universe that makes up the MSCI EAFE Index: small cap foreign stocks and emerging market stocks. Within domestic equities, a modest overall tilt to growth style stocks helped both absolute and relative performance. The AFIS Growth Fund had the biggest contribution to relative performance due to a large weighting and very good relative performance. It bettered the broad equity market despite its significant cash position because of its growth style, exposure to foreign stocks and overall good stock selection, particularly in the Energy sector. Because of the Portfolio’s 85% asset class goal for common stocks, the equity segment was responsible for the vast majority of the Portfolio’s performance.
1
| | |
| American Funds Growth Allocation Portfolio | | For the period ended 6/30/09 |
| Managed by MetLife Advisers, LLC | | |
Portfolio Manager Commentary (continued)
MetLife Advisers, LLC
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the advisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
American Funds Growth-Income Fund
(Class 1) | | 44.58% |
American Funds Growth Fund (Class 1) | | 30.18% |
American Funds International Fund (Class 1) | | 7.27% |
American Funds U.S. Government/AAA—Rated Securities Fund (Class 1) | | 4.62% |
American Funds Global Small Capitalization Fund (Class 1) | | 4.29% |
American Funds New World Fund (Class 1) | | 4.21% |
American Funds High-Income Bond Fund (Class 1) | | 2.04% |
American Funds Bond Fund (Class 1) | | 1.93% |
American Funds Global Bond Fund (Class 1) | | 0.98% |
2
| | |
| American Funds Growth Allocation Portfolio | | For the period ended 6/30/09 |
| Managed by MetLife Advisers, LLC | | |
Portfolio Manager Commentary (continued)
American Funds Growth Allocation Portfolio managed by MetLife Advisers, LLC vs. Dow Jones Moderately Aggressive Index1 and Growth Blended Benchmark2
Growth Based on $10,000+
| | | | | | | | |
| | | | | Average Annual Return (for the period ended 6/30/09)3 |
| | | | | 6 Months | | 1 Year | | Since
Inception4 |
| — | | American Funds Growth Allocation
Portfolio—Class B | | 10.86% | | -24.44% | | -24.78% |
| | Class C | | 10.75% | | -24.82% | | -25.17% |
| — | | Dow Jones Moderately Aggressive Index1 | | 9.13% | | -20.82% | | -21.74% |
| - - | | Growth Blended Benchmark2 | | 5.64% | | -22.82% | | -23.77% |
+The chart reflects the performance of Class B shares of the Portfolio. The performance of Class B shares will differ from that of the other class because of the difference in expenses paid by policyholders investing in the different share classes.
1The Dow Jones Moderately Aggressive Index is a benchmark designed for asset allocation strategists who are willing to take 80% of the risk of an all equity portfolio. It is a total returns index that is a time-varying weighted average of stocks, bonds, and cash using a combination of various indices (both domestic and foreign) from Barclays and Dow Jones. The index has held an average of 80% in equities over the past three years ending in June 2009.
2The Growth Blended Benchmark is comprised of 63% Dow Jones U.S. Total Full Cap Index, 15% Barclays Capital U.S. Universal Index and 22% Morgan Stanley Capital International Europe Australasia and Far East Index.
The Dow Jones U.S. Total Full Cap Index measures the performance of all U.S. equity securities with readily available price data.
The Barclays Capital U.S. Universal Index represents the union of the U.S. Aggregate Bond Index, the U.S. High Yield Corporate Index, the Investment Grade 144A Index, the Eurodollar Index, the U.S. Emerging Markets Index and the non-ERISA portion of the Commercial Mortgage Backed Securities Index.
The Morgan Stanley Capital International Europe, Australasia and Far East Index (“MSCI EAFE® Index”) is an unmanaged free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the U.S. and Canada.
3“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
4Inception of the Class B and Class C shares is 4/28/08. Index returns are based on an inception date of 4/28/08.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Indexes do not include fees or expenses and are not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| American Funds Growth Allocation Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class B(a)(b) | | | | | | | | | | | |
Actual | | 0.72% | | $ | 1,000.00 | | $ | 1,108.60 | | $ | 1.83 |
Hypothetical | | 0.72% | | | 1,000.00 | | | 1,023.06 | | | 1.76 |
| | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class C(a)(b) | | | | | | | | | | | |
Actual | | 1.02% | | $ | 1,000.00 | | $ | 1,107.50 | | $ | 3.40 |
Hypothetical | | 1.02% | | | 1,000.00 | | | 1,021.57 | | | 3.26 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
(a) The annualized expense ratio shown reflects an expense limitation agreement between MetLife Advisers, LLC and the Portfolio as described in Note 3 of the Notes to Financial Statements.
(b) The annualized expense ratio reflects the expenses of both the Portfolio and the Underlying Portfolios in which it invests.
4
Met Investors Series Trust
American Funds Growth Allocation Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Shares | | Value | |
| | | | | | |
|
| Investment Company Securities - 100.1% | |
American Funds Bond Fund (Class 1)(a) | | 2,862,828 | | $ | 28,485,141 | |
American Funds Global Bond Fund (Class 1)(a) | | 1,315,138 | | | 14,387,612 | |
American Funds Global Small Capitalization Fund (Class 1)(a) | | 4,466,503 | | | 63,513,680 | |
American Funds Growth Fund (Class 1)(a) | | 11,819,241 | | | 446,649,102 | |
American Funds Growth-Income Fund (Class 1)(a) | | 25,305,954 | | | 659,726,211 | |
American Funds High-Income Bond Fund (Class 1)(a) | | 3,201,924 | | | 30,098,083 | |
American Funds International Fund (Class 1)(a) | | 7,691,057 | | | 107,520,977 | |
American Funds New World Fund (Class 1)(a) | | 3,832,820 | | | 62,245,002 | |
American Funds U.S. Government /AAA - Rated Securities Fund (Class 1)(a) | | 5,595,870 | | | 68,269,616 | |
| | | | | | |
Total Investment Company Securities
(Cost $1,573,373,650) | | | | | 1,480,895,424 | |
| | | | | | |
| | |
TOTAL INVESTMENTS - 100.1%
(Cost $1,573,373,650) | | | | | 1,480,895,424 | |
| | | | | | |
| | |
| Other Assets and Liabilities (net) - (0.1)% | | | | | (883,940 | ) |
| | | | | | |
| | |
| NET ASSETS - 100.0% | | | | $ | 1,480,011,484 | |
| | | | | | |
Portfolio Footnotes:
| (a) | | A Portfolio of the American Funds Insurance Series. |
See accompanying notes to financial statements
5
Met Investors Series Trust
American Funds Growth Allocation Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
| Level 1—quoted | | prices in active markets for identical securities |
| Level 2—other | | significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.) |
| Level 3—significant | | unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments) |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Investment Company Securities | | $ | 1,480,895,424 | | $ | — | | $ | — | | $ | 1,480,895,424 |
TOTAL INVESTMENTS | | $ | 1,480,895,424 | | $ | — | | $ | — | | $ | 1,480,895,424 |
See accompanying notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| American Funds Growth Allocation Portfolio | | | |
| Assets | | | | |
Investments, at value (a) | | $ | 1,480,895,424 | |
Receivable for Trust shares sold | | | 1,215,206 | |
Receivable from Manager | | | 18,568 | |
| | | | |
Total assets | | | 1,482,129,198 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 698,041 | |
Trust shares redeemed | | | 517,165 | |
Distribution and services fees—Class B | | | 268 | |
Distribution and services fees—Class C | | | 662,929 | |
Management fee | | | 120,640 | |
Administration fee | | | 2,000 | |
Custodian and accounting fees | | | 3,720 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 109,524 | |
| | | | |
Total liabilities | | | 2,117,714 | |
| | | | |
| Net Assets | | $ | 1,480,011,484 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 1,601,351,467 | |
Accumulated net realized loss | | | (30,706,152 | ) |
Unrealized depreciation on investments | | | (92,478,226 | ) |
Undistributed net investment income | | | 1,844,395 | |
| | | | |
Total | | $ | 1,480,011,484 | |
| | | | |
| Net Assets | | | | |
Class B | | $ | 1,487,916 | |
| | | | |
Class C | | | 1,478,523,568 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class B | | | 217,497 | |
| | | | |
Class C | | | 217,297,747 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class B | | $ | 6.84 | |
| | | | |
Class C | | | 6.80 | |
| | | | |
| | | | | |
(a) Investments at cost | | $ | 1,573,373,650 | |
See accompanying notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| American Funds Growth Allocation Portfolio | | | |
| Investment Income | | | | |
Dividends from Underlying Portfolios | | $ | 5,331,166 | |
| | | | |
Total investment income | | | 5,331,166 | |
| | | | |
| Expenses | | | | |
Management fee | | | 535,239 | |
Administration fees | | | 11,985 | |
Custodian and accounting fees | | | 12,138 | |
Distribution and services fees—Class B | | | 1,226 | |
Distribution and services fees—Class C | | | 2,941,117 | |
Audit and tax services | | | 13,890 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,299 | |
Shareholder reporting | | | 49,420 | |
Insurance | | | 2,878 | |
Other | | | 2,263 | |
| | | | |
Total expenses | | | 3,596,189 | |
Less expenses reimbursed by the Manager | | | (109,552 | ) |
| | | | |
Net expenses | | | 3,486,637 | |
| | | | |
Net investment income | | | 1,844,529 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | (29,692,863 | ) |
Capital gain distributions from Underlying Portfolios | | | 1,155,903 | |
| | | | |
Net realized loss on investments and capital gain distributions from Underlying Portfolios | | | (28,536,960 | ) |
| | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 175,705,040 | |
| | | | |
Net change in unrealized appreciation on investments | | | 175,705,040 | |
| | | | |
Net realized and unrealized gain on investments | | | 147,168,080 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 149,012,609 | |
| | | | |
See accompanying notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| American Funds Growth Allocation Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Period Ended
December 31,
2008* | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 1,844,529 | | | $ | 14,384,955 | |
Net realized gain (loss) on investments and capital gains distributions from Underlying Portfolios | | | (28,536,960 | ) | | | 17,168,255 | |
Net change in unrealized appreciation (depreciation) on investments | | | 175,705,040 | | | | (268,183,266 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 149,012,609 | | | | (236,630,056 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class B | | | (0 | )+ | | | (32,458 | ) |
Class C | | | (186 | ) | | | (33,936,756 | ) |
From net realized gains | | | | | | | | |
Class B | | | — | | | | (14 | ) |
Class C | | | — | | | | (14,346 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (186 | ) | | | (33,983,574 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class B | | | 650,318 | | | | 1,813,006 | |
Class C | | | 581,439,374 | | | | 1,049,580,597 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class B | | | 0 | + | | | 32,472 | |
Class C | | | 186 | | | | 33,951,102 | |
Cost of shares repurchased | | | | | | | | |
Class B | | | (36,283 | ) | | | (849,852 | ) |
Class C | | | (37,302,364 | ) | | | (27,665,865 | ) |
| | | | | | | | |
Net increase in net assets from capital share transactions | | | 544,751,231 | | | | 1,056,861,460 | |
| | | | | | | | |
| Net Increase in Net Assets | | | 693,763,654 | | | | 786,247,830 | |
Net assets at beginning of period | | | 786,247,830 | | | | — | |
| | | | | | | | |
Net assets at end of period | | $ | 1,480,011,484 | | | $ | 786,247,830 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 1,844,395 | | | $ | 52 | |
| | | | | | | | |
| * | | For the period 4/28/08 (Commencement of operations) through 12/31/08. |
| + | | Rounds to less than $0.50. |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | |
| | |
| Selected Per Share Data for the Period Ended: | | | | | | |
| | |
| | | | | | | |
| American Funds Growth Allocation Portfolio | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the
Period Ended
December 31,
2008(b) | |
| Net Asset Value, Beginning of Period | | $ | 6.17 | | | $ | 10.00 | |
| | | | | | | | |
| Income (Loss) from Investment Operations: | | | | | | | | |
Net Investment Income(a) | | | 0.02 | | | | 0.14 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.65 | | | | (3.69 | ) |
| | | | | | | | |
Total from Investment Operations | | | 0.67 | | | | (3.55 | ) |
| | | | | | | | |
| Less Distributions | | | | | | | | |
Dividends from Net Investment Income | | | (0.00 | )+ | | | (0.28 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (0.00 | )+ |
| | | | | | | | |
Total Distributions | | | (0.00 | )+ | | | (0.28 | ) |
| | | | | | | | |
| Net Asset Value, End of Period | | $ | 6.84 | | | $ | 6.17 | |
| | | | | | | | |
| Total Return | | | 10.86 | % | | | (35.45 | )% |
Ratio of Expenses to Average Net Assets(c) | | | 0.35 | %* | | | 0.35 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates(d) | | | 0.37 | %* | | | 0.65 | %* |
Ratio of Net Investment Income to Average Net Assets(e) | | | 0.68 | %* | | | 2.37 | %* |
Portfolio Turnover Rate | | | 3.5 | % | | | 4.6 | % |
Net Assets, End of Period (in millions) | | $ | 1.5 | | | $ | 0.7 | |
| |
| | | Class C | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the
Period Ended
December 31,
2008(b) | |
| Net Asset Value, Beginning of Period | | $ | 6.14 | | | $ | 10.00 | |
| | | | | | | | |
| Income (Loss) from Investment Operations: | | | | | | | | |
Net Investment Income(a) | | | 0.01 | | | | 0.23 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.65 | | | | (3.81 | ) |
| | | | | | | | |
Total from Investment Operations | | | 0.66 | | | | (3.58 | ) |
| | | | | | | | |
| Less Distributions | | | | | | | | |
Dividends from Net Investment Income | | | (0.00 | )+ | | | (0.28 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (0.00 | )+ |
| | | | | | | | |
Total Distributions | | | (0.00 | )+ | | | (0.28 | ) |
| | | | | | | | |
| Net Asset Value, End of Period | | $ | 6.80 | | | $ | 6.14 | |
| | | | | | | | |
| Total Return | | | 10.75 | % | | | (35.78 | )% |
Ratio of Expenses to Average Net Assets(c) | | | 0.65 | %* | | | 0.65 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates(d) | | | 0.67 | %* | | | 0.70 | %* |
Ratio of Net Investment Income to Average Net Assets(e) | | | 0.34 | %* | | | 4.65 | %* |
Portfolio Turnover Rate | | | 3.5 | % | | | 4.6 | % |
Net Assets, End of Period (in millions) | | $ | 1,478.5 | | | $ | 785.5 | |
| + | | Rounds to less than $0.005 per share. |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—04/28/2008. |
| (c) | | The ratio of operating expenses to average net assets does not include expenses of the Underlying Portfolios in which the Portfolio invests. |
| (d) | | See Note 3 of the Notes to Financial Statements. |
| (e) | | Recognition of net investment income by the Portfolio is affected by the timing of the declaration of dividends by the Underlying Portfolios in which it invests. |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is American Funds Growth Allocation Portfolio (the “Portfolio”), which is non-diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class B and C Shares are currently offered by the Portfolio. Class A and E Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
The Portfolio is designed on established principles of asset allocation and risk tolerance. The Portfolio will invest substantially all of its assets in certain funds of the American Funds Insurance Series (“AFIS”), which invest either in equity securities or fixed income securities, as applicable (“Underlying Portfolios”). AFIS is an open-end diversified investment management company advised by Capital Research and Management Company (“CRMC”), an indirect, wholly owned subsidiary of The Capital Group Companies, Inc.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Investments in the Underlying Portfolios are valued at their closing daily net asset value. The net asset value of the Portfolio is calculated based on the net asset values of the Underlying Portfolios in which the Portfolio invests. For information about the use of fair value pricing by the Underlying Portfolios that are funds of AFIS, please refer to the prospectus of the Underlying Portfolios.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes.
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Income and capital gain distributions from the Underlying Portfolios are recorded on the ex-dividend date.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2008 tax year remains subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement (the “Management Agreement”) with the Manager for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board of Trustees (the “Board”) and has overall responsibility for the general management and administration of the Trust.
11
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $ | 535,239 | | 0.10 | % | | All |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Manager has entered into an expense limitation agreement with the Trust (“Expense Limitation Agreement”) in the interest of limiting expenses of the Portfolio of the Trust. The Expense Limitation Agreement shall continue in effect with respect to the Portfolio until April 30, 2010. Pursuant to that Expense Limitation Agreement, the Manager has agreed to waive or limit its fees and to assume other expenses so that the total annual operating expenses of the Portfolio other than interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with accounting principles generally accepted in the United States of America, other extraordinary expenses not incurred in the ordinary course of the Portfolio’s business, and Underlying Portfolios’ fees and expenses, but including amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act, are limited to the following expense ratios as a percentage of the Portfolio’s average daily net assets:
| | | | | | | | | | |
Maximum Expense Ratio under current
Expense Limitation Agreement | | | Expenses Deferred in |
| | 2008 | | 2009 |
| | Subject to repayment until
December 31, |
| Class B | | | Class C | | | 2013 | | 2014 |
| | | |
| 0.35 | % | | 0.65 | % | | $ | 145,377 | | $ | 109,552 |
The expenses reimbursed for the period ended June 30, 2009 are shown as expenses reimbursed in the Statement of Operations of the Portfolio.
If in any year in which the Management Agreement is still in effect, the estimated aggregate portfolio operating expenses of the Portfolio for the fiscal year are less than the Maximum Expense Ratios for that year, subject to approval by the Trust’s Board, the Manager shall be entitled to reimbursement by the Portfolio to the extent that the charge does not cause the expenses in such subsequent year to exceed the Maximum Expense Ratios as stated above. The Portfolio is not obligated to repay any expense paid by the Manager more than five years after the end of the fiscal year in which such expense was incurred.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class B and Class C Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B and Class C distribution plans provide that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 1.00% respectively, of the average net assets of the Portfolio attributable to its Class B and Class C Shares in respect to activities primarily intended to result in the sale of Class B and Class C Shares. However, under the Class B and Class C distribution agreements, payments to the Distributor for activities pursuant to the Class B and Class C distribution plans are currently limited to payments at an annual rate equal to 0.25% and 0.55% of average daily net assets of the Portfolio, attributable to its Class B and Class C Shares, respectively.
Under terms of the Class B and Class C distribution plans and distribution agreements, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B and Class C Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
12
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | | Redemptions | | | Net Increase
in Shares
Outstanding | | Ending
Shares |
| | | | | | |
Class B | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 120,688 | | 102,646 | | 0 | + | | (5,837 | ) | | 96,809 | | 217,497 |
04/28/2008-12/31/2008 | | — | | 214,278 | | 5,315 | | | (98,905 | ) | | 120,688 | | 120,688 |
| | | | | | |
Class C | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 127,868,366 | | 95,368,136 | | 30 | | | (5,938,785 | ) | | 89,429,381 | | 217,297,747 |
04/28/2008-12/31/2008 | | — | | 125,821,911 | | 5,574,894 | | | (3,528,439 | ) | | 127,868,366 | | 127,868,366 |
+ Rounds to less than 0.50 share.
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 586,502,105 | | $ | — | | $ | 38,333,562 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $1,573,373,650 | | $ | 1,618,144 | | $ | (94,096,370 | ) | | $ | (92,478,226 | ) |
6. Distributions to Shareholders
The tax character of distributions paid for the year ended December 31, 2008 was as follows:
| | | | | | |
Ordinary Income | | Long-Term Capital Gains | | Total |
2008 | | 2008 | | 2008 |
| | |
| $16,880,302 | | $ | 17,103,272 | | $ | 33,983,574 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards | | Total | |
| | | | |
| $52 | | $ | — | | $ | (270,352,458 | ) | | $ | — | | $ | (270,352,406 | ) |
7. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
8. Market, Credit and Counterparty Risk
In the normal course of business, the Underlying Portfolios, in which the Portfolio invests, invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
8. Market, Credit and Counterparty Risk - continued
securities held by the Underlying Portfolios may decline in response to certain events, including those directly involving the companies whose securities are owned by the Underlying Portfolios; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Underlying Portfolios may be exposed to counterparty risk, or the risk that an entity with which the Underlying Portfolios have unsettled or open transactions may default. Financial assets, which potentially expose the Underlying Portfolios to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Underlying Portfolios’ exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Underlying Portfolios’ Statements of Assets and Liabilities.
9. Transactions in Securities of Affiliated Issuers
Transactions in the Underlying Portfolios during the period ended June 30, 2009 in which the Portfolio had ownership of at least 5% of the outstanding voting securities at the end of the period are as follows:
| | | | | | | | | |
Security Description | | Number of shares
held at December 31,
2008 | | Shares purchased
during the period | | Shares sold
during the period | | | Number of shares
held at June 30,
2009 |
| | | | |
American Funds Global Bond Fund (Class 1) | | 772,120 | | 598,295 | | (55,277 | ) | | 1,315,138 |
American Funds Global Small Capitalization Fund (Class 1) | | 2,762,215 | | 1,922,253 | | (217,965 | ) | | 4,466,503 |
American Funds Growth Fund (Class 1) | | 7,492,965 | | 5,119,807 | | (793,531 | ) | | 11,819,241 |
American Funds Growth-Income Fund (Class 1) | | 14,170,572 | | 11,173,030 | | (37,648 | ) | | 25,305,954 |
American Funds High-Income Bond Fund (Class 1) | | 1,838,535 | | 1,382,042 | | (18,653 | ) | | 3,201,924 |
American Funds New World Fund (Class 1) | | 2,401,415 | | 1,564,859 | | (133,454 | ) | | 3,832,820 |
American Funds U.S. Government/AAA—Rated Securities
Fund (Class 1) | | 3,223,095 | | 2,545,942 | | (173,167 | ) | | 5,595,870 |
| | | | | | | | | | | | | |
Security Description | | Net Realized Gain
(Loss) on Investments
during the period | | | Net Realized Gain
on Capital Gain
Distributions from
Affiliates during the
period | | Income earned from
affiliate during the
period | | Ending Value |
| | | | |
American Funds Global Bond Fund (Class 1) | | $ | (40,697 | ) | | $ | — | | $ | 46,708 | | $ | 14,387,612 |
American Funds Global Small Capitalization Fund (Class 1) | | | (2,770,105 | ) | | | — | | | — | | | 63,513,680 |
American Funds Growth Fund (Class 1) | | | (23,759,982 | ) | | | — | | | 1,132,059 | | | 446,649,102 |
American Funds Growth-Income Fund (Class 1) | | | (548,335 | ) | | | — | | | 2,718,920 | | | 659,726,211 |
American Funds High-Income Bond Fund (Class 1) | | | (58,929 | ) | | | — | | | 363,280 | | | 30,098,083 |
American Funds New World Fund (Class 1) | | | (1,534,766 | ) | | | — | | | 196,760 | | | 62,245,002 |
American Funds U.S. Government/AAA—Rated Securities
Fund (Class 1) | | | 81,179 | | | | 604,354 | | | 356,019 | | | 68,269,616 |
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
15
| | |
| American Funds Growth Portfolio | | For the period ended 6/30/09 |
| Managed by MetLife Advisers, LLC | | |
Performance Summary
During the period ended June 30, 2009, the Portfolio had a return of 12.72% for Class C versus 3.16% for its benchmark, the S&P 500® Index1.
American Funds Growth Portfolio managed by
MetLife Advisers, LLC vs. S&P 500® Index1
Growth Based on $10,000+
| | | | | | | | | | | | |
| | | | | Average Annual Return2 (for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | 3 Year | | 5 Year | | 10 Year |
| — | | American Funds Growth
Portfolio—Class C | | 12.72% | | -31.71% | | -9.02% | | -0.93% | | 0.87% |
| - - | | S&P 500® Index1 | | 3.16% | | -26.21% | | -8.22% | | -2.24% | | -2.22% |
+The chart reflects the performance of Class C shares of the Portfolio.
1The S&P 500® Index is an unmanaged index consisting of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-weighted index (stock price times number of shares outstanding) with each stock’s weight in the Index proportionate to its market value.
2“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
The Portfolio and its corresponding Master Fund have essentially the same investment objectives, policies, and strategies. Since the Portfolio commenced operations on April 28, 2008, it does not have a significant operating history. However, hypothetical performance information regarding the Portfolio is presented because the Portfolio’s performance is based on the performance of the Master Fund for the period ended June 30, 2009 adjusted to reflect the Portfolio’s expenses for the period ended June 30, 2009 (including contractual expense waivers).
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Index does not include fees or expenses and is not available for direct investment.
1
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| American Funds Growth Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class C | | | | | | | | | | | |
Actual | | 0.65% | | $ | 1,000.00 | | $ | 1,127.20 | | $ | 3.43 |
Hypothetical | | 0.65% | | | 1,000.00 | | | 1,021.57 | | | 3.26 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
2
Met Investors Series Trust
American Funds Growth Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Shares | | Value | |
| | | | | | |
|
| Investment Company Security - 100.1% | |
American Funds Growth Fund(a)
(Cost $182,677,690) | | 4,666,103 | | $ | 176,332,018 | |
| | | | | | |
| | |
TOTAL INVESTMENTS - 100.1%
(Cost $182,677,690) | | | | | 176,332,018 | |
| | | | | | |
| | |
| Other Assets and Liabilities (net) - (0.1)% | | | | | (137,786 | ) |
| | | | | | |
| | |
| NET ASSETS - 100.0% | | | | $ | 176,194,232 | |
| | | | | | |
Portfolio Footnotes:
| (a) | | A Portfolio of the American Funds Insurance Series. |
See accompanying notes to financial statements
3
Met Investors Series Trust
American Funds Growth Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
| Level 1—quoted | | prices in active markets for identical securities |
| Level 2—other | | significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.) |
| Level 3—significant | | unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments) |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Investment Company Security | | $ | 176,332,018 | | $ | — | | $ | — | | $ | 176,332,018 |
TOTAL INVESTMENTS | | $ | 176,332,018 | | $ | — | | $ | — | | $ | 176,332,018 |
See accompanying notes to financial statements
4
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| American Funds Growth Portfolio | | | |
| Assets | | | | |
Investments, at value (a) | | $ | 176,332,018 | |
Receivable for Trust shares sold | | | 924,548 | |
| | | | |
Total assets | | | 177,256,566 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 870,308 | |
Trust shares redeemed | | | 54,240 | |
Distribution and services fees—Class C | | | 76,280 | |
Administration fee | | | 2,000 | |
Custodian and accounting fees | | | 3,720 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 52,359 | |
| | | | |
Total liabilities | | | 1,062,334 | |
| | | | |
| Net Assets | | $ | 176,194,232 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 184,264,661 | |
Accumulated net realized loss | | | (1,806,714 | ) |
Unrealized depreciation on investments | | | (6,345,672 | ) |
Undistributed net investment income | | | 81,957 | |
| | | | |
Total | | $ | 176,194,232 | |
| | | | |
| Net Assets | | | | |
Class C | | $ | 176,194,232 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class C | | | 28,020,014 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class C | | $ | 6.29 | |
| | | | |
| | | | | |
(a) Investments at cost | | $ | 182,677,690 | |
See accompanying notes to financial statements
5
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| American Funds Growth Portfolio | | | |
| Investment Income | | | | |
Dividends from Master Fund | | $ | 437,134 | |
| | | | |
Total investment income | | | 437,134 | |
| | | | |
| Expenses | | | | |
Administration fees | | | 11,985 | |
Custodian and accounting fees | | | 12,138 | |
Distribution and services fees—Class C | | | 300,636 | |
Audit and tax services | | | 13,890 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 1,958 | |
Shareholder reporting | | | 17,597 | |
Insurance | | | 4,634 | |
Other | | | 2,255 | |
| | | | |
Total expenses | | | 381,827 | |
Less expenses reimbursed by the Manager | | | (26,650 | ) |
| | | | |
Net expenses | | | 355,177 | |
| | | | |
Net investment income | | | 81,957 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments | | | | |
Net realized loss on: | | | | |
Investments | | | (1,750,084 | ) |
| | | | |
Net realized loss on investments | | | (1,750,084 | ) |
| | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 18,740,331 | |
| | | | |
Net change in unrealized appreciation on investments | | | 18,740,331 | |
| | | | |
Net realized and unrealized gain on investments | | | 16,990,247 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 17,072,204 | |
| | | | |
See accompanying notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| American Funds Growth Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Period Ended
December 31,
2008* | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 81,957 | | | $ | 753,517 | |
Net realized gain (loss) on investments and capital gain distribution from Master Fund | | | (1,750,084 | ) | | | 1,890,642 | |
Net change in unrealized appreciation (depreciation) on investments | | | 18,740,331 | | | | (25,086,003 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 17,072,204 | | | | (22,441,844 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class C | | | — | | | | (2,720,585 | ) |
From net realized gains | | | | | | | | |
Class C | | | — | | | | — | |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | — | | | | (2,720,585 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class C | | | 98,441,212 | | | | 95,320,579 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class C | | | — | | | | 2,720,585 | |
Cost of shares repurchased | | | | | | | | |
Class C | | | (7,809,578 | ) | | | (4,388,341 | ) |
| | | | | | | | |
Net increase in net assets from capital share transactions | | | 90,631,634 | | | | 93,652,823 | |
| | | | | | | | |
| Net Increase in Net Assets | | | 107,703,838 | | | | 68,490,394 | |
Net assets at beginning of period | | | 68,490,394 | | | | — | |
| | | | | | | | |
Net assets at end of period | | $ | 176,194,232 | | | $ | 68,490,394 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 81,957 | | | $ | — | |
| | | | | | | | |
| * | | For the period 4/28/2008 (Commencement of operations) through 12/31/2008. |
See accompanying notes to financial statements
7
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | |
| | |
| Selected Per Share Data for the Period Ended: | | | | | | |
| | |
| | | | | | | |
| American Funds Growth Portfolio | | Class C | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the
Period Ended
December 31,
2008(b) | |
| Net Asset Value, Beginning of Period | | $ | 5.58 | | | $ | 10.00 | |
| | | | | | | | |
| Income (Loss) from Investment Operations: | | | | | | | | |
Net Investment Income(a) | | | 0.00 | + | | | 0.15 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.71 | | | | (4.34 | ) |
| | | | | | | | |
Total from Investment Operations | | | 0.71 | | | | (4.19 | ) |
| | | | | | | | |
| Less Distributions | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | (0.23 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | — | |
| | | | | | | | |
Total Distributions | | | — | | | | (0.23 | ) |
| | | | | | | | |
| Net Asset Value, End of Period | | $ | 6.29 | | | $ | 5.58 | |
| | | | | | | | |
| Total Return | | | 12.72 | % | | | (41.84 | )% |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.65 | %* | | | 0.65 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.70 | %* | | | 0.92 | %* |
Ratio of Net Investment Income to Average Net Assets | | | 0.15 | %* | | | 3.09 | %* |
Portfolio Turnover Rate | | | 1.2 | % | | | 0.2 | % |
Net Assets, End of Period (in millions) | | $ | 176.2 | | | $ | 68.5 | |
| + | | Rounds to less than $0.005 per share. |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—4/28/2008. |
See accompanying notes to financial statements
8
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is American Funds Growth Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc. (“MetLife”).
The Trust has registered four classes of shares: Class C Shares are currently offered by the Portfolio. Class A, B, and E Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
The Portfolio, a feeder fund, seeks to achieve its investment objective by investing all of its investable assets in a master fund, the Growth Fund (the “Master Fund”), a fund of the American Funds Insurance Series (“AFIS”). AFIS is an open-end diversified investment management company advised by Capital Research and Management Company (“CRMC”), an indirect, wholly owned subsidiary of The Capital Group Companies, Inc. The financial statements of the Master Fund, including the summary investment portfolio are included elsewhere in this report and should be read with the Portfolio’s financial statements. As of June 30, 2009, the Portfolio owned approximately 0.87% of the Master Fund.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Investments in the Master Fund are valued at its closing daily net asset value. The net asset value of the Portfolio is calculated based on the net asset value of the Master Fund in which the Portfolio invests. For information about the use of fair value pricing by the Master Fund, please refer to the prospectus for the Master Fund.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes.
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Income and capital gain distributions from the Master Fund are recorded on the ex-dividend date.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2008 tax year remains subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
9
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board of Trustees (the “Board”) and has overall responsibility for the general management and administration of the Trust. The Manager selects the Master Fund in which the Portfolio will invest and monitors the Master Fund investment program. The Manager is an affiliate of MetLife. The Manager currently receives no compensation for its services to the Portfolio. In the event that the Portfolio were to withdraw from the Master Fund and invest its assets directly in investment securities, the Manager would retain the services of an investment adviser and would receive a management fee at an annual rate of percentage of the assets of the Portfolio as follows:
| | |
% per annum | | Average Daily Net Assets |
| |
0.75% | | ALL |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Manager has entered into an expense limitation agreement with the Trust (“Expense Limitation Agreement”) in the interest of limiting expenses of the Portfolio of the Trust. The Expense Limitation Agreement shall continue in effect with respect to the Portfolio until April 30, 2010. Pursuant to that Expense Limitation Agreement, the Manager has agreed to waive or limit its fees and to assume other expenses so that the total annual operating expenses of the Portfolio other than interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with accounting principles generally accepted in the United States of America, other extraordinary expenses not incurred in the ordinary course of the Portfolio’s business, and Master Fund fees and expenses, but including amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act, are limited to the following expense ratio as a percentage of the Portfolio’s average daily net assets:
| | | | | | | |
Maximum Expense Ratio under current
Expense Limitation Agreement | | | Expenses Deferred in |
| | 2008 | | 2009 |
| | Subject to repayment
until December 31, |
Class C | | | 2013 | | 2014 |
| | |
| 0.65 | % | | $ | 66,600 | | $ | 26,650 |
The expenses reimbursed for the period ended June 30, 2009 are shown as expenses reimbursed in the Statement of Operations of the Portfolio.
If in any year in which the Management Agreement is still in effect, the estimated aggregate portfolio operating expenses of the Portfolio for the fiscal year are less than the Maximum Expense Ratio for that year, subject to approval by the Trust’s Board, the Manager shall be entitled to reimbursement by the Portfolio to the extent that the charge does not cause the expenses in such subsequent year to exceed the Maximum Expense Ratio as stated above. The Portfolio is not obligated to repay any expense paid by the Manager more than five years after the end of the fiscal year in which such expense was incurred.
The Trust has a distribution agreement with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class C Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class C distribution plan provides that the Trust, on behalf of the Portfolio, may pay annually up to 1.00% of the average net assets of the Portfolio attributable to its Class C Shares in respect to activities primarily intended to result in the sale of Class C Shares. However, under the Class C distribution agreement, payments to the Distributor for activities pursuant to the Class C distribution plan are currently limited to payments at an annual rate equal to 0.55% of average daily net assets of the Portfolio, attributable to its Class C Shares.
Under terms of the Class C distribution plan and distribution agreement, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class C Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
10
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
in Shares
Outstanding | | Ending
Shares |
| | | | | | |
Class C | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 12,277,510 | | 17,177,139 | | — | | (1,434,635 | ) | | 15,742,504 | | 28,020,014 |
4/28/08-12/31/2008 | | — | | 12,395,042 | | 494,652 | | (612,184 | ) | | 12,277,510 | | 12,277,510 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 92,109,695 | | $ | — | | $ | 1,333,686 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $182,677,690 | | $ | — | | $ | (6,345,672 | ) | | $ | (6,345,672 | ) |
6. Distributions to Shareholders
The tax character of distributions paid for the year ended December 31, 2008 was as follows:
| | | | | | |
Ordinary Income | | Long-Term Capital Gains | | Total |
2008 | | 2008 | | 2008 |
| | |
| $991,370 | | $ | 1,729,215 | | $ | 2,720,585 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards | | Total | |
| | | | |
| $— | | $ | — | | $ | (25,142,633 | ) | | $ | — | | $ | (25,142,633 | ) |
7. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
8. Market, Credit and Counterparty Risk
In the normal course of business, the Master Fund, in which the Portfolio invests, invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Master Fund may decline in response to certain events, including those directly involving the companies whose securities are owned by the Master Fund; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Master Fund may be exposed to counterparty risk, or the risk that an entity with which the Master Fund has unsettled or open transactions may default. Financial assets, which potentially expose the
11
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
8. Market, Credit and Counterparty Risk - continued
Master Fund to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Master Fund’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Master Fund’s Statement of Assets and Liabilities.
9. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
10. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
12
| | |
| American Funds International Portfolio | | For the period ended 6/30/09 |
| Managed by MetLife Advisers, LLC | | |
Performance Summary
During the period ended June 30, 2009, the Portfolio had a return of 14.89% for Class C versus 7.95% and 13.92% for its benchmarks, the MSCI EAFE® Index (net)1 and Morgan Stanley Capital International AC World (ex-U.S.) Index (net)2.
American Funds International Portfolio managed by MetLife Advisers, LLC vs. MSCI EAFE® Index (net)1 and Morgan Stanley Capital International AC World (ex-U.S.) Index (net)2
Growth Based on $10,000+
| | | | | | | | | | | | |
| | | | | Average Annual Return3 (for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | 3 Year | | 5 Year | | 10 Year |
| — | | American Funds International
Portfolio—Class C | | 14.89% | | -24.80% | | -3.9% | | 5.18% | | 3.55% |
| - - | | MSCI EAFE®
Index (net)1 | | 7.95% | | -31.35% | | -7.98% | | 2.31% | | 1.16% |
| — | | Morgan Stanley Capital International AC World (ex-U.S.) Index (net)2 | | 13.92% | | -30.92% | | -5.80% | | 4.48% | | 2.52% |
+The chart reflects the performance of Class C shares of the Portfolio.
1The Morgan Stanley Capital International Europe, Australasia and Far East Index (“MSCI EAFE® Index”) is an unmanaged free float-adjusted market capitalization index that is designed to measure developed market equity performance excluding the U.S. and Canada.
2The Morgan Stanley Capital International AC World (ex-U.S.) Index (net) is an unmanaged free float-adjusted market capitalization index that is designed to measure equity market performance in the global developed and emerging markets, excluding the United States.
3“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
The Portfolio and its corresponding Master Fund have essentially the same investment objectives, policies, and strategies. Since the Portfolio commenced operations on April 28, 2008, it does not have a significant operating history. However, hypothetical performance information regarding the Portfolio is presented because the Portfolio’s performance is based on the performance of the Master Fund for the period ended June 30, 2009 adjusted to reflect the Portfolio’s expenses for the period ended June 30, 2009 (including contractual expense waivers).
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Indexes do not include fees or expenses and are not available for direct investment.
1
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| American Funds International Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class C | | | | | | | | | | | |
Actual | | 0.65% | | $ | 1,000.00 | | $ | 1,148.90 | | $ | 3.46 |
Hypothetical | | 0.65% | | | 1,000.00 | | | 1,021.57 | | | 3.26 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
2
Met Investors Series Trust
American Funds International Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Shares | | Value | |
| | | | | | |
| | | | | | |
| |
| Investment Company Security - 100.1% | | | | |
American Funds International Fund(a)
(Cost $117,891,914) | | 8,194,716 | | $ | 114,562,127 | |
| | | | | | |
| | |
TOTAL INVESTMENTS - 100.1%
(Cost $117,891,914) | | | | | 114,562,127 | |
| | | | | | |
| | |
| Other Assets and Liabilities (net) - (0.1)% | | | | | (69,183 | ) |
| | | | | | |
| | |
| NET ASSETS - 100.0% | | | | $ | 114,492,944 | |
| | | | | | |
Portfolio Footnotes:
| (a) | | A Portfolio of the American Funds Insurance Series. |
See accompanying notes to financial statements
3
Met Investors Series Trust
American Funds International Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1—quoted prices in active markets for identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Investment Company Security | | $ | 114,562,127 | | $ | — | | $ | — | | $ | 114,562,127 |
TOTAL INVESTMENTS | | $ | 114,562,127 | | $ | — | | $ | — | | $ | 114,562,127 |
See accompanying notes to financial statements
4
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| American Funds International Portfolio | | | |
| Assets | | | | |
Investments, at value (a) | | $ | 114,562,127 | |
Receivable for Trust shares sold | | | 140,413 | |
| | | | |
Total assets | | | 114,702,540 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 25,095 | |
Trust shares redeemed | | | 115,318 | |
Distribution and services fees—Class C | | | 51,309 | |
Administration fee | | | 2,000 | |
Custodian and accounting fees | | | 3,720 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 8,727 | |
| | | | |
Total liabilities | | | 209,596 | |
| | | | |
| Net Assets | | $ | 114,492,944 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 120,034,937 | |
Accumulated net realized loss | | | (2,255,306 | ) |
Unrealized depreciation on investments | | | (3,329,787 | ) |
Undistributed net investment income | | | 43,100 | |
| | | | |
Total | | $ | 114,492,944 | |
| | | | |
| Net Assets | | | | |
Class C | | $ | 114,492,944 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class C | | | 17,442,010 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class C | | $ | 6.56 | |
| | | | |
| | | | | |
(a) Investments at cost | | $ | 117,891,914 | |
See accompanying notes to financial statements
5
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| American Funds International Portfolio | | | |
| Investment Income | | | | |
Dividends from Master Fund | | $ | 294,078 | |
| | | | |
Total investment income | | | 294,078 | |
| | | | |
| Expenses | | | | |
Administration fees | | | 11,985 | |
Custodian and accounting fees | | | 12,138 | |
Distribution and services fees—Class C | | | 212,392 | |
Audit and tax services | | | 13,890 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 935 | |
Shareholder reporting | | | 4,409 | |
Insurance | | | 147 | |
Other | | | 2,255 | |
| | | | |
Total expenses | | | 274,885 | |
Less expenses reimbursed by the Manager | | | (23,907 | ) |
| | | | |
Net expenses | | | 250,978 | |
| | | | |
Net investment income | | | 43,100 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments | | | | |
Net realized loss on: | | | | |
Investments | | | (1,154,639 | ) |
| | | | |
Net realized loss on investments | | | (1,154,639 | ) |
| | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 16,175,453 | |
| | | | |
Net change in unrealized appreciation on investments | | | 16,175,453 | |
| | | | |
Net realized and unrealized gain on investments | | | 15,020,814 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 15,063,914 | |
| | | | |
See accompanying notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| American Funds International Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Period Ended
December 31,
2008* | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 43,100 | | | $ | 1,365,615 | |
Net realized gain (loss) on investments and capital gain distribution from Master Fund | | | (1,154,639 | ) | | | 1,114,528 | |
Net change in unrealized appreciation (depreciation) on investments | | | 16,175,453 | | | | (19,505,240 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 15,063,914 | | | | (17,025,097 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class C | | | — | | | | (3,597,911 | ) |
From net realized gains | | | | | | | | |
Class C | | | (14 | ) | | | (1,157 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (14 | ) | | | (3,599,068 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class C | | | 51,152,123 | | | | 78,256,528 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class C | | | 14 | | | | 3,599,068 | |
Cost of shares repurchased | | | | | | | | |
Class C | | | (6,376,288 | ) | | | (6,578,236 | ) |
| | | | | | | | |
Net increase in net assets from capital share transactions | | | 44,775,849 | | | | 75,277,360 | |
| | | | | | | | |
| Net Increase in Net Assets | | | 59,839,749 | | | | 54,653,195 | |
Net assets at beginning of period | | | 54,653,195 | | | | — | |
| | | | | | | | |
Net assets at end of period | | $ | 114,492,944 | | | $ | 54,653,195 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 43,100 | | | $ | — | |
| | | | | | | | |
| * | | For the period 4/28/2008 (Commencement of operations) through 12/31/2008. |
See accompanying notes to financial statements
7
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | |
| | |
| Selected Per Share Data for the Period Ended: | | | | | | |
| | |
| | | | | | | |
| American Funds International Portfolio | | | | | | |
| | | Class C | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Period
Ended
December 31,
2008(b) | |
| Net Asset Value, Beginning of Period | | $ | 5.71 | | | $ | 10.00 | |
| | | | | | | | |
| Income (Loss) from Investment Operations: | | | | | | | | |
Net Investment Income(a) | | | 0.00 | + | | | 0.31 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.85 | | | | (4.20 | ) |
| | | | | | | | |
Total from Investment Operations | | | 0.85 | | | | (3.89 | ) |
| | | | | | | | |
| Less Distributions | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | (0.40 | ) |
Distributions from Net Realized Capital Gains | | | (0.00 | )+ | | | (0.00 | )+ |
| | | | | | | | |
Total Distributions | | | (0.00 | )+ | | | (0.40 | ) |
| | | | | | | | |
| Net Asset Value, End of Period | | $ | 6.56 | | | $ | 5.71 | |
| | | | | | | | |
| Total Return | | | 14.89 | % | | | (38.86 | )% |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.65 | %* | | | 0.65 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.71 | %* | | | 0.85 | %* |
Ratio of Net Investment Income to Average Net Assets | | | 0.11 | %* | | | 6.43 | %* |
Portfolio Turnover Rate | | | 2.7 | % | | | 7.9 | % |
Net Assets, End of Period (in millions) | | $ | 114.5 | | | $ | 54.7 | |
| + | | Rounds to less than $0.005 per share. |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—4/28/2008. |
See accompanying notes to financial statements
8
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is American Funds International Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc. (“MetLife”).
The Trust has registered four classes of shares: Class C Shares are currently offered by the Portfolio. Class A, B, and E Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
The Portfolio, a feeder fund, seeks to achieve its investment objective by investing all of its investable assets in a master fund, the International Fund (the “Master Fund”), a fund of the American Funds Insurance Series (“AFIS”). AFIS is an open-end diversified investment management company advised by Capital Research and Management Company (“CRMC”), an indirect, wholly owned subsidiary of The Capital Group Companies, Inc. The financial statements of the Master Fund, including the summary investment portfolio are included elsewhere in this report and should be read with the Portfolio’s financial statements. As of June 30, 2009, the Portfolio owned approximately 1.49% of the Master Fund.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Investments in the Master Fund are valued at its closing daily net asset value. The net asset value of the Portfolio is calculated based on the net asset value of the Master Fund in which the Portfolio invests. For information about the use of fair value pricing by the Master Fund, please refer to the prospectus for the Master Fund.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes.
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Income and capital gain distributions from the Master Fund are recorded on the ex-dividend date.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2008 tax year remains subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
9
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board of Trustees (the “Board”) and has overall responsibility for the general management and administration of the Trust. The Manager selects the Master Fund in which the Portfolio will invest and monitors the Master Fund investment program. The Manager is an affiliate of MetLife. The Manager currently receives no compensation for its services to the Portfolio. In the event that the Portfolio were to withdraw from the Master Fund and invest its assets directly in investment securities, the Manager would retain the services of an investment adviser and would receive a management fee at an annual rate of percentage of the assets of the Portfolio as follows:
| | |
% per annum | | Average Daily Net Assets |
| |
| 0.90% | | ALL |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Manager has entered into an expense limitation agreement with the Trust (“Expense Limitation Agreement”) in the interest of limiting expenses of the Portfolio of the Trust. The Expense Limitation Agreement shall continue in effect with respect to the Portfolio until April 30, 2010. Pursuant to that Expense Limitation Agreement, the Manager has agreed to waive or limit its fees and to assume other expenses so that the total annual operating expenses of the Portfolio other than interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with accounting principles generally accepted in the United States of America, other extraordinary expenses not incurred in the ordinary course of the Portfolio’s business, and Master Fund fees and expenses, but including amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act, are limited to the following expense ratio as a percentage of the Portfolio’s average daily net assets:
| | | | | | | |
Maximum Expense Ratio under current
Expense Limitation Agreement | | | Expenses Deferred in |
| | 2008 | | 2009 |
| | Subject to repayment
until December 31, |
Class C | | | 2013 | | 2014 |
| | |
| 0.65 | % | | $ | 44,363 | | $ | 23,907 |
The expenses reimbursed for the period ended June 30, 2009 are shown as expenses reimbursed in the Statement of Operations of the Portfolio.
If in any year in which the Management Agreement is still in effect, the estimated aggregate portfolio operating expenses of the Portfolio for the fiscal year are less than the Maximum Expense Ratio for that year, subject to approval by the Trust’s Board, the Manager shall be entitled to reimbursement by the Portfolio to the extent that the charge does not cause the expenses in such subsequent year to exceed the Maximum Expense Ratio as stated above. The Portfolio is not obligated to repay any expense paid by the Manager more than five years after the end of the fiscal year in which such expense was incurred.
The Trust has a distribution agreement with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class C Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class C distribution plan provides that the Trust, on behalf of the Portfolio, may pay annually up to 1.00% of the average net assets of the Portfolio attributable to its Class C Shares in respect to activities primarily intended to result in the sale of Class C Shares. However, under the Class C distribution agreement, payments to the Distributor for activities pursuant to the Class C distribution plan are currently limited to payments at an annual rate equal to 0.55% of average daily net assets of the Portfolio, attributable to its Class C Shares.
Under terms of the Class C distribution plan and distribution agreement, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class C Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
10
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
in Shares
Outstanding | | Ending
Shares |
| | | | | | |
Class C | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 9,573,092 | | 8,949,908 | | 3 | | (1,080,993 | ) | | 7,868,918 | | 17,442,010 |
4/28/2008-12/31/2008 | | — | | 9,816,178 | | 629,208 | | (872,294 | ) | | 9,573,092 | | 9,573,092 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 47,598,622 | | $ | — | | $ | 2,144,881 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $117,891,914 | | $ | — | | $ | (3,329,787 | ) | | $ | (3,329,787 | ) |
6. Distributions to Shareholders
The tax character of distributions paid for the year ended December 31, 2008 was as follows:
| | | | | | |
Ordinary Income | | Long-Term Capital Gains | | Total |
2008 | | 2008 | | 2008 |
| | |
| $1,628,706 | | $ | 1,970,362 | | $ | 3,599,068 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards | | Total | |
| | | | |
| $— | | $ | 1 | | $ | (20,605,894 | ) | | $ | — | | $ | (20,605,893 | ) |
7. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
8. Market, Credit and Counterparty Risk
In the normal course of business, the Master Fund, in which the Portfolio invests, invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Master Fund may decline in response to certain events, including those directly involving the companies whose securities are owned by the Master Fund; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Master Fund may be exposed to counterparty risk, or the risk that an entity with which the Master Fund has unsettled or open transactions may default. Financial assets, which potentially expose the
11
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
8. Market, Credit and Counterparty Risk - continued
Master Fund to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Master Fund’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Master Fund’s Statement of Assets and Liabilities.
9. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
10. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
12
| | |
| American Funds Moderate Allocation Portfolio | | For the period ended 6/30/09 |
| Managed by MetLife Advisers, LLC | | |
Portfolio Manager Commentary
Performance
For the six-month period ended June 30, 2009, the Class B and C shares of the Portfolio returned 8.14% and 7.89%, respectively, compared to the 7.11% return of its primary index, the Dow Jones Moderate Index.
Market Environment/Conditions
The worst economic downturn since the 1930s—dubbed “The Great Recession” by some pundits—showed few signs of sustained improvement; although at least the rapid rate of descent appeared to have slowed during the first half of 2009. The Unemployment Rate reached 9.5% in June as more than six million jobs were lost over the past twelve months. Other economic statistics were more ambiguous: Consumer Confidence, although still well below its level of two years ago, recovered from the level reached in March and Existing Home Sales improved modestly in response to lower house prices and improved availability of credit.
The Barclays Capital U.S. Aggregate Bond Index produced a modest, but positive total return of 1.9% for the first six months of 2009. The increase in Treasury yields that lowered the price of Treasury bonds was offset by a narrowing of yield spreads, which boosted credit based securities as investors became more positive on the prospects for the economy. The Barclays Capital U.S. Treasury Index was down 4.3% for the six months ending June, while the Barclays Capital U.S. Corporate Investment Grade Index was up 8.3%. Although the Barclays U.S. Corporate High Yield Index was up over 30% for the six-month period, it was still down 2.4% over the previous twelve months. The yield on Three Month Treasury Bills stayed close to 0.2% as the Federal Reserve kept their target rate in the 0.00% to 0.25% range.
The Standard & Poor’s 500 Index, buoyed by a robust 15.9% return for the second quarter, returned 3.2% for the six months ending in June. The rout in stocks that began last summer continued into the first quarter of this year as the severity of the recession became apparent. A turnaround began in early March on improving sentiment and stocks surged over 35% from the low in early March to the end of the June. Although small cap stocks had better performance in the second quarter, they were up slightly less than large cap stocks for the full six-month period as measured by the 2.6% rise of the Russell 2000® Index. Growth outperformed Value stocks during the first half of 2009 primarily due to the strength of technology companies compared to the relative weakness in traditional value stocks such as those in the Financials sector. Technology and Basic Materials were the best performing sectors over the six-month period. The Financials sector, despite a nearly 100% return from the middle of March to the end of June, was still among the worst performing sectors for the six-month period (-3.4%). The MSCI EAFE® Index was up nearly 8% for the six months ending in June, slightly more than the local return due to a weaker dollar that made foreign securities more valuable to the U.S. dollar based investor. Emerging Market equities and international small cap equities were both up more than the large cap stocks from developed countries.
Portfolio Review/Current Positioning
The American Funds Moderate Allocation Portfolio is structured to be broadly diversified across and within a wide variety of fixed income and equity asset classes to add value and control risk over the long term. The Portfolio strives to achieve its objectives through investment in the various funds of the American Funds Insurance Series (AFIS). Although the Portfolio’s broad asset allocation goal of 50% to fixed income and 50% to equities did not change, there were several very modest changes to the narrower asset class goals. These changes included the elimination of a formal goal for cash, although we still expect the Portfolio will hold some residual cash through the underlying portfolios, and a slight reduction in the goals for the riskier, non-core fixed income securities, such as high-yield bonds. To achieve these new asset class goals and to improve the overall diversification of the Portfolio, several adjustments to the underlying portfolio targets were made as part of the May 1, 2009 restructuring.
In the first quarter, the cumulatively high cash position (approximately 10%) of the Portfolio served as a buffer to the turbulent capital markets and helped both relative and absolute returns. However, the cash position hurt relative performance during the second quarter when both stocks and corporate bonds posted strong positive returns. Overall, the cash position was a detractor from performance during the first six months of 2009. While the percentage held in high yield bonds was slightly below the stated goal of 6%, the Portfolio’s higher overall exposure to credit based bonds (including investment grade corporate bonds) helped relative performance, especially in the second quarter. Among the fixed income underlying portfolios, the six month returns were directly related to the level of credit exposure: the higher the credit exposure and less held in the safety of U.S. Treasury Securities, the better the performance. The AFIS High Income Bond Fund was the best absolute performer among the underlying bond portfolios, while the AFIS Government/AAA Securities Fund posted a nearly flat return in response to the rise in treasury yields.
The underlying equity portfolios that invest primarily in foreign securities were the best absolute performers over the first six months of 2009, they benefited from both good local returns and a weaker dollar that made foreign securities more valuable to a U.S. based investor. The Portfolio especially benefited from its foreign equity exposure outside of the large cap, developed market universe that makes up the MSCI EAFE Index: small cap foreign stocks and emerging market stocks. Within domestic equities, a modest overall tilt to growth style stocks helped both absolute and relative performance. The AFIS Growth Fund had the biggest contribution to relative performance due to a large weighting and very good relative performance. It bettered the broad equity market despite its significant cash position because of its growth style, exposure to foreign stocks and overall good stock selection, particularly in the Energy sector. Because the asset class goals call for an even split between stocks and bonds, both segments were a major contributor to performance.
1
| | |
| American Funds Moderate Allocation Portfolio | | For the period ended 6/30/09 |
| Managed by MetLife Advisers, LLC | | |
Portfolio Manager Commentary (continued)
MetLife Advisers, LLC
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the advisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
American Funds Growth-Income Fund (Class 1) | | 34.35% |
American Funds U.S. Government /AAA—Rated Securities Fund (Class 1) | | 22.73% |
American Funds Bond Fund (Class 1) | | 14.75% |
American Funds Growth Fund (Class 1) | | 10.31% |
American Funds High-Income Bond Fund (Class 1) | | 8.37% |
American Funds International Fund (Class 1) | | 6.32% |
American Funds Global Small Capitalization Fund (Class 1) | | 1.14% |
American Funds New World Fund (Class 1) | | 1.10% |
American Funds Global Bond Fund (Class 1) | | 1.03% |
2
| | |
| American Funds Moderate Allocation Portfolio | | For the period ended 6/30/09 |
| Managed by MetLife Advisers, LLC | | |
Portfolio Manager Commentary (continued)
American Funds Moderate Allocation Portfolio managed by
MetLife Advisers, LLC vs. Dow Jones Moderate Index1 and
Moderate Blended Benchmark2
Growth Based on $10,000+
| | | | | | | | |
| | | | | Average Annual Return (for the period ended 6/30/09)3 |
| | | | | 6 Months | | 1 Year | | Since
Inception4 |
| — | | American Funds Moderate Allocation
Portfolio—Class B | | 8.14% | | -13.11% | | -13.76% |
| | Class C | | 7.89% | | -13.42% | | -14.03% |
| — | | Dow Jones Moderate Index1 | | 7.11% | | -14.71% | | -15.80% |
| - - | | Moderate Blended Benchmark2 | | 4.95% | | -11.90% | | -12.87% |
+The chart reflects the performance of Class B shares of the Portfolio. The performance of Class B shares will differ from that of the other class because of the difference in expenses paid by policyholders investing in the different share classes.
1The Dow Jones Moderate Index is a benchmark designed for asset allocation strategists who are willing to take 60% of the risk of an all equity portfolio. It is a total returns index that is a time-varying weighted average of stocks, bonds, and cash using a combination of various indices (both domestic and foreign) from Barclays and Dow Jones. The index has held an average of 58% in equities over the past three years ending in June 2009.
2The Moderate Blended Benchmark is comprised of 37% Dow Jones U.S. Total Full Cap Index, 50% Barclays Capital U.S. Universal Index and 13% Morgan Stanley Capital International Europe Australasia and Far East Index.
The Dow Jones U.S. Total Full Cap Index measures the performance of all U.S. equity securities with readily available price data.
The Barclays Capital U.S. Universal Index represents the union of the U.S. Aggregate Bond Index, the U.S. High Yield Corporate Index, the Investment Grade 144A Index, the Eurodollar Index, the U.S. Emerging Markets Index and the non-ERISA portion of the Commercial Mortgage Backed Securities Index.
The Morgan Stanley Capital International Europe, Australasia and Far East Index (“MSCI EAFE® Index”) is an unmanaged free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the U.S. and Canada.
3“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
4Inception of the Class B and Class C shares is 4/28/08. Index returns are based on an inception date of 4/28/08.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Indexes do not include fees or expenses and are not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| American Funds Moderate Allocation Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class B(a)(b) | | | | | | | | | | | |
Actual | | 0.75% | | $ | 1,000.00 | | $ | 1,081.40 | | $ | 1.81 |
Hypothetical | | 0.75% | | | 1,000.00 | | | 1,023.06 | | | 1.76 |
| | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class C(a)(b) | | | | | | | | | | | |
Actual | | 1.05% | | $ | 1,000.00 | | $ | 1,078.90 | | $ | 3.35 |
Hypothetical | | 1.05% | | | 1,000.00 | | | 1,021.57 | | | 3.26 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
(a) The annualized expense ratio shown reflects an expense limitation agreement between MetLife Advisers, LLC and the Portfolio as described in Note 3 of the Notes to Financial Statements.
(b) The annualized expense ratio reflects the expenses of both the Portfolio and the Underlying Portfolios in which it invests.
4
Met Investors Series Trust
American Funds Moderate Allocation Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Shares | | Value | |
| | | | | | |
|
| Investment Company Securities - 100.1% | |
American Funds Bond Fund (Class 1)(a) | | 14,159,982 | | $ | 140,891,822 | |
American Funds Global Bond Fund (Class 1)(a) | | 891,403 | | | 9,751,949 | |
American Funds Global Small Capitalization Fund (Class 1)(a) | | 759,246 | | | 10,796,478 | |
American Funds Growth Fund (Class 1)(a) | | 2,604,422 | | | 98,421,092 | |
American Funds Growth-Income Fund (Class 1)(a) | | 12,585,022 | | | 328,091,533 | |
American Funds High-Income Bond Fund (Class 1)(a) | | 8,498,029 | | | 79,881,474 | |
American Funds International Fund (Class 1)(a) | | 4,316,611 | | | 60,346,215 | |
American Funds New World Fund (Class 1)(a) | | 642,466 | | | 10,433,648 | |
American Funds U.S. Government/AAA - Rated Securities Fund (Class 1)(a) | | 17,795,044 | | | 217,099,536 | |
| | | | | | |
Total Investment Company Securities
(Cost $947,718,993) | | | 955,713,747 | |
| | | | | | |
| |
TOTAL INVESTMENTS - 100.1%
(Cost $947,718,993) | | | 955,713,747 | |
| | | | | | |
| |
| Other Assets and Liabilities (net) - (0.1)% | | | (512,252 | ) |
| | | | | | |
| |
| NET ASSETS - 100.0% | | $ | 955,201,495 | |
| | | | | | |
Portfolio Footnotes:
| (a) | | A Portfolio of the American Funds Insurance Series. |
See accompanying notes to financial statements
5
Met Investors Series Trust
American Funds Moderate Allocation Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1—quoted prices in active markets for identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Investment Company Securities | | $ | 955,713,747 | | $ | — | | $ | — | | $ | 955,713,747 |
| TOTAL INVESTMENTS | | $ | 955,713,747 | | $ | — | | $ | — | | $ | 955,713,747 |
See accompanying notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| American Funds Moderate Allocation Portfolio | | | |
| Assets | |
Investments, at value (a) | | $ | 955,713,747 | |
Receivable for Trust shares sold | | | 1,353,496 | |
Receivable from Manager | | | 10,292 | |
| | | | |
Total assets | | | 957,077,535 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 1,173,000 | |
Trust shares redeemed | | | 180,496 | |
Distribution and services fees—Class B | | | 68 | |
Distribution and services fees—Class C | | | 413,179 | |
Management fee | | | 75,150 | |
Administration fee | | | 2,000 | |
Custodian and accounting fees | | | 3,720 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 25,000 | |
| | | | |
Total liabilities | | | 1,876,040 | |
| | | | |
| Net Assets | | $ | 955,201,495 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 966,938,499 | |
Accumulated net realized loss | | | (22,631,448 | ) |
Unrealized appreciation on investments | | | 7,994,754 | |
Undistributed net investment income | | | 2,899,690 | |
| | | | |
Total | | $ | 955,201,495 | |
| | | | |
| Net Assets | | | | |
Class B | | $ | 366,848 | |
| | | | |
Class C | | | 954,834,647 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class B | | | 45,286 | |
| | | | |
Class C | | | 118,270,659 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class B | | $ | 8.10 | |
| | | | |
Class C | | | 8.07 | |
| | | | |
| | | | | |
(a) Investments at cost | | $ | 947,718,993 | |
See accompanying notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| American Funds Moderate Allocation Portfolio | | | |
| Investment Income | |
Dividends from Underlying Portfolios | | $ | 5,029,226 | |
| | | | |
Total investment income | | | 5,029,226 | |
| | | | |
| Expenses | | | | |
Management fee | | | 326,279 | |
Administration fees | | | 11,985 | |
Custodian and accounting fees | | | 12,138 | |
Distribution and services fees—Class B | | | 275 | |
Distribution and services fees—Class C | | | 1,793,928 | |
Audit and tax services | | | 13,890 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,298 | |
Shareholder reporting | | | 12,032 | |
Insurance | | | 451 | |
Other | | | 2,254 | |
| | | | |
Total expenses | | | 2,199,264 | |
Less expenses reimbursed by the Manager | | | (69,728 | ) |
| | | | |
Net expenses | | | 2,129,536 | |
| | | | |
Net investment income | | | 2,899,690 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | (21,957,490 | ) |
Capital gain distributions from Underlying Portfolios | | | 2,159,318 | |
| | | | |
Net realized loss on investments and capital gain distributions from Underlying Portfolios | | | (19,798,172 | ) |
| | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 83,698,765 | |
| | | | |
Net change in unrealized appreciation on investments | | | 83,698,765 | |
| | | | |
Net realized and unrealized gain on investments | | | 63,900,593 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 66,800,283 | |
| | | | |
See accompanying notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| American Funds Moderate Allocation Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Period Ended
December 31,
2008* | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 2,899,690 | | | $ | 12,810,203 | |
Net realized gain (loss) on investments and capital gains from Underlying Portfolios | | | (19,798,172 | ) | | | 293,520 | |
Net change in unrealized appreciation (depreciation) on investments | | | 83,698,765 | | | | (75,704,011 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 66,800,283 | | | | (62,600,288 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class B | | | — | | | | (3,519 | ) |
Class C | | | — | | | | (16,002,152 | ) |
From net realized gains | | | | | | | | |
Class B | | | — | | | | (3 | ) |
Class C | | | — | | | | (14,308 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | — | | | | (16,019,982 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class B | | | 266,187 | | | | 1,102,862 | |
Class C | | | 458,953,579 | | | | 545,471,962 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class B | | | — | | | | 3,522 | |
Class C | | | — | | | | 16,016,460 | |
Cost of shares repurchased | | | | | | | | |
Class B | | | (28,940 | ) | | | (912,370 | ) |
Class C | | | (20,221,426 | ) | | | (33,630,354 | ) |
| | | | | | | | |
Net increase in net assets from capital share transactions | | | 438,969,400 | | | | 528,052,082 | |
| | | | | | | | |
| Net Increase in Net Assets | | | 505,769,683 | | | | 449,431,812 | |
Net assets at beginning of period | | | 449,431,812 | | | | — | |
| | | | | | | | |
Net assets at end of period | | $ | 955,201,495 | | | $ | 449,431,812 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 2,899,690 | | | $ | — | |
| | | | | | | | |
| * | | For the period 4/28/08 (Commencement of operations) through 12/31/08. |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | |
| | |
| Selected Per Share Data for the Period Ended: | | | | | | |
| | |
| | | | | | | |
| American Funds Moderate Allocation Portfolio | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the
Period Ended
December 31,
2008(b) | |
| | | |
| Net Asset Value, Beginning of Period | | $ | 7.49 | | | $ | 10.00 | |
| | | | | | | | |
| Income (Loss) from Investment Operations: | | | | | | | | |
Net Investment Income(a) | | | 0.05 | | | | 0.11 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.56 | | | | (2.34 | ) |
| | | | | | | | |
Total From Investment Operations | | | 0.61 | | | | (2.23 | ) |
| | | | | | | | |
| Less Distributions | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | (0.28 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (0.00 | )+ |
| | | | | | | | |
Total Distributions | | | — | | | | (0.28 | ) |
| | | | | | | | |
| Net Asset Value, End of Period | | $ | 8.10 | | | $ | 7.49 | |
| | | | | | | | |
| Total Return | | | 8.14 | % | | | (22.30 | )% |
Ratio of Expenses to Average Net Assets After Reimbursement(c) | | | 0.35 | %* | | | 0.35 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates(d) | | | 0.37 | %* | | | 0.85 | %* |
Ratio of Net Investment Income to Average Net Assets(e) | | | 1.24 | %* | | | 1.75 | %* |
Portfolio Turnover Rate | | | 14.6 | % | | | 12.8 | % |
Net Assets, End of Period (in millions) | | $ | 0.4 | | | $ | 0.1 | |
| |
| | | Class C | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the
Period Ended
December 31,
2008(b) | |
| | | |
| Net Asset Value, Beginning of Period | | $ | 7.48 | | | $ | 10.00 | |
| | | | | | | | |
| Income (Loss) from Investment Operations: | | | | | | | | |
Net Investment Income(a) | | | 0.03 | | | | 0.49 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.56 | | | | (2.73 | ) |
| | | | | | | | |
Total From Investment Operations | | | 0.59 | | | | (2.24 | ) |
| | | | | | | | |
| Less Distributions | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | (0.28 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (0.00 | )+ |
| | | | | | | | |
Total Distributions | | | — | | | | (0.28 | ) |
| | | | | | | | |
| Net Asset Value, End of Period | | $ | 8.07 | | | $ | 7.48 | |
| | | | | | | | |
| Total Return | | | 7.89 | % | | | (22.40 | )% |
Ratio of Expenses to Average Net Assets After Reimbursement(c) | | | 0.65 | %* | | | 0.65 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates(d) | | | 0.67 | %* | | | 0.70 | %* |
Ratio of Net Investment Income to Average Net Assets(e) | | | 0.89 | %* | | | 8.74 | %* |
Portfolio Turnover Rate | | | 14.6 | % | | | 12.8 | % |
Net Assets, End of Period (in millions) | | $ | 955 | | | $ | 449.3 | |
| + | | Rounds to less than $0.005 per share. |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—04/28/2008. |
| (c) | | The ratio of operating expenses to average net assets does not include expenses of the Underlying Portfolios in which the Portfolio invests. |
| (d) | | See Note 3 of the Notes to Financial Statements. |
| (e) | | Recognition of net investment income by the Portfolio is affected by the timing of the declaration of dividends by the Underlying Portfolios in which it invests. |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is American Funds Moderate Allocation Portfolio (the “Portfolio”), which is non-diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class B and C Shares are currently offered by the Portfolio. Class A and E Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
The Portfolio is designed on established principles of asset allocation and risk tolerance. The Portfolio will invest substantially all of its assets in certain funds of the American Funds Insurance Series (“AFIS”), which invest either in equity securities or fixed income securities, as applicable (“Underlying Portfolios”). AFIS is an open-end diversified investment management company advised by Capital Research and Management Company (“CRMC”), an indirect, wholly owned subsidiary of The Capital Group Companies, Inc.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Investments in the Underlying Portfolios are valued at their closing daily net asset value. The net asset value of the Portfolio is calculated based on the net asset values of the Underlying Portfolios in which the Portfolio invests. For information about the use of fair value pricing by the Underlying Portfolios that are funds of AFIS, please refer to the prospectus of the Underlying Portfolios.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes.
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Income and capital gain distributions from the Underlying Portfolios are recorded on the ex-dividend date.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2008 tax year remains subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement (the “Management Agreement”) with the Manager for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board of Trustees (the “Board”) and has overall responsibility for the general management and administration of the Trust.
11
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $326,279 | | 0.10 | % | | ALL |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Manager has entered into an expense limitation agreement with the Trust (“Expense Limitation Agreement”) in the interest of limiting expenses of the Portfolio of the Trust. The Expense Limitation Agreement shall continue in effect with respect to the Portfolio until April 30, 2010. Pursuant to that Expense Limitation Agreement, the Manager has agreed to waive or limit its fees and to assume other expenses so that the total annual operating expenses of the Portfolio other than interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with accounting principles generally accepted in the United States of America, other extraordinary expenses not incurred in the ordinary course of the Portfolio’s business, and Underlying Portfolios’ fees and expenses, but including amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act, are limited to the following expense ratios as a percentage of the Portfolio’s average daily net assets:
| | | | | | | | | | |
Maximum Expense Ratio under current
Expense Limitation Agreement | | | Expenses Deferred in |
| | 2008 | | 2009 |
| | Subject to repayment until
December 31, |
| Class B | | | Class C | | | 2013 | | 2014 |
| | | |
| 0.35 | % | | 0.65 | % | | $ | 79,192 | | $ | 69,728 |
The expenses reimbursed for the period ended June 30, 2009 are shown as expenses reimbursed in the Statement of Operations of the Portfolio.
If in any year in which the Management Agreement is still in effect, the estimated aggregate portfolio operating expenses of the Portfolio for the fiscal year are less than the Maximum Expense Ratios for that year, subject to approval by the Trust’s Board, the Manager shall be entitled to reimbursement by the Portfolio to the extent that the charge does not cause the expenses in such subsequent year to exceed the Maximum Expense Ratios as stated above. The Portfolio is not obligated to repay any expense paid by the Manager more than five years after the end of the fiscal year in which such expense was incurred.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class B and Class C Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B and Class C distribution plans provide that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 1.00%, respectively, of the average net assets of the Portfolio attributable to its Class B and Class C Shares in respect to activities primarily intended to result in the sale of Class B and Class C Shares. However, under the Class B and Class C distribution agreements, payments to the Distributor for activities pursuant to the Class B and Class C distribution plans are currently limited to payments at an annual rate equal to 0.25% and 0.55% of average daily net assets of the Portfolio, attributable to its Class B and Class C Shares, respectively.
Under terms of the Class B and Class C distribution plans and distribution agreements, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B and Class C Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
12
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
in Shares
Outstanding | | Ending
Shares |
| | | | | | |
Class B | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 13,369 | | 35,724 | | — | | (3,807 | ) | | 31,917 | | 45,286 |
04/28/2008-12/31/2008 | | — | | 112,605 | | 472 | | (99,708 | ) | | 13,369 | | 13,369 |
| | | | | | |
Class C | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 60,077,943 | | 60,908,432 | | — | | (2,715,716 | ) | | 58,192,716 | | 118,270,659 |
04/28/2008-12/31/2008 | | — | | 61,995,367 | | 2,149,861 | | (4,067,285 | ) | | 60,077,943 | | 60,077,943 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 541,387,539 | | $ | — | | $ | 97,099,163 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Appreciation |
| | | |
| $947,718,993 | | $ | 18,476,996 | | $ | (10,482,242 | ) | | $ | 7,994,754 |
6. Distributions to Shareholders
The tax character of distributions paid for the year ended December 31, 2008 was as follows:
| | | | | | |
Ordinary Income | | Long-Term Capital Gains | | Total |
2008 | | 2008 | | 2008 |
| | |
| $13,274,050 | | $ | 2,745,932 | | $ | 16,019,982 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards | | Total | |
| | | | |
| $— | | $ | — | | $ | (78,537,287 | ) | | $ | — | | $ | (78,537,287 | ) |
7. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
8. Market, Credit and Counterparty Risk
In the normal course of business, the Underlying Portfolios, in which the Portfolio invests, invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
8. Market, Credit and Counterparty Risk - continued
securities held by the Underlying Portfolios may decline in response to certain events, including those directly involving the companies whose securities are owned by the Underlying Portfolios; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Underlying Portfolios may be exposed to counterparty risk, or the risk that an entity with which the Underlying Portfolios have unsettled or open transactions may default. Financial assets, which potentially expose the Underlying Portfolios to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Underlying Portfolios’ exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Underlying Portfolios’ Statements of Assets and Liabilities.
9. Transactions in Securities of Affiliated Issuers
Transactions in the Underlying Portfolios during the period ended June 30, 2009 in which the Portfolio had ownership of at least 5% of the outstanding voting securities at the end of the period are as follows:
| | | | | | | | | |
Security Description | | Number of shares
held at December 31,
2008 | | Shares purchased
during the period | | Shares sold
during the period | | | Number of shares
held at June 30,
2009 |
American Funds Global Bond Fund (Class 1) | | 2,657,742 | | 1,717,373 | | (3,483,712 | ) | | 891,403 |
American Funds Growth-Income Fund (Class 1) | | 5,520,650 | | 7,064,372 | | — | | | 12,585,022 |
American Funds High-Income Bond Fund (Class 1) | | 5,820,787 | | 5,144,808 | | (2,467,566 | ) | | 8,498,029 |
American Funds U.S. Government/AAA—Rated Securities Fund (Class 1) | | 8,524,649 | | 9,577,719 | | (307,324 | ) | | 17,795,044 |
| | | | | | | | | | | | | |
Security Description | | Net Realized Gain
(Loss) on Investments
during the period | | | Capital
Gain Distributions
from Affiliates
during the period | | Income earned
from Affiliates
during the period | | Ending Value |
American Funds Global Bond Fund (Class 1) | | $ | (904,541 | ) | | $ | — | | $ | 31,222 | | $ | 9,751,949 |
American Funds Growth-Income Fund (Class 1) | | | (6,320,086 | ) | | | — | | | 1,332,840 | | | 328,091,533 |
American Funds High-Income Bond Fund (Class 1) | | | — | | | | — | | | 950,934 | | | 79,881,474 |
American Funds U.S. Government/AAA—Rated Securities Fund (Class 1) | | | 144,169 | | | | 1,921,865 | | | 1,085,968 | | | 217,099,536 |
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
15
| | |
| Batterymarch Growth and Income Portfolio | | For the period ended 6/30/09 |
| Managed by Batterymarch Financial Management, Inc. | | |
Portfolio Manager Commentary
Performance
During the period ended June 30, 2009, the Portfolio had a return of 0.76% for Class A Shares versus 3.16% for its benchmark, the S&P 500® Index.
Market Environment/Conditions
US equity market performance continued to reflect uncertainty regarding the world economy in the first quarter of 2009. Investor questions about the condition of the US financial system and the impact of government intervention led to broad declines early in the quarter. Protectionist rhetoric added to investor concerns and helped to keep market volatility at elevated levels.
A rebound was sparked in early March with financial stocks leading the pack. Across all 20 sectors within which Batterymarch views the market, returns rotated from sharply negative to positive between February and March. From the beginning of the rally on March 9th through the equity market peak on June 12th, the S&P 500® gained 40.8%—marking its third largest bounce over the last 100 years. The reversal that characterized the start of the rally continued through much of the second quarter; those stocks that suffered most during the 2008 market decline were most rewarded in the rally. The narrow breadth of the rally was reflected in our factors’ performance, where only deep value factors such as price-to-book were effective.
Investors were buoyed in April and May by marginally better announcements covering corporate earnings, employment, housing and manufacturing statistics. However, by mid-June optimism began to wane and the markets started to trade sideways as conflicting data about the health of the economy continued to surface.
Technical indicators were largely supportive of the market advances. However, fundamental uncertainty regarding the health of the dollar and the US economy overall, plus the potential for sweeping changes in public policy cast a pall over market opinion. This contrast in investor sentiment coupled with an all-time high in analyst estimate dispersion kept market performance largely range bound for the last few weeks of the quarter.
Portfolio Review/Current Positioning
The Portfolio underperformed its benchmark during the period. Relative outperformance in the first quarter was erased as the rally which began in early March continued well into the second quarter.
Batterymarch’s preference for high-quality stocks benefited the Portfolio in the first quarter when an underweight to financials-banks was a strong contributor, but detracted from performance during the second quarter. Ordinarily, we expect that stocks with the strongest fundamentals will be rewarded. During this rally, however, lower-quality names with high debt levels and poor prior performance rebounded sharply, outperforming more fundamentally sound stocks by huge margins. Some of the names which had been the biggest contributors to relative performance early in the year became the largest detractors. The extent of this disconnect, coupled with dramatic
shifts in market sentiment, had a significant impact on our multidimensional stock model, which struggled particularly at the height of the rally in April.
While overall stock selection detracted from relative performance, sector allocation contributed during the period, especially the overweight in software & services and the underweight in Industrials.
Although investors have recently favored low-quality stocks, we continue to believe that the market will reward fundamentally sound stocks over the longer term. While we have muted our active positions during the rally to manage risk exposures, the Portfolio continues to be invested in high-quality stocks that rank attractively relative to their peers and the characteristics of the Portfolio continue to compare favorably to the benchmark.
Yu-Nien (Charles) Ko, CFA and Stephen A. Lanzendorf, CFA
Senior Portfolio Managers and Co-Directors of the U.S. Investment team
Batterymarch Financial Management, Inc.
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
1
| | |
| Batterymarch Growth and Income Portfolio | | For the period ended 6/30/09 |
| Managed by Batterymarch Financial Management, Inc. | | |
Portfolio Manager Commentary (continued)
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
Exxon Mobil Corp. | | 3.65% |
Microsoft Corp. | | 2.67% |
International Business Machines Corp. | | 2.40% |
AT&T, Inc. | | 2.08% |
Apple, Inc. | | 2.01% |
Chevron Corp. | | 1.86% |
Hewlett-Packard Co. | | 1.75% |
Johnson & Johnson | | 1.68% |
Verizon Communications, Inc. | | 1.67% |
Cisco Systems, Inc. | | 1.63% |
Portfolio Composition (% of portfolio market value)
As of 6/30/09
2
| | |
| Batterymarch Growth and Income Portfolio | | For the period ended 6/30/09 |
| Managed by Batterymarch Financial Management, Inc. | | |
Portfolio Manager Commentary (continued)
Batterymarch Growth and Income Portfolio managed by
Batterymarch Financial Management, Inc. vs. S&P 500® Index1
Growth Based on $10,000+
| | | | | | | | | | | | |
| | | | | Average Annual Return2 (for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | 3 Year | | 5 Year | | 10 Year |
| — | | Batterymarch Growth and Income Portfolio—Class A | | 0.76% | | -29.39% | | -8.53% | | -3.03% | | -3.43% |
| - - | | S&P 500® Index1 | | 3.16% | | -26.21% | | -8.22% | | -2.24% | | -2.22% |
+The chart reflects the performance of Class A shares of the Portfolio.
1The S&P 500® Index is an unmanaged index consisting of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value weighted index (stock price times number of shares outstanding), with each stock’s weight in the Index proportionate to its market value.
2“Average Annual Return” is calculated including reinvestment of all income dividends and capital gains distributions.
Inception of Class A shares is 5/16/83. Index returns are based on an inception date of 5/16/83. On May 1, 2006, the assets of The Travelers Growth and Income Stock Account for Variable Annuities were transferred to the Portfolio. The historical performance prior to this period is the performance of the Portfolio’s predecessor insurance company separate account managed by an
entity which became an affiliate of the Advisor in December 2005 using the same investment objective and similar investment strategies as the Portfolio. The separate account’s performance reflects all expenses including Contract charges since such charges were not separately stated from other account expenses. Subsequent to May 1, 2006, the Portfolio’s performance will not reflect Contract charges. If Contract charges had been excluded from the performance calculations, the performance numbers would have been higher. Prior to May 1, 2006, the Portfolio was not registered under the Investment Company Act of 1940 (“1940 Act”) and was not subject to certain investment limitations, diversification requirements, and other restrictions imposed by the 1940 Act and the Internal Revenue Code, which, if applicable, may have adversely affected its performance.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Index does not include fees or expenses and is not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| Batterymarch Growth and Income Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.65% | | $ | 1,000.00 | | $ | 1,007.60 | | $ | 3.24 |
Hypothetical | | 0.65% | | | 1,000.00 | | | 1,021.57 | | | 3.26 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
4
Met Investors Series Trust
Batterymarch Growth and Income Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | |
| Common Stocks - 99.8% | | | | | |
| Aerospace & Defense - 2.9% |
Boeing Co. (The) | | 12,741 | | $ | 541,493 |
General Dynamics Corp. | | 19,916 | | | 1,103,147 |
Honeywell International, Inc. | | 14,666 | | | 460,512 |
Lockheed Martin Corp. | | 21,063 | | | 1,698,731 |
Northrop Grumman Corp. | | 8,000 | | | 365,440 |
Raytheon Co. | | 31,916 | | | 1,418,028 |
United Technologies Corp. | | 19,341 | | | 1,004,958 |
| | | | | |
| | | | | 6,592,309 |
| | | | | |
| Air Freight & Logistics - 0.3% |
United Parcel Service, Inc. - Class B | | 11,210 | | | 560,388 |
| | | | | |
| Beverages - 1.4% |
Coca-Cola Co. | | 28,350 | | | 1,360,517 |
Coca-Cola Enterprises, Inc. | | 22,300 | | | 371,295 |
PepsiCo, Inc. | | 26,092 | | | 1,434,016 |
| | | | | |
| | | | | 3,165,828 |
| | | | | |
| Biotechnology - 2.7% |
Amgen, Inc.* | | 41,541 | | | 2,199,180 |
Biogen Idec, Inc.* | | 16,500 | | | 744,975 |
Celgene Corp.* | | 8,900 | | | 425,776 |
Cephalon, Inc.*(a) | | 20,100 | | | 1,138,665 |
Gilead Sciences, Inc.* | | 35,926 | | | 1,682,774 |
| | | | | |
| | | | | 6,191,370 |
| | | | | |
| Capital Markets - 4.1% |
Affiliated Managers Group, Inc.* | | 9,900 | | | 576,081 |
Ameriprise Financial, Inc. | | 37,382 | | | 907,261 |
Bank of New York Mellon Corp. | | 22,187 | | | 650,301 |
Charles Schwab Corp. (The) | | 65,425 | | | 1,147,555 |
Goldman Sachs Group, Inc. (The) | | 14,111 | | | 2,080,526 |
Jefferies Group, Inc.* | | 37,020 | | | 789,637 |
Morgan Stanley | | 46,712 | | | 1,331,759 |
State Street Corp. | | 14,790 | | | 698,088 |
TD Ameritrade Holding Corp.* | | 55,960 | | | 981,538 |
| | | | | |
| | | | | 9,162,746 |
| | | | | |
| Chemicals - 1.1% |
Dow Chemical Co. (The) | | 39,100 | | | 631,074 |
E.I. du Pont de Nemours & Co. | | 17,196 | | | 440,562 |
Lubrizol Corp. (The) | | 13,200 | | | 624,492 |
Monsanto Co. | | 10,939 | | | 813,205 |
| | | | | |
| | | | | 2,509,333 |
| | | | | |
| Commercial & Professional Services - 0.1% |
Brink’s Co. (The) | | 11,000 | | | 319,330 |
| | | | | |
| Commercial Banks - 1.5% |
Cullen/Frost Bankers, Inc. | | 22,300 | | | 1,028,476 |
U.S. Bancorp | | 27,979 | | | 501,384 |
Wells Fargo & Co. | | 81,044 | | | 1,966,127 |
| | | | | |
| | | | | 3,495,987 |
| | | | | |
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Communications Equipment - 2.6% |
Cisco Systems, Inc.* | | 197,204 | | $ | 3,675,883 |
Motorola, Inc. | | 107,400 | | | 712,062 |
QUALCOMM, Inc. | | 32,952 | | | 1,489,430 |
| | | | | |
| | | | | 5,877,375 |
| | | | | |
| Computers & Peripherals - 7.3% |
Apple, Inc.* | | 31,862 | | | 4,538,104 |
Dell, Inc.* | | 76,704 | | | 1,053,146 |
EMC Corp.* | | 8,500 | | | 111,350 |
Hewlett-Packard Co. | | 102,306 | | | 3,954,127 |
International Business Machines Corp. | | 51,835 | | | 5,412,611 |
NCR Corp.* | | 39,600 | | | 468,468 |
Seagate Technology | | 86,800 | | | 907,928 |
| | | | | |
| | | | | 16,445,734 |
| | | | | |
| Construction & Engineering - 1.7% |
Fluor Corp. | | 29,900 | | | 1,533,571 |
KBR, Inc. | | 35,500 | | | 654,620 |
Shaw Group, Inc. (The)* | | 36,450 | | | 999,095 |
URS Corp.* | | 12,100 | | | 599,192 |
| | | | | |
| | | | | 3,786,478 |
| | | | | |
| Consumer Finance - 0.4% |
American Express Co. | | 43,250 | | | 1,005,130 |
| | | | | |
| Containers & Packaging - 0.0% |
Pactiv Corp.* | | 4,700 | | | 101,990 |
| | | | | |
| Diversified Consumer Services - 1.1% |
Apollo Group, Inc. - Class A* | | 22,540 | | | 1,603,045 |
ITT Educational Services, Inc.*(a) | | 8,100 | | | 815,346 |
| | | | | |
| | | | | 2,418,391 |
| | | | | |
| Diversified Financial Services - 2.5% |
Bank of America Corp. | | 161,487 | | | 2,131,628 |
JPMorgan Chase & Co. | | 105,953 | | | 3,614,057 |
| | | | | |
| | | | | 5,745,685 |
| | | | | |
| Diversified Telecommunication Services - 4.0% |
AT&T, Inc. | | 188,923 | | | 4,692,847 |
Embarq Corp. | | 15,710 | | | 660,763 |
Verizon Communications, Inc. | | 122,895 | | | 3,776,563 |
| | | | | |
| | | | | 9,130,173 |
| | | | | |
| Electric Utilities - 1.8% |
DPL, Inc.(a) | | 34,600 | | | 801,682 |
Duke Energy Corp. | | 25,600 | | | 373,504 |
Edison International | | 51,750 | | | 1,628,055 |
Exelon Corp. | | 10,560 | | | 540,778 |
FPL Group, Inc. | | 13,400 | | | 761,924 |
| | | | | |
| | | | | 4,105,943 |
| | | | | |
| Electrical Equipment - 0.2% |
Emerson Electric Co. | | 15,900 | | | 515,160 |
| | | | | |
See accompanying notes to financial statements
5
Met Investors Series Trust
Batterymarch Growth and Income Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Electronic Equipment, Instruments & Components - 0.7% |
Amphenol Corp. - Class A | | 35,500 | | $ | 1,123,220 |
Flextronics International, Ltd.* | | 25,300 | | | 103,983 |
Ingram Micro, Inc. - Class A* | | 24,000 | | | 420,000 |
| | | | | |
| | | | | 1,647,203 |
| | | | | |
| Energy Equipment & Services - 1.8% |
Diamond Offshore Drilling, Inc.(a) | | 9,200 | | | 764,060 |
National-Oilwell Varco, Inc.* | | 22,900 | | | 747,914 |
Noble Corp. | | 23,600 | | | 713,900 |
Oil States International, Inc.* | | 23,800 | | | 576,198 |
Schlumberger, Ltd. | | 21,486 | | | 1,162,607 |
| | | | | |
| | | | | 3,964,679 |
| | | | | |
| Food & Staples Retailing - 2.9% |
BJ’s Wholesale Club, Inc.*(a) | | 23,308 | | | 751,217 |
Costco Wholesale Corp. | | 7,327 | | | 334,844 |
CVS Caremark Corp. | | 29,500 | | | 940,165 |
Kroger Co. (The) | | 61,200 | | | 1,349,460 |
Wal-Mart Stores, Inc. | | 66,885 | | | 3,239,909 |
| | | | | |
| | | | | 6,615,595 |
| | | | | |
| Food Products - 1.6% |
Archer-Daniels-Midland Co. | | 26,200 | | | 701,374 |
ConAgra Foods, Inc. | | 35,800 | | | 682,348 |
Dean Foods Co.* | | 21,920 | | | 420,645 |
Kraft Foods, Inc. - Class A | | 29,200 | | | 739,928 |
Unilever N.V. | | 42,210 | | | 1,020,638 |
| | | | | |
| | | | | 3,564,933 |
| | | | | |
| Health Care Equipment & Supplies - 1.8% |
Baxter International, Inc. | | 18,400 | | | 974,464 |
Beckman Coulter, Inc.(a) | | 11,100 | | | 634,254 |
Covidien Plc | | 22,776 | | | 852,733 |
Hospira, Inc.* | | 24,100 | | | 928,332 |
Medtronic, Inc. | | 18,500 | | | 645,465 |
| | | | | |
| | | | | 4,035,248 |
| | | | | |
| Health Care Providers & Services - 2.1% |
AmerisourceBergen Corp. | | 28,200 | | | 500,268 |
Coventry Health Care, Inc.* | | 45,790 | | | 856,731 |
Humana, Inc.* | | 17,550 | | | 566,163 |
Medco Health Solutions, Inc.* | | 13,800 | | | 629,418 |
UnitedHealth Group, Inc. | | 46,075 | | | 1,150,953 |
WellPoint, Inc.* | | 19,200 | | | 977,088 |
| | | | | |
| | | | | 4,680,621 |
| | | | | |
| Hotels, Restaurants & Leisure - 1.5% |
Darden Restaurants, Inc. | | 24,240 | | | 799,435 |
McDonald’s Corp. | | 43,158 | | | 2,481,154 |
| | | | | |
| | | | | 3,280,589 |
| | | | | |
| Household Durables - 1.1% |
Garmin, Ltd.(a) | | 41,249 | | | 982,551 |
Mohawk Industries, Inc.*(a) | | 18,900 | | | 674,352 |
Newell Rubbermaid, Inc. | | 73,340 | | | 763,470 |
| | | | | |
| | | | | 2,420,373 |
| | | | | |
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Household Products - 1.6% |
Colgate-Palmolive Co.(a) | | 10,060 | | $ | 711,645 |
Procter & Gamble Co. (The) | | 58,462 | | | 2,987,408 |
| | | | | |
| | | | | 3,699,053 |
| | | | | |
| Independent Power Producers & Energy Traders - 0.2% |
Mirant Corp.* | | 34,000 | | | 535,160 |
| | | | | |
| Industrial Conglomerates - 1.7% |
3M Co. | | 14,061 | | | 845,066 |
General Electric Co. | | 164,904 | | | 1,932,675 |
Tyco International, Ltd. | | 37,100 | | | 963,858 |
| | | | | |
| | | | | 3,741,599 |
| | | | | |
| Insurance - 2.6% |
Aegon N.V. | | 34,210 | | | 210,734 |
Aflac, Inc. | | 21,240 | | | 660,351 |
American Financial Group, Inc. | | 33,100 | | | 714,298 |
Arthur J. Gallagher & Co. | | 18,300 | | | 390,522 |
Principal Financial Group, Inc. | | 33,115 | | | 623,887 |
Progressive Corp. (The)* | | 77,520 | | | 1,171,327 |
Prudential Financial, Inc. | | 17,100 | | | 636,462 |
Torchmark Corp. | | 27,420 | | | 1,015,637 |
Travelers Cos., Inc. (The) | | 11,700 | | | 480,168 |
| | | | | |
| | | | | 5,903,386 |
| | | | | |
| Internet Software & Services - 1.2% |
eBay, Inc.* | | 40,000 | | | 685,200 |
Google, Inc. - Class A* | | 4,900 | | | 2,065,791 |
| | | | | |
| | | | | 2,750,991 |
| | | | | |
| IT Services - 1.7% |
Affiliated Computer Services, Inc. - Class A* | | 1,900 | | | 84,398 |
Amdocs, Ltd.* | | 29,650 | | | 635,992 |
Automatic Data Processing, Inc. | | 5,300 | | | 187,832 |
Computer Sciences Corp.* | | 32,400 | | | 1,435,320 |
Hewitt Associates, Inc. - Class A*(a) | | 26,400 | | | 786,192 |
Western Union Co. | | 45,430 | | | 745,052 |
| | | | | |
| | | | | 3,874,786 |
| | | | | |
| Machinery - 0.7% |
Joy Global, Inc.(a) | | 15,220 | | | 543,658 |
Navistar International Corp.* | | 21,300 | | | 928,680 |
| | | | | |
| | | | | 1,472,338 |
| | | | | |
| Media - 1.6% |
Comcast Corp. - Class A | | 51,904 | | | 752,089 |
DISH Network Corp. - Class A* | | 45,000 | | | 729,450 |
Time Warner, Inc. | | 19,645 | | | 494,857 |
Viacom, Inc. - Class B* | | 31,240 | | | 709,148 |
Walt Disney Co. (The) | | 38,130 | | | 889,573 |
| | | | | |
| | | | | 3,575,117 |
| | | | | |
| Metals & Mining - 0.7% |
Allegheny Technologies, Inc. | | 19,372 | | | 676,664 |
Cliffs Natural Resources, Inc. | | 38,700 | | | 946,989 |
| | | | | |
| | | | | 1,623,653 |
| | | | | |
See accompanying notes to financial statements
6
Met Investors Series Trust
Batterymarch Growth and Income Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Multi-Utilities - 1.4% |
Dominion Resources, Inc. | | 33,300 | | $ | 1,112,886 |
PG&E Corp. | | 25,900 | | | 995,596 |
Sempra Energy | | 19,900 | | | 987,637 |
| | | | | |
| | | | | 3,096,119 |
| | | | | |
| Multiline Retail - 1.0% |
Dollar Tree, Inc.*(a) | | 13,200 | | | 555,720 |
Family Dollar Stores, Inc.(a) | | 30,200 | | | 854,660 |
Target Corp. | | 24,217 | | | 955,845 |
| | | | | |
| | | | | 2,366,225 |
| | | | | |
| Oil, Gas & Consumable Fuels - 10.7% |
Anadarko Petroleum Corp. | | 16,990 | | | 771,176 |
Apache Corp. | | 17,500 | | | 1,262,625 |
Canadian Natural Resources, Ltd. | | 27,700 | | | 1,453,973 |
Chevron Corp. | | 63,439 | | | 4,202,834 |
ConocoPhillips | | 59,058 | | | 2,483,979 |
Devon Energy Corp. | | 9,375 | | | 510,938 |
EnCana Corp. | | 13,950 | | | 690,106 |
Exxon Mobil Corp. | | 118,054 | | | 8,253,155 |
Hess Corp. | | 8,240 | | | 442,900 |
Marathon Oil Corp. | | 29,400 | | | 885,822 |
Murphy Oil Corp. | | 10,800 | | | 586,656 |
Occidental Petroleum Corp. | | 19,466 | | | 1,281,057 |
Talisman Energy, Inc. | | 47,550 | | | 679,490 |
Valero Energy Corp. | | 39,200 | | | 662,088 |
| | | | | |
| | | | | 24,166,799 |
| | | | | |
| Paper & Forest Products - 0.7% |
International Paper Co. | | 98,260 | | | 1,486,674 |
| | | | | |
| Pharmaceuticals - 8.4% |
Abbott Laboratories | | 27,579 | | | 1,297,316 |
Bristol-Myers Squibb Co. | | 100,375 | | | 2,038,616 |
Eli Lilly & Co. | | 22,976 | | | 795,889 |
Endo Pharmaceuticals Holdings, Inc.*(a) | | 70,700 | | | 1,266,944 |
Johnson & Johnson | | 66,854 | | | 3,797,307 |
Merck & Co., Inc. | | 70,208 | | | 1,963,016 |
Pfizer, Inc.(a) | | 214,906 | | | 3,223,590 |
Schering-Plough Corp. | | 83,400 | | | 2,095,008 |
Watson Pharmaceuticals, Inc.*(a) | | 44,000 | | | 1,482,360 |
Wyeth | | 22,051 | | | 1,000,895 |
| | | | | |
| | | | | 18,960,941 |
| | | | | |
| Real Estate Investment Trusts (REITs) - 0.4% |
Liberty Property Trust | | 22,600 | | | 520,704 |
Plum Creek Timber Co., Inc.(a) | | 9,000 | | | 268,020 |
| | | | | |
| | | | | 788,724 |
| | | | | |
| Real Estate Management & Development - 0.3% |
Brookfield Properties Corp.(a) | | 82,100 | | | 654,337 |
| | | | | |
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Road & Rail - 1.5% |
Burlington Northern Santa Fe Corp. | | 14,600 | | $ | 1,073,684 |
CSX Corp. | | 17,000 | | | 588,710 |
Union Pacific Corp. | | 31,600 | | | 1,645,096 |
| | | | | |
| | | | | 3,307,490 |
| | | | | |
| Semiconductors & Semiconductor Equipment - 2.0% |
Intel Corp. | | 158,369 | | | 2,621,007 |
LSI Corp.* | | 87,840 | | | 400,551 |
Marvell Technology Group, Ltd.* | | 61,439 | | | 715,150 |
Texas Instruments, Inc. | | 25,574 | | | 544,726 |
Xilinx, Inc.(a) | | 11,100 | | | 227,106 |
| | | | | |
| | | | | 4,508,540 |
| | | | | |
| Software - 5.7% |
BMC Software, Inc.* | | 11,300 | | | 381,827 |
McAfee, Inc.*(a) | | 21,760 | | | 918,054 |
Microsoft Corp. | | 253,390 | | | 6,023,080 |
Oracle Corp. | | 151,900 | | | 3,253,698 |
Symantec Corp.* | | 77,140 | | | 1,200,299 |
Synopsys, Inc.* | | 54,190 | | | 1,057,247 |
| | | | | |
| | | | | 12,834,205 |
| | | | | |
| Specialty Retail - 2.3% |
Aeropostale, Inc.*(a) | | 14,700 | | | 503,769 |
Home Depot, Inc. (The)(a) | | 44,128 | | | 1,042,745 |
Lowe’s Cos., Inc. | | 57,400 | | | 1,114,134 |
PetSmart, Inc. | | 47,100 | | | 1,010,766 |
Ross Stores, Inc.(a) | | 17,400 | | | 671,640 |
TJX Cos., Inc. (The) | | 28,600 | | | 899,756 |
| | | | | |
| | | | | 5,242,810 |
| | | | | |
| Textiles, Apparel & Luxury Goods - 1.2% |
Coach, Inc. | | 27,570 | | | 741,081 |
NIKE, Inc. - Class B | | 12,660 | | | 655,535 |
Polo Ralph Lauren Corp.(a) | | 22,750 | | | 1,218,035 |
| | | | | |
| | | | | 2,614,651 |
| | | | | |
| Thrifts & Mortgage Finance - 1.0% |
Capitol Federal Financial | | 6,900 | | | 264,477 |
Hudson City Bancorp, Inc. | | 158,100 | | | 2,101,149 |
| | | | | |
| | | | | 2,365,626 |
| | | | | |
| Tobacco - 1.4% |
Altria Group, Inc.(a) | | 85,625 | | | 1,403,394 |
Philip Morris International, Inc. | | 41,688 | | | 1,818,430 |
| | | | | |
| | | | | 3,221,824 |
| | | | | |
| Wireless Telecommunication Services - 0.6% |
Sprint Nextel Corp.* | | 300,560 | | | 1,445,694 |
| | | | | |
Total Common Stocks
(Cost $252,616,076) | | | | | 225,575,333 |
| | | | | |
See accompanying notes to financial statements
7
Met Investors Series Trust
Batterymarch Growth and Income Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | | |
Security
Description | | Shares/Par
Amount | | Value | |
| | | | | | | |
|
| Short-Term Investments - 6.9% | |
| Mutual Funds - 6.6% | |
State Street Navigator Securities Lending Trust Prime Portfolio(b) | | | 14,836,327 | | $ | 14,836,327 | |
| | | | | | | |
| Repurchase Agreement - 0.3% | |
State Street Bank & Trust Co.,
Repurchase Agreement,
dated 06/30/09 at 0.010% to be repurchased at $675,000
on 07/01/09 collateralized by
$690,000 FNMA at 1.722% due 05/10/11
with a value of $693,450. | | $ | 675,000 | | | 675,000 | |
| | | | | | | |
| Total Short-Term Investments (Cost $15,511,327) | | | | | | 15,511,327 | |
| | | | | | | |
| | |
TOTAL INVESTMENTS - 106.7%
(Cost $268,127,403) | | | | | | 241,086,660 | |
| | | | | | | |
| |
| Other Assets and Liabilities (net) - (6.7)% | | | (15,133,515 | ) |
| | | | | | | |
| | |
| NET ASSETS - 100.0% | | | | | $ | 225,953,145 | |
| | | | | | | |
Portfolio Footnotes:
| * | | Non-income producing security. |
| (a) | | All or a portion of security is on loan. |
| (b) | | Represents investment of collateral received from securities lending transactions. |
FNMA - Federal National Mortgage Association
See accompanying notes to financial statements
8
Met Investors Series Trust
Batterymarch Growth and Income Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
| Level 1—quoted | | prices in active markets for identical securities |
| Level 2—other | | significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.) |
| Level 3—significant | | unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments) |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Common Stocks | | | | | | | | | | | | |
Aerospace & Defense | | $ | 6,592,309 | | $ | — | | $ | — | | $ | 6,592,309 |
Air Freight & Logistics | | | 560,388 | | | — | | | — | | | 560,388 |
Beverages | | | 3,165,828 | | | — | | | — | | | 3,165,828 |
Biotechnology | | | 6,191,370 | | | — | | | — | | | 6,191,370 |
Capital Markets | | | 9,162,746 | | | — | | | — | | | 9,162,746 |
Chemicals | | | 2,509,333 | | | — | | | — | | | 2,509,333 |
Commercial & Professional Services | | | 319,330 | | | — | | | — | | | 319,330 |
Commercial Banks | | | 3,495,987 | | | — | | | — | | | 3,495,987 |
Communications Equipment | | | 5,877,375 | | | — | | | — | | | 5,877,375 |
Computers & Peripherals | | | 16,445,734 | | | — | | | — | | | 16,445,734 |
Construction & Engineering | | | 3,786,478 | | | — | | | — | | | 3,786,478 |
Consumer Finance | | | 1,005,130 | | | — | | | — | | | 1,005,130 |
Containers & Packaging | | | 101,990 | | | — | | | — | | | 101,990 |
Diversified Consumer Services | | | 2,418,391 | | | — | | | — | | | 2,418,391 |
Diversified Financial Services | | | 5,745,685 | | | — | | | — | | | 5,745,685 |
Diversified Telecommunication Services | | | 9,130,173 | | | — | | | — | | | 9,130,173 |
Electric Utilities | | | 4,105,943 | | | — | | | — | | | 4,105,943 |
Electrical Equipment | | | 515,160 | | | — | | | — | | | 515,160 |
Electronic Equipment, Instruments & Components | | | 1,647,203 | | | — | | | — | | | 1,647,203 |
Energy Equipment & Services | | | 3,964,679 | | | — | | | — | | | 3,964,679 |
Food & Staples Retailing | | | 6,615,595 | | | — | | | — | | | 6,615,595 |
Food Products | | | 3,564,933 | | | — | | | — | | | 3,564,933 |
Health Care Equipment & Supplies | | | 4,035,248 | | | — | | | — | | | 4,035,248 |
Health Care Providers & Services | | | 4,680,621 | | | — | | | — | | | 4,680,621 |
Hotels, Restaurants & Leisure | | | 3,280,589 | | | — | | | — | | | 3,280,589 |
Household Durables | | | 2,420,373 | | | — | | | — | | | 2,420,373 |
Household Products | | | 3,699,053 | | | — | | | — | | | 3,699,053 |
Independent Power Producers & Energy Traders | | | 535,160 | | | — | | | — | | | 535,160 |
Industrial Conglomerates | | | 3,741,599 | | | — | | | — | | | 3,741,599 |
Insurance | | | 5,903,386 | | | — | | | — | | | 5,903,386 |
Internet Software & Services | | | 2,750,991 | | | — | | | — | | | 2,750,991 |
IT Services | | | 3,874,786 | | | — | | | — | | | 3,874,786 |
Machinery | | | 1,472,338 | | | — | | | — | | | 1,472,338 |
Media | | | 3,575,117 | | | — | | | — | | | 3,575,117 |
See accompanying notes to financial statements
9
Met Investors Series Trust
Batterymarch Growth and Income Portfolio
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Metals & Mining | | $ | 1,623,653 | | $ | — | | $ | — | | $ | 1,623,653 |
Multi-Utilities | | | 3,096,119 | | | — | | | — | | | 3,096,119 |
Multiline Retail | | | 2,366,225 | | | — | | | — | | | 2,366,225 |
Oil, Gas & Consumable Fuels | | | 24,166,799 | | | — | | | — | | | 24,166,799 |
Paper & Forest Products | | | 1,486,674 | | | — | | | — | | | 1,486,674 |
Pharmaceuticals | | | 18,960,941 | | | — | | | — | | | 18,960,941 |
Real Estate Investment Trusts (REITs) | | | 788,724 | | | — | | | — | | | 788,724 |
Real Estate Management & Development | | | 654,337 | | | — | | | — | | | 654,337 |
Road & Rail | | | 3,307,490 | | | — | | | — | | | 3,307,490 |
Semiconductors & Semiconductor Equipment | | | 4,508,540 | | | — | | | — | | | 4,508,540 |
Software | | | 12,834,205 | | | — | | | — | | | 12,834,205 |
Specialty Retail | | | 5,242,810 | | | — | | | — | | | 5,242,810 |
Textiles, Apparel & Luxury Goods | | | 2,614,651 | | | — | | | — | | | 2,614,651 |
Thrifts & Mortgage Finance | | | 2,365,626 | | | — | | | — | | | 2,365,626 |
Tobacco | | | 3,221,824 | | | — | | | — | | | 3,221,824 |
Wireless Telecommunication Services | | | 1,445,694 | | | — | | | — | | | 1,445,694 |
Total Common Stocks | | | 225,575,333 | | | — | | | — | | | 225,575,333 |
Short-Term Investments | | | | | | | | | | | | |
Mutual Funds | | | 14,836,327 | | | — | | | — | | | 14,836,327 |
Repurchase Agreement | | | — | | | 675,000 | | | — | | | 675,000 |
Total Short-Term Investments | | | 14,836,327 | | | 675,000 | | | — | | | 15,511,327 |
TOTAL INVESTMENTS | | $ | 240,411,660 | | $ | 675,000 | | $ | — | | $ | 241,086,660 |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009
| | | | |
| Batterymarch Growth and Income Portfolio | | | |
| Assets | | | | |
Investments, at value (a)(b) | | $ | 240,411,660 | |
Repurchase Agreement | | | 675,000 | |
Cash | | | 415 | |
Receivable for trust shares sold | | | 15 | |
Dividends receivable | | | 268,375 | |
Receivable from Manager | | | 8,831 | |
| | | | |
Total assets | | | 241,364,296 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 381,583 | |
Trust shares redeemed | | | 18,161 | |
Collateral for securities on loan | | | 14,836,327 | |
Management fee | | | 121,698 | |
Administration fee | | | 1,429 | |
Custodian and accounting fees | | | 1,790 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 46,736 | |
| | | | |
Total liabilities | | | 15,411,151 | |
| | | | |
| Net Assets | | $ | 225,953,145 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 327,115,794 | |
Accumulated net realized loss | | | (76,068,828 | ) |
Unrealized depreciation on investments and foreign currency | | | (27,041,075 | ) |
Undistributed net investment income | | | 1,947,254 | |
| | | | |
Total | | $ | 225,953,145 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 225,953,145 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 18,736,790 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 12.06 | |
| | | | |
| | | | | |
(a) Investments at cost, excluding repurchase agreement | | $ | 267,452,403 | |
(b) Includes cash collateral for securities loaned of | | | 14,836,327 | |
See accompanying notes to financial statements
11
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009
| | | | |
| Batterymarch Growth and Income Portfolio | | | |
| Investment Income | | | | |
Dividends (1) | | $ | 2,585,180 | |
Interest (2) | | | 78,477 | |
| | | | |
Total investment income | | | 2,663,657 | |
| | | | |
| Expenses | | | | |
Management fee | | | 702,542 | |
Administration fees | | | 10,388 | |
Custodian and accounting fees | | | 16,294 | |
Audit and tax services | | | 21,294 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 14,592 | |
Other | | | 3,370 | |
| | | | |
Total expenses | | | 794,913 | |
Less expenses reimbursed by the Manager | | | (82,548 | ) |
Less broker commission recapture | | | (9,822 | ) |
| | | | |
Net expenses | | | 702,543 | |
| | | | |
Net investment income | | | 1,961,114 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | (19,938,014 | ) |
Foreign currency | | | 309 | |
| | | | |
Net realized loss on investments and foreign currency | | | (19,937,705 | ) |
| | | | |
Net change in unrealized appreciation (depreciation) on: | | | | |
Investments | | | 18,520,882 | |
Foreign currency | | | (345 | ) |
| | | | |
Net change in unrealized appreciation on investments and foreign currency | | | 18,520,537 | |
| | | | |
Net realized and unrealized loss on investments and foreign currency | | | (1,417,168 | ) |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 543,946 | |
| | | | |
| | | | | |
(1) Dividend income is net of foreign withholding taxes of: | | $ | 7,158 | |
(2) Interest income includes securities lending net income of: | | | 78,400 | |
See accompanying notes to financial statements
12
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| Batterymarch Growth and Income Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 1,961,114 | | | $ | 5,264,864 | |
Net realized loss on investments and foreign currency | | | (19,937,705 | ) | | | (53,165,613 | ) |
Net change in unrealized appreciation (depreciation) on investments and foreign currency | | | 18,520,537 | | | | (102,980,469 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 543,946 | | | | (150,881,218 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | (5,218,829 | ) | | | (4,974,136 | ) |
From net realized gains | | | | | | | | |
Class A | | | — | | | | (49,532,248 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (5,218,829 | ) | | | (54,506,384 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 279,417 | | | | 1,473,554 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | 5,218,829 | | | | 54,506,384 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (13,959,419 | ) | | | (51,777,739 | ) |
| | | | | | | | |
Net increase (decrease) in net assets from capital share transactions | | | (8,461,173 | ) | | | 4,202,199 | |
| | | | | | | | |
| Net Decrease in Net Assets | | | (13,136,056 | ) | | | (201,185,403 | ) |
Net assets at beginning of period | | | 239,089,201 | | | | 440,274,604 | |
| | | | | | | | |
Net assets at end of period | | $ | 225,953,145 | | | $ | 239,089,201 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 1,947,254 | | | $ | 5,204,969 | |
| | | | | | | | |
See accompanying notes to financial statements
13
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | |
| | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | |
| Batterymarch Growth and Income Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended
December 31, | |
| | | | 2008 | | | 2007 | | | 2006(b) | |
| Net Asset Value, Beginning of Period | | $ | 12.27 | | | $ | 22.52 | | | $ | 22.56 | | | $ | 20.73 | |
| | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.10 | | | | 0.26 | | | | 0.24 | | | | 0.19 | |
Net Realized/Unrealized Gain (Loss) on Investment Activity | | | (0.03 | ) | | | (7.61 | ) | | | 1.50 | | | | 1.64 | |
| | | | | | | | | | | | | | | | |
Total From Investment Operations | | | 0.07 | | | | (7.35 | ) | | | 1.74 | | | | 1.83 | |
| | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.28 | ) | | | (0.26 | ) | | | (0.20 | ) | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | (2.64 | ) | | | (1.58 | ) | | | — | |
| | | | | | | | | | | | | | | | |
Total Distributions | | | (0.28 | ) | | | (2.90 | ) | | | (1.78 | ) | | | — | |
| | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 12.06 | | | $ | 12.27 | | | $ | 22.52 | | | $ | 22.56 | |
| | | | | | | | | | | | | | | | |
| Total Return | | | 0.76 | % | | | (36.87 | )% | | | 7.85 | % | | | 8.83 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.65 | %* | | | 0.65 | % | | | 0.65 | % | | | 0.65 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.74 | %* | | | 0.69 | % | | | 0.71 | % | | | 0.72 | %* |
Ratio of Net Investment Income to Average Net Assets | | | 1.81 | %* | | | 1.52 | % | | | 1.06 | % | | | 1.32 | %* |
Portfolio Turnover Rate | | | 55.0 | % | | | 69.2 | % | | | 81.4 | % | | | 63.6 | % |
Net Assets, End of Period (in millions) | | $ | 226.0 | | | $ | 239.1 | | | $ | 440.3 | | | $ | 483.0 | |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—05/01/2006. |
See accompanying notes to financial statements
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is Batterymarch Growth and Income Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A Shares are currently offered by the Portfolio. Class B, C and E Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2006 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | | |
Expiring
12/31/2016 | | Total |
| |
| $ | 53,123,237 | | $ | 53,123,237 |
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
G. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
H. Foreign Currency Translation - The books and records of the Portfolio are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars on a daily basis using prevailing exchange rates. Purchases and sales of securities are translated at the rates of exchange prevailing when such securities were acquired or sold. Income is translated at rates of exchange prevailing when interest is accrued or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in forward foreign currency contracts; sales of foreign currencies; currency gains or losses realized between the trade and settlement dates on securities transactions; and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Portfolio’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end; from changes in the exchange rates of foreign currency held; and from changes in the contract value of forward foreign currency contracts.
16
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
I. Directed Brokerage Agreement - The Trust has entered into a directed brokerage arrangement with State Street Global Markets (“SSGM”). Under the arrangement, the Portfolio directs certain trades to SSGM in return for a recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to the Portfolio are shown separately as an expense reduction on the Statement of Operations of the Portfolio.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with Batterymarch Financial Management, Inc. (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $702,542 | | 0.65 | % | | First $500 Million |
| | |
| | 0.55 | % | | $500 Million to $1 Billion |
| | |
| | 0.50 | % | | $1 Billion to $1.5 Billion |
| | |
| | 0.45 | % | | $1.5 Billion to $2 Billion |
| | |
| | 0.40 | % | | Over $2 Billion |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Manager has entered into an expense limitation agreement with the Trust (“Expense Limitation Agreement”) in the interest of limiting expenses of the Portfolio of the Trust. The Expense Limitation Agreement for the Portfolio is permanent. Pursuant to that Expense Limitation Agreement, the Manager has agreed to waive or limit its fees and to assume other expenses so that the total annual operating expenses of the Portfolio other than interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with accounting principles generally accepted in the United States of America, and other extraordinary expenses not incurred in the ordinary course of the Portfolio’s business, but including amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act, are limited to the following expense ratio as a percentage of the Portfolio’s average daily net assets:
| | | | | | | | | | | | | | | |
Maximum Expense Ratio under current
Expense Limitation Agreement | | Expenses Reimbursed in |
Class A
Expense Ratio | | | Average Daily Net Assets | | 2006 | | 2007 | | 2008 | | 2009 |
| | | | | |
| 0.65 | % | | First $500 Million | | $ | 226,089 | | $ | 223,355 | | $ | 139,303 | | $ | 82,548 |
| | | | | |
| 0.55 | % | | $500 Million to $1 Billion | | | | | | | | | | | | |
| | | | | |
| 0.50 | % | | $1 Billion to $1.5 Billion | | | | | | | | | | | | |
| | | | | |
| 0.45 | % | | $1.5 Billion to $2 Billion | | | | | | | | | | | | |
| | | | | |
| 0.40 | % | | Over $2 Billion | | | | | | | | | | | | |
The expenses reimbursed for the period ended June 30, 2009 are shown as expenses reimbursed in the Statement of Operations of the Portfolio.
If in any year in which the Management Agreement is still in effect, the estimated aggregate portfolio operating expenses of the Portfolio for the fiscal year are less than the Maximum Expense Ratio for that year, subject to approval by the Trust’s Board, the Manager shall be entitled to
17
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
reimbursement by the Portfolio to the extent that the charge does not cause the expenses in such subsequent year to exceed the Maximum Expense Ratio as stated above. The Portfolio is not obligated to repay any expense paid by the Manager more than five years after the end of the fiscal year in which such expense was incurred.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Decrease
in Shares
Outstanding | | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 19,490,238 | | 24,557 | | 468,476 | | (1,246,481 | ) | | (753,448 | ) | | 18,736,790 |
12/31/2008 | | 19,554,703 | | 80,917 | | 2,980,119 | | (3,125,501 | ) | | (64,465 | ) | | 19,490,238 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 119,549,077 | | $— | | $ | 147,059,736 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $268,127,403 | | $ | 14,026,563 | | $ | (41,067,306 | ) | | $ | (27,040,743 | ) |
6. Securities Lending
As of June 30, 2009, the Portfolio had loaned securities which were collateralized by short-term investments. The value of securities on loan and the value of the related collateral were as follows:
| | | | | | | | | |
Value of
Securities | | Value of
Cash
Collateral | | Value of
Non-Cash
Collateral* | | Total
Collateral |
| | | |
| $14,474,230 | | $ | 14,836,327 | | $ | — | | $ | 14,836,327 |
* The Portfolio cannot repledge or resell this collateral. The non-cash collateral is typically comprised of government securities and/or bank letters of credit.
18
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
7. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gains | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $ | 14,582,981 | | $ | 7,559,639 | | $ | 39,923,403 | | $ | 28,861,711 | | $ | 54,506,384 | | $ | 36,421,350 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards | | | Total | |
| | | | |
| $5,204,969 | | $ | — | | $ | (48,569,498 | ) | | $ | (53,123,237 | ) | | $ | (96,487,766 | ) |
8. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
9. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
19
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
20
| | |
| BlackRock High Yield Portfolio | | For the period ended 6/30/09 |
| Managed by BlackRock Financial Management, Inc. | | |
Portfolio Manager Commentary
Performance
During the period ended June 30, 2009, the Portfolio had a return of 22.23% and 22.02% for Class A and B Shares, respectively, versus 30.92% for its benchmark, the Barclays Capital U.S. Corporate High Yield 2% Issuer Capped Index (the “Index”).
Market Environment/Conditions
The first half of 2009 was an exceptional period for the high yield universe, as it posted its best semi-annual return in market history. During the period, the high yield asset class returned more than 30%, completely recouping its devastating losses in 2008. Rising investor sentiment towards low-quality debt and falling yields spurred nearly $70 billion of healthy new high yield debt issuance, surpassing the entire total for all of 2008. Likewise, high yield mutual funds received inflows in excess of $17 billion, signaling a heightened demand for risky assets. The continued improvement in market conditions has led to lower default activity for leveraged companies over the last several months. Though longer term conditions remain quite challenged, the abatement in negative economic trends and increasing risk appetite of investors has resulted in tremendous flows into the non-investment grade debt market. These trends have consequently greatly enhanced market liquidity, reopened capital markets, lowered financing costs and moderated near-term default risk.
The Index contains more than 1,500 securities, many of which are small issues that are not liquid and not investable. Less liquid issues had very high returns, which benefited the index. Likewise, many of the more economically sensitive, higher-beta sectors that suffered in 2008 dramatically outperformed in this year’s recovery. A large number of financial issues, primarily hybrid or trust preferreds, were downgraded into high yield this year and were under-owned. Those issues recovered sharply over the last few months and drove the Index to post its best quarterly (second quarter of 2009) and semi-annual (year-to-date as of June 30, 2009) returns ever.
High yield valuations remain enticing with a yield-to-maturity of more than 12% and an average spread versus U.S. Treasuries of more than 10%, down from 22% in mid-December. The average credit in the Index currently trades at a price of 80. Implied defaults at these levels are above the 11% to 13% levels we expect this year and next, and we therefore believe the market is attractively priced for the patient and risk-tolerant investor.
Portfolio Review/Current Positioning
At period-end, the Portfolio held an underweight in BB-rated issues and CCC-rated issues. In addition, security selection in BBB-rated and B-rated securities negatively impacted the Portfolio. An underweight in CCC-rated bonds also detracted, as lower-quality, non-investment grade issues considerably outperformed their higher-rated counterparts during the period. We continue to target underweight exposures to both the U.S. consumer and higher-beta cyclical sectors, while being overweight in defensive, income-oriented and event-driven credits. Regarding sectors, an underweight in banking and negative security selection in wireless and building materials further hindered relative
performance. The Portfolio’s allocation to cash also reduced performance as cash markedly underperformed high yield debt during the period. Conversely, relative performance benefited from security selection within the media-cable sector, and from the combined effects of underweights and security selection within both the healthcare and electric sectors. Additionally, the Portfolio’s exposure to bank loans also positively contributed, as this asset class outperformed the traditional non-investment grade bond market during the period. As of June 30, 2009, the Portfolio held overweights in sectors such as: wireless, independent energy and media-cable, with underweights in sectors such as information technology, home construction and gaming. We also maintain an 8% allocation to bank loans and 6% in cash.
During the period, we actively participated in high yield and corporate investment grade primary markets, both markets saw a robust supply of new issues. In both markets, we purchased higher-quality defensive credits that exhibited good fundamentals, as well as solid cash flows and earnings. We have since sold down some of our investment grade new-issues to take profits, as many of these bonds appreciated nicely over the period. The surge of new issuance in the high yield primary market and the resulting investor demand for the new debt has made it difficult to accumulate the same proportion of this new debt as the Index. Thus, a lack of exposure to these well-performing new bonds has been an additional drag on Portfolio performance relative to the Index. Recently, we have been increasing Portfolio exposure to new first-lien, senior-secured bond deals that were also available in the high yield primary market. These bonds provide superior downside protection versus unsecured bonds, and their terms and covenant structures are far more attractive than the bonds issued in the recent few years.
James Keenan
Mitchell Garfin
Derek Schoenhofen
Portfolio Managers
BlackRock Financial Management, Inc.
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an
1
| | |
| BlackRock High Yield Portfolio | | For the period ended 6/30/09 |
| Managed by BlackRock Financial Management, Inc. | | |
Portfolio Manager Commentary (continued)
indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
| | |
Qwest Communications International, Inc. (7.500%, due 02/01/16) | | 1.46% |
TL Acquisitions, Inc. (10.500%, due 01/15/15) | | 1.41% |
EchoStar DBS Corp.(7.000%, due 10/01/13) | | 1.24% |
Wind Acquisition Holdings Finance (7.198%, due 06/17/15) | | 1.12% |
Cincinnati Bell, Inc. (7.250%, due 07/15/13) | | 1.07% |
NRG Energy, Inc. (7.375%, due 02/01/16) | | 1.07% |
American Real Estate Partners LP/American Real Estate Finance Corp. (7.125%, due 02/15/13) | | 1.05% |
FCE Bank Plc (7.125%, due 01/16/12) | | 0.98% |
Tenet Healthcare Corp. (10.000%, due 05/01/18) | | 0.88% |
GMAC LLC (6.750%, due 12/01/14) | | 0.87% |
Portfolio Composition (% of portfolio market value)
As of 6/30/09
2
| | |
| BlackRock High Yield Portfolio | | For the period ended 6/30/09 |
| Managed by BlackRock Financial Management, Inc. | | |
Portfolio Manager Commentary (continued)
BlackRock High Yield Portfolio managed by
BlackRock Financial Management, Inc. vs.
Barclays Capital U.S. Corporate High Yield 2% Issuer Capped Index1
Growth Based on $10,000+
| | | | | | | | | | | | | | |
| | | | | Average Annual Return2 (for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | 3 Year | | 5 Year | | 10 Year | | Since Inception3 |
| — | | BlackRock High Yield Portfolio—Class A | | 22.23% | | -7.04% | | 0.59% | | 2.99% | | 3.43% | | — |
| | Class B | | 22.02% | | -7.24% | | — | | — | | — | | -6.51% |
| - - | | Barclays Capital U.S. Corporate High Yield 2% Issuer Capped Index1 | | 30.92% | | -1.90% | | 2.34% | | 4.36% | | 4.85% | | — |
+The chart reflects the performance of Class A shares of the Portfolio. The performance of Class A shares will differ from that of the other class of shares because of the difference in expenses paid by policyholders investing in the different share classes.
1The Barclays Capital U.S. Corporate High Yield 2% Issuer Capped Index is composed of fixed rate non-investment grade debt with at least one year remaining to maturity that are dollar-denominated, nonconvertible and have an outstanding par value of at least $100 million. There is a 2% limit on issuers held in the Index.
2“Average Annual Return” is calculated including reinvestment of all income dividends and capital gains distributions.
3Inception of Class A shares is 8/30/1996. Inception of Class B shares is 4/28/08.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Index does not include fees or expenses and is not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| BlackRock High Yield Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.68% | | $ | 1,000.00 | | $ | 1,222.30 | | $ | 3.75 |
Hypothetical | | 0.68% | | | 1,000.00 | | | 1,021.42 | | | 3.41 |
| | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class B* | | | | | | | | | | | |
Actual | | 0.93% | | $ | 1,000.00 | | $ | 1,220.20 | | $ | 5.12 |
Hypothetical | | 0.93% | | | 1,000.00 | | | 1,020.18 | | | 4.66 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period).
4
Met Investors Series Trust
BlackRock High Yield Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| | |
| Asset-Backed Security - 0.7% | | | | | | |
Crown Castle Towers LLC
0.699%, due 06/15/35 (144A)(a)(b)
(Cost - $3,363,039) | | $ | 3,695,000 | | $ | 3,519,186 |
| | | | | | |
|
| Domestic Bonds & Debt Securities - 80.3% |
| Aerospace & Defense - 1.4% |
L-3 Communications Corp.
6.375%, due 10/15/15 | | | 1,055,000 | | | 962,688 |
5.875%, due 01/15/15 | | | 3,610,000 | | | 3,221,925 |
Sequa Corp.
11.750%, due 12/01/15 (144A)(a) | | | 2,110,000 | | | 1,229,075 |
13.500%, due 12/01/15 (144A)(a)(c) | | | 3,665,783 | | | 1,851,220 |
| | | | | | |
| | | | | | 7,264,908 |
| | | | | | |
| Air Freight & Logistics - 0.2% |
FedEx Corp.
8.000%, due 01/15/19 | | | 1,045,000 | | | 1,190,875 |
| | | | | | |
| Airlines - 0.8% |
American Airlines Pass Through Trust, | | | | | | |
Series 2001-02
7.858%, due 10/01/11 | | | 1,520,000 | | | 1,434,500 |
Series 2009-1A
10.375%, due 07/02/19 | | | 700,000 | | | 700,000 |
Continental Airlines, Inc.
7.875%, due 07/02/18 | | | 679,550 | | | 414,526 |
United Air Lines, Inc.
12.750%, due 07/15/12 | | | 1,700,000 | | | 1,531,190 |
| | | | | | |
| | | | | | 4,080,216 |
| | | | | | |
| Auto Components - 1.1% |
Allison Transmission, Inc.
11.000%, due 11/01/15 (144A)(a) | | | 1,029,000 | | | 818,055 |
Goodyear Tire & Rubber Co. (The)
5.010%, due 12/01/09(b)(d) | | | 2,795,000 | | | 2,781,025 |
7.857%, due 08/15/11 | | | 915,000 | | | 896,700 |
8.625%, due 12/01/11(d) | | | 1,150,000 | | | 1,138,500 |
Lear Corp.
5.750%, due 08/01/14(e) | | | 295,000 | | | 76,700 |
8.750%, due 12/01/16(e) | | | 150,000 | | | 40,125 |
Stanadyne Corp., Series 1
10.000%, due 08/15/14 | | | 250,000 | | | 196,250 |
Stanadyne Holdings, Inc.
0.000%/12.000%, due 02/15/15(f) | | | 125,000 | | | 56,875 |
| | | | | | |
| | | | | | 6,004,230 |
| | | | | | |
| Automobiles - 0.1% |
Ford Capital B.V.
9.500%, due 06/01/10 | | | 430,000 | | | 389,150 |
| | | | | | |
| Beverages - 0.3% |
Anheuser-Busch InBev Worldwide, Inc.
7.750%, due 01/15/19 (144A)(a) | | | 1,435,000 | | | 1,572,074 |
| | | | | | |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Building Products - 0.3% |
Ainsworth Lumber Co., Ltd.
11.000%, due 07/29/15 (144A)(a)(c) | | $ | 81,811 | | $ | 36,406 |
Nortek, Inc.
10.000%, due 12/01/13 | | | 1,670,000 | | | 1,348,525 |
| | | | | | |
| | | | | | 1,384,931 |
| | | | | | |
| Capital Markets - 0.0% |
E*TRADE Financial Corp. | | | | | | |
12.500%, due 11/30/17 (144A)(a)(c) | | | 100,000 | | | 111,500 |
12.500%, due 11/30/17(c) | | | 15,000 | | | 15,000 |
| | | | | | |
| | | | | | 126,500 |
| | | | | | |
| Chemicals - 1.3% |
American Pacific Corp.
9.000%, due 02/01/15 | | | 150,000 | | | 133,688 |
Ashland, Inc.
9.125%, due 06/01/17 (144A)(a) | | | 1,535,000 | | | 1,600,237 |
CPG International I, Inc.
10.500%, due 07/01/13 | | | 755,000 | | | 426,575 |
Innophos, Inc.
8.875%, due 08/15/14 | | | 2,060,000 | | | 1,895,200 |
MacDermid, Inc.
9.500%, due 04/15/17 (144A)(a) | | | 2,010,000 | | | 1,477,350 |
Nalco Co.
8.250%, due 05/15/17 (144A)(a) | | | 1,300,000 | | | 1,313,000 |
Rockwood Specialties Group, Inc.
7.625%, due 11/15/14 | | | 50,000 | | | 65,894 |
| | | | | | |
| | | | | | 6,911,944 |
| | | | | | |
| Commercial & Professional Services - 1.6% |
Aleris International, Inc.
10.000%, due 12/15/16(e) | | | 1,350,000 | | | 35,437 |
9.000%, due 12/15/14(c)(e) | | | 1,665,000 | | | 27,056 |
ARAMARK Corp.
4.528%, due 02/01/15(b) | | | 950,000 | | | 776,625 |
Corrections Corp. of America
7.750%, due 06/01/17 | | | 2,300,000 | | | 2,277,000 |
DI Finance/DynCorp International, Series B 9.500%, due 02/15/13 | | | 1,110,000 | | | 1,071,150 |
iPayment, Inc.
9.750%, due 05/15/14 | | | 310,000 | | | 168,950 |
RSC Equipment Rental, Inc.
10.000%, due 07/15/17 (144A)(a) | | | 1,580,000 | | | 1,587,900 |
Sunstate Equipment Co. LLC
10.500%, due 04/01/13 (144A)(a) | | | 2,670,000 | | | 1,882,350 |
Tropicana Entertainment LLC
9.625%, due 12/15/14(e) | | | 70,000 | | | 963 |
U.S. Investigations Services, Inc.
10.500%, due 11/01/15 (144A)(a) | | | 900,000 | | | 738,000 |
| | | | | | |
| | | | | | 8,565,431 |
| | | | | | |
See accompanying notes to financial statements
5
Met Investors Series Trust
BlackRock High Yield Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| |
| Commercial Banks - 0.0% | | | |
ATF Capital B.V.
9.250%, due 02/21/14 (144A)(a) | | $ | 100,000 | | $ | 71,000 |
Shingle Springs Tribal Gaming Authority
9.375%, due 06/15/15 (144A)(a) | | | 60,000 | | | 36,300 |
| | | | | | |
| | | | | | 107,300 |
| | | | | | |
| Communications Equipment - 0.6% |
Verso Paper Holdings LLC
4.778%, due 08/01/14(b) | | | 950,000 | | | 451,250 |
9.125%, due 08/01/14 | | | 2,930,000 | | | 1,377,100 |
11.500%, due 07/01/14 (144A)(a) | | | 1,210,000 | | | 1,107,150 |
11.375%, due 08/01/16(d) | | | 930,000 | | | 265,050 |
Viant Holdings, Inc.
10.125%, due 07/15/17 (144A)(a) | | | 236,000 | | | 186,440 |
| | | | | | |
| | | | | | 3,386,990 |
| | | | | | |
| Computers & Peripherals - 0.2% |
SunGard Data Systems, Inc.
10.625%, due 05/15/15 (144A)(a) | | | 940,000 | | | 925,900 |
| | | | | | |
| Construction & Engineering - 0.4% |
ESCO Corp.
8.625%, due 12/15/13 (144A)(a) | | | 2,180,000 | | | 1,896,600 |
| | | | | | |
| Construction Materials - 0.1% |
Texas Industries, Inc.
7.250%, due 07/15/13 | | | 450,000 | | | 406,125 |
| | | | | | |
| Consumer Finance - 5.6% | | | |
FCE Bank Plc
2.120%, due 09/30/09(b) | | | 465,000 | | | 642,151 |
7.875%, due 02/15/11 | | | 1,300,000 | | | 1,892,457 |
7.125%, due 01/16/12-01/15/13 | | | 6,350,000 | | | 7,454,431 |
Ford Motor Credit Co. LLC
5.700%, due 01/15/10 | | | 50,000 | | | 48,264 |
2.701%, due 01/15/10(b) | | | 1,600,000 | | | 1,526,000 |
5.879%, due 06/15/11(b)(d) | | | 676,000 | | | 587,275 |
3.889%, due 01/13/12(b) | | | 1,030,000 | | | 798,250 |
7.800%, due 06/01/12 | | | 3,000,000 | | | 2,582,853 |
GMAC LLC
7.250%, due 03/02/11 (144A)(a) | | | 2,000,000 | | | 1,850,000 |
6.875%, due 08/28/12 (144A)(a) | | | 785,000 | | | 663,325 |
2.868%, due 12/01/14 (144A)(a)(b) | | | 4,337,000 | | | 3,041,321 |
6.750%, due 12/01/14(d) | | | 6,000,000 | | | 4,617,516 |
6.750%, due 12/01/14 (144A)(a) | | | 770,000 | | | 612,150 |
8.000%, due 11/01/31 (144A)(a) | | | 4,940,000 | | | 3,507,400 |
| | | | | | |
| | | | | | 29,823,393 |
| | | | | | |
| Containers & Packaging - 3.9% |
Ball Corp.
6.625%, due 03/15/18 | | | 175,000 | | | 160,563 |
Berry Plastics Corp.
8.875%, due 09/15/14(d) | | | 580,000 | | | 491,550 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Containers & Packaging - continued |
5.881%, due 02/15/15(b) | | $ | 1,775,000 | | $ | 1,575,312 |
Cascades, Inc.
7.250%, due 02/15/13 | | | 1,400,000 | | | 1,228,500 |
Crown Americas LLC/Crown Americas Capital Corp. II
7.625%, due 05/15/17 (144A)(a) | | | 2,500,000 | | | 2,425,000 |
Crown European Holdings S.A.
6.250%, due 09/01/11 | | | 2,041,000 | | | 2,775,637 |
Graphic Packaging International Corp.
9.500%, due 08/15/13(d) | | | 180,000 | | | 172,800 |
Graphic Packaging International, Inc.
8.500%, due 08/15/11(d) | | | 225,000 | | | 223,875 |
9.500%, due 06/15/17 (144A)(a) | | | 3,850,000 | | | 3,811,500 |
Jefferson Smurfit Corp.
8.250%, due 10/01/12(e) | | | 175,000 | | | 66,500 |
Owens-Brockway Glass Container, Inc.
8.250%, due 05/15/13 | | | 400,000 | | | 404,000 |
6.750%, due 12/01/14 | | | 1,035,000 | | | 1,320,473 |
7.375%, due 05/15/16 (144A)(a) | | | 2,145,000 | | | 2,091,375 |
Pregis Corp.
12.375%, due 10/15/13 | | | 1,020,000 | | | 765,000 |
Rock-Tenn Co.
5.625%, due 03/15/13 | | | 770,000 | | | 695,888 |
Russell-Stanley Holdings, Inc.
9.000%, due 11/30/08 (144A)(a)(e)(g) | | | 18,258 | | | 0 |
Sealed Air Corp.
7.875%, due 06/15/17 (144A)(a) | | | 1,785,000 | | | 1,771,648 |
Solo Cup Co.
10.500%, due 11/01/13 (144A)(a) | | | 845,000 | | | 851,337 |
| | | | | | |
| | | | | | 20,830,958 |
| | | | | | |
| Distributors - 0.4% |
NSG Holdings LLC
7.750%, due 12/15/25 (144A)(a) | | | 2,465,000 | | | 1,984,325 |
| | | | | | |
| Diversified Consumer Services - 0.0% |
American Achievement Group Holding Corp.
14.750%, due 10/01/12(c) | | | 4,144 | | | 927 |
Service Corp. International
7.875%, due 02/01/13 | | | 60,000 | | | 57,900 |
7.625%, due 10/01/18 | | | 115,000 | | | 107,238 |
| | | | | | |
| | | | | | 166,065 |
| | | | | | |
| Diversified Financial Services - 2.9% |
Bank of America Corp.
5.650%, due 05/01/18 | | | 2,000,000 | | | 1,770,218 |
7.625%, due 06/01/19 | | | 450,000 | | | 452,785 |
GrafTech Finance, Inc.
10.250%, due 02/15/12 | | | 8,000 | | | 7,600 |
Kinder Morgan Finance Co. ULC
5.350%, due 01/05/11 | | | 1,485,000 | | | 1,462,725 |
See accompanying notes to financial statements
6
Met Investors Series Trust
BlackRock High Yield Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Diversified Financial Services - continued |
Leucadia National Corp.
8.125%, due 09/15/15 | | $ | 1,800,000 | | $ | 1,638,000 |
Residential Capital LLC
8.375%, due 06/30/10(d) | | | 5,740,000 | | | 4,218,900 |
Snoqualmie Entertainment Authority
5.384%, due 02/01/14 (144A)(a)(b) | | | 165,000 | | | 80,025 |
Tyco International Finance S.A.
8.500%, due 01/15/19 | | | 955,000 | | | 1,060,645 |
Windstream Corp.
8.625%, due 08/01/16 | | | 4,595,000 | | | 4,422,687 |
| | | | | | |
| | | | | | 15,113,585 |
| | | | | | |
| Diversified Telecommunication Services - 6.8% |
BCM Ireland Preferred Equity, Ltd.
8.281%, due 02/15/17(b)(c) | | | 184,287 | | | 64,593 |
Broadview Networks Holdings, Inc.
11.375%, due 09/01/12 | | | 1,835,000 | | | 1,458,825 |
Cincinnati Bell, Inc.
7.250%, due 07/15/13 | | | 6,186,000 | | | 5,691,120 |
Citizens Communications Co.
6.250%, due 01/15/13 | | | 455,000 | | | 420,875 |
Digicel Group, Ltd.
8.875%, due 01/15/15 (144A)(a) | | | 1,995,000 | | | 1,665,825 |
9.125%, due 01/15/15 (144A)(a)(c) | | | 2,357,665 | | | 1,968,650 |
Frontier Communications Corp.
8.250%, due 05/01/14 | | | 480,000 | | | 456,000 |
Inmarsat Finance II Plc
0.000%/10.375%, due 11/15/12(f) | | | 400,000 | | | 416,000 |
Inmarsat Finance Plc
7.625%, due 06/30/12 | | | 190,000 | | | 186,200 |
Intelsat Corp.
9.250%, due 08/15/14-06/15/16
(144A)(a) | | | 4,550,000 | | | 4,395,575 |
Intelsat Subsidiary Holding Co., Ltd.
8.500%, due 01/15/13 | | | 750,000 | | | 723,750 |
8.875%, due 01/15/15 | | | 540,000 | | | 523,800 |
8.875%, due 01/15/15 | | | 540,000 | | | 0 |
Nordic Telephone Holdings Co.
8.875%, due 05/01/16 (144A)(a) | | | 1,245,000 | | | 1,207,650 |
Qwest Communications International, Inc.
7.500%, due 02/15/14 | | | 8,430,000 | | | 7,734,525 |
Qwest Corp.
7.500%, due 10/01/14-06/15/23 | | | 730,000 | | | 588,763 |
Sprint Capital Corp.
6.875%, due 11/15/28 | | | 4,750,000 | | | 4,578,150 |
West Corp.
9.500%, due 10/15/14 | | | 2,500,000 | | | 2,200,000 |
11.000%, due 10/15/16(d) | | | 2,095,000 | | | 1,759,800 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Diversified Telecommunication Services - continued |
Wind Acquisition Finance S.A.
10.750%, due 12/01/15 (144A)(a) | | $ | 75,000 | | $ | 75,375 |
| | | | | | |
| | | | | | 36,115,476 |
| | | | | | |
| Electric Utilities - 2.1% |
AES Ironwood LLC
8.857%, due 11/30/25 | | | 1,244,401 | | | 1,082,629 |
AES Red Oak LLC
8.540%, due 11/30/19 | | | 803,464 | | | 723,118 |
Series B 9.200%, 11/30/29 | | | 650,000 | | | 552,500 |
Calpine Construction Finance Co. LP/CCFC Finance Corp.
8.000%, due 06/01/16 (144A)(a) | | | 2,995,000 | | | 2,882,687 |
Edison Mission Energy
7.750%, due 06/15/16 | | | 1,084,000 | | | 888,880 |
7.200%, due 05/15/19 | | | 140,000 | | | 105,000 |
Elwood Energy LLC
8.159%, due 07/05/26 | | | 1,304,920 | | | 1,091,315 |
Entergy Texas, Inc.
7.125%, due 02/01/19 | | | 735,000 | | | 767,569 |
FPL Energy National Wind
6.125%, due 03/25/19 (144A)(a) | | | 89,324 | | | 87,004 |
Ipalco Enterprises, Inc.
8.625%, due 11/14/11 | | | 525,000 | | | 530,250 |
7.250%, due 04/01/16 (144A)(a) | | | 545,000 | | | 523,200 |
Tenaska Alabama Partners LP
7.000%, due 06/30/21 (144A)(a) | | | 1,314,784 | | | 1,138,549 |
Texas Competitive Electric Holdings Co. LLC
10.250%, due 11/01/15 | | | 225,000 | | | 141,188 |
10.500%, due 11/01/16(c) | | | 1,135,468 | | | 527,993 |
| | | | | | |
| | | | | | 11,041,882 |
| | | | | | |
| Electrical Equipment - 1.5% | | | | | | |
Orascom Telecom Finance SCA
7.875%, due 02/08/14 (144A)(a) | | | 305,000 | | | 259,250 |
TL Acquisitions, Inc.
10.500%, due 01/15/15 (144A)(a) | | | 9,180,000 | | | 7,481,700 |
| | | | | | |
| | | | | | 7,740,950 |
| | | | | | |
| Electronic Equipment, Instruments & Components - 0.1% |
Mobile Services Group, Inc./Mobile Storage Group, Inc.
9.750%, due 08/01/14 | | | 75,000 | | | 72,187 |
Sanmina-SCI Corp.
8.125%, due 03/01/16 | | | 425,000 | | | 311,844 |
| | | | | | |
| | | | | | 384,031 |
| | | | | | |
| Energy Equipment & Services - 1.1% |
Compagnie Generale de Geophysique-Veritas
9.500%, due 05/15/16 (144A)(a) | | | 980,000 | | | 982,450 |
7.500%, due 05/15/15 | | | 130,000 | | | 119,925 |
See accompanying notes to financial statements
7
Met Investors Series Trust
BlackRock High Yield Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Energy Equipment & Services - continued |
7.750%, due 05/15/17 | | $ | 2,615,000 | | $ | 2,392,725 |
Drummond Co., Inc.
7.375%, due 02/15/16 (144A)(a) | | | 1,285,000 | | | 944,475 |
Hornbeck Offshore Services, Inc.
6.125%, due 12/01/14 | | | 180,000 | | | 164,025 |
North American Energy Partners, Inc.
8.750%, due 12/01/11 | | | 435,000 | | | 380,625 |
Southern Star Central Corp.
6.750%, due 03/01/16 (144A)(a) | | | 740,000 | | | 663,225 |
| | | | | | |
| | | | | | 5,647,450 |
| | | | | | |
| Entertainment & Leisure - 0.2% |
WMG Acquisition Corp.
9.500%, due 06/15/16 (144A)(a) | | | 1,305,000 | | | 1,311,525 |
| | | | | | |
| Food & Staples Retailing - 0.8% |
Rite Aid Corp.
9.750%, due 06/12/16 (144A)(a) | | | 1,515,000 | | | 1,522,575 |
SUPERVALU, Inc.
8.000%, due 05/01/16 | | | 2,570,000 | | | 2,505,750 |
| | | | | | |
| | | | | | 4,028,325 |
| | | | | | |
| Food Products - 0.7% |
JBS USA LLC/JBS USA Finance, Inc.
11.625%, due 05/01/14 (144A)(a) | | | 440,000 | | | 418,000 |
Smithfield Foods, Inc.
10.000%, due 07/15/14 (144A)(a) | | | 2,400,000 | | | 2,382,000 |
Tyson Foods, Inc. - Class A
10.500%, due 03/01/14 (144A)(a) | | | 670,000 | | | 730,300 |
| | | | | | |
| | | | | | 3,530,300 |
| | | | | | |
| Gas Utilities - 0.4% |
Energy Future Holdings Corp.
11.250%, due 11/01/17(c) | | | 3,791,000 | | | 2,331,465 |
| | | | | | |
| Health Care Equipment & Supplies - 1.3% |
Biomet, Inc.
10.000%, due 10/15/17 | | | 2,550,000 | | | 2,607,375 |
DJO Finance LLC/DJO Finance Corp.
10.875%, due 11/15/14 | | | 4,500,000 | | | 3,960,000 |
Elan Finance PLC/Elan Finance Corp.
8.875%, due 12/01/13 | | | 175,000 | | | 161,000 |
| | | | | | |
| | | | | | 6,728,375 |
| | | | | | |
| Health Care Providers & Services - 2.4% |
Community Health Systems, Inc.
8.875%, due 07/15/15 | | | 3,970,000 | | | 3,910,450 |
HEALTHSOUTH Corp.
10.750%, due 06/15/16 | | | 530,000 | | | 535,300 |
Tenet Healthcare Corp.
9.000%, due 05/01/15 (144A)(a) | | | 3,668,000 | | | 3,713,850 |
10.000%, due 05/01/18 (144A)(a) | | | 4,398,000 | | | 4,639,890 |
| | | | | | |
| | | | | | 12,799,490 |
| | | | | | |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Homebuilders - 0.5% |
Beazer Homes USA, Inc. | | | | | | |
8.375%, due 04/15/12 | | $ | 1,735,000 | | $ | 1,032,325 |
8.125%, due 06/15/16 | | | 520,000 | | | 249,600 |
Toll Brothers Finance Corp.
8.910%, due 10/15/17 | | | 1,520,000 | | | 1,556,647 |
| | | | | | |
| | | | | | 2,838,572 |
| | | | | | |
| Hotels, Restaurants & Leisure - 1.8% |
Fontainebleau Las Vegas Holdings LLC
/Fontainebleau Las Vegas Capital Corp.
11.000%, due 06/15/15 (144A)(a)(e) | | | 1,425,000 | | | 60,563 |
Gaylord Entertainment Co.
8.000%, due 11/15/13 | | | 1,245,000 | | | 1,067,587 |
6.750%, due 11/15/14 | | | 175,000 | | | 131,687 |
Harrah’s Operating Co., Inc. | | | | | | |
10.000%, due 12/15/15-12/15/18
(144A)(a) | | | 1,622,000 | | | 946,710 |
10.000%, due 12/15/18 (144A)(a)(d) | | | 474,000 | | | 272,550 |
MGM Mirage, Inc.
13.000%, due 11/15/13 (144A)(a) | | | 1,000,000 | | | 1,100,000 |
10.375%, due 05/15/14 (144A)(a) | | | 1,300,000 | | | 1,355,250 |
11.125%, due 11/15/17 (144A)(a) | | | 2,160,000 | | | 2,300,400 |
River Rock Entertainment Authority
9.750%, due 11/01/11 | | | 45,000 | | | 33,975 |
Scientific Games International, Inc.
9.250%, due 06/15/19 (144A)(a) | | | 1,455,000 | | | 1,462,275 |
Virgin River Casino Corp.
9.000%, due 01/15/12(e) | | | 1,800,000 | | | 193,500 |
Waterford Gaming LLC
8.625%, due 09/15/14 (144A)(a) | | | 894,000 | | | 545,340 |
| | | | | | |
| | | | | | 9,469,837 |
| | | | | | |
| Household Durables - 0.8% |
Catalina Marketing Corp.
10.500%, due 10/01/15 (144A)(a)(c) | | | 3,475,000 | | | 2,884,250 |
Centex Corp.
4.550%, due 11/01/10 | | | 140,000 | | | 137,550 |
Jarden Corp.
8.000%, due 05/01/16 | | | 865,000 | | | 828,237 |
KB HOME
6.375%, due 08/15/11 | | | 320,000 | | | 310,400 |
Stanley-Martin Communities LLC
9.750%, due 08/15/15 | | | 450,000 | | | 114,750 |
| | | | | | |
| | | | | | 4,275,187 |
| | | | | | |
| Independent Power Producers & Energy Traders - 1.6% |
NRG Energy, Inc. | | | | | | |
7.250%, due 02/01/14 | | | 245,000 | | | 238,263 |
7.375%, due 02/01/16-01/15/17 | | | 6,215,000 | | | 5,895,525 |
See accompanying notes to financial statements
8
Met Investors Series Trust
BlackRock High Yield Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Independent Power Producers & Energy Traders - continued |
3.662%, due 02/01/13 | | $ | 213,958 | | $ | 201,922 |
8.500%, due 06/15/19 | | | 2,265,000 | | | 2,205,544 |
| | | | | | |
| | | | | | 8,541,254 |
| | | | | | |
| Industrial - Diversified - 0.4% |
Harland Clarke Holdings Corp. | | | | | | |
5.633%, due 05/15/15(b) | | | 50,000 | | | 30,375 |
9.500%, due 05/15/15 | | | 60,000 | | | 46,650 |
Ply Gem Industries, Inc.
11.750%, due 06/15/13(d) | | | 2,715,000 | | | 1,764,750 |
| | | | | | |
| | | | | | 1,841,775 |
| | | | | | |
| Insurance - 0.0% | | | | | | |
USI Holdings Corp.
4.758%, due 11/15/14(144A)(a)(b) | | | 80,000 | | | 52,400 |
| | | | | | |
| Internet Software & Services - 0.3% |
Impress Holdings B.V.
4.256%, due 09/15/13(144A)(a)(b) | | | 2,160,000 | | | 1,827,900 |
| | | | | | |
| Life Sciences Tools & Services - 0.5% |
Bio-Rad Laboratories, Inc. | | | | | | |
6.125%, due 12/15/14 | | | 225,000 | | | 205,875 |
8.000%, due 09/15/16 (144A)(a) | | | 2,655,000 | | | 2,635,087 |
| | | | | | |
| | | | | | 2,840,962 |
| | | | | | |
| Machinery - 0.3% | | | | | | |
Accuride Corp.
8.500%, due 02/01/15(d) | | | 720,000 | | | 147,600 |
Titan International, Inc.
8.000%, due 01/15/12 | | | 1,790,000 | | | 1,628,900 |
| | | | | | |
| | | | | | 1,776,500 |
| | | | | | |
| Manufacturing - 0.3% | | | | | | |
Ingersoll Rand Global Holding Co., Ltd.
9.500%, due 04/15/14 | | | 1,325,000 | | | 1,452,391 |
RBS Global, Inc./Rexnord Corp.
8.875%, due 09/01/16 | | | 105,000 | | | 75,075 |
| | | | | | |
| | | | | | 1,527,466 |
| | | | | | |
| Marine - 0.0% | | | | | | |
Navios Maritime Holdings, Inc.
9.500%, due 12/15/14 | | | 36,000 | | | 29,700 |
| | | | | | |
| Media - 7.6% | | | | | | |
Affinion Group, Inc.
10.125%, due 10/15/13 | | | 1,185,000 | | | 1,102,050 |
10.125%, due 10/15/13 (144A)(a) | | | 1,005,000 | | | 942,187 |
Cablevision Systems Corp., Series B
8.000%, due 04/15/12 | | | 4,050,000 | | | 4,029,750 |
CCH I Holdings LLC
9.920%, due 04/01/14(e) | | | 110,000 | | | 1,238 |
CCH II LLC/CCH II Capital Corp.
10.250%, due 09/15/10(e) | | | 1,700,000 | | | 1,802,000 |
Series B 10.250%, 09/15/10(e) | | | 1,345,000 | | | 1,418,975 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| | |
| Media - continued | | | | | | |
CCH LLC/CCH Capital Corp.
8.375%, due 04/30/14(144A)(a)(e) | | $ | 1,410,000 | | $ | 1,357,125 |
CCO Holdings LLC/CCO Holdings Capital Corp.
8.750%, due 11/15/13(d)(e) | | | 930,000 | | | 888,150 |
CMP Susquehanna Corp.
1.000%, due 05/15/14(g) | | | 122,000 | | | 2,440 |
COX Communications, Inc.
8.375%, due 03/01/39(144A)(a) | | | 2,315,000 | | | 2,588,765 |
CSC Holdings, Inc.
8.500%, due 04/15/14 (144A)(a) | | | 780,000 | | | 777,075 |
Series B 7.625%, 04/01/11 | | | 1,010,000 | | | 1,004,950 |
DirecTV Holdings LLC/DirecTV Financing Co.
8.375%, due 03/15/13 | | | 4,256,000 | | | 4,287,920 |
EchoStar DBS Corp.
6.375%, due 10/01/11 | | | 400,000 | | | 389,000 |
6.625%, due 10/01/14 | | | 1,175,000 | | | 1,086,875 |
7.000%, due 10/01/13 | | | 6,905,000 | | | 6,594,275 |
Local Insight Regatta Holdings, Inc.
11.000%, due 12/01/17 | | | 524,000 | | | 141,480 |
Mediacom Broadband LLC
8.500%, due 10/15/15 | | | 830,000 | | | 751,150 |
Mediacom LLC/Mediacom Capital Corp.
9.500%, due 01/15/13(d) | | | 80,000 | | | 76,600 |
Newsday, Inc.
10.000%, due 08/01/13 | | | 965,000 | | | 969,825 |
Nielsen Finance LLC/Nielsen Finance Co.
11.625%, due 02/01/14 (144A)(a) | | | 2,200,000 | | | 2,194,500 |
10.000%, due 08/01/14 | | | 870,000 | | | 827,588 |
0.000%/12.500%, due 08/01/16(f) | | | 150,000 | | | 97,125 |
Rainbow National Services LLC
10.375%, due 09/01/14 (144A)(a) | | | 1,978,000 | | | 2,059,592 |
8.750%, due 09/01/12 (144A)(a) | | | 1,610,000 | | | 1,630,125 |
Shaw Communications, Inc.
7.250%, due 04/06/11(d) | | | 375,000 | | | 388,125 |
Spansion, Inc.
3.793%, due 06/01/13 (144A)(a)(b)(e) | | | 950,000 | | | 622,250 |
UPC Holding BV
9.875%, due 04/15/18(144A)(a) | | | 1,900,000 | | | 1,844,202 |
Virgin Media Finance Plc
8.750%, due 04/15/14(d) | | | 285,000 | | | 279,300 |
| | | | | | |
| | | | | | 40,154,637 |
| | | | | | |
| Metals & Mining - 4.0% | | | | | | |
Anglo American Capital Plc
9.375%, due 04/08/19(144A)(a) | | | 815,000 | | | 881,627 |
Atlas Energy Resources LLC
10.750%, due 02/01/18(144A)(a) | | | 2,635,000 | | | 2,496,662 |
Atlas Pipeline Partners L.P.
8.750%, due 06/15/18 | | | 1,120,000 | | | 767,200 |
See accompanying notes to financial statements
9
Met Investors Series Trust
BlackRock High Yield Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| |
| Metals & Mining - continued | | | |
CII Carbon LLC
11.125%, due 11/15/15(144A)(a) | | $ | 685,000 | | $ | 497,481 |
Evraz Group S.A.
8.875%, due 04/24/13 (144A)(a) | | | 1,030,000 | | | 849,750 |
9.500%, due 04/24/18 (144A)(a) | | | 690,000 | | | 536,475 |
FMG Finance Property, Ltd. | | | | | | |
4.668%, due 09/01/11 (144A)(a)(b) | | | 700,000 | | | 672,000 |
10.625%, due 09/01/16 (144A)(a) | | | 2,315,000 | | | 2,233,975 |
Foundation Pennsylvania Coal Co.
7.250%, due 08/01/14 | | | 950,000 | | | 935,750 |
Freeport-McMoRan Copper & Gold, Inc.
4.995%, due 04/01/15(b) | | | 710,000 | | | 665,483 |
Novelis, Inc.
7.250%, due 02/15/15 | | | 355,000 | | | 271,575 |
Peabody Energy Corp.
7.375%, due 11/01/16 | | | 1,650,000 | | | 1,567,500 |
Ryerson, Inc.
8.403%, due 11/01/14(b) | | | 660,000 | | | 483,450 |
12.000%, due 11/01/15(h) | | | 155,000 | | | 127,100 |
Steel Dynamics, Inc.
7.375%, due 11/01/12 | | | 2,445,000 | | | 2,328,863 |
Teck Resources, Ltd.
10.250%, due 05/15/16 (144A)(a) | | | 785,000 | | | 832,100 |
10.750%, due 05/15/19 (144A)(a) | | | 3,820,000 | | | 4,163,800 |
Vedanta Resources Plc
9.500%, due 07/18/18(144A)(a) | | | 985,000 | | | 822,475 |
| | | | | | |
| | | | | | 21,133,266 |
| | | | | | |
| Multiline Retail - 0.5% | | | | | | |
Dollar General Corp.
10.625%, due 07/15/15 | | | 1,420,000 | | | 1,540,700 |
Macy’s Retail Holdings, Inc.
5.875%, due 01/15/13 | | | 1,155,000 | | | 1,012,666 |
| | | | | | |
| | | | | | 2,553,366 |
| | | | | | |
| Oil, Gas & Consumable Fuels - 10.1% |
Arch Western Financial LLC
6.750%, due 07/01/13 | | | 3,710,000 | | | 3,403,925 |
Berry Petroleum Co.
8.250%, due 11/01/16 | | | 205,000 | | | 176,813 |
Bill Barrett Corp.
9.875%, due 07/15/16 | | | 1,245,000 | | | 1,204,692 |
Chesapeake Energy Corp.
6.250%, due 01/15/18 | | | 655,000 | | | 546,925 |
9.500%, due 02/15/15 | | | 3,180,000 | | | 3,219,750 |
6.375%, due 06/15/15 | | | 1,000,000 | | | 895,000 |
7.250%, due 12/15/18 | | | 880,000 | | | 770,000 |
6.875%, due 11/15/20 | | | 400,000 | | | 324,000 |
Cimarex Energy Co.
7.125%, due 05/01/17 | | | 1,610,000 | | | 1,424,850 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Oil, Gas & Consumable Fuels - continued |
Compton Petroleum Finance Corp.
7.625%, due 12/01/13 | | $ | 860,000 | | $ | 481,600 |
Connacher Oil and Gas, Ltd.
11.750%, due 07/15/14 (144A)(a) | | | 465,000 | | | 452,213 |
10.250%, due 12/15/15 (144A)(a) | | | 1,870,000 | | | 1,140,700 |
Denbury Resources, Inc.
7.500%, due 04/01/13-12/15/15 | | | 745,000 | | | 712,475 |
9.750%, due 03/01/16 | | | 3,360,000 | | | 3,469,200 |
Dynegy Holdings, Inc.
8.375%, due 05/01/16 | | | 645,000 | | | 549,862 |
7.750%, due 06/01/19 | | | 715,000 | | | 560,381 |
Dynegy Roseton/Danskammer Pass Through Trust,
Series B
7.670%, due 11/08/16 | | | 1,325,000 | | | 1,162,687 |
El Paso Corp.
8.250%, due 02/15/16 | | | 2,460,000 | | | 2,404,650 |
6.700%, due 02/15/27 | | | 62,930 | | | 42,144 |
Encore Acquisition Co.
6.000%, due 07/15/15 | | | 1,125,000 | | | 933,750 |
EXCO Resources, Inc.
7.250%, due 01/15/11 | | | 2,825,000 | | | 2,754,375 |
Forest Oil Corp.
8.500%, due 02/15/14 (144A)(a) | | | 3,680,000 | | | 3,634,000 |
7.250%, due 06/15/19 | | | 3,860,000 | | | 3,474,000 |
Hess Corp.
8.125%, due 02/15/19 | | | 1,370,000 | | | 1,562,351 |
Newfield Exploration Co.
6.625%, due 09/01/14-04/15/16 | | | 680,000 | | | 619,444 |
7.125%, due 05/15/18 | | | 115,000 | | | 105,081 |
OPTI Canada, Inc.
7.875%, due 12/15/14 | | | 1,155,000 | | | 753,637 |
8.250%, due 12/15/14 | | | 2,610,000 | | | 1,735,650 |
Petrohawk Energy Corp.
10.500%, due 08/01/14 (144A)(a) | | | 1,155,000 | | | 1,186,762 |
7.875%, due 06/01/15 | | | 1,520,000 | | | 1,413,600 |
Range Resources Corp.
7.375%, due 07/15/13 | | | 950,000 | | | 936,937 |
6.375%, due 03/15/15 | | | 200,000 | | | 185,250 |
7.500%, due 05/15/16 | | | 75,000 | | | 72,375 |
8.000%, due 05/15/19(d) | | | 1,100,000 | | | 1,087,625 |
Sabine Pass LNG LP
7.500%, due 11/30/16(d) | | | 300,000 | | | 243,750 |
SandRidge Energy, Inc.
8.625%, due 04/01/15(c) | | | 100,000 | | | 90,750 |
9.875%, due 05/15/16
(144A)(a)(d) | | | 1,400,000 | | | 1,358,000 |
8.000%, due 06/01/18 (144A)(a) | | | 1,510,000 | | | 1,298,600 |
Southwestern Energy Co.
7.500%, due 02/01/18(144A)(a) | | | 2,020,000 | | | 1,949,300 |
See accompanying notes to financial statements
10
Met Investors Series Trust
BlackRock High Yield Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Oil, Gas & Consumable Fuels - continued |
Swift Energy Co.
7.125%, due 06/01/17 | | $ | 825,000 | | $ | 585,750 |
Tennessee Gas Pipeline Co.
7.500%, due 04/01/17 | | | 150,000 | | | 157,687 |
8.000%, due 02/01/16 | | | 1,040,000 | | | 1,094,600 |
Whiting Petroleum Corp.
7.250%, due 05/01/12-05/01/13 | | | 730,000 | | | 698,876 |
Williams Cos., Inc. (The)
7.875%, due 09/01/21 | | | 1,310,000 | | | 1,292,839 |
8.750%, due 01/15/20 (144A)(a) | | | 1,070,000 | | | 1,117,399 |
| | | | | | |
| | | | | | 53,284,255 |
| | | | | | |
| Paper & Forest Products - 1.8% | | | |
Boise Cascade LLC
7.125%, due 10/15/14 | | | 463,000 | | | 246,548 |
Clearwater Paper Corp.
10.625%, due 06/15/16 (144A)(a) | | | 1,040,000 | | | 1,068,600 |
Georgia-Pacific LLC
8.125%, due 05/15/11 | | | 650,000 | | | 653,250 |
7.700%, due 06/15/15 | | | 380,000 | | | 357,200 |
8.250%, due 05/01/16 (144A)(a) | | | 3,485,000 | | | 3,397,875 |
International Paper Co.
9.375%, due 05/15/19(d) | | | 1,360,000 | | | 1,388,545 |
NewPage Corp.
10.000%, due 05/01/12 | | | 5,145,000 | | | 2,495,325 |
| | | | | | |
| | | | | | 9,607,343 |
| | | | | | |
| Pharmaceuticals - 1.3% |
Angiotech Pharmaceuticals, Inc.
4.418%, due 12/01/13(b) | | | 3,455,000 | | | 2,625,800 |
Axcan Intermediate Holdings, Inc.
12.750%, due 03/01/16 | | | 1,130,000 | | | 1,149,775 |
Catalent Pharma Solutions, Inc.
9.500%, due 04/15/15(d)(c) | | | 1,020,000 | | | 536,775 |
9.750%, due 04/15/17 | | | 144,000 | | | 73,891 |
Valeant Pharmaceuticals International
8.375%, due 06/15/16 (144A)(a) | | | 2,745,000 | | | 2,738,137 |
| | | | | | |
| | | | | | 7,124,378 |
| | | | | | |
| Real Estate - 1.2% |
American Real Estate Partners LP/American Real Estate Finance Corp.
7.125%, due 02/15/13 | | | 6,115,000 | | | 5,549,362 |
Ashton Woods USA LLC/Ashton Woods Finance Co.
0.000%/11.000%, due 06/30/15 (144A)(a)(f)(g) | | | 119,600 | | | 23,920 |
Realogy Corp.
10.500%, due 04/15/14(d) | | | 1,600,000 | | | 700,000 |
12.375%, due 04/15/15 | | | 362,000 | | | 103,170 |
| | | | | | |
| | | | | | 6,376,452 |
| | | | | | |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Real Estate Investment Trusts (REITs) - 0.0% |
BMS Holdings, Inc.
9.224%, due 02/15/12 (144A)(a)(b)(c) | | $ | 661,816 | | $ | 104,236 |
| | | | | | |
| Road & Rail - 0.4% |
CSX Corp.
7.375%, due 02/01/19(d) | | | 970,000 | | | 1,055,287 |
Marsico Parent Co. LLC
10.625%, due 01/15/16(i) | | | 1,432,000 | | | 601,440 |
Marsico Parent Holdco LLC
12.500%, due 07/15/16(c)(i) | | | 578,640 | | | 144,660 |
Marsico Parent Superholdco LLC
14.500%, due 01/15/18(c)(i) | | | 395,429 | | | 102,812 |
| | | | | | |
| | | | | | 1,904,199 |
| | | | | | |
| Software - 0.5% |
First Data Corp.
9.875%, due 09/24/15(d) | | | 640,000 | | | 457,600 |
11.250%, due 03/31/16 (144A)(a) | | | 4,155,000 | | | 2,430,675 |
| | | | | | |
| | | | | | 2,888,275 |
| | | | | | |
| Specialty Retail - 0.8% |
Asbury Automotive Group, Inc.
7.625%, due 03/15/17(d) | | | 880,000 | | | 629,200 |
General Nutrition Centers, Inc.
6.404%, due 03/15/14 (b)(c) | | | 1,000,000 | | | 805,000 |
10.750%, due 03/15/15 | | | 315,000 | | | 269,325 |
Group 1 Automotive, Inc.
8.250%, due 08/15/13 | | | 300,000 | | | 255,000 |
Limited Brands, Inc.
8.500%, due 06/15/19 (144A)(a)(d) | | | 390,000 | | | 374,265 |
Michaels Stores, Inc.
10.000%, due 11/01/14(d) | | | 35,000 | | | 29,575 |
11.375%, due 11/01/16(d) | | | 1,270,000 | | | 838,200 |
United Auto Group, Inc.
7.750%, due 12/15/16 | | | 1,260,000 | | | 1,023,750 |
| | | | | | |
| | | | | | 4,224,315 |
| | | | | | |
| Textiles, Apparel & Luxury Goods - 0.1% |
Levi Strauss & Co.
9.750%, due 01/15/15(d) | | | 575,000 | | | 567,813 |
8.875%, due 04/01/16(d) | | | 40,000 | | | 38,900 |
| | | | | | |
| | | | | | 606,713 |
| | | | | | |
| Tobacco - 0.7% |
Altria Group, Inc.
10.200%, due 02/06/39 | | | 1,140,000 | | | 1,350,532 |
Lorillard Tobacco Co.
8.125%, due 06/23/19 | | | 865,000 | | | 896,597 |
Vector Group, Ltd.
11.000%, due 08/15/15 | | | 1,330,000 | | | 1,236,900 |
| | | | | | |
| | | | | | 3,484,029 |
| | | | | | |
See accompanying notes to financial statements
11
Met Investors Series Trust
BlackRock High Yield Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Trading Companies & Distributors - 0.0% |
Russel Metals, Inc.
6.375%, due 03/01/14 | | $ | 230,000 | | $ | 187,738 |
| | | | | | |
| Transportation - 0.0% |
Travelport LLC
11.875%, due 09/01/16(d) | | | 100,000 | | | 59,500 |
| | | | | | |
| Wireless Telecommunication Services - 6.3% |
American Tower Corp.
7.125%, due 10/15/12 | | | 140,000 | | | 141,575 |
CC Holdings GS V LLC/Crown Castle GS III Corp.
7.750%, due 05/01/17 (144A)(a) | | | 1,610,000 | | | 1,577,800 |
Centennial Communications Corp.
10.000%, due 01/01/13(d) | | | 200,000 | | | 212,000 |
Cricket Communications, Inc.
9.375%, due 11/01/14 | | | 3,110,000 | | | 3,078,900 |
10.000%, due 07/15/15 | | | 2,760,000 | | | 2,753,100 |
7.750%, due 05/15/16 (144A)(a) | | | 3,500,000 | | | 3,386,250 |
Crown Castle International Corp.
9.000%, due 01/15/15 | | | 410,000 | | | 419,225 |
Crown Castle Towers LLC
4.643%, due 06/15/35 (144A)(a) | | | 4,725,000 | | | 4,606,875 |
FiberTower Corp.
9.000%, due 11/15/12 | | | 722,675 | | | 301,717 |
iPCS, Inc.
3.153%, due 05/01/13(b) | | | 4,881,000 | | | 3,880,395 |
MetroPCS Wireless, Inc.
9.250%, due 11/01/14 | | | 4,120,000 | | | 4,114,850 |
9.250%, due 11/01/14 (144A)(a) | | | 1,070,000 | | | 1,064,650 |
Nextel Communications, Inc.
6.875%, due 10/31/13 | | | 4,720,000 | | | 3,929,400 |
7.375%, due 08/01/15 | | | 890,000 | | | 714,225 |
Qwest Corp.
8.375%, due 05/01/16 (144A)(a) | | | 1,050,000 | | | 1,018,500 |
Rogers Communications, Inc.
8.000%, due 12/15/12 | | | 800,000 | | | 828,000 |
Sprint Nextel Corp.
1.001%, due 06/28/10(b) | | | 1,200,000 | | | 1,131,746 |
| | | | | | |
| | | | | | 33,159,208 |
| | | | | | |
Total Domestic Bonds & Debt Securities
(Cost $459,477,340) | | | | | | 425,664,232 |
| | | | | | |
|
| Convertible Bonds - 3.3% |
| Airlines - 0.0% |
UAL Corp.
4.500%, due 06/30/21(d) | | | 255,000 | | | 87,116 |
| | | | | | |
| Diversified Telecommunication Services - 0.3% |
NTL Cable Plc
8.750%, due 04/15/14 | | | 175,000 | | | 230,629 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Diversified Telecommunication Services - continued |
Qwest Communications International, Inc.
3.500%, due 11/15/25 | | $ | 1,510,000 | | $ | 1,494,900 |
| | | | | | |
| | | | | | 1,725,529 |
| | | | | | |
| Energy Equipment & Services - 0.3% |
Transocean, Ltd.
1.625%, due 12/15/37 | | | 1,630,000 | | | 1,548,500 |
| | | | | | |
| Health Care Equipment & Supplies - 0.5% |
Hologic, Inc.
2.000%/0.000%, due 12/15/37(h) | | | 3,535,000 | | | 2,527,525 |
| | | | | | |
| Hotels, Restaurants & Leisure - 0.1% |
Scientific Games Corp. -
Class A
0.750%/0.500%, due 12/01/24(h) | | | 640,000 | | | 623,200 |
| | | | | | |
| IT Services - 0.4% |
Alliance Data Systems Corp.
1.750%, due 08/01/13 (144A)(a) | | | 2,730,000 | | | 2,020,200 |
| | | | | | |
| Marine - 0.2% |
Horizon Lines, Inc.
4.250%, due 08/15/12 | | | 1,660,000 | | | 1,172,375 |
| | | | | | |
| Media - 0.5% | | | | | | |
Lamar Advertising Co.
2.875%, due 12/31/10 | | | 920,000 | | | 902,750 |
Virgin Media, Inc.
6.500%, due 11/15/16 (144A)(a) | | | 2,010,000 | | | 1,567,800 |
| | | | | | |
| | | | | | 2,470,550 |
| | | | | | |
| Oil, Gas & Consumable Fuels - 0.5% |
Chesapeake Energy Corp.
2.250%, due 12/15/38 | | | 1,250,000 | | | 773,438 |
Massey Energy Co.
3.250%, due 08/01/15 | | | 2,655,000 | | | 1,765,575 |
| | | | | | |
| | | | | | 2,539,013 |
| | | | | | |
| Wireless Telecommunication Services - 0.5% |
American Tower Corp. - Class A
5.000%, due 02/15/10 | | | 1,025,000 | | | 1,020,653 |
FiberTower Corp.
9.000%, due 11/15/12 (144A)(a) | | | 179,350 | | | 74,879 |
Leap Wireless International Inc.
4.500%, due 07/15/14 | | | 450,000 | | | 354,316 |
NII Holdings, Inc.
2.750%, due 08/15/25 | | | 1,580,000 | | | 1,485,200 |
| | | | | | |
| | | | | | 2,935,048 |
| | | | | | |
Total Convertible Bonds
(Cost $18,211,733) | | | | | | 17,649,056 |
| | | | | | |
|
| Loan Participation - 8.6% |
Abbot Turbo Mezzanine Bridge
14.500%, due 03/15/18(b) | | | 3,169,779 | | | 2,218,845 |
Allison Transmission, Inc.
3.070%, due 08/07/14(b) | | | 4,627,605 | | | 3,712,219 |
See accompanying notes to financial statements
12
Met Investors Series Trust
BlackRock High Yield Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Loan Participation - continued |
Building Materials Corp.
3.063%, due 02/24/14(b) | | $ | 740,672 | | $ | 652,099 |
Dana Exit
7.250%, due 01/31/15(b) | | | 2,562,460 | | | 1,647,303 |
Delphi Auto
10.500%, due 06/30/09 | | | 8,340,921 | | | 2,644,857 |
Dynegy Holdings, Inc.
1.810%, due 04/02/13(b) | | | 699,766 | | | 629,181 |
Education Media, Inc.
5.080%, due 11/14/14(b) | | | 5,402,095 | | | 2,025,785 |
7.660%, due 11/14/14(b) | | | 1,974,925 | | | 1,372,573 |
First Data Corp.
3.062%, due 09/24/14(b) | | | 448,858 | | | 337,990 |
Ford Motor Co.
3.320%, due 12/16/13(b) | | | 921,508 | | | 672,125 |
General Motors Corp.
4.148%, due 11/29/13(b) | | | 1,436,076 | | | 1,418,577 |
HCA, Inc.
2.346%, due 11/19/12(b) | | | 4,114,438 | | | 3,748,582 |
Marsico Parent
5.063%, due 11/14/14(b) | | | 462,208 | | | 231,104 |
Navistar International Corp.
1.856%, due 01/19/12(b) | | | 3,025,000 | | | 2,623,431 |
3.560%, due 01/19/12(b) | | | 1,100,000 | | | 953,975 |
Nielsen Finance LLC
2.321%, due 08/09/13(b) | | | 712,667 | | | 645,299 |
NRG Energy, Inc.
5.262%, due 02/01/13 | | | 399,650 | | | 377,170 |
Pillowtex Corp.
9.000%, due 12/15/49(g) | | | 175,000 | | | 0 |
PQ Corp.
4.290%, due 07/30/14(b) | | | 742,500 | | | 582,863 |
7.540%, due 07/30/15(b) | | | 2,750,000 | | | 1,464,375 |
Quebecor World, Inc.
0.010%, due 06/30/12 | | | 900,000 | | | 810,000 |
Rite Aid Corp.
9.500%, due 06/05/15 | | | 2,250,000 | | | 2,243,914 |
Sba Infrastructure
1.969%, due 11/01/10(b) | | | 3,731,661 | | | 3,563,736 |
Solutia Exit
7.250%, due 02/28/14(b) | | | 895,455 | | | 830,852 |
Texas Competitive Electric Holdings Co. LLC
3.820%, due 10/10/14(b) | | | 4,594,051 | | | 3,288,700 |
Texas Competitive Energy
3.820%, due 10/10/14(b) | | | 491,250 | | | 352,406 |
Verso Paper Holdings LLC
7.685%, due 02/01/13(b) | | | 471,119 | | | 465,819 |
| | | | | | |
Security
Description | | Shares/Par
Amount | | Value |
| | | | | | |
|
| Loan Participation - continued |
Wind Acquisition Holdings Finance
7.198%, due 06/17/15(b) | | $ | 4,428,449 | | $ | 5,936,184 |
| | | | | | |
Total Loan Participation
(Cost $51,531,063) | | | | | | 45,449,964 |
| | | | | | |
| | |
| Common Stocks - 0.6% | | | | | | |
| Building Products - 0.3% | | | | | | |
Ainsworth Lumber Co., Ltd.* | | | 20,151 | | | 17,915 |
Masonite Worldwide Holdings*(g) | | | 58,362 | | | 1,604,955 |
| | | | | | |
| | | | | | 1,622,870 |
| | | | | | |
| Capital Markets - 0.3% | | | | | | |
E*TRADE Financial Corp.* | | | 1,352,000 | | | 1,730,560 |
| | | | | | |
| Chemicals - 0.0% | | | | | | |
Zemex Minerals Group, Inc. | | | 87 | | | 0 |
| | | | | | |
| Containers & Packaging - 0.0% | | | |
Russell-Stanley Holdings, Inc.(g) | | | 2,000 | | | 0 |
| | | | | | |
| Diversified Telecommunication Services - 0.0% |
Viatel Holding Bermuda, Ltd.* | | | 4 | | | 35 |
| | | | | | |
| Hotels, Restaurants & Leisure - 0.0% | | | |
Buffets Restaurants Holdings, Inc.*(g) | | | 114 | | | 1 |
| | | | | | |
| Media - 0.0% | | | | | | |
Cebridge Connections Holdings(g) | | | 7,460 | | | 67,140 |
| | | | | | |
| Real Estate - 0.0% | | | | | | |
Ashton Woods - Class B | | | 0 | | | 0 |
| | | | | | |
Total Common Stocks
(Cost $5,140,214) | | | | | | 3,420,606 |
| | | | | | |
| | |
| Preferred Stocks - 0.0% | | | | | | |
| Media - 0.0% | | | | | | |
CMP Susquehanna Radio Holdings Corp. (144A)*(a)(g) | | | 28,451 | | | 0 |
| | | | | | |
| Road & Rail - 0.0% | | | | | | |
Marsico Parent Superholdco LLC (144A)(i) | | | 96 | | | 25,440 |
| | | | | | |
Total Preferred Stocks
(Cost $90,515) | | | | | | 25,440 |
| | | | | | |
| |
| Convertible Preferred Stock - 0.2% | | | |
| Diversified Financial Services - 0.2% | | | |
Citigroup, Inc.
8.400%, due 04/29/49
(Cost - $818,940) | | | 1,315,000 | | | 987,986 |
| | | | | | |
| | |
| Warrants - 0.0% | | | | | | |
| Communications Equipment - 0.0% | | | |
Turbo Cayman, Ltd.,
expires 12/31/09* | | | 1 | | | 0 |
Viasystems Group, Inc.,
expires 04/30/11*(g) | | | 9,411 | | | 0 |
| | | | | | |
| | | | | | 0 |
| | | | | | |
See accompanying notes to financial statements
13
Met Investors Series Trust
BlackRock High Yield Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | | |
Security
Description | | Shares/Par Amount | | Value | |
| | | | | | | |
| | |
| Gas Utilities - 0.0% | | | | | | | |
AMF Bowling Worldwide, Inc.,
expires 03/09/09*(g) | | | 901 | | $ | 0 | |
| | | | | | | |
| Hotels, Restaurants & Leisure - 0.0% | |
Buffets Restaurant Holdings,
expires 04/28/14* | | | 50 | | | 0 | |
| | | | | | | |
| Media - 0.0% | |
Advanstar Holdings Corp.,
expires 10/15/11* | | | 75 | | | 675 | |
MDP Acquisitions Plc,
expires 10/01/13 (144A)*(a) | | | 100 | | | 2,856 | |
Sirius XM Radio, Inc.
expires 03/15/10* | | | 125 | | | 25 | |
| | | | | | | |
| | | | | | 3,556 | |
| | | | | | | |
| Paper & Forest Products - 0.0% | |
Neenah Enterprises, Inc.,
expires 10/07/13* | | | 6,130 | | | 0 | |
| | | | | | | |
| Road & Rail - 0.0% | | | | | | | |
Marsico Parent Superholdco, Ltd.,
expires 12/31/49* | | | 25 | | | 25,003 | |
| | | | | | | |
| Thrifts & Mortgage Finance - 0.0% | |
CNB Capital Trust I,
expires 03/23/19* | | | 32,513 | | | 0 | |
| | | | | | | |
Total Warrants
(Cost $271,437) | | | | | | 28,559 | |
| | | | | | | |
| |
| Short-Term Investments - 10.8% | | | | |
| Mutual Funds - 3.3% | | | | | | | |
State Street Navigator Securities Lending Trust Prime Portfolio(j) | | | 17,402,908 | | | 17,402,908 | |
| | | | | | | |
| Repurchase Agreement - 7.5% | | | | |
State Street Bank & Trust Co., Repurchase Agreement, dated 06/30/09 at 0.010% to be repurchased at $39,675,011 on 07/01/09 collateralized by $40,270,000 FHLB 0.090% due 04/08/10 with a value of $40,471,350. | | $ | 39,675,000 | | | 39,675,000 | |
| | | | | | | |
Total Short-Term Investments
(Cost $57,077,908) | | | | | | 57,077,908 | |
| | | | | | | |
| |
TOTAL INVESTMENTS - 104.5%
(Cost $595,982,189) | | | 553,822,937 | |
| | | | | | | |
| |
| Other Assets and Liabilities (net) - (4.5)% | | | (24,025,205 | ) |
| | | | | | | |
| |
| NET ASSETS - 100.0% | | $ | 529,797,732 | |
| | | | | | | |
Portfolio Footnotes:
| * | | Non-income producing security. |
| (a) | | Securities that may be resold to “qualified institutional buyers” under Rule 144A or securities offered pursuant to Section 4(2) of the Securities Act of 1933, as amended. These securities have been determined to be liquid under the guidelines established by the Board of Trustees. These securities represent in the aggregate $164,637,476 of net assets. |
| (b) | | Variable or floating rate security. The stated rate represents the rate at June 30, 2009. |
| (c) | | Payment-in-kind security for which part of the income earned may be paid as additional principal. |
| (d) | | All or a portion of security is on loan. |
| (e) | | Security is in default and/or issuer is in bankruptcy. |
| (f) | | Security is a “step up” bond where coupon increases or steps up at a predetermined date. Rates shown are current coupon and next coupon rate when security steps up. |
| (g) | | Security is valued in good faith at fair value by or under the direction of the Board of Trustees. |
| (h) | | Security is a “step-down” bond where the coupon decreases or steps down at a predetermined date. Rates shown are current coupon and next coupon rate when a security steps down. |
| (i) | | Illiquid securities representing in the aggregate $848,912 of net assets. |
| (j) | | Represents investment of collateral received from securities lending transactions. |
FHLB - Federal Home Loan Bank
See accompanying notes to financial statements
14
Met Investors Series Trust
BlackRock High Yield Portfolio
The following table summarizes the credit composition of the portfolio holdings of the BlackRock High Yield Portfolio at June 30, 2009, based upon quality ratings issued by Standard & Poor’s. For securities not rated by Standard & Poor’s, the equivalent Moody’s rating is used.
| | | |
| Portfolio Composition by Credit Quality (Unaudited) | | Percent of
Portfolio | |
AAA | | 1.63 | % |
A | | 0.59 | |
BBB | | 5.91 | |
BB | | 33.88 | |
B | | 31.52 | |
Below B | | 15.28 | |
Equities/Other | | 11.19 | |
| | | |
Total: | | 100.00 | % |
| | | |
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
| Level 1—quoted | | prices in active markets for identical securities |
| Level 2—other | | significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.) |
| Level 3—significant | | unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments) |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
| | | | | | | | | | | | |
Asset-Backed Security | | $ | — | | $ | 3,519,186 | | $ | — | | $ | 3,519,186 |
Domestic Bonds & Debt Securities | | | | | | | | | | | | |
Aerospace & Defense | | | — | | | 7,264,908 | | | — | | | 7,264,908 |
Air Freight & Logistics | | | — | | | 1,190,875 | | | — | | | 1,190,875 |
Airlines | | | — | | | 4,080,216 | | | — | | | 4,080,216 |
Auto Components | | | — | | | 6,004,230 | | | — | | | 6,004,230 |
Automobiles | | | — | | | 389,150 | | | — | | | 389,150 |
Beverages | | | — | | | 1,572,074 | | | — | | | 1,572,074 |
Building Products | | | — | | | 1,384,931 | | | — | | | 1,384,931 |
Capital Markets | | | — | | | 126,500 | | | — | | | 126,500 |
Chemicals | | | — | | | 6,911,944 | | | — | | | 6,911,944 |
Commercial & Professional Services | | | — | | | 8,565,431 | | | — | | | 8,565,431 |
Commercial Banks | | | — | | | 107,300 | | | — | | | 107,300 |
Communications Equipment | | | — | | | 3,386,990 | | | — | | | 3,386,990 |
Computers & Peripherals | | | — | | | 925,900 | | | — | | | 925,900 |
Construction & Engineering | | | — | | | 1,896,600 | | | — | | | 1,896,600 |
Construction Materials | | | — | | | 406,125 | | | — | | | 406,125 |
Consumer Finance | | | — | | | 29,823,393 | | | — | | | 29,823,393 |
Containers & Packaging | | | — | | | 20,830,958 | | | — | | | 20,830,958 |
Distributors | | | — | | | 1,984,325 | | | — | | | 1,984,325 |
Diversified Consumer Services | | | — | | | 166,065 | | | — | | | 166,065 |
See accompanying notes to financial statements
15
Met Investors Series Trust
BlackRock High Yield Portfolio
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Diversified Financial Services | | $ | — | | $ | 15,113,585 | | $ | — | | $ | 15,113,585 |
Diversified Telecommunication Services | | | — | | | 36,115,476 | | | — | | | 36,115,476 |
Electric Utilities | | | — | | | 11,041,882 | | | — | | | 11,041,882 |
Electrical Equipment | | | — | | | 7,740,950 | | | — | | | 7,740,950 |
Electronic Equipment, Instruments & Components | | | — | | | 384,031 | | | — | | | 384,031 |
Energy Equipment & Services | | | — | | | 5,647,450 | | | — | | | 5,647,450 |
Entertainment & Leisure | | | — | | | 1,311,525 | | | — | | | 1,311,525 |
Food & Staples Retailing | | | — | | | 4,028,325 | | | — | | | 4,028,325 |
Food Products | | | — | | | 3,530,300 | | | — | | | 3,530,300 |
Gas Utilities | | | — | | | 2,331,465 | | | — | | | 2,331,465 |
Health Care Equipment & Supplies | | | — | | | 6,728,375 | | | — | | | 6,728,375 |
Health Care Providers & Services | | | — | | | 12,799,490 | | | — | | | 12,799,490 |
Homebuilders | | | — | | | 2,838,572 | | | — | | | 2,838,572 |
Hotels, Restaurants & Leisure | | | — | | | 9,469,837 | | | — | | | 9,469,837 |
Household Durables | | | — | | | 4,275,187 | | | — | | | 4,275,187 |
Independent Power Producers & Energy Traders | | | — | | | 8,541,254 | | | — | | | 8,541,254 |
Industrial - Diversified | | | — | | | 1,841,775 | | | — | | | 1,841,775 |
Insurance | | | — | | | 52,400 | | | — | | | 52,400 |
Internet Software & Services | | | — | | | 1,827,900 | | | — | | | 1,827,900 |
Life Sciences Tools & Services | | | — | | | 2,840,962 | | | — | | | 2,840,962 |
Machinery | | | — | | | 1,776,500 | | | — | | | 1,776,500 |
Manufacturing | | | — | | | 1,527,466 | | | — | | | 1,527,466 |
Marine | | | — | | | 29,700 | | | — | | | 29,700 |
Media | | | — | | | 40,152,197 | | | 2,440 | | | 40,154,637 |
Metals & Mining | | | — | | | 21,133,266 | | | — | | | 21,133,266 |
Multiline Retail | | | — | | | 2,553,366 | | | — | | | 2,553,366 |
Oil, Gas & Consumable Fuels | | | — | | | 53,284,255 | | | — | | | 53,284,255 |
Paper & Forest Products | | | — | | | 9,607,343 | | | — | | | 9,607,343 |
Pharmaceuticals | | | — | | | 7,124,378 | | | — | | | 7,124,378 |
Real Estate | | | — | | | 6,352,532 | | | 23,920 | | | 6,376,452 |
Real Estate Investment Trusts (REITs) | | | — | | | 104,236 | | | — | | | 104,236 |
Road & Rail | | | — | | | 1,904,199 | | | — | | | 1,904,199 |
Software | | | — | | | 2,888,275 | | | — | | | 2,888,275 |
Specialty Retail | | | — | | | 4,224,315 | | | — | | | 4,224,315 |
Textiles, Apparel & Luxury Goods | | | — | | | 606,713 | | | — | | | 606,713 |
Tobacco | | | — | | | 3,484,029 | | | — | | | 3,484,029 |
Trading Companies & Distributors | | | — | | | 187,738 | | | — | | | 187,738 |
Transportation | | | — | | | 59,500 | | | — | | | 59,500 |
Wireless Telecommunication Services | | | — | | | 33,159,208 | | | — | | | 33,159,208 |
Total Domestic Bonds & Debt Securities | | | — | | | 425,637,872 | | | 26,360 | | | 425,664,232 |
Convertible Bonds | | | | | | | | | | | | |
Airlines | | | — | | | 87,116 | | | — | | | 87,116 |
Diversified Telecommunication Services | | | — | | | 1,725,529 | | | — | | | 1,725,529 |
Energy Equipment & Services | | | — | | | 1,548,500 | | | — | | | 1,548,500 |
Health Care Equipment & Supplies | | | — | | | 2,527,525 | | | — | | | 2,527,525 |
Hotels, Restaurants & Leisure | | | — | | | 623,200 | | | — | | | 623,200 |
See accompanying notes to financial statements
16
Met Investors Series Trust
BlackRock High Yield Portfolio
| | | | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | | Significant
Unobservable
Inputs
(Level 3) | | Total | |
IT Services | | $ | — | | $ | 2,020,200 | | | $ | — | | $ | 2,020,200 | |
Marine | | | — | | | 1,172,375 | | | | — | | | 1,172,375 | |
Media | | | — | | | 2,470,550 | | | | — | | | 2,470,550 | |
Oil, Gas & Consumable Fuels | | | — | | | 2,539,013 | | | | — | | | 2,539,013 | |
Wireless Telecommunication Services | | | — | | | 2,935,048 | | | | — | | | 2,935,048 | |
Total Convertible Bonds | | | — | | | 17,649,056 | | | | — | | | 17,649,056 | |
Loan Participation | | | — | | | 43,231,119 | | | | 2,218,845 | | | 45,449,964 | |
Common Stocks | | | | | | | | | | | | | | |
Building Products | | | 1,622,870 | | | — | | | | — | | | 1,622,870 | |
Capital Markets | | | 1,730,560 | | | — | | | | — | | | 1,730,560 | |
Chemicals | | | — | | | — | | | | — | | | — | |
Containers & Packaging | | | — | | | — | | | | — | | | — | |
Diversified Telecommunication Services | | | 35 | | | — | | | | — | | | 35 | |
Hotels, Restaurants & Leisure | | | — | | | — | | | | 1 | | | 1 | |
Media | | | — | | | — | | | | 67,140 | | | 67,140 | |
Real Estate | | | — | | | — | | | | — | | | — | |
Total Common Stocks | | | 3,353,465 | | | — | | | | 67,141 | | | 3,420,606 | |
Preferred Stocks | | | | | | | | | | | | | | |
Media | | | — | | | — | | | | — | | | — | |
Road & Rail | | | — | | | 25,440 | | | | — | | | 25,440 | |
Total Preferred Stocks | | | — | | | 25,440 | | | | — | | | 25,440 | |
Convertible Preferred Stock | | | | | | | | | | | | | | |
Diversified Financial Services | | | — | | | 987,986 | | | | — | | | 987,986 | |
Warrants | | | | | | | | | | | | | | |
Communications Equipment | | | — | | | — | | | | — | | | — | |
Gas Utilities | | | — | | | — | | | | — | | | — | |
Hotels, Restaurants & Leisure | | | — | | | — | | | | — | | | — | |
Media | | | 25 | | | 3,531 | | | | — | | | 3,556 | |
Paper & Forest Products | | | — | | | — | | | | — | | | — | |
Road & Rail | | | — | | | 25,003 | | | | — | | | 25,003 | |
Thrifts & Mortgage Finance | | | — | | | — | | | | — | | | — | |
Total Warrants | | | 25 | | | 28,534 | | | | — | | | 28,559 | |
Short-Term Investments | | | | | | | | | | | | | | |
Mutual Funds | | | 17,402,908 | | | — | | | | — | | | 17,402,908 | |
Repurchase Agreement | | | — | | | 39,675,000 | | | | — | | | 39,675,000 | |
Total Short-Term Investments | | | 17,402,908 | | | 39,675,000 | | | | — | | | 57,077,908 | |
| TOTAL INVESTMENTS | | $ | 20,756,398 | | $ | 530,754,193 | | | $ | 2,312,346 | | $ | 553,822,937 | |
Forward Contracts | | | | | | | | | | | | | | |
Forward Currency Contracts | | $ | — | | $ | (502,794 | ) | | $ | — | | $ | (502,794 | ) |
See accompanying notes to financial statements
17
Met Investors Series Trust
BlackRock High Yield Portfolio
FAS 157 Level 3 Reconciliation Disclosure
Following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value:
Asset Valuation Inputs
| | | | | | | | | | | | | | | | |
| Investments in Securities | | Balance as of
December 31,
2008 | | Discounts | | Change in
Unrealized
Depreciation | | | Net Purchases | | Balance as of
June 30,
2009 |
| Domestic Bonds & Debt Securities | | | | | | | | | | | | | | | | |
Media | | $ | — | | $ | — | | $ | (59,819 | ) | | $ | 62,259 | | $ | 2,440 |
Real Estate | | | — | | | 1,318 | | | (21,098 | ) | | | 43,700 | | | 23,920 |
| Loan Participation | | | 3,067,823 | | | — | | | (888,325 | ) | | | 39,347 | | | 2,218,845 |
| Common Stock | | | | | | | | | | | | | | | | |
Hotels, Restaurants & Leisure | | | — | | | — | | | (62,687 | ) | | | 62,688 | | | 1 |
Media | | | 67,140 | | | — | | | — | | | | — | | | 67,140 |
| Total | | $ | 3,134,963 | | $ | 1,318 | | ($ | 1,031,929 | ) | | $ | 207,994 | | $ | 2,312,346 |
See accompanying notes to financial statements
18
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| BlackRock High Yield Portfolio | | | |
| Assets | | | | |
Investments, at value (a)(b) | | $ | 514,147,937 | |
Repurchase Agreement | | | 39,675,000 | |
Cash | | | 565,870 | |
Cash denominated in foreign currencies (c) | | | 833,478 | |
Receivable for investments sold | | | 1,813,089 | |
Receivable for Trust shares sold | | | 484,423 | |
Interest receivable | | | 10,138,199 | |
Unrealized appreciation on forward currency contracts | | | 21,888 | |
| | | | |
Total assets | | | 567,679,884 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 19,169,286 | |
Trust shares redeemed | | | 416,020 | |
Unrealized depreciation on forward currency contracts | | | 524,682 | |
Distribution and services fees—Class B | | | 12,879 | |
Collateral for securities on loan | | | 17,402,908 | |
Management fee | | | 257,770 | |
Administration fee | | | 3,149 | |
Custodian and accounting fees | | | 5,762 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 86,269 | |
| | | | |
Total liabilities | | | 37,882,152 | |
| | | | |
| Net Assets | | $ | 529,797,732 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 619,812,525 | |
Accumulated net realized loss | | | (67,298,088 | ) |
Unrealized depreciation on investments and foreign currency | | | (42,673,987 | ) |
Undistributed net investment income | | | 19,957,282 | |
| | | | |
Total | | $ | 529,797,732 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 462,896,396 | |
| | | | |
Class B | | | 66,901,336 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 69,576,413 | |
| | | | |
Class B | | | 10,090,649 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 6.65 | |
| | | | |
Class B | | | 6.63 | |
| | | | |
| | | | | |
(a) Investments at cost, excluding repurchase agreement | | $ | 556,307,189 | |
(b) Includes cash collateral for securities loaned of | | | 17,402,908 | |
(c) Cost of cash denominated in foreign currencies | | | 826,688 | |
See accompanying notes to financial statements
19
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| BlackRock High Yield Portfolio | | | |
| Investment Income | | | | |
Interest (1) | | $ | 20,399,823 | |
| | | | |
Total investment income | | | 20,399,823 | |
| | | | |
| Expenses | | | | |
Management fee | | | 1,176,411 | |
Administration fees | | | 17,286 | |
Custodian and accounting fees | | | 52,686 | |
Distribution and services fees—Class B | | | 42,100 | |
Audit and tax services | | | 37,156 | |
Legal | | | 16,070 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 15,486 | |
Insurance | | | 5,432 | |
Other | | | 2,592 | |
| | | | |
Total expenses | | | 1,374,918 | |
| | | | |
Net investment income | | | 19,024,905 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency | | | | |
Net realized loss on: | | | | |
Investments | | | (18,824,662 | ) |
Foreign currency | | | (1,138,233 | ) |
| | | | |
Net realized loss on investments and foreign currency | | | (19,962,895 | ) |
| | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 80,665,236 | |
Foreign currency | | | 392,443 | |
| | | | |
Net change in unrealized appreciation on investments and foreign currency | | | 81,057,679 | |
| | | | |
Net realized and unrealized gain on investments and foreign currency | | | 61,094,784 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 80,119,689 | |
| | | | |
| | | | | |
(1) Interest income includes securities lending net income of: | | $ | 81,264 | |
See accompanying notes to financial statements
20
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| BlackRock High Yield Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 19,024,905 | | | $ | 33,011,396 | |
Net realized loss on investments and foreign currency | | | (19,962,895 | ) | | | (31,403,713 | ) |
Net change in unrealized appreciation (depreciation) on investments and foreign currency | | | 81,057,679 | | | | (105,934,818 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 80,119,689 | | | | (104,327,135 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | (21,252,736 | ) | | | (29,255,292 | ) |
Class B | | | (2,134,251 | ) | | | — | |
From net realized gains | | | | | | | | |
Class A | | | — | | | | — | |
Class B | | | — | | | | — | |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (23,386,987 | ) | | | (29,255,292 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 119,066,721 | | | | 83,090,043 | |
Class B | | | 55,916,650 | | | | 32,338,687 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | 21,252,736 | | | | 29,255,292 | |
Class B | | | 2,134,251 | | | | — | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (24,878,410 | ) | | | (92,246,282 | ) |
Class B | | | (9,229,171 | ) | | | (14,171,793 | ) |
| | | | | | | | |
Net increase in net assets from capital share transactions | | | 164,262,777 | | | | 38,265,947 | |
| | | | | | | | |
| Net Increase (Decrease) in Net Assets | | | 220,995,479 | | | | (95,316,480 | ) |
Net assets at beginning of period | | | 308,802,253 | | | | 404,118,733 | |
| | | | | | | | |
Net assets at end of period | | $ | 529,797,732 | | | $ | 308,802,253 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 19,957,282 | | | $ | 24,319,364 | |
| | | | | | | | |
See accompanying notes to financial statements
21
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| BlackRock High Yield Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004++ | |
| Net Asset Value, Beginning of Period | | | $ 5.80 | | | $ | 8.24 | | | $ | 8.92 | | | $ | 8.84 | | | $ | 8.62 | | | $ | 8.41 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income | | | 0.30 | (a) | | | 0.61 | (a) | | | 0.60 | (a) | | | 0.63 | (a) | | | 0.63 | (a) | | | 0.64 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.95 | | | | (2.48 | ) | | | (0.34 | ) | | | 0.19 | | | | (0.41 | ) | | | 0.23 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total From Investment Operations | | | 1.25 | | | | (1.87 | ) | | | 0.26 | | | | 0.82 | | | | 0.22 | | | | 0.87 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.40 | ) | | | (0.57 | ) | | | (0.94 | ) | | | (0.74 | ) | | | — | | | | (0.66 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.40 | ) | | | (0.57 | ) | | | (0.94 | ) | | | (0.74 | ) | | | — | | | | (0.66 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 6.65 | | | $ | 5.80 | | | $ | 8.24 | | | $ | 8.92 | | | $ | 8.84 | | | $ | 8.62 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 22.23 | % | | | (24.20 | )% | | | 2.70 | % | | | 9.81 | % | | | 2.55 | % | | | 10.38 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.68 | %* | | | 0.67 | % | | | 0.72 | % | | | 0.93 | % | | | 0.87 | % | | | 0.83 | %(b) |
Ratio of Expenses to Average Net Assets Before Reimbursement
and Rebates | | | 0.68 | %* | | | 0.67 | % | | | 0.73 | %(c) | | | 0.96 | % | | | 0.87 | % | | | 0.87 | % |
Ratio of Net Investment Income to Average Net Assets | | | 9.74 | %* | | | 8.40 | % | | | 7.21 | % | | | 7.34 | % | | | 7.28 | % | | | 7.42 | % |
Portfolio Turnover Rate | | | 45.0 | % | | | 57.8 | % | | | 60.2 | % | | | 88.9 | % | | | 36.0 | % | | | 38.0 | % |
Net Assets, End of Period (in millions) | | $ | 462.9 | | | $ | 295.7 | | | $ | 404.1 | | | $ | 77.5 | | | $ | 84.0 | | | $ | 87.0 | |
| | | | | | | | |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the
Period Ended
December 31,
2008(d) | |
| | | |
| Net Asset Value, Beginning of Period | | $ | 5.78 | | | $ | 7.66 | |
| | | | | | | | |
| Income (Loss) from Investment Operations: | | | | | | | | |
Net Investment Income(a) | | | 0.29 | | | | 0.41 | |
Net Realized / Unrealized Gain (Loss) on Investments | | | 0.96 | | | | (2.29 | ) |
| | | | | | | | |
Total From Investment Operations | | | 1.25 | | | | (1.88 | ) |
| | | | | | | | |
| Less Distributions | | | | | | | | |
Dividends from Net Investment Income | | | (0.40 | ) | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | — | |
| | | | | | | | |
Total Distributions | | | (0.40 | ) | | | — | |
| | | | | | | | |
| Net Asset Value, End of Period | | $ | 6.63 | | | $ | 5.78 | |
| | | | | | | | |
| Total Return | | | 22.02 | % | | | (24.54 | )% |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.93 | %* | | | 0.94 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.93 | %* | | | 0.94 | %* |
Ratio of Net Investment Loss to Average Net Assets | | | 9.27 | %* | | | 8.70 | %* |
Portfolio Turnover Rate | | | 45.0 | % | | | 57.8 | % |
Net Assets, End of Period (in millions) | | $ | 66.9 | | | $ | 13.2 | |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | The investment manager waived a portion of its management fee for the year. |
| (c) | | Excludes effect of deferred expense reimbursement. |
| (d) | | Commencement of operations 4/28/08. |
| ++ | | Audited by other auditors Independent Registered Public Accounting Firm. |
See accompanying notes to financial statements
22
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is BlackRock High Yield Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A and B Shares are currently offered by the Portfolio. Class C and E Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
23
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | | | | | | | | | | | | | | | | | |
Expiring
12/31/2009 | | Expiring
12/31/2010 | | Expiring
12/31/2011 | | Expiring
12/31/2013 | | Expiring
12/31/2015 | | Expiring
12/31/2016 | | Total |
| | | | | | |
| $ | 4,592,238 | | $ | 6,217,956 | | $ | 1,599,086 | | $ | 825,797 | | $ | 705,137 | | $ | 32,375,160 | | $ | 46,315,374 |
On May 1, 2006, the Federated High Yield Portfolio, a series of The Travelers Series Trust, was reorganized into the Federated High Yield Portfolio, a series of Met Investors Series Trust. The Portfolio acquired capital losses of $13,291,427 which are subject to an annual limitation of $3,740,137.
On May 23, 2006, Federated Investment Management Company resigned as the investment adviser for the Federated High Yield Portfolio. On August 10, 2006, the Board of Trustees of the Trust approved BlackRock Financial Management, Inc. as the new investment adviser for the Portfolio. Effective August 21, 2006, the Portfolio changed its name to the BlackRock High Yield Portfolio and the new investment adviser became BlackRock Financial Management, Inc.
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Financial Derivative Instruments - Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133, (“FAS 161” or the “Statement”) requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. The disclosure requirements of FAS 161 distinguish between derivatives which are accounted for as “hedges” under FAS 133 and those that do not qualify for such accounting. The Portfolio reflects derivatives at fair value and recognizes changes in fair value through the Statement of Operations, and as such do not qualify for FAS 133 hedge accounting treatment.
G. Forward Foreign Currency Contracts - The Portfolio may enter into forward foreign currency contracts to hedge its portfolio holdings against future movements in certain foreign currency exchange rates. A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a set price. Forward currency contracts are valued at the forward rate and are marked-to-market daily. The change in market value is recorded by the Portfolio as an unrealized gain or loss. When the contract is closed, the Portfolio recognizes a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.
The use of forward foreign currency contracts does not eliminate fluctuations in the underlying prices of the securities of the Portfolio, but it does establish a rate of exchange that can be achieved in the future. Although forward foreign currency contracts to sell limit the risk of loss due to a decline in the value of the currency holdings, they also limit any potential gain that might result should the value of the currency increase. In addition, the Portfolio could be exposed to risks if the counterparties to the contracts are unable to meet the terms of the contracts.
24
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
At June 30, 2009, the Portfolio had following derivatives (not designated as hedging instruments under SFAS No. 133), grouped into appropriate risk categories that illustrate how and why the Portfolio uses derivative instruments:
| | | | | | | | | | | |
| | | Asset Derivatives | | Liability Derivatives | |
Derivatives not accounted for as hedging instruments under Statement 133 | | Balance Sheet Location | | Fair Value | | Balance Sheet Location | | Fair Value | |
| | | | |
Foreign Exchange Contracts | | Unrealized appreciation on forward currency contracts | | $ | 21,888 | | Unrealized depreciation on forward currency contracts | | $ | (524,682 | ) |
| | | | | | | | | | | |
| | | | |
Total | | | | $ | 21,888 | | | | $ | (524,682 | ) |
| | | | | | | | | | | |
Transactions in derivative instruments during the six months ended June 30, 2009, were as follows:
| | | |
Derivatives not accounted for as hedging instruments under Statement 133 |
Location | | Foreign
Exchange
Contracts |
| |
Statement of Operations—Change in Unrealized Gain (Loss) | | | |
| |
Foreign Currency | | $ | 429,626 |
| | | |
| |
Total | | $ | 429,626 |
| | | |
H. Foreign Currency Translation - The books and records of the Portfolio are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars on a daily basis using prevailing exchange rates. Purchases and sales of securities are translated at the rates of exchange prevailing when such securities were acquired or sold. Income is translated at rates of exchange prevailing when interest is accrued or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in forward foreign currency contracts; sales of foreign currencies; currency gains or losses realized between the trade and settlement dates on securities transactions; and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Portfolio’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end; from changes in the exchange rates of foreign currency held; and from changes in the contract value of forward foreign currency contracts.
I. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
J. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of collateral decreases below the value of the securities loaned.
25
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
K. Loan Participations - The Portfolio may invest in loans arranged through private negotiation between one or more financial institutions. The Portfolio’s investment in any such loan may be in the form of a participation in or an assignment of the loan. In connection with purchasing participations, the Portfolio generally will have no right to enforce compliance by the borrower with the terms of the loan agreement relating to the loan, nor any rights of set-off against the borrower and the Portfolio may not benefit directly from any collateral supporting the loan in which it has purchased the participation.
L. Mortgage Related and Other Asset Backed Securities - The Portfolio may invest in mortgage related or other asset-backed securities. These securities may include mortgage pass-through securities, collateralized mortgaged obligations (“CMOs”), commercial mortgage-backed securities, mortgage dollar rolls, CMO residuals, stripped mortgage backed securities (“SMBS”) and other securities that directly or indirectly represent a participation in, or are secured by a payable from, mortgage loans on real property or other receivables. The value of some mortgage or asset-backed securities may be particularly sensitive to changes in prevailing interest rates. Early repayment of principal on some mortgage-related securities may expose the Portfolio to a lower rate of return upon reinvestment of principal. The value of these securities may fluctuate in response to the market’s perception of the creditworthiness of the issuers. Additionally, although mortgages and mortgage-related securities are generally supported by some form of government or private guarantee and/or insurance, there is no assurance that private guarantors or insurers will meet their obligations.
One type of SMBS has one class receiving all of the interest from the mortgage assets (the interest-only or “IO” class), while the other class will receive all of the principal (the principal-only or “PO” class). Payments received for the IOs are included in interest income on the Statement of Operations of the Portfolio. Because principal will not be received at the maturity of an IO, adjustments are made to the book value on the security on a daily basis until maturity. These adjustments are included in interest income on the Statement of Operations of the Portfolio. Payments received for POs are treated as reductions to the cost and par value of the securities. Details of mortgage related and other asset-backed securities held at year end are included in the Portfolio’s Portfolio of Investments.
The Portfolio may invest a significant portion of its assets in securities of issuers that hold mortgage and asset backed securities and direct investments in securities backed by commercial and residential mortgage loans and other financial assets. The value and related income of these securities are sensitive to changes in economic conditions, including delinquencies and/or defaults, and may be negatively impacted by increased volatility of market prices and periods of illiquidity.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with BlackRock Financial Management, Inc. (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $1,176,411 | | 0.60 | % | | ALL |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
26
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A and Class B Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B distribution plan provides that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% of the average net assets of the Portfolio attributable to its Class B Shares in respect to activities primarily intended to result in the sale of Class B Shares. However, under the Class B distribution agreement, payments to the Distributor for activities pursuant to the Class B distribution plan are currently limited to payments at an annual rate equal to 0.25% of average daily net assets of the Portfolio attributable to its Class B Shares.
Under terms of the Class B distribution plan and distribution agreement, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
in Shares
Outstanding | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 50,979,654 | | 19,090,734 | | 3,518,665 | | (4,012,640 | ) | | 18,596,759 | | 69,576,413 |
12/31/2008 | | 49,029,687 | | 11,138,707 | | 3,849,381 | | (13,038,121 | ) | | 1,949,967 | | 50,979,654 |
| | | | | | |
Class B | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 2,274,114 | | 8,934,449 | | 354,527 | | (1,472,441 | ) | | 7,816,535 | | 10,090,649 |
04/28/2008-12/31/2008 | | — | | 4,455,438 | | — | | (2,181,324 | ) | | 2,274,114 | | 2,274,114 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| $— | | $ | 331,391,959 | | $ | — | | $ | 162,636,404 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $595,982,189 | | $ | 15,385,191 | | $ | (57,544,443 | ) | | $ | (42,159,252 | ) |
27
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
6. Securities Lending
As of June 30, 2009, the Portfolio had loaned securities which were collateralized by short-term investments. The value of securities on loan and the value of the related collateral were as follows:
| | | | | | | | | |
Value of
Securities | | Value of
Cash
Collateral | | Value of
Non-Cash
Collateral* | | Total
Collateral |
| | | |
| $17,043,097 | | $ | 17,402,908 | | $ | — | | $ | 17,402,908 |
* The Portfolio cannot repledge or resell this collateral. The non-cash collateral is typically comprised of government securities and/or bank letters of credit.
7. Forward Foreign Currency Contracts
Open forward foreign currency contracts at June 30, 2009, were as follows:
Forward Foreign Currency Contracts to Buy:
| | | | | | | | | | | | | | |
Settlement Date | | Counterparty | | Contracts to Buy | | | Value at
June 30, 2009 | | In Exchange for U.S.$ | | Net Unrealized
Appreciation |
| | | | | |
7/15/2009 | | Citibank | | 555,000 | EUR | | $ | 778,112 | | $ | 775,861 | | $ | 2,250 |
| | | | | | | | | | | | | | |
Forward Foreign Currency Contracts to Sell:
| | | | | | | | | | | | | | | |
Settlement Date | | Counterparty | | Contracts to Deliver | | | Value at
June 30, 2009 | | In Exchange for U.S.$ | | Net Unrealized
Appreciation/
(Depreciation) | |
| | | | | |
7/15/2009 | | Citibank | | 13,035,000 | EUR | | $ | 18,275,117 | | $ | 17,753,670 | | $ | (521,446 | ) |
| | | | | |
7/15/2009 | | Citibank | | 258,000 | EUR | | | 361,717 | | | 359,677 | | | (2,040 | ) |
| | | | | |
7/15/2009 | | Citibank | | 580,000 | EUR | | | 813,162 | | | 822,666 | | | 9,504 | |
| | | | | |
7/15/2009 | | Goldman Sachs & Co. | | 202,500 | EUR | | | 283,906 | | | 282,710 | | | (1,196 | ) |
| | | | | |
8/26/2009 | | Barclays Capital, Inc. | | 1,149,000 | GBP | | | 1,889,852 | | | 1,899,986 | | | 10,134 | |
| | | | | | | | | | | | | | | |
| | | | | |
| | | | | | | | | | | | | $ | (505,044 | ) |
| | | | | | | | | | | | | | | |
EUR - Euro Dollar
GBP - - Great Britain Pound
8. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $ | 29,255,292 | | $ | 7,871,993 | | $ | — | | $ | — | | $ | 29,255,292 | | $ | 7,871,993 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net Unrealized
Depreciation | | | Loss Carryforwards | | | Total | |
| | | | |
| $ | 23,386,943 | | $ | — | | $ | (123,819,064 | ) | | $ | (46,315,374 | ) | | $ | (146,747,495 | ) |
28
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
9. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
10. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
11. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
12. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
29
| | |
| BlackRock Large Cap Core Portfolio | | For the period ended 6/30/09 |
| Managed by BlackRock Advisors, LLC | | |
Portfolio Manager Commentary
Performance
During the period ended June 30, 2009, the Portfolio had a return of (1.11)%, (1.26)% and (1.20)% for Class A, B and E Shares, respectively, versus 4.32% for its benchmark, the Russell 1000® Index.
Market Environment/Conditions
Equity market volatility from the latter part of 2008 continued through the first quarter of 2009, with stocks sinking deeply in January and February as economic data continued to worsen and investors grew uncertain as to policymakers’ next steps in combating the credit crisis. Sentiment improved noticeably in March following the announcements of new Fed and Treasury programs aimed at putting the economy and financial markets back on an even keel.
Initial market enthusiasm, triggered by signs of a slower pace of economic decline, is giving way to a more realistic assessment of the environment. The U.S. and global economies are starting to stabilize, but there continues to be considerable uncertainty about the outlook. Although past economic patterns cannot predict the future, deep recessions have typically been followed by strong recoveries. The implication is that growth could surprise on the upside in the coming year, which would be bullish for profits and equity prices. Yet, the financial nature of the downturn highlights that this is far from a typical cycle. The cyclical outlook is not disastrous for risky assets, but neither is it unambiguously bright. On the one hand, the U.S. monetary and fiscal stance is highly simulative, and there is considerable cash on the sidelines. On the other hand, the future trend in corporate earnings is uncertain, there will not be any early return to free-flowing credit, and equities and corporate bonds are no longer at bargain levels.
The data for the U.S. and global economies are becoming increasingly mixed, as one would expect in the approach to a turning point. Diffusion indexes, such as purchasing managers’ surveys, turned the corner a couple of months ago, and composite indexes of leading economic indicators are rising. This all seems consistent with the recession ending in the second half of the year. It is one thing for the recession to end, and quite another for economic activity to return to a normal level. Turning points in the economic cycle are all about rates of change.
Portfolio Review/Current Positioning
Stock selection was the main driver of the underperformance, particularly in financials, consumer discretionary and information technology (IT). Additionally, our overweight in healthcare detracted. The bulk of the underperformance occurred during the height of the low-quality rally in April.
Within financials, relative performance was hurt by our long-standing underweight in capital markets and diversified financials, as well as by stock selection in insurance. In consumer discretionary, the flight away from quality that occurred in the second half of the period impacted returns. We took a barbell approach. On one side, we own companies that are well positioned for an improvement in consumer spending that has not yet been priced into valuations, including restaurants (casual dining) and specialty retailers. On the other side of the barbell we own defensive retailers that are likely to benefit from recent consumer belt-
tightening, particularly off-price retailers and dollar stores. These “trade-down” names were left behind in the rally, but we remain convinced that the shift in consumer behavior will outlast the current recession.
Our high-quality stance in the IT sector negatively impacted performance. We believe the IT sector provides an opportunity to own high-quality, blue-chip companies at below-average valuations. We favor IT services companies due to the secular trend in outsourcing and their high degree of recurring revenues, and software companies that earn the majority of their profits from upgrade, maintenance and support of existing software deployments.
In this uncertain environment we maintain our preference for high-quality, well-managed companies with recurring, stable revenue streams selling at reasonable valuations. We remain comfortable with our current sector allocation, believing that investments in healthcare, IT and consumer discretionary companies offer compelling long-term value. Despite the short-term underperformance from our financials holdings, we remain firm in our conviction that the diversified and money-center firms face a future of lower leverage, lower multiples and lower returns on equity. As always, we rely on a disciplined investment process and a belief in the importance of portfolio construction and risk management to strive to deliver consistent outperformance over the long term. At the end of the period, relative to the benchmark, the Portfolio’s largest overweights are in healthcare and consumer discretionary, and the largest underweights are in financials and consumer staples.
Bob Doll, CFA, CPA
Dan Hanson, CFA
Portfolio Managers
BlackRock Advisors, LLC
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
1
| | |
| BlackRock Large Cap Core Portfolio | | For the period ended 6/30/09 |
| Managed by BlackRock Advisors, LLC | | |
Portfolio Manager Commentary (continued)
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
Exxon Mobil Corp. | | 2.94% |
Johnson & Johnson | | 2.74% |
International Business Machines Corp. | | 2.52% |
Chevron Corp. | | 2.43% |
Cisco Systems, Inc. | | 2.17% |
Pfizer, Inc. | | 2.11% |
Oracle Corp. | | 2.02% |
Verizon Communications, Inc. | | 1.96% |
Goldman Sachs Group, Inc. (The) | | 1.83% |
AT&T, Inc. | | 1.76% |
Portfolio Composition (% of portfolio market value)
As of 6/30/09
2
| | |
| BlackRock Large Cap Core Portfolio | | For the period ended 6/30/09 |
| Managed by BlackRock Advisors, LLC | | |
Portfolio Manager Commentary (continued)
BlackRock Large Cap Core Portfolio managed by
BlackRock Advisors, LLC vs. Russell 1000® Index1
Growth Based on $10,000+
| | | | | | | | | | | | | | |
| | | | | Average Annual Return2 (for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | 3 Year | | 5 Year | | 10 Year | | Since
Inception3 |
| — | | BlackRock
Large Cap Core Portfolio—
Class A | | -1.11% | | -29.30% | | -9.70% | | -1.45% | | -2.94% | | — |
| | Class B | | -1.26% | | -29.53% | | — | | — | | — | | -19.50% |
| | Class E | | -1.20% | | -29.45% | | — | | — | | — | | -19.41% |
| - - | | Russell 1000® Index1 | | 4.32% | | -26.69% | | -8.20% | | -1.85% | | -1.75% | | — |
+The chart reflects the performance of Class A shares of the Portfolio. The performance of Class A shares will differ from that of the other classes of shares because of the difference in expenses paid by policyholders investing in the different share classes.
1The Russell 1000® Index is an unmanaged index which measures the performances of the 1,000 largest companies in the Russell 3000® Index, which represents approximately 90% of the investable U.S. equity market.
2“Average Annual Return” is calculated including reinvestment of all income dividends and capital gains distributions.
3Inception of Class A shares is 3/23/1998. Inception of Class B and Class E shares is 4/30/2007.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Index does not include fees or expenses and is not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| Blackrock Large Cap Core Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.64% | | $ | 1,000.00 | | $ | 988.90 | | $ | 3.16 |
Hypothetical | | 0.64% | | | 1,000.00 | | | 1,021.62 | | | 3.21 |
| | | | | | | | | | | |
| | | | |
Class B | | | | | | | | | | | |
Actual | | 0.89% | | $ | 1,000.00 | | $ | 987.40 | | $ | 4.39 |
Hypothetical | | 0.89% | | | 1,000.00 | | | 1,020.38 | | | 4.46 |
| | | | | | | | | | | |
| | | | |
Class E | | | | | | | | | | | |
Actual | | 0.79% | | $ | 1,000.00 | | $ | 988.00 | | $ | 3.89 |
Hypothetical | | 0.79% | | | 1,000.00 | | | 1,020.88 | | | 3.96 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
4
Met Investors Series Trust
BlackRock Large Cap Core Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | |
| Common Stocks - 99.8% | | | | | |
| Aerospace & Defense - 5.7% | | | |
General Dynamics Corp. | | 87,000 | | $ | 4,818,930 |
Goodrich Corp. | | 194,000 | | | 9,694,180 |
Honeywell International, Inc. | | 17,000 | | | 533,800 |
L-3 Communications Holdings, Inc. | | 68,900 | | | 4,780,282 |
Lockheed Martin Corp. | | 148,000 | | | 11,936,200 |
Northrop Grumman Corp. | | 224,000 | | | 10,232,320 |
Raytheon Co. | | 254,000 | | | 11,285,220 |
| | | | | |
| | | | | 53,280,932 |
| | | | | |
| Beverages - 0.3% | | | |
Coca-Cola Co. (The) | | 51,000 | | | 2,447,490 |
| | | | | |
| Biotechnology - 2.6% | | | |
Amgen, Inc.* | | 285,000 | | | 15,087,900 |
Biogen Idec, Inc.* | | 211,000 | | | 9,526,650 |
| | | | | |
| | | | | 24,614,550 |
| | | | | |
| Building Products - 0.3% | | | |
Lennox International, Inc. | | 74,000 | | | 2,376,140 |
| | | | | |
| Capital Markets - 1.8% | | | |
Goldman Sachs Group, Inc. (The) | | 116,000 | | | 17,103,040 |
| | | | | |
| Commercial & Professional Services - 0.2% | | | |
Pitney Bowes, Inc. | | 98,000 | | | 2,149,140 |
| | | | | |
| Commercial Banks - 0.3% | | | |
Wells Fargo & Co. | | 126,000 | | | 3,056,760 |
| | | | | |
| Communications Equipment - 2.2% | | | |
Cisco Systems, Inc.* | | 1,084,000 | | | 20,205,760 |
| | | | | |
| Computers & Peripherals - 6.8% | | | |
Apple, Inc.* | | 27,000 | | | 3,845,610 |
EMC Corp.* | | 900,000 | | | 11,790,000 |
International Business Machines Corp. | | 225,000 | | | 23,494,500 |
Lexmark International, Inc. - Class A* | | 90,000 | | | 1,426,500 |
NetApp, Inc.* | | 516,000 | | | 10,175,520 |
QLogic Corp.* | | 200,000 | | | 2,536,000 |
Western Digital Corp.* | | 372,000 | | | 9,858,000 |
| | | | | |
| | | | | 63,126,130 |
| | | | | |
| Diversified Consumer Services - 1.1% | | | |
Apollo Group, Inc. - Class A* | | 150,000 | | | 10,668,000 |
| | | | | |
| Diversified Financial Services - 0.5% | | | |
JPMorgan Chase & Co. | | 143,000 | | | 4,877,730 |
| | | | | |
| Diversified Telecommunication Services - 3.7% |
AT&T, Inc. | | 660,000 | | | 16,394,400 |
Verizon Communications, Inc. | | 595,000 | | | 18,284,350 |
| | | | | |
| | | | | 34,678,750 |
| | | | | |
| Electrical Equipment & Services - 0.6% | | | |
General Cable Corp.* | | 140,000 | | | 5,261,200 |
| | | | | |
| Energy Equipment & Services - 2.8% | | | |
Diamond Offshore Drilling, Inc.(a) | | 120,000 | | | 9,966,000 |
ENSCO International, Inc. | | 249,000 | | | 8,682,630 |
Noble Corp. | | 263,000 | | | 7,955,750 |
| | | | | |
| | | | | 26,604,380 |
| | | | | |
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| |
| Food & Staples Retailing - 1.3% | | | |
Kroger Co. (The) | | 484,000 | | $ | 10,672,200 |
Wal-Mart Stores, Inc. | | 36,000 | | | 1,743,840 |
| | | | | |
| | | | | 12,416,040 |
| | | | | |
| Food Products - 1.2% | | | |
Archer-Daniels-Midland Co. | | 416,000 | | | 11,136,320 |
| | | | | |
| Gas Utilities - 0.2% | | | |
UGI Corp. | | 82,000 | | | 2,090,180 |
| | | | | |
| Health Care Equipment & Supplies - 0.2% | | | |
ResMed, Inc.* | | 39,000 | | | 1,588,470 |
| | | | | |
| Health Care Providers & Services - 8.8% | | | |
Aetna, Inc. | | 409,000 | | | 10,245,450 |
Community Health Systems, Inc.*(a) | | 190,000 | | | 4,797,500 |
Coventry Health Care, Inc.* | | 239,000 | | | 4,471,690 |
Express Scripts, Inc.* | | 163,000 | | | 11,206,250 |
Health Net, Inc.* | | 176,000 | | | 2,736,800 |
Humana, Inc.* | | 280,000 | | | 9,032,800 |
Lincare Holdings, Inc.* | | 80,000 | | | 1,881,600 |
Medco Health Solutions, Inc.* | | 254,000 | | | 11,584,940 |
Tenet Healthcare Corp.* | | 436,000 | | | 1,229,520 |
UnitedHealth Group, Inc. | | 520,000 | | | 12,989,600 |
WellPoint, Inc.* | | 236,000 | | | 12,010,040 |
| | | | | |
| | | | | 82,186,190 |
| | | | | |
| Health Care Technology - 0.7% | | | |
Cerner Corp.* | | 81,000 | | | 5,045,490 |
IMS Health, Inc. | | 90,000 | | | 1,143,000 |
| | | | | |
| | | | | 6,188,490 |
| | | | | |
| Hotels, Restaurants & Leisure - 1.0% | | | |
Darden Restaurants, Inc. | | 297,000 | | | 9,795,060 |
| | | | | |
| Household Durables - 4.0% | | | |
D.R. Horton, Inc.(a) | | 739,000 | | | 6,917,040 |
Garmin, Ltd.(a) | | 263,000 | | | 6,264,660 |
Lennar Corp. - Class A(a) | | 570,000 | | | 5,523,300 |
M.D.C. Holdings, Inc. | | 198,000 | | | 5,961,780 |
NVR, Inc.*(a) | | 10,000 | | | 5,023,900 |
Toll Brothers, Inc.*(a) | | 462,000 | | | 7,840,140 |
| | | | | |
| | | | | 37,530,820 |
| | | | | |
| Household Products - 0.7% | | | |
Procter & Gamble Co. (The) | | 121,000 | | | 6,183,100 |
| | | | | |
| Industrial Conglomerates - 0.5% | | | |
General Electric Co. | | 372,000 | | | 4,359,840 |
| | | | | |
| Insurance - 2.4% | | | |
Chubb Corp. (The) | | 270,000 | | | 10,767,600 |
Travelers Cos., Inc. (The) | | 281,000 | | | 11,532,240 |
| | | | | |
| | | | | 22,299,840 |
| | | | | |
| Internet Software & Services - 0.3% | | | |
Google, Inc. - Class A* | | 3,000 | | | 1,264,770 |
Sohu.com, Inc.*(a) | | 20,000 | | | 1,256,600 |
| | | | | |
| | | | | 2,521,370 |
| | | | | |
See accompanying notes to financial statements
5
Met Investors Series Trust
BlackRock Large Cap Core Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| |
| IT Services - 5.4% | | | |
Accenture, Ltd. - Class A | | 357,000 | | $ | 11,945,220 |
Affiliated Computer Services, Inc. - Class A*(a) | | 120,000 | | | 5,330,400 |
Automatic Data Processing, Inc. | | 280,000 | | | 9,923,200 |
Computer Sciences Corp.* | | 210,900 | | | 9,342,870 |
Fiserv, Inc.* | | 60,000 | | | 2,742,000 |
Western Union Co. | | 653,000 | | | 10,709,200 |
| | | | | |
| | | | | 49,992,890 |
| | | | | |
| Metals & Mining - 1.3% | | | | | |
Allegheny Technologies, Inc. | | 134,000 | | | 4,680,620 |
United States Steel Corp. | | 210,000 | | | 7,505,400 |
| | | | | |
| | | | | 12,186,020 |
| | | | | |
| Multi-Utilities - 1.0% | | | | | |
CMS Energy Corp.(a) | | 431,000 | | | 5,206,480 |
NiSource, Inc. | | 380,000 | | | 4,430,800 |
| | | | | |
| | | | | 9,637,280 |
| | | | | |
| Multiline Retail - 2.1% | | | | | |
Big Lots, Inc.* | | 90,000 | | | 1,892,700 |
Dollar Tree, Inc.* | | 228,000 | | | 9,598,800 |
Family Dollar Stores, Inc. | | 287,000 | | | 8,122,100 |
| | | | | |
| | | | | 19,613,600 |
| | | | | |
| Oil, Gas & Consumable Fuels - 11.5% |
Alpha Natural Resources, Inc.* | | 298,000 | | | 7,828,460 |
Anadarko Petroleum Corp. | | 257,000 | | | 11,665,230 |
Chevron Corp. | | 343,000 | | | 22,723,750 |
Exxon Mobil Corp. | | 392,000 | | | 27,404,720 |
Marathon Oil Corp. | | 390,000 | | | 11,750,700 |
Murphy Oil Corp. | | 190,000 | | | 10,320,800 |
Tesoro Corp.(a) | | 593,000 | | | 7,548,890 |
Valero Energy Corp. | | 464,000 | | | 7,836,960 |
| | | | | |
| | | | | 107,079,510 |
| | | | | |
| Pharmaceuticals - 9.3% |
Bristol-Myers Squibb Co. | | 650,000 | | | 13,201,500 |
Forest Laboratories, Inc.* | | 70,000 | | | 1,757,700 |
Johnson & Johnson | | 450,000 | | | 25,560,000 |
Pfizer, Inc. | | 1,313,000 | | | 19,695,000 |
Schering-Plough Corp. | | 549,000 | | | 13,790,880 |
Wyeth | | 277,000 | | | 12,573,030 |
| | | | | |
| | | | | 86,578,110 |
| | | | | |
| Semiconductors & Semiconductor Equipment - 1.8% |
National Semiconductor Corp.(a) | | 744,000 | | | 9,337,200 |
Texas Instruments, Inc. | | 342,000 | | | 7,284,600 |
| | | | | |
| | | | | 16,621,800 |
| | | | | |
| Software - 6.4% |
BMC Software, Inc.* | | 284,000 | | | 9,596,360 |
CA, Inc. | | 556,000 | | | 9,691,080 |
McAfee, Inc.*(a) | | 240,000 | | | 10,125,600 |
| | | | | | | |
Security
Description | | Shares/Par
Amount | | Value | |
| | | | | | | |
|
| Software - continued | |
Microsoft Corp. | | | 396,000 | | $ | 9,412,920 | |
Oracle Corp. | | | 878,000 | | | 18,806,760 | |
Sybase, Inc.* | | | 72,000 | | | 2,256,480 | |
| | | | | | | |
| | | | | | 59,889,200 | |
| | | | | | | |
| Specialty Retail - 8.6% | |
Advance Auto Parts, Inc. | | | 232,000 | | | 9,625,680 | |
AutoZone, Inc.*(a) | | | 65,000 | | | 9,822,150 | |
Best Buy Co., Inc.(a) | | | 282,000 | | | 9,444,180 | |
Gap, Inc. (The) | | | 641,000 | | | 10,512,400 | |
Limited Brands, Inc. | | | 830,000 | | | 9,935,100 | |
Ross Stores, Inc. | | | 257,000 | | | 9,920,200 | |
Sherwin-Williams Co. (The) | | | 183,000 | | | 9,836,250 | |
TJX Cos., Inc. (The) | | | 341,000 | | | 10,727,860 | |
| | | | | | | |
| | | | | | 79,823,820 | |
| | | | | | | |
| Textiles, Apparel & Luxury Goods - 1.4% | |
Coach, Inc. | | | 125,000 | | | 3,360,000 | |
Polo Ralph Lauren Corp.(a) | | | 179,000 | | | 9,583,660 | |
| | | | | | | |
| | | | | | 12,943,660 | |
| | | | | | | |
| Wireless Telecommunication Services - 0.8% | |
Sprint Nextel Corp.* | | | 1,624,000 | | | 7,811,440 | |
| | | | | | | |
Total Common Stocks
(Cost $952,953,769) | | | | | | 930,923,052 | |
| | | | | | | |
|
| Escrowed Shares - 0.0% | |
| Computers & Peripherals - 0.0% | |
ESC Seagate Technology(b)*
(Cost - $0) | | | 27,200 | | | 27 | |
| | | | | | | |
|
| Short-Term Investments - 4.8% | |
| Mutual Funds - 4.7% | |
State Street Navigator Securities Lending Trust Prime Portfolio(c) | | | 43,878,924 | | | 43,878,924 | |
| | | | | | | |
| Repurchase Agreement - 0.1% | |
State Street Bank & Trust Co., Repurchase Agreement, dated 06/30/09 at 0.010% to be repurchased at $1,237,000 on 07/01/09 collateralized by $1,225,000 FHLMC at 2.875% due 11/23/10 with a value of $1,263,281. | | $ | 1,237,000 | | | 1,237,000 | |
| | | | | | | |
| Total Short-Term Investments (Cost $45,115,924) | | | | | | 45,115,924 | |
| | | | | | | |
| |
TOTAL INVESTMENTS - 104.6% (Cost $998,069,693) | | | 976,039,003 | |
| | | | | | | |
| | |
| Other Assets and Liabilities (net) - (4.6)% | | | | | | (42,777,184 | ) |
| | | | | | | |
| | |
| NET ASSETS - 100.0% | | | | | $ | 933,261,819 | |
| | | | | | | |
See accompanying notes to financial statements
6
Met Investors Series Trust
BlackRock Large Cap Core Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
Portfolio Footnotes:
| * | | Non-income producing security. |
| (a) | | All or a portion of security is on loan. |
| (b) | | Illiquid securities representing in the aggregate $27 of net assets. |
| (c) | | Represents investment of collateral received from securities lending transactions. |
FHLMC - Federal Home Loan Mortgage Corporation
See accompanying notes to financial statements
7
Met Investors Series Trust
BlackRock Large Cap Core Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1—quoted prices in active markets for identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
| Common Stocks | | | | | | | | | | | | |
Aerospace & Defense | | $ | 53,280,932 | | $ | — | | $ | — | | $ | 53,280,932 |
Beverages | | | 2,447,490 | | | — | | | — | | | 2,447,490 |
Biotechnology | | | 24,614,550 | | | — | | | — | | | 24,614,550 |
Building Products | | | 2,376,140 | | | — | | | — | | | 2,376,140 |
Capital Markets | | | 17,103,040 | | | — | | | — | | | 17,103,040 |
Commercial & Professional Services | | | 2,149,140 | | | — | | | — | | | 2,149,140 |
Commercial Banks | | | 3,056,760 | | | — | | | — | | | 3,056,760 |
Communications Equipment | | | 20,205,760 | | | — | | | — | | | 20,205,760 |
Computers & Peripherals | | | 63,126,130 | | | — | | | — | | | 63,126,130 |
Diversified Consumer Services | | | 10,668,000 | | | — | | | — | | | 10,668,000 |
Diversified Financial Services | | | 4,877,730 | | | — | | | — | | | 4,877,730 |
Diversified Telecommunication Services | | | 34,678,750 | | | — | | | — | | | 34,678,750 |
Electrical Equipment | | | 5,261,200 | | | — | | | — | | | 5,261,200 |
Energy Equipment & Services | | | 26,604,380 | | | — | | | — | | | 26,604,380 |
Food & Staples Retailing | | | 12,416,040 | | | — | | | — | | | 12,416,040 |
Food Products | | | 11,136,320 | | | — | | | — | | | 11,136,320 |
Gas Utilities | | | 2,090,180 | | | — | | | — | | | 2,090,180 |
Health Care Equipment & Supplies | | | 1,588,470 | | | — | | | — | | | 1,588,470 |
Health Care Providers & Services | | | 82,186,190 | | | — | | | — | | | 82,186,190 |
Health Care Technology | | | 6,188,490 | | | — | | | — | | | 6,188,490 |
Hotels, Restaurants & Leisure | | | 9,795,060 | | | — | | | — | | | 9,795,060 |
Household Durables | | | 37,530,820 | | | — | | | — | | | 37,530,820 |
Household Products | | | 6,183,100 | | | — | | | — | | | 6,183,100 |
Industrial Conglomerates | | | 4,359,840 | | | — | | | — | | | 4,359,840 |
Insurance | | | 22,299,840 | | | — | | | — | | | 22,299,840 |
Internet Software & Services | | | 2,521,370 | | | — | | | — | | | 2,521,370 |
IT Services | | | 49,992,890 | | | — | | | — | | | 49,992,890 |
Metals & Mining | | | 12,186,020 | | | — | | | — | | | 12,186,020 |
Multi-Utilities | | | 9,637,280 | | | — | | | — | | | 9,637,280 |
Multiline Retail | | | 19,613,600 | | | — | | | — | | | 19,613,600 |
Oil, Gas & Consumable Fuels | | | 107,079,510 | | | — | | | — | | | 107,079,510 |
Pharmaceuticals | | | 86,578,110 | | | — | | | — | | | 86,578,110 |
Semiconductors & Semiconductor Equipment | | | 16,621,800 | | | — | | | — | | | 16,621,800 |
Software | | | 59,889,200 | | | — | | | — | | | 59,889,200 |
Specialty Retail | | | 79,823,820 | | | — | | | — | | | 79,823,820 |
Textiles, Apparel & Luxury Goods | | | 12,943,660 | | | — | | | — | | | 12,943,660 |
Wireless Telecommunication Services | | | 7,811,440 | | | — | | | — | | | 7,811,440 |
Total Common Stocks | | | 930,923,052 | | | — | | | — | | | 930,923,052 |
See accompanying notes to financial statements
8
Met Investors Series Trust
BlackRock Large Cap Core Portfolio
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Escrowed Shares | | | | | | | | | | | | |
Computers & Peripherals | | $ | — | | $ | — | | $ | 27 | | $ | 27 |
| Short-Term Investments | | | | | | | | | | | | |
Mutual Funds | | | 43,878,924 | | | — | | | — | | | 43,878,924 |
Repurchase Agreement | | | — | | | 1,237,000 | | | — | | | 1,237,000 |
Total Short-Term Investments | | | 43,878,924 | | | 1,237,000 | | | — | | | 45,115,924 |
| TOTAL INVESTMENTS | | $ | 974,801,976 | | $ | 1,237,000 | | $ | 27 | | $ | 976,039,003 |
FAS 157 Level 3 Reconciliation Disclosure
Following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value:
Asset Valuation Inputs
| | | | | | |
| Investments in Securities | | Balance as of
December 31,
2008 | | Balance as of
June 30,
2009 |
| Escrowed Shares | | | | | | |
Computers & Peripherals | | $ | 27 | | $ | 27 |
| Total | | $ | 27 | | $ | 27 |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| BlackRock Large Cap Core Portfolio | | | |
| Assets | | | | |
Investments, at value (a)(b) | | $ | 974,802,003 | |
Repurchase Agreement | | | 1,237,000 | |
Cash | | | 35 | |
Receivable for investments sold | | | 54,538,563 | |
Receivable for Trust shares sold | | | 4,248,586 | |
Dividends receivable | | | 443,295 | |
| | | | |
Total assets | | | 1,035,269,482 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 53,148,174 | |
Trust shares redeemed | | | 4,238,567 | |
Distribution and services fees—Class B | | | 8,209 | |
Distribution and services fees—Class E | | | 11,192 | |
Collateral for securities on loan | | | 43,878,924 | |
Management fee | | | 461,641 | |
Administration fee | | | 5,699 | |
Custodian and accounting fees | | | 13,806 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 238,024 | |
| | | | |
Total liabilities | | | 102,007,663 | |
| | | | |
| Net Assets | | $ | 933,261,819 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 1,492,172,575 | |
Accumulated net realized loss | | | (544,371,214 | ) |
Unrealized depreciation on investments | | | (22,030,690 | ) |
Undistributed net investment income | | | 7,491,148 | |
| | | | |
Total | | $ | 933,261,819 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 803,214,298 | |
| | | | |
Class B | | | 40,382,458 | |
| | | | |
Class E | | | 89,665,063 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 123,988,248 | |
| | | | |
Class B | | | 6,306,865 | |
| | | | |
Class E | | | 13,919,751 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 6.48 | |
| | | | |
Class B | | | 6.40 | |
| | | | |
Class E | | | 6.44 | |
| | | | |
| | | | | |
(a) Investments at cost, excluding repurchase agreement | | $ | 996,832,693 | |
(b) Includes cash collateral for securities loaned of | | | 43,878,924 | |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| BlackRock Large Cap Core Portfolio | | | |
| Investment Income | | | | |
Dividends | | $ | 10,665,668 | |
Interest (1) | | | 188,111 | |
| | | | |
Total investment income | | | 10,853,779 | |
| | | | |
| Expenses | | | | |
Management fee | | | 3,004,876 | |
Administration fees | | | 42,492 | |
Custodian and accounting fees | | | 44,465 | |
Distribution and services fees—Class B | | | 42,906 | |
Distribution and services fees—Class E | | | 65,405 | |
Audit and tax services | | | 18,008 | |
Legal | | | 16,595 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 97,213 | |
Insurance | | | 14,344 | |
Other | | | 6,585 | |
| | | | |
Total expenses | | | 3,362,588 | |
| | | | |
Net investment income | | | 7,491,191 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments | | | | |
Net realized loss on: | | | | |
Investments | | | (236,056,672 | ) |
| | | | |
Net realized loss on investments | | | (236,056,672 | ) |
| | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 206,960,275 | |
| | | | |
Net change in unrealized appreciation on investments | | | 206,960,275 | |
| | | | |
Net realized and unrealized loss on investments | | | (29,096,397 | ) |
| | | | |
| Net Decrease in Net Assets from Operations | | $ | (21,605,206 | ) |
| | | | |
| | | | | |
(1) Interest income includes securities lending net income of: | | $ | 188,052 | |
See accompanying notes to financial statements
11
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| BlackRock Large Cap Core Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 7,491,191 | | | $ | 18,488,315 | |
Net realized loss on investments | | | (236,056,672 | ) | | | (264,666,275 | ) |
Net change in unrealized appreciation (depreciation) on investments | | | 206,960,275 | | | | (468,385,956 | ) |
| | | | | | | | |
Net decrease in net assets resulting from operations | | | (21,605,206 | ) | | | (714,563,916 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | (16,652,014 | ) | | | (9,674,115 | ) |
Class B | | | (520,566 | ) | | | (208,807 | ) |
Class E | | | (1,315,679 | ) | | | (808,522 | ) |
From net realized gains | | | | | | | | |
Class A | | | — | | | | (63,194,324 | ) |
Class B | | | — | | | | (1,856,247 | ) |
Class E | | | — | | | | (6,473,762 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (18,488,259 | ) | | | (82,215,777 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 16,174,932 | | | | 139,429,006 | |
Class B | | | 9,517,111 | | | | 12,084,131 | |
Class E | | | 9,254,235 | | | | 40,230,320 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | 16,652,014 | | | | 72,868,439 | |
Class B | | | 520,566 | | | | 2,065,054 | |
Class E | | | 1,315,679 | | | | 7,282,284 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (234,172,444 | ) | | | (179,486,847 | ) |
Class B | | | (2,517,247 | ) | | | (7,229,511 | ) |
Class E | | | (14,685,107 | ) | | | (61,726,745 | ) |
| | | | | | | | |
Net increase (decrease) in net assets from capital share transactions | | | (197,940,261 | ) | | | 25,516,131 | |
| | | | | | | | |
| Net Increase (Decrease) in Net Assets | | | (238,033,726 | ) | | | (771,263,562 | ) |
Net assets at beginning of period | | | 1,171,295,545 | | | | 1,942,559,107 | |
| | | | | | | | |
Net assets at end of period | | $ | 933,261,819 | | | $ | 1,171,295,545 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 7,491,148 | | | $ | 18,488,216 | |
| | | | | | | | |
See accompanying notes to financial statements
12
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| BlackRock Large Cap Core Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004++ | |
| Net Asset Value, Beginning of Period | | $ | 6.67 | | | $ | 11.14 | | | $ | 11.20 | | | $ | 10.14 | | | $ | 9.05 | | | $ | 7.85 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income Gain (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income | | | 0.05 | (a) | | | 0.11 | (a) | | | 0.09 | (a) | | | 0.05 | (a) | | | 0.02 | (a) | | | 0.04 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | (0.13 | ) | | | (4.10 | ) | | | 0.63 | | | | 1.37 | | | | 1.07 | | | | 1.21 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | (0.08 | ) | | | (3.99 | ) | | | 0.72 | | | | 1.42 | | | | 1.09 | | | | 1.25 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.11 | ) | | | (0.06 | ) | | | (0.08 | ) | | | (0.02 | ) | | | — | | | | (0.05 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (0.42 | ) | | | (0.70 | ) | | | (0.34 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.11 | ) | | | (0.48 | ) | | | (0.78 | ) | | | (0.36 | ) | | | — | | | | (0.05 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 6.48 | | | $ | 6.67 | | | $ | 11.14 | | | $ | 11.20 | | | $ | 10.14 | | | $ | 9.05 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | (1.11 | )% | | | (37.17 | )% | | | 6.55 | % | | | 14.25 | % | | | 12.04 | % | | | 15.89 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.64 | %* | | | 0.62 | % | | | 0.64 | % | | | 0.98 | % | | | 0.91 | % | | | 0.92 | %(b) |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.64 | %* | | | 0.62 | % | | | 0.65 | %(d) | | | 1.04 | % | | | 0.91 | % | | | 0.95 | % |
Ratio of Net Investment Income to Average Net Assets | | | 1.50 | %* | | | 1.20 | % | | | 0.83 | % | | | 0.48 | % | | | 0.23 | % | | | 0.51 | % |
Portfolio Turnover Rate | | | 70.3 | % | | | 102.8 | % | | | 87.3 | % | | | 72.2 | % | | | 79.0 | % | | | 136.0 | % |
Net Assets, End of Period (in millions) | | $ | 803.2 | | | $ | 1,041.2 | | | $ | 1,716.0 | | | $ | 131.0 | | | $ | 131.0 | | | $ | 126.0 | |
| | | | | | | | | | | | |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years
Ended
December 31, | |
| | | | 2008 | | | 2007(c) | |
| Net Asset Value, Beginning of Period | | $ | 6.58 | | | $ | 11.01 | | | $ | 10.91 | |
| | | | | | | | | | | | |
| Income Gain (Loss) from Investment Operations | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.04 | | | | 0.08 | | | | 0.04 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | (0.13 | ) | | | (4.04 | ) | | | 0.06 | |
| | | | | | | | | | | | |
Total from Investment Operations | | | (0.09 | ) | | | (3.96 | ) | | | 0.10 | |
| | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.09 | ) | | | (0.05 | ) | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | (0.42 | ) | | | — | |
| | | | | | | | | | | | |
Total Distributions | | | (0.09 | ) | | | (0.47 | ) | | | — | |
| | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 6.40 | | | $ | 6.58 | | | $ | 11.01 | |
| | | | | | | | | | | | |
| Total Return | | | (1.26 | )% | | | (37.36 | )% | | | 0.92 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.89 | %* | | | 0.87 | % | | | 0.89 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.89 | %* | | | 0.87 | % | | | 0.89 | %*(d) |
Ratio of Net Investment Income to Average Net Assets | | | 1.24 | %* | | | 0.96 | % | | | 0.58 | %* |
Portfolio Turnover Rate | | | 70.3 | % | | | 102.8 | % | | | 87.3 | % |
Net Assets, End of Period (in millions) | | $ | 40.4 | | | $ | 33.5 | | | $ | 47.0 | |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | The investment manager waived a portion of its management fee for the year. |
| (c) | | Commencement of operations—04/30/2007. |
| (d) | | Excludes effect of deferred expense reimbursement. |
| ++ | | Audited by other auditors Independent Registered Public Accounting Firm. |
See accompanying notes to financial statements
13
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | |
| | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | |
| | | |
| | | | | | | | | | |
| BlackRock Large Cap Core Portfolio | | Class E | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years
Ended
December 31, | |
| | | | 2008 | | | 2007(b) | |
| Net Asset Value, Beginning of Period | | $ | 6.62 | | | $ | 11.07 | | | $ | 10.96 | |
| | | | | | | | | | | | |
| Income Gain (Loss) from Investment Operations | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.04 | | | | 0.09 | | | | 0.05 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | (0.13 | ) | | | (4.07 | ) | | | 0.06 | |
| | | | | | | | | | | | |
Total from Investment Operations | | | (0.09 | ) | | | (3.98 | ) | | | 0.11 | |
| | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.09 | ) | | | (0.05 | ) | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | (0.42 | ) | | | — | |
| | | | | | | | | | | | |
Total Distributions | | | (0.09 | ) | | | (0.47 | ) | | | — | |
| | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 6.44 | | | $ | 6.62 | | | $ | 11.07 | |
| | | | | | | | | | | | |
| Total Return | | | (1.20 | )% | | | (37.30 | )% | | | 1.00 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.79 | %* | | | 0.77 | % | | | 0.79 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.79 | %* | | | 0.77 | % | | | 0.79 | %*(c) |
Ratio of Net Investment Income to Average Net Assets | | | 1.35 | %* | | | 1.04 | % | | | 0.69 | %* |
Portfolio Turnover Rate | | | 70.3 | % | | | 102.8 | % | | | 87.3 | % |
Net Assets, End of Period (in millions) | | $ | 89.7 | | | $ | 96.6 | | | $ | 179.6 | |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—04/30/2007. |
| (c) | | Excludes effect of deferred expense reimbursement. |
See accompanying notes to financial statements
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is BlackRock Large Cap Core Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A, B, and E Shares are currently offered by the Portfolio. Class C Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | | | | | | | | |
Expiring
12/31/2010 | | Expiring
12/31/2011 | | Expiring
12/31/2016 | | Total |
| | | |
| $ | 24,073,084 | | $ | 14,588,867 | | $ | 219,324,202 | | $ | 257,986,153 |
On May 1, 2006, the BlackRock Large Cap Core Portfolio, a series of The Travelers Series Trust, was reorganized into the BlackRock Large Cap Core Portfolio, a series of Met Investors Series Trust. The Portfolio acquired capital losses of $67,463,346 which are subject to an annual limitation of $5,495,892.
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
G. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities including accrued interest will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities including accrued interest will continue to be at least equal to the value of the repurchase agreement.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with BlackRock Advisors, LLC (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
16
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | Average Daily Net Assets |
| | |
| $3,004,876 | | 0.625% | | First $250 Million |
| | |
| | 0.60% | | $250 Million to $500 Million |
| | |
| | 0.575% | | $500 Million to $1 Billion |
| | |
| | 0.55% | | $1 Billion to $2 Billion |
| | |
| | 0.50% | | Over $2 Billion |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A, Class B and Class E Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B and Class E distribution plans provide that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%, respectively, of the average net assets of the Portfolio attributable to its Class B and Class E Shares in respect to activities primarily intended to result in the sale of Class B and Class E Shares. However, under the Class B and Class E distribution agreements, payments to the Distributor for activities pursuant to the Class B and Class E distribution plans are currently limited to payments at an annual rate equal to 0.25% and 0.15% of average daily net assets of the Portfolio attributable to its Class B and Class E Shares, respectively.
Under terms of the Class B and Class E distribution plans and distribution agreements, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B and Class E Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
(Decrease)
in Shares
Outstanding | | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 156,190,742 | | 2,626,198 | | 2,720,917 | | (37,549,609 | ) | | (32,202,494 | ) | | 123,988,248 |
12/31/2008 | | 154,054,548 | | 15,269,290 | | 7,435,555 | | (20,568,651 | ) | | 2,136,194 | | | 156,190,742 |
| | | | | | |
Class B | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 5,096,495 | | 1,539,592 | | 85,901 | | (415,123 | ) | | 1,210,370 | | | 6,306,865 |
12/31/2008 | | 4,269,640 | | 1,435,421 | | 213,112 | | (821,678 | ) | | 826,855 | | | 5,096,495 |
| | | | | | |
Class E | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 14,594,518 | | 1,472,350 | | 216,040 | | (2,363,157 | ) | | (674,767 | ) | | 13,919,751 |
12/31/2008 | | 16,227,601 | | 4,287,279 | | 747,667 | | (6,668,029 | ) | | (1,633,083 | ) | | 14,594,518 |
17
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 705,983,869 | | $ | — | | $ | 916,276,255 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $998,069,693 | | $ | 46,970,642 | | $ | (69,001,332 | ) | | $ | (22,030,690 | ) |
6. Securities Lending
As of June 30, 2009, the Portfolio had loaned securities which were collateralized by short-term investments. The value of securities on loan and the value of the related collateral were as follows:
| | | | | | | | | |
Value of
Securities | | Value of
Cash
Collateral | | Value of
Non-Cash
Collateral* | | Total
Collateral |
| | | |
| $42,726,147 | | $ | 43,878,924 | | $ | — | | $ | 43,878,924 |
* The Portfolio cannot repledge or resell this collateral. The non-cash collateral is typically comprised of government securities and/or bank letters of credit.
7. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $10,691,484 | | $ | 904,022 | | $ | 71,524,293 | | $ | 7,875,932 | | $ | 82,215,777 | | $ | 8,779,954 |
| | | | | |
| | | | | | | | | | | | | | | |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net Unrealized
Depreciation | | | Loss Carryforwards | | | Total | |
| | | | |
| $18,488,216 | | $ | — | | $ | (279,319,354 | ) | | $ | (257,986,153 | ) | | $ | (518,817,291 | ) |
8. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
18
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
9. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
19
| | |
| Clarion Global Real Estate Portfolio | | For the period ended 6/30/09 |
| Managed by ING Clarion Real Estate Securities, LLC | | |
Portfolio Manager Commentary
Performance
During the period ended June 30, 2009, the Portfolio generated a total return of 3.25%, 3.13% and 3.23% for Class A, B and E shares, respectively, versus 5.88% for its benchmark, the FTSE/EPRA NAREIT Developed Real Estate Index. (Please note the index had a change in name only on March 23, 2009)
Market Environment/Conditions
Global real estate stocks turned in positive performance for the six month period ending June 30, 2009, due to a rally which began in mid-March and continued through to the end of the period. After a difficult first quarter, global property markets rallied during the second quarter (up almost 36%), lifting returns for the year back into positive territory (up nearly 6%).
By region, the Asia-Pacific region has provided the strongest performance, gaining 25% during the period as positive revisions to economic forecasts as well as stronger than expected demand for residential property, especially in Hong Kong and China, helped drive the Hong Kong and Singapore markets up 63% and 38%, respectively, during the period. The European region was up slightly for the period, +2.8%, as some of the poorer-performing markets in 2008 have rebounded in 2009. This rebound has been led by countries whose companies provide less ‘visibility’, typically in Southern and Central European countries. Additionally, companies in these countries on average have business models that include development activities versus the more stable lease-driven business models that are more prevalent in property markets such as France and the Benelux (Belgium, Netherlands & Luxembourg) countries. The Americas region lagged during the period, primarily due to the performance of the U.S. property market, where fundamentals continue to be revised downward, given conditions in the economy as well as the credit markets.
In light of improving conditions in the credit markets, real estate companies have raised over $33 billion of equity over the past nine months, with the majority of this activity occurring over the past four months. The U.S., Australia, the U.K. and Singapore accounted for more than 90% of the aggregate equity raised as companies have moved quickly to repair balance sheets as the equity “window” remains open.
Real estate companies are also conserving cash through other measures as additional capital has been sourced via combinations of a reduction in payout policies (dividend cuts), access to the secured and unsecured debt markets, and successful refinancing of existing secured debt. While not an overall panacea, these capital raising activities constitute a critical but necessary step in preparing property companies for the latter stages of a recession which should begin to present an increasing number of potential attractive investment opportunities.
Portfolio Review/Current Positioning
The Portfolio underperformed during this period, primarily as the result of stock selection but also as the result of country allocation
decisions in Asia and the Americas. Portfolio holdings performed well for the most part in absolute terms but were relative underperformers against the benchmark. The strong rebound in listed property stocks during the second quarter was widespread and was led by companies and regions with higher risk profiles. Stock selection in Hong Kong and Singapore was the primary drag on fund relative performance as an overweight to underperforming “defensive” companies with strong balance sheets and stable income was compounded by an underweight in the higher-octane development-based companies which outperformed. For example, development companies with a focus on Mainland China rallied sharply during the quarter, catalyzed by a combination of stimulus provided by the Chinese government and demand for residential property which exceeded expectations. From a country allocation perspective, an underweight to the outperforming Hong Kong market accounted for much of the relative underperformance. Even though our underweight was relatively minor, the impact was magnified given the strong performance of the Hong Kong market which was up 63% during the period and was the result of our underweight to many of the China-focused development companies.
T. Ritson Ferguson, Chief Investment Officer
Steven D. Burton, Managing Director
Joseph P. Smith, Managing Director
Portfolio Manager
ING Clarion Real Estate Securities, LLC
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
1
| | |
| Clarion Global Real Estate Portfolio | | For the period ended 6/30/09 |
| Managed by ING Clarion Real Estate Securities, LLC | | |
Portfolio Manager Commentary (continued)
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of Net Assets |
Sun Hung Kai Properties, Ltd. | | 6.30% |
Simon Property Group, Inc. (REIT) | | 4.81% |
Westfield Group (REIT) | | 4.28% |
Mitsui Fudosan Co., Ltd. | | 3.74% |
Mitsubishi Estate Co., Ltd. | | 3.66% |
Sumitomo Realty & Development Co., Ltd. | | 3.15% |
Unibail-Rodamco (REIT) | | 2.96% |
Vornado Realty Trust | | 2.21% |
China Overseas Land & Investment, Ltd. | | 2.08% |
Capitaland, Ltd. | | 1.93% |
Portfolio Composition (% of portfolio market value)
As of 6/30/09
2
| | |
| Clarion Global Real Estate Portfolio | | For the period ended 6/30/09 |
| Managed by ING Clarion Real Estate Securities, LLC | | |
Portfolio Manager Commentary (continued)
Clarion Global Real Estate Portfolio managed by
ING Clarion Real Estate Securities, LLC vs. FTSE EPRA/NAREIT Developed (formerly Global Real Estate) Index1
Growth Based on $10,000+
| | | | | | | | | | | | |
| | | | | Average Annual Return2
(for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | 3 Year | | 5 Year | | Since
Inception3 |
| — | | Clarion Global Real Estate
Portfolio—Class A | | 3.25% | | -32.51% | | -15.17% | | 0.19% | | 0.86% |
| | Class B | | 3.13% | | -32.62% | | -15.36% | | -0.03% | | 0.62% |
| | Class E | | 3.23% | | -32.58% | | -15.28% | | 0.07% | | 0.72% |
| — | | FTSE EPRA/NAREIT Developed (formerly Global Real Estate) Index1 | | 5.88% | | -35.86% | | -13.57% | | 1.41% | | 2.81% |
+The chart reflects the performance of Class A shares of the Portfolio. The performance of Class A shares will differ from that of the other classes of shares because of the difference in expenses paid by policyholders investing in the different share classes.
1The FTSE EPRA/NAREIT Developed (formerly Global Real Estate) Index is designed to track the performance of listed real estate companies and REITS worldwide.
2“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
3Inception of Class A, B and E shares is 5/1/04. Index returns are based on an inception date of 5/1/04.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Index does not include fees or expenses and is not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| Clarion Global Real Estate Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.71% | | $ | 1,000.00 | | $ | 1,032.50 | | $ | 3.58 |
Hypothetical | | 0.71% | | | 1,000.00 | | | 1,021.27 | | | 3.56 |
| | | | | | | | | | | |
| | | | |
Class B | | | | | | | | | | | |
Actual | | 0.96% | | $ | 1,000.00 | | $ | 1,031.30 | | $ | 4.84 |
Hypothetical | | 0.96% | | | 1,000.00 | | | 1,020.03 | | | 4.81 |
| | | | | | | | | | | |
| | | | |
Class E | | | | | | | | | | | |
Actual | | 0.86% | | $ | 1,000.00 | | $ | 1,032.30 | | $ | 4.33 |
Hypothetical | | 0.86% | | | 1,000.00 | | | 1,020.53 | | | 4.31 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
4
Met Investors Series Trust
Clarion Global Real Estate Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | |
| Common Stocks - 98.0% | | | | | |
| Australia - 10.4% | | | | | |
CFS Retail Property Trust (REIT) | | 2,922,848 | | $ | 3,862,352 |
Commonwealth Property Office Fund (REIT) | | 4,052,400 | | | 2,694,057 |
Dexus Property Group (REIT) | | 24,389,112 | | | 14,613,914 |
Goodman Group (REIT) | | 10,122,552 | | | 2,967,405 |
GPT Group (REIT) | | 26,075,200 | | | 10,172,469 |
Mirvac Group (REIT) | | 11,420,597 | | | 9,837,973 |
Stockland (REIT) | | 5,632,436 | | | 14,435,142 |
Westfield Group (REIT) | | 4,467,900 | | | 40,675,426 |
| | | | | |
| | | | | 99,258,738 |
| | | | | |
| Bermuda - 2.8% | | | | | |
Great Eagle Holdings, Ltd. | | 464,000 | | | 981,192 |
Hongkong Land Holdings, Ltd. | | 3,138,300 | | | 11,079,495 |
Kerry Properties, Ltd. | | 3,177,300 | | | 14,206,217 |
| | | | | |
| | | | | 26,266,904 |
| | | | | |
| Canada - 2.6% | | | | | |
Calloway Real Estate Investment Trust (REIT) | | 399,300 | | | 4,430,561 |
Canadian Real Estate Investment Trust (REIT) | | 171,500 | | | 3,628,849 |
Cominar Real Estate Investment Trust (REIT) | | 120,800 | | | 1,608,450 |
H&R Real Estate Investment Trust (REIT) | | 296,000 | | | 2,795,527 |
Primaris Retail Real Estate Investment Trust (REIT) | | 184,500 | | | 2,184,480 |
RioCan Real Estate Investment Trust (REIT) | | 764,800 | | | 10,051,732 |
| | | | | |
| | | | | 24,699,599 |
| | | | | |
| Cayman Islands - 2.5% | | | | | |
China Resources Land, Ltd. | | 7,116,936 | | | 15,705,645 |
New World China Land, Ltd. | | 3,225,300 | | | 1,781,504 |
Shimao Property Holdings, Ltd. | | 3,445,300 | | | 6,633,024 |
| | | | | |
| | | | | 24,120,173 |
| | | | | |
| China - 0.2% | | | | | |
Shui On Land, Ltd. | | 2,847,600 | | | 1,940,035 |
| | | | | |
| Finland - 0.1% | | | | | |
Sponda Oyj* | | 314,840 | | | 896,168 |
| | | | | |
| France - 6.1% | | | | | |
Fonciere des Regions (REIT) | | 69,640 | | | 5,236,724 |
Gecina S.A. (REIT) | | 37,260 | | | 2,303,981 |
ICADE (REIT) | | 56,780 | | | 4,666,783 |
Klepierre (REIT) | | 589,390 | | | 15,193,556 |
Mercialys (REIT) | | 80,385 | | | 2,480,807 |
Unibail-Rodamco (REIT) | | 188,310 | | | 28,103,452 |
| | | | | |
| | | | | 57,985,303 |
| | | | | |
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | |
| Hong Kong - 14.4% | | | | | |
Cheung Kong Holdings, Ltd. | | 714,200 | | $ | 8,169,360 |
China Overseas Land & Investment, Ltd. | | 8,581,288 | | | 19,735,905 |
Hang Lung Group, Ltd. | | 41,400 | | | 195,678 |
Hang Lung Properties, Ltd. | | 3,962,100 | | | 12,849,494 |
Henderson Land Development Co., Ltd. | | 1,463,000 | | | 8,313,466 |
Link (The) | | 3,153,500 | | | 6,723,143 |
Sino Land Co., Ltd. | | 2,329,500 | | | 3,827,949 |
Sino-Ocean Land Holdings, Ltd. | | 5,732,200 | | | 6,569,782 |
Sun Hung Kai Properties, Ltd. | | 4,799,400 | | | 59,923,635 |
Wharf Holdings, Ltd. (The) | | 2,386,500 | | | 10,104,388 |
| | | | | |
| | | | | 136,412,800 |
| | | | | |
| Japan - 14.8% | | | | | |
Aeon Mall Co., Ltd. | | 217,500 | | | 4,111,502 |
Frontier Real Estate Investment Corp. (REIT) | | 302 | | | 1,928,195 |
Japan Logistics Fund, Inc. (REIT) | | 403 | | | 2,686,828 |
Japan Real Estate Investment Corp. (REIT) | | 964 | | | 7,992,958 |
Kenedix Realty Investment Corp. (REIT) | | 545 | | | 1,879,647 |
Mitsubishi Estate Co., Ltd. | | 2,102,300 | | | 34,792,286 |
Mitsui Fudosan Co., Ltd. | | 2,053,374 | | | 35,539,305 |
Nippon Accommodations Fund, Inc. (REIT) | | 268 | | | 1,201,569 |
Nippon Building Fund, Inc. (REIT) | | 989 | | | 8,455,810 |
Nomura Real Estate Office Fund, Inc. (REIT) | | 357 | | | 2,265,186 |
NTT Urban Development Corp. | | 3,132 | | | 3,017,086 |
Orix JREIT, Inc. (REIT) | | 475 | | | 2,172,243 |
Sumitomo Realty & Development Co., Ltd. | | 1,649,300 | | | 29,971,484 |
Tokyu REIT, Inc. (REIT) | | 450 | | | 2,430,410 |
United Urban Investment Corp. (REIT) | | 603 | | | 2,585,122 |
| | | | | |
| | | | | 141,029,631 |
| | | | | |
| Luxembourg - 0.2% | | | | | |
Gagfah S.A. | | 89,440 | | | 741,738 |
ProLogis European Properties | | 278,720 | | | 1,063,710 |
| | | | | |
| | | | | 1,805,448 |
| | | | | |
| Netherlands - 2.2% | | | | | |
Corio N.V. (REIT) | | 326,562 | | | 15,908,113 |
Eurocommercial Properties N.V. | | 100,537 | | | 3,097,816 |
Vastned Retail N.V. (REIT) | | 36,280 | | | 1,805,540 |
| | | | | |
| | | | | 20,811,469 |
| | | | | |
| Singapore - 3.2% | | | | | |
Ascendas Real Estate Investment Trust (REIT) | | 5,990,446 | | | 6,558,941 |
Capitaland, Ltd. | | 7,208,200 | | | 18,311,068 |
CapitaMall Trust (REIT) | | 5,589,723 | | | 5,382,875 |
| | | | | |
| | | | | 30,252,884 |
| | | | | |
See accompanying notes to financial statements
5
Met Investors Series Trust
Clarion Global Real Estate Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | |
| Sweden - 0.8% | | | | | |
Castellum A.B. (REIT) | | 860,420 | | $ | 5,474,631 |
Kungsleden A.B. | | 414,040 | | | 1,906,649 |
| | | | | |
| | | | | 7,381,280 |
| | | | | |
| Switzerland - 0.5% | | | | | |
PSP Swiss Property A.G. | | 76,880 | | | 3,671,255 |
Swiss Prime Site A.G. | | 19,960 | | | 977,027 |
| | | | | |
| | | | | 4,648,282 |
| | | | | |
| United Kingdom - 4.9% | | | | | |
British Land Co. Plc (REIT) | | 1,349,083 | | | 8,506,803 |
Derwent London Plc (REIT) | | 194,690 | | | 2,999,388 |
Great Portland Estates Plc (REIT) | | 49,115 | | | 178,123 |
Hammerson Plc (REIT) | | 1,678,089 | | | 8,503,070 |
Land Securities Group Plc (REIT) | | 2,246,915 | | | 17,477,679 |
Liberty International Plc (REIT) | | 722,642 | | | 4,743,282 |
Safestore Holdings Plc | | 2,688,900 | | | 4,202,148 |
Segro Plc (REIT) | | 1,065,800 | | | 426,734 |
| | | | | |
| | | | | 47,037,227 |
| | | | | |
| United States - 32.3% | | | | | |
Acadia Realty Trust (REIT) | | 206,271 | | | 2,691,837 |
Alexandria Real Estate Equities, Inc. (REIT)(a) | | 148,200 | | | 5,304,078 |
AMB Property Corp. (REIT)(a) | | 443,600 | | | 8,344,116 |
Apartment Investment & Management Co. - Class A (REIT) | | 445,100 | | | 3,939,135 |
AvalonBay Communities, Inc. (REIT) | | 166,048 | | | 9,288,725 |
Boston Properties, Inc. (REIT)(a) | | 227,900 | | | 10,870,830 |
BRE Properties, Inc. - Class A (REIT)(a) | | 240,346 | | | 5,710,621 |
Camden Property Trust | | 242,767 | | | 6,700,369 |
Corporate Office Properties Trust (REIT)(a) | | 97,685 | | | 2,865,101 |
Digital Realty Trust, Inc.(a) | | 278,500 | | | 9,984,225 |
Duke Realty Corp. (REIT) | | 315,100 | | | 2,763,427 |
Equity Residential | | 301,800 | | | 6,709,014 |
Essex Property Trust, Inc.(a) | | 74,676 | | | 4,647,087 |
Extra Space Storage, Inc. | | 243,800 | | | 2,035,730 |
Federal Realty Investment Trust (REIT)(a) | | 248,134 | | | 12,783,864 |
HCP, Inc.(a) | | 694,900 | | | 14,724,931 |
Health Care REIT, Inc. (REIT) | | 76,147 | | | 2,596,613 |
Highwoods Properties, Inc. (REIT) | | 357,078 | | | 7,987,835 |
Host Hotels & Resorts, Inc. (REIT) | | 1,689,400 | | | 14,174,066 |
Kimco Realty Corp. (REIT)(a) | | 266,800 | | | 2,681,340 |
Liberty Property Trust | | 452,000 | | | 10,414,080 |
Macerich Co. (The) (REIT)(a) | | 347,612 | | | 6,121,447 |
Nationwide Health Properties, Inc. (REIT) | | 418,059 | | | 10,760,839 |
OMEGA Healthcare Investors, Inc. (REIT) | | 309,600 | | | 4,804,992 |
Peoples Choice Financial Corp. (144A)*(b)(c) | | 60,000 | | | 0 |
ProLogis (REIT)(a) | | 1,164,700 | | | 9,387,482 |
Public Storage | | 234,300 | | | 15,341,964 |
Regency Centers Corp. (REIT)(a) | | 212,400 | | | 7,414,884 |
| | | | | | | |
Security
Description | | Shares/Par
Amount | | Value | |
| | | | | | | |
| | |
| United States - continued | | | | | | | |
Simon Property Group, Inc. (REIT) | | | 888,391 | | $ | 45,689,949 | |
SL Green Realty Corp. (REIT) | | | 229,760 | | | 5,270,694 | |
Tanger Factory Outlet Centers | | | 184,165 | | | 5,972,471 | |
Taubman Centers, Inc. (REIT)(a) | | | 144,213 | | | 3,873,561 | |
UDR, Inc. (REIT) | | | 763,175 | | | 7,883,598 | |
Ventas, Inc.(a) | | | 380,200 | | | 11,352,772 | |
Vornado Realty Trust | | | 465,815 | | | 20,975,649 | |
Weingarten Realty Investors (REIT) | | | 348,500 | | | 5,056,735 | |
| | | | | | | |
| | | | | | 307,124,061 | |
| | | | | | | |
Total Common Stocks
(Cost $1,180,398,567) | | | | | | 931,670,002 | |
| | | | | | | |
| | |
| Short-Term Investments - 8.7% | | | | | | | |
| Mutual Funds - 6.3% | | | | | | | |
State Street Navigator Securities Lending Trust Prime Portfolio(d) | | | 59,795,913 | | | 59,795,913 | |
| | | | | | | |
| Repurchase Agreement - 2.4% | | | | | | | |
State Street Bank & Trust Co., Repurchase Agreement, dated 06/30/09 at 0.010% to be repurchased at $23,332,006 on 07/01/09 collateralized by $23,165,000 FHLMC 5.755% due 08/27/14 with a value of $23,802,038. | | $ | 23,332,000 | | | 23,332,000 | |
| | | | | | | |
Total Short-Term Investments (Cost $83,127,913) | | | | | | 83,127,913 | |
| | | | | | | |
| | |
TOTAL INVESTMENTS - 106.7% (Cost $1,263,526,480) | | | | | | 1,014,797,915 | |
| | | | | | | |
| | |
| Other Assets and Liabilities (net) - (6.7)% | | | | | | (64,067,892 | ) |
| | | | | | | |
| | |
| NET ASSETS - 100.0% | | | | | $ | 950,730,023 | |
| | | | | | | |
Portfolio Footnotes:
| * | | Non-income producing security. |
| (a) | | All or a portion of security is on loan. |
| (b) | | Security is valued in good faith at fair value by or under the direction of the Board of Trustees. |
| (c) | | Securities that may be resold to “qualified institutional buyers” under Rule 144A or securities offered pursuant to Section 4(2) of the Securities Act of 1933, as amended. These securities have been determined to be illiquid by the Portfolio’s adviser. These securities represent in the aggregate $0 of net assets. |
| (d) | | Represents investment of collateral received from securities lending transactions. |
FHLMC - Federal Home Loan Mortgage Corporation
REIT - Real Estate Investment Trust
See accompanying notes to financial statements
6
Met Investors Series Trust
Clarion Global Real Estate Portfolio
The following table summarizes the top ten sector diversification of the portfolio holdings of the Clarion Global Real Estate Portfolio at June 30, 2009.
| | |
Ten Largest Industries as of
June 30, 2009 (Unaudited) | | Percent of
Total
Net Assets |
Diversified | | 22.8% |
Operating & Development | | 21.5% |
Regional Malls | | 14.9% |
Office | | 5.6% |
REITS | | 5.6% |
Apartments | | 4.8% |
Real Estate | | 4.7% |
Health Care Providers & Services | | 4.7% |
Management & Services | | 4.0% |
Industrials | | 3.5% |
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1—quoted prices in active markets for identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Common Stocks | | | | | | | | | | | | |
Australia | | $ | — | | $ | 99,258,738 | | $ | — | | $ | 99,258,738 |
Bermuda | | | — | | | 26,266,904 | | | — | | | 26,266,904 |
Canada | | | 24,699,599 | | | — | | | — | | | 24,699,599 |
Cayman Islands | | | — | | | 24,120,173 | | | — | | | 24,120,173 |
China | | | — | | | 1,940,035 | | | — | | | 1,940,035 |
Finland | | | — | | | 896,168 | | | — | | | 896,168 |
France | | | — | | | 57,985,303 | | | — | | | 57,985,303 |
Hong Kong | | | — | | | 136,412,800 | | | — | | | 136,412,800 |
Japan | | | — | | | 141,029,631 | | | — | | | 141,029,631 |
Luxembourg | | | — | | | 1,805,448 | | | — | | | 1,805,448 |
Netherlands | | | — | | | 20,811,469 | | | — | | | 20,811,469 |
Singapore | | | — | | | 30,252,884 | | | — | | | 30,252,884 |
Sweden | | | — | | | 7,381,280 | | | — | | | 7,381,280 |
Switzerland | | | — | | | 4,648,282 | | | — | | | 4,648,282 |
United Kingdom | | | — | | | 47,037,227 | | | — | | | 47,037,227 |
United States | | | 307,124,061 | | | — | | | — | | | 307,124,061 |
Total Common Stocks | | | 331,823,660 | | | 599,846,342 | | | — | | | 931,670,002 |
Short-Term Investments | | | | | | | | | | | | |
Mutual Funds | | | 59,795,913 | | | — | | | — | | | 59,795,913 |
Repurchase Agreement | | | — | | | 23,332,000 | | | — | | | 23,332,000 |
Total Short-Term Investments | | | 59,795,913 | | | 23,332,000 | | | — | | | 83,127,913 |
| TOTAL INVESTMENTS | | $ | 391,619,573 | | $ | 623,178,342 | | $ | — | | $ | 1,014,797,915 |
See accompanying notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| Clarion Global Real Estate Portfolio | | | |
| Assets | | | | |
Investments, at value (a)(b) | | $ | 991,465,915 | |
Repurchase Agreement | | | 23,332,000 | |
Cash | | | 219 | |
Cash denominated in foreign currencies (c) | | | 566,433 | |
Receivable for investments sold | | | 6,750,070 | |
Receivable for Trust shares sold | | | 222,962 | |
Dividends receivable | | | 3,247,035 | |
Interest receivable | | | 6 | |
| | | | |
Total assets | | | 1,025,584,640 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 13,305,302 | |
Trust shares redeemed | | | 995,585 | |
Distribution and services fees—Class B | | | 63,516 | |
Distribution and services fees—Class E | | | 4,186 | |
Collateral for securities on loan | | | 59,795,913 | |
Management fee | | | 500,867 | |
Administration fee | | | 5,641 | |
Custodian and accounting fees | | | 35,201 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 144,979 | |
| | | | |
Total liabilities | | | 74,854,617 | |
| | | | |
| Net Assets | | $ | 950,730,023 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 1,635,144,775 | |
Accumulated net realized loss | | | (454,007,438 | ) |
Unrealized depreciation on investments and foreign currency | | | (247,471,740 | ) |
Undistributed net investment income | | | 17,064,426 | |
| | | | |
Total | | $ | 950,730,023 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 611,305,214 | |
| | | | |
Class B | | | 306,605,677 | |
| | | | |
Class E | | | 32,819,132 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 83,454,848 | |
| | | | |
Class B | | | 41,932,537 | |
| | | | |
Class E | | | 4,481,210 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 7.32 | |
| | | | |
Class B | | | 7.31 | |
| | | | |
Class E | | | 7.32 | |
| | | | |
| | | | | |
(a) Investments at cost, excluding repurchase agreement | | $ | 1,240,194,480 | |
(b) Includes cash collateral for securities loaned of | | | 59,795,913 | |
(c) Cost of cash denominated in foreign currencies | | | 570,546 | |
See accompanying notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| Clarion Global Real Estate Portfolio | | | |
| Investment Income | | | | |
Dividends (1) | | $ | 21,761,502 | |
Interest (2) | | | 362,292 | |
| | | | |
Total investment income | | | 22,123,794 | |
| | | | |
| Expenses | | | | |
Management fee | | | 2,590,947 | |
Administration fees | | | 33,262 | |
Custodian and accounting fees | | | 154,449 | |
Distribution and services fees—Class B | | | 322,256 | |
Distribution and services fees—Class E | | | 22,163 | |
Audit and tax services | | | 21,456 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 59,544 | |
Insurance | | | 12,236 | |
Other | | | 5,287 | |
| | | | |
Total expenses | | | 3,248,033 | |
Less broker commission recapture | | | (79,821 | ) |
| | | | |
Net expenses | | | 3,168,212 | |
| | | | |
Net investment income | | | 18,955,582 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | (220,641,790 | ) |
Foreign currency | | | 96,819 | |
| | | | |
Net realized loss on investments and foreign currency | | | (220,544,971 | ) |
| | | | |
Net change in unrealized appreciation (depreciation) on: | | | | |
Investments | | | 240,909,075 | |
Foreign currency | | | (26,959 | ) |
| | | | |
Net change in unrealized appreciation on investments and foreign currency | | | 240,882,116 | |
| | | | |
Net realized and unrealized gain on investments and foreign currency | | | 20,337,145 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 39,292,727 | |
| | | | |
| | | | | |
(1) Dividend income is net of foreign withholding taxes of: | | $ | 1,601,748 | |
(2) Interest income includes securities lending net income of: | | | 361,036 | |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| Clarion Global Real Estate Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 18,955,582 | | | $ | 31,088,700 | |
Net realized loss on investments and foreign currency | | | (220,544,971 | ) | | | (227,254,371 | ) |
Net change in unrealized appreciation (depreciation) on investments and foreign currency | | | 240,882,116 | | | | (370,943,992 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 39,292,727 | | | | (567,109,663 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | (21,395,042 | ) | | | (12,871,229 | ) |
Class B | | | (9,985,927 | ) | | | (6,742,260 | ) |
Class E | | | (1,151,099 | ) | | | (996,047 | ) |
From net realized gains | | | | | | | | |
Class A | | | — | | | | (62,356,696 | ) |
Class B | | | — | | | | (39,830,003 | ) |
Class E | | | — | | | | (5,590,157 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (32,532,068 | ) | | | (128,386,392 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 85,552,247 | | | | 301,131,736 | |
Class B | | | 33,863,881 | | | | 85,885,098 | |
Class E | | | 2,164,701 | | | | 8,098,339 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | 21,395,042 | | | | 75,227,925 | |
Class B | | | 9,985,927 | | | | 46,572,263 | |
Class E | | | 1,151,099 | | | | 6,586,204 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (34,502,584 | ) | | | (132,676,732 | ) |
Class B | | | (18,844,803 | ) | | | (97,137,626 | ) |
Class E | | | (4,849,518 | ) | | | (19,624,926 | ) |
| | | | | | | | |
Net increase in net assets from capital share transactions | | | 95,915,992 | | | | 274,062,281 | |
| | | | | | | | |
| Net Increase (Decrease) in Net Assets | | | 102,676,651 | | | | (421,433,774 | ) |
Net assets at beginning of period | | | 848,053,372 | | | | 1,269,487,146 | |
| | | | | | | | |
Net assets at end of period | | $ | 950,730,023 | | | $ | 848,053,372 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 17,064,426 | | | $ | 30,640,912 | |
| | | | | | | | |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Clarion Global Real Estate Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004(b) | |
| Net Asset Value, Beginning of Period | | $ | 7.40 | | | $ | 14.08 | | | $ | 18.13 | | | $ | 14.15 | | | $ | 12.47 | | | $ | 10.00 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.16 | | | | 0.32 | | | | 0.22 | | | | 0.28 | | | | 0.30 | | | | 0.55 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.03 | | | | (5.53 | ) | | | (2.59 | ) | | | 4.81 | | | | 1.40 | | | | 2.42 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.19 | | | | (5.21 | ) | | | (2.37 | ) | | | 5.09 | | | | 1.70 | | | | 2.97 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.27 | ) | | | (0.25 | ) | | | (0.19 | ) | | | (0.19 | ) | | | — | | | | (0.22 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (1.22 | ) | | | (1.49 | ) | | | (0.92 | ) | | | (0.02 | ) | | | (0.28 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.27 | ) | | | (1.47 | ) | | | (1.68 | ) | | | (1.11 | ) | | | (0.02 | ) | | | (0.50 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 7.32 | | | $ | 7.40 | | | $ | 14.08 | | | $ | 18.13 | | | $ | 14.15 | | | $ | 12.47 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 3.25 | % | | | (41.56 | )% | | | (14.79 | )% | | | 37.90 | % | | | 13.61 | % | | | 29.73 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.71 | %* | | | 0.67 | % | | | 0.62 | % | | | 0.66 | % | | | 0.69 | % | | | 0.84 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.73 | %* | | | 0.69 | % | | | 0.65 | % | | | 0.70 | % | | | 0.70 | % | | | 0.84 | %* |
Ratio of Net Investment Income to Average Net Assets | | | 4.88 | %* | | | 2.91 | % | | | 1.35 | % | | | 1.74 | % | | | 2.27 | % | | | 6.76 | %* |
Portfolio Turnover Rate | | | 31.3 | % | | | 146.2 | % | | | 110.0 | % | | | 73.0 | % | | | 13.5 | % | | | 52.3 | % |
Net Assets, End of Period (in millions) | | $ | 611.3 | | | $ | 534.1 | | | $ | 711.9 | | | $ | 627.5 | | | $ | 204.1 | | | $ | 77.1 | |
| |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004(b) | |
| Net Asset Value, Beginning of Period | | $ | 7.37 | | | $ | 14.01 | | | $ | 18.06 | | | $ | 14.11 | | | $ | 12.47 | | | $ | 10.00 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.15 | | | | 0.29 | | | | 0.21 | | | | 0.23 | | | | 0.26 | | | | 0.26 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.04 | | | | (5.50 | ) | | | (2.62 | ) | | | 4.81 | | | | 1.40 | | | | 2.69 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.19 | | | | (5.21 | ) | | | (2.41 | ) | | | 5.04 | | | | 1.66 | | | | 2.95 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.25 | ) | | | (0.21 | ) | | | (0.15 | ) | | | (0.17 | ) | | | — | | | | (0.20 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (1.22 | ) | | | (1.49 | ) | | | (0.92 | ) | | | (0.02 | ) | | | (0.28 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.25 | ) | | | (1.43 | ) | | | (1.64 | ) | | | (1.09 | ) | | | (0.02 | ) | | | (0.48 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 7.31 | | | $ | 7.37 | | | $ | 14.01 | | | $ | 18.06 | | | $ | 14.11 | | | $ | 12.47 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 3.13 | % | | | (41.67 | )% | | | (15.01 | )% | | | 37.58 | % | | | 13.29 | % | | | 29.55 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.96 | %* | | | 0.92 | % | | | 0.87 | % | | | 0.92 | % | | | 0.94 | % | | | 0.98 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.98 | %* | | | 0.93 | % | | | 0.90 | % | | | 0.95 | % | | | 0.95 | % | | | 0.98 | %* |
Ratio of Net Investment Income to Average Net Assets | | | 4.60 | %* | | | 2.57 | % | | | 1.30 | % | | | 1.43 | % | | | 2.00 | % | | | 3.45 | %* |
Portfolio Turnover Rate | | | 31.3 | % | | | 146.2 | % | | | 110.0 | % | | | 73.0 | % | | | 13.5 | % | | | 52.3 | % |
Net Assets, End of Period (in millions) | | $ | 306.6 | | | $ | 279.2 | | | $ | 484.8 | | | $ | 623.4 | | | $ | 316.4 | | | $ | 167.2 | |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—05/01/2004. |
See accompanying notes to financial statements
11
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Clarion Global Real Estate Portfolio | | Class E | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004(b) | |
| Net Asset Value, Beginning of Period | | $ | 7.38 | | | $ | 14.04 | | | $ | 18.08 | | | $ | 14.13 | | | $ | 12.47 | | | $ | 10.00 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.15 | | | | 0.29 | | | | 0.26 | | | | 0.25 | | | | 0.28 | | | | 0.33 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.05 | | | | (5.51 | ) | | | (2.64 | ) | | | 4.80 | | | | 1.40 | | | | 2.64 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.20 | | | | (5.22 | ) | | | (2.38 | ) | | | 5.05 | | | | 1.68 | | | | 2.97 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.26 | ) | | | (0.22 | ) | | | (0.17 | ) | | | (0.18 | ) | | | — | | | | (0.22 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (1.22 | ) | | | (1.49 | ) | | | (0.92 | ) | | | (0.02 | ) | | | (0.28 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.26 | ) | | | (1.44 | ) | | | (1.66 | ) | | | (1.10 | ) | | | (0.02 | ) | | | (0.50 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 7.32 | | | $ | 7.38 | | | $ | 14.04 | | | $ | 18.08 | | | $ | 14.13 | | | $ | 12.47 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 3.23 | % | | | (41.68 | )% | | | (14.86 | )% | | | 37.62 | % | | | 13.45 | % | | | 29.69 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.86 | %* | | | 0.81 | % | | | 0.76 | % | | | 0.82 | % | | | 0.84 | % | | | 0.91 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.88 | %* | | | 0.83 | % | | | 0.80 | % | | | 0.85 | % | | | 0.84 | % | | | 0.91 | %* |
Ratio of Net Investment Income to Average Net Assets | | | 4.67 | %* | | | 2.62 | % | | | 1.54 | % | | | 1.55 | % | | | 2.14 | % | | | 4.19 | %* |
Portfolio Turnover Rate | | | 31.3 | % | | | 146.2 | % | | | 110.0 | % | | | 73.0 | % | | | 13.5 | % | | | 52.3 | % |
Net Assets, End of Period (in millions) | | $ | 32.8 | | | $ | 34.7 | | | $ | 72.7 | | | $ | 119.2 | | | $ | 51.3 | | | $ | 20.9 | |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—05/01/2004. |
See accompanying notes to financial statements
12
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is Clarion Global Real Estate Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A, B and E Shares are currently offered by the Portfolio. Class C Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | | |
Expiring
12/31/2016 | | Total |
| |
| $ | 194,127,035 | | $ | 194,127,035 |
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
G. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
H. Directed Brokerage Agreement - The Trust has entered into a directed brokerage arrangement with State Street Global Markets (“SSGM”). Under this arrangement, the Portfolio directs certain trades to SSGM in return for a recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to the Portfolio are shown separately as an expense reduction on the Statement of Operations of the Portfolio.
I. Mortgage Related and Other Asset Backed Securities - The Portfolio may invest in mortgage related or other asset-backed securities. These securities may include mortgage pass-through securities, collateralized mortgaged obligations (“CMOs”), commercial mortgage-backed securities, mortgage dollar rolls, CMO residuals, stripped mortgage backed securities (“SMBS”) and other securities that directly or indirectly represent a participation in, or are secured by a payable from, mortgage loans on real property or other receivables. The value of some mortgage or asset-backed securities may be particularly sensitive to changes in prevailing interest rates. Early repayment of principal on some mortgage-related securities may expose the Portfolio to a lower rate of return upon reinvestment of principal. The value of these securities may fluctuate in response to the market’s perception of the creditworthiness of the issuers. Additionally, although mortgages and mortgage-related securities are generally supported by some form of government or private guarantee and/or insurance, there is no assurance that private guarantors or insurers will meet their obligations.
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
One type of SMBS has one class receiving all of the interest from the mortgage assets (the interest-only or “IO” class), while the other class will receive all of the principal (the principal-only or “PO” class). Payments received for the IOs are included in interest income on the Statement of Operations of the Portfolio. Because principal will not be received at the maturity of an IO, adjustments are made to the book value on the security on a daily basis until maturity. These adjustments are included in interest income on the Statement of Operations of the Portfolio. Payments received for POs are treated as reductions to the cost and par value of the securities. Details of mortgage related and other asset-backed securities held at year end are included in the Portfolio’s Portfolio of Investments.
The Portfolio may invest a significant portion of its assets in securities of issuers that hold mortgage and asset backed securities and direct investments in securities backed by commercial and residential mortgage loans and other financial assets. The value and related income of these securities are sensitive to changes in economic conditions, including delinquencies and/or defaults, and may be negatively impacted by increased volatility of market prices and periods of illiquidity.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with ING Clarion Real Estate Securities, LLC (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | Average Daily Net Assets |
| | |
| $ | 2,590,947 | | 0.70% | | First $200 Million |
| | |
| | | 0.65% | | $200 Million to $750 Million |
| | |
| | | 0.55% | | Over $750 Million |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A, Class B and Class E Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B and Class E distribution plans provide that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%, respectively, of the average net assets of the Portfolio attributable to its Class B and Class E Shares in respect to activities primarily intended to result in the sale of Class B and Class E Shares. However, under the Class B and Class E distribution agreements, payments to the Distributor for activities pursuant to the Class B and Class E distribution plans are currently limited to payments at an annual rate equal to 0.25% and 0.15% of average daily net assets of the Portfolio attributable to its Class B and Class E Shares, respectively.
Under terms of the Class B and Class E distribution plans and distribution agreements, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B and Class E Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
(Decrease)
in Shares
Outstanding | | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 72,177,666 | | 13,306,541 | | 3,423,207 | | (5,452,566 | ) | | 11,277,182 | | | 83,454,848 |
12/31/2008 | | 50,556,453 | | 27,654,913 | | 5,746,977 | | (11,780,677 | ) | | 21,621,213 | | | 72,177,666 |
| | | | | | |
Class B | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 37,897,348 | | 5,381,740 | | 1,597,749 | | (2,944,300 | ) | | 4,035,189 | | | 41,932,537 |
12/31/2008 | | 34,595,270 | | 8,140,621 | | 3,566,023 | | (8,404,566 | ) | | 3,302,078 | | | 37,897,348 |
| | | | | | |
Class E | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 4,706,373 | | 346,634 | | 183,882 | | (755,679 | ) | | (225,163 | ) | | 4,481,210 |
12/31/2008 | | 5,179,996 | | 745,349 | | 503,532 | | (1,722,504 | ) | | (473,623 | ) | | 4,706,373 |
| | | | | | |
| | | | | | | | | | | | | | |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 329,680,778 | | $ | — | | $ | 248,895,959 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $1,263,526,480 | | $ | 33,942,628 | | $ | (282,671,193 | ) | | $ | (248,728,565 | ) |
6. Securities Lending
As of June 30, 2009, the Portfolio had loaned securities which were collateralized by short-term investments. The value of securities on loan and the value of the related collateral were as follows:
| | | | | | | | | |
Value of
Securities | | Value of
Cash
Collateral | | Value of
Non-Cash
Collateral* | | Total
Collateral |
| | | |
| $62,595,585 | | $ | 59,795,913 | | $ | 4,223,932 | | $ | 64,019,845 |
* The Portfolio cannot repledge or resell this collateral. The non-cash collateral is typically comprised of government securities and/or bank letters of credit.
16
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
7. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $ | 20,609,620 | | $ | 63,893,215 | | $ | 107,776,773 | | $ | 67,179,153 | | $ | 128,386,393 | | $ | 131,072,368 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net Unrealized
Depreciation | | | Loss Carryforwards | | | Total | |
| | | | |
| $ | 33,170,940 | | $ | — | | $ | (530,219,183 | ) | | $ | (194,127,035 | ) | | $ | (691,175,278 | ) |
8. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
9. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
17
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
18
| | |
| Dreman Small Cap Value Portfolio | | For the period ended 6/30/09 |
| Managed by Dreman Value Management, LLC | | |
Portfolio Manager Commentary
Performance
During the six-month period ended June 30th, 2009, the Portfolio had a return of 1.87% and 1.74% for Class A and B Shares, respectively, versus (5.17)% for its benchmark, the Russell 2000® Value Index.
Market Environment/Conditions
The beginning of the year seems so long ago as investors have endured a wild and exhausting ride. The ups and downs have been intense with continued government bailouts of banks, financial institutions, and automotive companies, a large market sell off, capital raises by the large financial institutions to repay TARP (Troubled Asset Relief Program), the bankruptcy of two American icons (GM and Chrysler), increasing unemployment, a weakening dollar, and a huge recovery rally in stocks.
As the year started, all eyes were watching the changing of the guard from President George W. Bush to President Barack Obama. The first hundred days of the new presidency had tremendous economic and market impact. President Obama and Congress passed massive stimulus packages and continued the bailouts. In spite of the stimulus the markets continued to bleed. The decline quickened with dismal economic news as forecasts of 10%+ unemployment, the death of the American consumer, and fear of a financial system collapse swirled across the national newspapers. The market finally capitulated, for the time being, around March 9th, as valuations of stocks priced in not only a recession but arguably a depression. A little over three months into 2009 the Russell 2000® Value Index was down an astounding 35%, more than it was for all of 2008! As February ended and March began, the market looked as cheap as it has been in at least a decade. With the market’s attractive relative valuation coupled with economic factors declining at a slower pace, stocks started an amazing recovery rally that saw the previously believed insurmountable losses for the year erased. In fact, by the end of June although the Russell 2000® Value Index was still down over 5%, the S&P 500®, a broader market index, was up 3.16%.
Portfolio Review/Current Positioning
With the start of 2009 the Portfolio remained defensive with over weight positions in consumer staples, health care, and materials. However, as the market plummeted into chaos through March 9th we found opportunity for the Portfolio. By the end of March we had lowered our weight in consumer staples and went to an overweight in consumer discretionary. In addition we added to energy, industrials, and technology throughout the first half of 2009.
For the first six months of 2009, the Portfolio’s alpha was generated through both sector allocation and stock selection. From a sector standpoint, Consumer Discretionary, Energy, Financials, Health Care, Industrials, Materials and Utilities all contributed to performance. Information Technology, Consumer Staples and Telecommunication Services detracted from performance.
The financial sector posted the worst performance for the first six months of the year as investors remained concerned over government bailouts and rising loan charge-offs at the banks. Nevertheless, our
substantial underweight coupled with stock selection added to the Portfolio’s return. Our best performing stock in this sector was Legg Mason, an asset management company, which was up over 84%. We purchased this stock in March as it cratered due to concerns over asset flows and deteriorating operating margins. Our analysis showed that this was already priced into the stock as it traded at 80% of book value and 7 times earnings. Another top performer for the Portfolio in this sector was Waddell & Reed Financial, an investment management and underwriting company, which was up over 70%. On the bank front we avoided many disasters due to our significant underweight in this industry. Surprisingly, two of our bank stocks posted slightly positive gains, TCF Financial and Prosperity Bancshares. Our other banks did not fare as well. Associated Bancorp and MB Financial fell 38% and 63%, respectively, as poor loan quality forced the banks into boosting reserves. After considerable analysis we sold out of MB Financial due to our belief that their commercial real estate loans could continue to pressure earnings. Overall, we remain underweight this sector as loan losses continue to rise.
As the markets started to rebound in March, the information technology sector soared. This sector was the leading performer for the Russell 2000® Value Index, posting an average gain of over 25%. Our slight underweight and stock selection hurt performance for the first half. However, many of our stocks performed well. CommScope, a manufacturer of network connectivity solutions, was up over 68% as the company posted better than expected earnings. Plantronics, a manufacturer of telecommunication equipment, was up 44% as their business stabilized and new opportunities in Bluetooth technology developed. Our stock selection in the IT Services industry did not fare as well. DST Systems and CACI were down 2% and 5%, respectively, through June. DST Systems, a provider of processed information and software services, was down as the company missed earnings and revenue expectations. The stock remains in the Portfolio as it trades near its historical lows in terms of valuation. CACI, an information systems and high technology services firm, was down as investors were concerned over revenue growth and earnings. CACI remains in the Portfolio as the company was awarded several new contract wins and in addition, delivered a positive earnings surprise. We have a slight underweight in this sector as valuations have significantly expanded from the troughs we experienced at the beginning of the year.
Consumer discretionary stocks were the second best performing group through June posting nearly a 20% gain. Our stock selection helped the Portfolio as we added several key stocks into the Portfolio when the market crumbled in January and February based on fears over the consumer. Key additions include well known brands like Dick’s Sporting Goods, RadioShack, and Brinker International, owner/operator of Chile’s Bar and Grill, Romano’s Macaroni Grill, On The Border Mexican Grill, and Maggiano’s Little Italy restaurants. Dick’s Sporting Goods was up over 40% from our cost as it remains the consolidator in a fragmented industry with a strong balance sheet. The stock fell sharply from a high of $36 in 2007 to its low of $9.61 in November of 2008 giving us an opportunity to pick up this forgotten gem at valuation levels not seen since 2003. RadioShack, the well known consumer electronics store, was picked up under $10 a share as concerns over store closings, and revenue growth weighed on
1
| | |
| Dreman Small Cap Value Portfolio | | For the period ended 6/30/09 |
| Managed by Dreman Value Management, LLC | | |
Portfolio Manager Commentary (continued)
investors minds. The stock rocketed up over 40% as the company posted strong earnings for the first quarter of 2009. Brinker International was up over 50% as the company posted strong earnings, forcing Wall Street analysts to revise upwards their growth expectations for the company. These three stocks highlight our investment philosophy. Each of these companies was harshly punished by investor’s fear that the consumer was dead. The stocks were trading near or at trough valuation levels. Earnings expectations called for significant declines in earnings growth over the coming quarters. However, as we analyzed the fundamentals, it appeared as though expectations had become too pessimistic and we took the opportunity to build positions in these stocks. We have recently pared back our holdings in this sector given the magnitude of the recovery rally we have experienced. In addition, valuation levels have risen to a point where, in our opinion, some of these stocks look expensive. We are now slightly underweight this sector.
Other areas of note for the first half include the Materials sector where our stock selection helped provide alpha for the Portfolio. Key stocks included IAMGOLD, a gold miner, up 65% and Reliance Steel, a metal processor, up over 90%. The Industrial Sector was another sector in which stock selection helped the Portfolio. One key addition was Joy Global, a leading manufacturer of coal mining equipment which jumped 58% on increased demand for their products. General Cable, a provider of aluminum and copper wires for the distribution of electricity, was up over 110% as copper prices recovered. We remain overweight both the Materials and Industrial sectors.
As noted above, there is no shortage of events to discuss and analyze. One could easily argue fairly successfully both a bear and a bull case for the markets. Regardless of the market and economic conditions, one thing that is certain is our unwavering philosophy and process for picking stocks. Dreman Value Management has traditionally taken advantage of volatile periods by adding or increasing positions when waves of selling drive individual companies or sectors well below their intrinsic value. The Portfolio’s superior alpha over time has been built by taking advantage of such opportunities as they present themselves.
David Dreman, E. Clifton Hoover Jr., Mark Roach
Portfolio Managers
Dreman Value Management, LLC
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The
views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
Central European Distribution Corp. | | 1.33% |
Waddell & Reed Financial, Inc.—Class A | | 1.28% |
EMCOR Group, Inc. | | 1.22% |
International Speedway Corp.—Class A | | 1.19% |
LifePoint Hospitals, Inc. | | 1.13% |
IDACORP, Inc. | | 1.13% |
PAN American Silver Corp. | | 1.12% |
Del Monte Foods Co. | | 1.12% |
Healthspring, Inc. | | 1.12% |
Inverness Medical Innovations, Inc. | | 1.12% |
Portfolio Composition (% of portfolio market value)
As of 6/30/09
2
| | |
| Dreman Small Cap Value Portfolio | | For the period ended 6/30/09 |
| Managed by Dreman Value Management, LLC | | |
Portfolio Manager Commentary (continued)
Dreman Small Cap Value Portfolio managed by
Dreman Value Management, LLC vs. Russell 2000® Value Index1
Growth Based on $10,000+
| | | | | | | | | | |
| | | | | Average Annual Return2 (for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | 3 Year | | Since
Inception3 |
| — | | Dreman Small Cap Value
Portfolio—Class A | | 1.87% | | -21.82% | | -5.80% | | 1.51% |
| | Class B | | 1.74% | | -22.00% | | — | | -20.38% |
| - - | | Russell 2000® Value Index1 | | -5.17% | | -25.24% | | -12.07% | | -3.47% |
+The chart reflects the performance of Class A shares of the Portfolio. The performance of Class A shares will differ from that of the other class of shares because of the difference in expenses paid by policyholders investing in the different share classes.
1The Russell 2000® Value Index is an unmanaged index which measures the performance of those Russell 2000® companies with lower price-to-book ratios and lower forecasted growth values.
2“Average Annual Return” is calculated including reinvestment of all income dividend and capital gains distributions.
3Inception of Class A shares is 05/02/2005. Inception of Class B shares is 4/28/2008. Index returns are based on an inception date of 05/02/2005.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Index does not include fees or expenses and is not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| Dreman Small Cap Value Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.89% | | $ | 1,000.00 | | $ | 1,018.70 | | $ | 4.45 |
Hypothetical | | 0.89% | | | 1,000.00 | | | 1,020.38 | | | 4.46 |
| | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class B | | | | | | | | | | | |
Actual | | 1.14% | | $ | 1,000.00 | | $ | 1,017.40 | | $ | 5.70 |
Hypothetical | | 1.14% | | | 1,000.00 | | | 1,019.14 | | | 5.71 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
4
Met Investors Series Trust
Dreman Small Cap Value Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | | | | |
|
| Common Stocks - 95.2% |
| Aerospace & Defense - 2.0% |
Curtiss-Wright Corp.(a) | | 54,060 | | $ | 1,607,204 |
Esterline Technologies Corp.* | | 62,250 | | | 1,685,107 |
| | | | | |
| | | | | 3,292,311 |
| | | | | |
| Beverages - 1.3% |
Central European Distribution Corp.*(a) | | 85,100 | | | 2,261,107 |
| | | | | |
| Capital Markets - 3.4% |
Legg Mason, Inc. | | 71,200 | | | 1,735,856 |
Raymond James Financial, Inc. | | 105,200 | | | 1,810,492 |
Waddell & Reed Financial, Inc. - Class A | | 82,190 | | | 2,167,350 |
| | | | | |
| | | | | 5,713,698 |
| | | | | |
| Chemicals - 2.0% |
RPM International, Inc. | | 123,600 | | | 1,735,344 |
Scotts Miracle-Gro Co. (The) - Class A(a) | | 48,500 | | | 1,699,925 |
| | | | | |
| | | | | 3,435,269 |
| | | | | |
| Commercial & Professional Services - 1.1% |
Brink’s Co. (The) | | 62,500 | | | 1,814,375 |
| | | | | |
| Commercial Banks - 5.6% |
Associated Banc-Corp.(a) | | 122,375 | | | 1,529,688 |
Bank of Hawaii Corp. | | 46,500 | | | 1,666,095 |
FirstMerit Corp. | | 98,744 | | | 1,676,673 |
Prosperity Bancshares, Inc. | | 61,250 | | | 1,827,087 |
TCF Financial Corp.(a) | | 121,500 | | | 1,624,455 |
Zions Bancorporation | | 103,800 | | | 1,199,928 |
| | | | | |
| | | | | 9,523,926 |
| | | | | |
| Communications Equipment - 2.2% |
CommScope, Inc.*(a) | | 69,795 | | | 1,832,817 |
Plantronics, Inc. | | 98,975 | | | 1,871,617 |
| | | | | |
| | | | | 3,704,434 |
| | | | | |
| Construction & Engineering - 1.2% |
EMCOR Group, Inc.* | | 102,770 | | | 2,067,732 |
| | | | | |
| Diversified Consumer Services - 0.9% |
Regis Corp. | | 91,110 | | | 1,586,225 |
| | | | | |
| Diversified Financial Services - 1.1% |
Financial Federal Corp.(a) | | 87,760 | | | 1,803,468 |
| | | | | |
| Diversified Telecommunication Services - 1.5% |
Alaska Communications Systems Group, Inc.(a) | | 164,370 | | | 1,203,188 |
Iowa Telecommunications Services, Inc.(a) | | 108,140 | | | 1,352,832 |
| | | | | |
| | | | | 2,556,020 |
| | | | | |
| Electric Utilities - 3.0% |
Allete, Inc. | | 46,500 | | | 1,336,875 |
IDACORP, Inc. | | 73,445 | | | 1,919,852 |
NV Energy, Inc. | | 165,000 | | | 1,780,350 |
| | | | | |
| | | | | 5,037,077 |
| | | | | |
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Electrical Equipment - 3.0% |
Baldor Electric Co.(a) | | 70,550 | | $ | 1,678,385 |
General Cable Corp.* | | 45,540 | | | 1,711,393 |
Regal-Beloit Corp.(a) | | 43,670 | | | 1,734,572 |
| | | | | |
| | | | | 5,124,350 |
| | | | | |
| Electronic Equipment, Instruments & Components - 3.0% |
Anixter International, Inc.*(a) | | 46,510 | | | 1,748,311 |
Jabil Circuit, Inc. | | 247,200 | | | 1,834,224 |
Park Electrochemical Corp. | | 72,308 | | | 1,556,791 |
| | | | | |
| | | | | 5,139,326 |
| | | | | |
| Energy Equipment & Services - 4.1% | | | | | |
Atwood Oceanics, Inc.*(a) | | 69,225 | | | 1,724,395 |
Bristow Group, Inc.*(a) | | 61,500 | | | 1,822,245 |
Oil States International, Inc.* | | 77,200 | | | 1,869,012 |
Superior Energy Services, Inc.* | | 91,905 | | | 1,587,199 |
| | | | | |
| | | | | 7,002,851 |
| | | | | |
| Food & Staples Retailing - 1.8% | | | | | |
Nash Finch Co. | | 52,670 | | | 1,425,250 |
Ruddick Corp.(a) | | 67,515 | | | 1,581,877 |
| | | | | |
| | | | | 3,007,127 |
| | | | | |
| Food Products - 3.0% | | | | | |
Corn Products International, Inc. | | 59,000 | | | 1,580,610 |
Del Monte Foods Co. | | 203,185 | | | 1,905,876 |
Ralcorp Holdings, Inc.* | | 26,510 | | | 1,614,989 |
| | | | | |
| | | | | 5,101,475 |
| | | | | |
| Health Care Equipment & Supplies - 2.2% |
Inverness Medical Innovations, Inc.*(a) | | 53,400 | | | 1,899,972 |
Teleflex, Inc. | | 42,000 | | | 1,882,860 |
| | | | | |
| | | | | 3,782,832 |
| | | | | |
| Health Care Providers & Services - 6.0% |
Amedisys, Inc.*(a) | | 55,275 | | | 1,825,181 |
Amsurg Corp.* | | 84,396 | | | 1,809,450 |
Healthspring, Inc.* | | 175,340 | | | 1,904,192 |
LifePoint Hospitals, Inc.*(a) | | 73,190 | | | 1,921,237 |
MEDNAX, Inc.*(a) | | 44,800 | | | 1,887,424 |
Owens & Minor, Inc. | | 20,125 | | | 881,878 |
| | | | | |
| | | | | 10,229,362 |
| | | | | |
| Hotels, Restaurants & Leisure - 2.1% | | | | | |
Brinker International, Inc. | | 92,700 | | | 1,578,681 |
International Speedway Corp. - Class A | | 78,730 | | | 2,016,275 |
| | | | | |
| | | | | 3,594,956 |
| | | | | |
| Household Durables - 1.0% | | | | | |
Helen of Troy, Ltd.* | | 96,000 | | | 1,611,840 |
| | | | | |
| Insurance - 6.9% | | | | | |
Allied World Assurance Holdings, Ltd. | | 41,975 | | | 1,713,839 |
Argo Group International Holdings, Ltd.* | | 53,341 | | | 1,505,283 |
Aspen Insurance Holdings, Ltd. | | 72,200 | | | 1,612,948 |
See accompanying notes to financial statements
5
Met Investors Series Trust
Dreman Small Cap Value Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Insurance - continued |
Endurance Specialty Holdings, Ltd. | | 57,350 | | $ | 1,680,355 |
Hanover Insurance Group, Inc. (The) | | 43,650 | | | 1,663,502 |
IPC Holdings, Ltd. | | 4,303 | | | 117,644 |
Platinum Underwriters Holdings, Ltd. | | 46,380 | | | 1,326,004 |
Safety Insurance Group, Inc. | | 49,140 | | | 1,501,718 |
StanCorp Financial Group, Inc. | | 3,100 | | | 88,908 |
United Fire & Casualty Co. | | 29,400 | | | 504,210 |
| | | | | |
| | | | | 11,714,411 |
| | | | | |
| IT Services - 2.0% | | | | | |
CACI International, Inc. - Class A* | | 39,200 | | | 1,674,232 |
DST Systems, Inc.* | | 44,800 | | | 1,655,360 |
| | | | | |
| | | | | 3,329,592 |
| | | | | |
| Life Sciences Tools & Services - 2.1% | | | | | |
Mettler-Toledo International, Inc.* | | 22,300 | | | 1,720,445 |
PerkinElmer, Inc. | | 103,800 | | | 1,806,120 |
| | | | | |
| | | | | 3,526,565 |
| | | | | |
| Machinery - 4.1% | | | | | |
Barnes Group, Inc.(a) | | 134,880 | | | 1,603,723 |
Gardner Denver, Inc.* | | 73,400 | | | 1,847,478 |
Joy Global, Inc. | | 45,750 | | | 1,634,190 |
Kennametal, Inc. | | 94,030 | | | 1,803,496 |
| | | | | |
| | | | | 6,888,887 |
| | | | | |
| Media - 1.0% | | | | | |
Dreamworks Animation SKG, Inc. - Class A* | | 62,075 | | | 1,712,649 |
| | | | | |
| Metals & Mining - 3.0% | | | | | |
Iamgold Corp. | | 157,230 | | | 1,591,168 |
PAN American Silver Corp.* | | 103,980 | | | 1,905,953 |
Reliance Steel & Aluminum Co. | | 42,500 | | | 1,631,575 |
| | | | | |
| | | | | 5,128,696 |
| | | | | |
| Multi-Utilities - 2.7% | | | | | |
Integrys Energy Group, Inc.(a) | | 36,490 | | | 1,094,335 |
TECO Energy, Inc.(a) | | 148,075 | | | 1,766,535 |
Vectren Corp. | | 74,855 | | | 1,753,853 |
| | | | | |
| | | | | 4,614,723 |
| | | | | |
| Oil, Gas & Consumable Fuels - 4.4% | | | | | |
Arch Coal, Inc.(a) | | 92,900 | | | 1,427,873 |
Contango Oil & Gas Co.* | | 29,711 | | | 1,262,420 |
Forest Oil Corp.*(a) | | 108,100 | | | 1,612,852 |
St. Mary Land & Exploration Co.(a) | | 87,280 | | | 1,821,534 |
Whiting Petroleum Corp.*(a) | | 39,500 | | | 1,388,820 |
| | | | | |
| | | | | 7,513,499 |
| | | | | |
| Professional Services - 0.9% | | | | | |
Kelly Services, Inc. | | 144,560 | | | 1,582,932 |
| | | | | |
| Real Estate Investment Trusts (REITs) - 3.1% | | | |
Alexandria Real Estate Equities, Inc.(a) | | 44,375 | | | 1,588,181 |
Anworth Mortgage Asset Corp. | | 256,000 | | | 1,845,760 |
Hospitality Properties Trust(a) | | 147,725 | | | 1,756,451 |
| | | | | |
| | | | | 5,190,392 |
| | | | | |
| | | | | | | |
Security
Description | | Shares/Par
Amount | | Value | |
| | | | | | | |
| | |
| Road & Rail - 1.9% | | | | | | | |
Genesee & Wyoming, Inc. - Class A* | | | 59,000 | | $ | 1,564,090 | |
Ryder System, Inc. | | | 58,725 | | | 1,639,602 | |
| | | | | | | |
| | | | | | 3,203,692 | |
| | | | | | | |
| Semiconductors & Semiconductor Equipment - 1.0% | |
Microsemi Corp.* | | | 126,400 | | | 1,744,320 | |
| | | | | | | |
| Software - 2.0% | |
Jack Henry & Associates, Inc. | | | 81,240 | | | 1,685,730 | |
Sybase, Inc.*(a) | | | 55,710 | | | 1,745,951 | |
| | | | | | | |
| | | | | | 3,431,681 | |
| | | | | | | |
| Specialty Retail - 2.9% | |
Dick’s Sporting Goods, Inc.*(a) | | | 76,200 | | | 1,310,640 | |
Men’s Wearhouse, Inc. (The)(a) | | | 89,760 | | | 1,721,597 | |
RadioShack Corp. | | | 134,637 | | | 1,879,532 | |
| | | | | | | |
| | | | | | 4,911,769 | |
| | | | | | | |
| Textiles, Apparel & Luxury Goods - 1.9% | |
Hanesbrands, Inc.*(a) | | | 107,950 | | | 1,620,330 | |
Wolverine World Wide, Inc. | | | 74,700 | | | 1,647,882 | |
| | | | | | | |
| | | | | | 3,268,212 | |
| | | | | | | |
| Thrifts & Mortgage Finance - 1.0% | | | | | | | |
Washington Federal, Inc. | | | 132,525 | | | 1,722,825 | |
| | | | | | | |
| Tobacco - 1.7% | | | | | | | |
Universal Corp.(a) | | | 47,600 | | | 1,576,036 | |
Vector Group, Ltd.(a) | | | 91,524 | | | 1,307,878 | |
| | | | | | | |
| | | | | | 2,883,914 | |
| | | | | | | |
| Trading Companies & Distributors - 1.1% | | | | |
GATX Corp.(a) | | | 71,205 | | | 1,831,393 | |
| | | | | | | |
Total Common Stocks
(Cost $168,464,136) | | | | | | 161,589,913 | |
| | | | | | | |
| | |
| Short-Term Investments - 19.3% | | | | | | | |
| Mutual Funds - 14.6% | | | | | | | |
State Street Navigator Securities Lending Trust Prime Portfolio(b) | | | 24,802,889 | | | 24,802,889 | |
| | | | | | | |
| Repurchase Agreement - 4.7% | | | | | | | |
State Street Bank & Trust Co., Repurchase Agreement, dated 06/30/09 at 0.010% to be repurchased at $8,019,002 on 07/01/09 collateralized by $8,140,000 FHLB at 0.900% due 04/08/10 with a value of $8,180,700. | | $ | 8,019,000 | | | 8,019,000 | |
| | | | | | | |
Total Short-Term Investments
(Cost $32,821,889) | | | | | | 32,821,889 | |
| | | | | | | |
| | |
TOTAL INVESTMENTS - 114.5%
(Cost $201,286,025) | | | | | | 194,411,802 | |
| | | | | | | |
| |
| Other Assets and Liabilities (net) - (14.5)% | | | (24,593,086 | ) |
| | | | | | | |
| | |
| NET ASSETS - 100.0% | | | | | $ | 169,818,716 | |
| | | | | | | |
See accompanying notes to financial statements
6
Met Investors Series Trust
Dreman Small Cap Value Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
Portfolio Footnotes:
| * | | Non-income producing security. |
| (a) | | All or a portion of security is on loan. |
| (b) | | Represents investment of collateral received from securities lending transactions. |
FHLB - Federal Home Loan Bank
See accompanying notes to financial statements
7
Met Investors Series Trust
Dreman Small Cap Value Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1—quoted prices in active markets for identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs (Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
| Common Stocks | | | | | | | | | | | | |
Aerospace & Defense | | $ | 3,292,311 | | $ | — | | $ | — | | $ | 3,292,311 |
Beverages | | | 2,261,107 | | | — | | | — | | | 2,261,107 |
Capital Markets | | | 5,713,698 | | | — | | | — | | | 5,713,698 |
Chemicals | | | 3,435,269 | | | — | | | — | | | 3,435,269 |
Commercial & Professional Services | | | 1,814,375 | | | — | | | — | | | 1,814,375 |
Commercial Banks | | | 9,523,926 | | | — | | | — | | | 9,523,926 |
Communications Equipment | | | 3,704,434 | | | — | | | — | | | 3,704,434 |
Construction & Engineering | | | 2,067,732 | | | — | | | — | | | 2,067,732 |
Diversified Consumer Services | | | 1,586,225 | | | — | | | — | | | 1,586,225 |
Diversified Financial Services | | | 1,803,468 | | | — | | | — | | | 1,803,468 |
Diversified Telecommunication Services | | | 2,556,020 | | | — | | | — | | | 2,556,020 |
Electric Utilities | | | 5,037,077 | | | — | | | — | | | 5,037,077 |
Electrical Equipment | | | 5,124,350 | | | — | | | — | | | 5,124,350 |
Electronic Equipment, Instruments & Components | | | 5,139,326 | | | — | | | — | | | 5,139,326 |
Energy Equipment & Services | | | 7,002,851 | | | — | | | — | | | 7,002,851 |
Food & Staples Retailing | | | 3,007,127 | | | — | | | — | | | 3,007,127 |
Food Products | | | 5,101,475 | | | — | | | — | | | 5,101,475 |
Health Care Equipment & Supplies | | | 3,782,832 | | | — | | | — | | | 3,782,832 |
Health Care Providers & Services | | | 10,229,362 | | | — | | | — | | | 10,229,362 |
Hotels, Restaurants & Leisure | | | 3,594,956 | | | — | | | — | | | 3,594,956 |
Household Durables | | | 1,611,840 | | | — | | | — | | | 1,611,840 |
Insurance | | | 11,714,411 | | | — | | | — | | | 11,714,411 |
IT Services | | | 3,329,592 | | | — | | | — | | | 3,329,592 |
Life Sciences Tools & Services | | | 3,526,565 | | | — | | | — | | | 3,526,565 |
Machinery | | | 6,888,887 | | | — | | | — | | | 6,888,887 |
Media | | | 1,712,649 | | | — | | | — | | | 1,712,649 |
Metals & Mining | | | 5,128,696 | | | — | | | — | | | 5,128,696 |
Multi-Utilities | | | 4,614,723 | | | — | | | — | | | 4,614,723 |
Oil, Gas & Consumable Fuels | | | 7,513,499 | | | — | | | — | | | 7,513,499 |
Professional Services | | | 1,582,932 | | | — | | | — | | | 1,582,932 |
Real Estate Investment Trusts (REITs) | | | 5,190,392 | | | — | | | — | | | 5,190,392 |
Road & Rail | | | 3,203,692 | | | — | | | — | | | 3,203,692 |
Semiconductors & Semiconductor Equipment | | | 1,744,320 | | | — | | | — | | | 1,744,320 |
Software | | | 3,431,681 | | | — | | | — | | | 3,431,681 |
Specialty Retail | | | 4,911,769 | | | — | | | — | | | 4,911,769 |
See accompanying notes to financial statements
8
Met Investors Series Trust
Dreman Small Cap Value Portfolio
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs (Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Textiles, Apparel & Luxury Goods | | $ | 3,268,212 | | $ | — | | $ | — | | $ | 3,268,212 |
Thrifts & Mortgage Finance | | | 1,722,825 | | | — | | | — | | | 1,722,825 |
Tobacco | | | 2,883,914 | | | — | | | — | | | 2,883,914 |
Trading Companies & Distributors | | | 1,831,393 | | | — | | | — | | | 1,831,393 |
Total Common Stocks | | | 161,589,913 | | | — | | | — | | | 161,589,913 |
Short-Term Investments | | | | | | | | | | | | |
Mutual Funds | | | 24,802,889 | | | — | | | — | | | 24,802,889 |
Repurchase Agreement | | | — | | | 8,019,000 | | | — | | | 8,019,000 |
Total Short-Term Investments | | | 24,802,889 | | | 8,019,000 | | | — | | | 32,821,889 |
TOTAL INVESTMENTS | | $ | 186,392,802 | | $ | 8,019,000 | | $ | — | | $ | 194,411,802 |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| Dreman Small Cap Value Portfolio | | | |
| Assets | | | | |
Investments, at value (a)(b) | | $ | 186,392,802 | |
Repurchase Agreement | | | 8,019,000 | |
Cash | | | 5 | |
Receivable for investments sold | | | 674,202 | |
Receivable for Trust shares sold | | | 115,481 | |
Dividends receivable | | | 165,537 | |
Interest receivable | | | 3 | |
| | | | |
Total assets | | | 195,367,030 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 504,037 | |
Trust shares redeemed | | | 94,259 | |
Distribution and services fees—Class B | | | 647 | |
Collateral for securities on loan | | | 24,802,889 | |
Management fee | | | 111,408 | |
Administration fee | | | 1,038 | |
Custodian and accounting fees | | | 1,289 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 29,320 | |
| | | | |
Total liabilities | | | 25,548,314 | |
| | | | |
| Net Assets | | $ | 169,818,716 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 230,654,748 | |
Accumulated net realized loss | | | (54,941,049 | ) |
Unrealized depreciation on investments | | | (6,874,223 | ) |
Undistributed net investment income | | | 979,240 | |
| | | | |
Total | | $ | 169,818,716 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 166,430,224 | |
| | | | |
Class B | | | 3,388,492 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 16,838,931 | |
| | | | |
Class B | | | 343,593 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 9.88 | |
| | | | |
Class B | | | 9.86 | |
| | | | |
| | | | | |
(a) Investments at cost, excluding repurchase agreement | | $ | 193,267,025 | |
(b) Includes cash collateral for securities loaned of | | | 24,802,889 | |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| Dreman Small Cap Value Portfolio | | | |
| Investment Income | | | | |
Dividends (1) | | $ | 1,615,500 | |
Interest (2) | | | 116,862 | |
| | | | |
Total investment income | | | 1,732,362 | |
| | | | |
| Expenses | | | | |
Management fee | | | 635,619 | |
Administration fees | | | 8,167 | |
Custodian and accounting fees | | | 10,020 | |
Distribution and services fees—Class B | | | 2,166 | |
Audit and tax services | | | 21,305 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 8,419 | |
Insurance | | | 780 | |
Other | | | 2,303 | |
| | | | |
Total expenses | | | 715,212 | |
| | | | |
Net investment income | | | 1,017,150 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | (27,166,390 | ) |
Foreign currency | | | 220 | |
| | | | |
Net realized loss on investments and foreign currency | | | (27,166,170 | ) |
| | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 29,853,430 | |
Foreign currency | | | 250 | |
| | | | |
Net change in unrealized appreciation on investments and foreign currency | | | 29,853,680 | |
| | | | |
Net realized and unrealized gain on investments and foreign currency | | | 2,687,510 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 3,704,660 | |
| | | | |
| | | | | |
(1) Dividend income is net of foreign withholding taxes of: | | $ | 723 | |
(2) Interest income includes securities lending net income of: | | | 116,463 | |
See accompanying notes to financial statements
11
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| Dreman Small Cap Value Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 1,017,150 | | | $ | 2,452,410 | |
Net realized loss on investments, futures contracts and foreign currency | | | (27,166,170 | ) | | | (27,513,264 | ) |
Net change in unrealized appreciation (depreciation) on investments and foreign currency | | | 29,853,680 | | | | (28,980,442 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 3,704,660 | | | | (54,041,296 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | (1,773,691 | ) | | | (1,803,717 | ) |
Class B | | | (19,643 | ) | | | — | |
From net realized gains | | | | | | | | |
Class A | | | — | | | | (6,775,539 | ) |
Class B | | | — | | | | — | |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (1,793,334 | ) | | | (8,579,256 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 21,804,972 | | | | 66,519,605 | |
Class B | | | 2,459,577 | | | | 1,113,178 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | 1,773,691 | | | | 8,579,256 | |
Class B | | | 19,643 | | | | — | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (33,321,942 | ) | | | (63,248,091 | ) |
Class B | | | (144,378 | ) | | | (185,186 | ) |
| | | | | | | | |
Net increase (decrease) in net assets from capital share transactions | | | (7,408,437 | ) | | | 12,778,762 | |
| | | | | | | | |
| Net Decrease in Net Assets | | | (5,497,111 | ) | | | (49,841,790 | ) |
Net assets at beginning of period | | | 175,315,827 | | | | 225,157,617 | |
| | | | | | | | |
Net assets at end of period | | $ | 169,818,716 | | | $ | 175,315,827 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 979,240 | | | $ | 1,755,424 | |
| | | | | | | | |
See accompanying notes to financial statements
12
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | |
| | | | | |
| | | | | | | | | | | | | | | | |
| Dreman Small Cap Value Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005(b) | |
| Net Asset Value, Beginning of Period | | $ | 9.80 | | | $ | 13.57 | | | $ | 13.77 | | | $ | 11.20 | | | $ | 10.00 | |
| | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.06 | | | | 0.14 | | | | 0.12 | | | | 0.13 | | | | 0.07 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.11 | | | | (3.44 | ) | | | (0.25 | ) | | | 2.57 | | | | 1.30 | |
| | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.17 | | | | (3.30 | ) | | | (0.13 | ) | | | 2.70 | | | | 1.37 | |
| | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.09 | ) | | | (0.10 | ) | | | — | | | | (0.06 | ) | | | (0.05 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (0.37 | ) | | | (0.07 | ) | | | (0.07 | ) | | | (0.12 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.09 | ) | | | (0.47 | ) | | | (0.07 | ) | | | (0.13 | ) | | | (0.17 | ) |
| | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 9.88 | | | $ | 9.80 | | | $ | 13.57 | | | $ | 13.77 | | | $ | 11.20 | |
| | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 1.87 | % | | | (25.22 | )% | | | (0.97 | )% | | | 24.23 | % | | | 13.56 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.89 | %* | | | 0.86 | % | | | 0.92 | % | | | 1.10 | % | | | 1.10 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.89 | %* | | | 0.86 | % | | | 0.95 | %(c) | | | 1.40 | % | | | 3.83 | %* |
Ratio of Net Investment Income to Average Net Assets | | | 1.27 | %* | | | 1.17 | % | | | 0.89 | % | | | 0.99 | % | | | 0.86 | %* |
Portfolio Turnover Rate | | | 36.5 | % | | | 73.6 | % | | | 69.6 | % | | | 62.0 | % | | | 55.0 | % |
Net Assets, End of Period (in millions) | | $ | 166.4 | | | $ | 174.5 | | | $ | 225.2 | | | $ | 83.6 | | | $ | 5.0 | |
| | | | | | | | |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Period
Ended
December 31,
2008(d) | |
| Net Asset Value, Beginning of Period | | $ | 9.79 | | | $ | 13.02 | |
| | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | |
Net Investment Income(a) | | | 0.05 | | | | 0.11 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.11 | | | | (3.34 | ) |
| | | | | | | | |
Total from Investment Operations | | | 0.16 | | | | (3.23 | ) |
| | | | | | | | |
| Less Distributions | | | | | | | | |
Dividends from Net Investment Income | | | (0.09 | ) | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | — | |
| | | | | | | | |
Total Distributions | | | (0.09 | ) | | | — | |
| | | | | | | | |
| Net Asset Value, End of Period | | $ | 9.86 | | | $ | 9.79 | |
| | | | | | | | |
| Total Return | | | 1.74 | % | | | (24.81 | )% |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 1.14 | %* | | | 1.16 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 1.14 | %* | | | 1.16 | %* |
Ratio of Net Investment Income to Average Net Assets | | | 1.08 | %* | | | 1.50 | %* |
Portfolio Turnover Rate | | | 36.5 | % | | | 73.6 | % |
Net Assets, End of Period (in millions) | | $ | 3.4 | | | $ | 0.8 | |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—05/02/2005. |
| (c) | | Excludes effect of deferred expense reimbursement. |
| (d) | | Commencement of operations—4/28/2008. |
See accompanying notes to financial statements
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is Dreman Small Cap Value Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A and B Shares are currently offered by the Portfolio. Class C and E Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | | |
Expiring
12/31/2016 | | Total |
| |
| $ | 21,858,551 | | $ | 21,858,551 |
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
G. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
H. Foreign Currency Translation - The books and records of the Portfolio are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars on a daily basis using prevailing exchange rates. Purchases and sales of securities are translated at the rates of exchange prevailing when such securities were acquired or sold. Income is translated at rates of exchange prevailing when interest is accrued or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
Reported net realized foreign exchange gains or losses arise from activity in forward foreign currency contracts; sales of foreign currencies; currency gains or losses realized between the trade and settlement dates on securities transactions; and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Portfolio’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end; from changes in the exchange rates of foreign currency held; and from changes in the contract value of forward foreign currency contracts.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with Dreman Value Management, LLC (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $635,619 | | 0.800 | % | | First $100 Million |
| | |
| | 0.775 | % | | $100 Million to $500 Million |
| | |
| | 0.750 | % | | $500 Million to $1 Billion |
| | |
| | 0.725 | % | | Over $1 Billion |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Manager has entered into an expense limitation agreement with the Trust (“Expense Limitation Agreement”) in the interest of limiting expenses of the Portfolio of the Trust. The Expense Limitation Agreement shall continue in effect with respect to the Portfolio until April 30, 2010. Pursuant to that Expense Limitation Agreement, the Manager has agreed to waive or limit its fees and to assume other expenses so that the total annual operating expenses of the Portfolio other than interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with accounting principles generally accepted in the United States of America, and other extraordinary expenses not incurred in the ordinary course of the Portfolio’s business, but including amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act, are limited to the following expense ratios as a percentage of the Portfolio’s average daily net assets:
| | | | |
Maximum Expense Ratio
under current Expense
Limitation Agreement | |
| Class A | | | Class B | |
| |
| 1.10 | % | | 1.35 | % |
If in any year in which the Management Agreement is still in effect, the estimated aggregate portfolio operating expenses of the Portfolio for the fiscal year are less than the Maximum Expense Ratios for that year, subject to approval by the Trust’s Board, the Manager shall be entitled to reimbursement by the Portfolio to the extent that the charge does not cause the expenses in such subsequent year to exceed the Maximum Expense Ratios as stated above. The Portfolio is not obligated to repay any expense paid by the Manager more than five years after the end of the fiscal year in which such expense was incurred.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A and Class B Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B distribution plan provides that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% of the average net assets of the Portfolio attributable to its Class B Shares in respect to activities primarily intended to result in the sale of Class B Shares.
16
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
However, under the Class B distribution agreement, payments to the Distributor for activities pursuant to the Class B distribution plan are currently limited to payments at an annual rate equal to 0.25% of average daily net assets of the Portfolio attributable to its Class B Shares.
Under terms of the Class B distribution plan and distribution agreement, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
(Decrease)
in Shares
Outstanding | | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 17,801,446 | | 2,419,377 | | 197,076 | | (3,578,968 | ) | | (962,515 | ) | | 16,838,931 |
| | | | | | |
12/31/2008 | | 16,587,405 | | 5,538,196 | | 655,405 | | (4,979,560 | ) | | 1,214,041 | | | 17,801,446 |
| | | | | | |
Class B | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 84,037 | | 272,528 | | 2,188 | | (15,160 | ) | | 259,556 | | | 343,593 |
| | | | | | |
04/28/2008-12/31/2008 | | — | | 99,657 | | — | | (15,620 | ) | | 84,037 | | | 84,037 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 56,009,551 | | $ | — | | $ | 64,996,433 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $201,286,025 | | $ | 12,530,228 | | $ | (19,404,451 | ) | | $ | (6,874,223 | ) |
6. Securities Lending
As of June 30, 2009, the Portfolio had loaned securities which were collateralized by short term investments. The value of securities on loan and the value of the related collateral were as follows:
| | | | | | | | | |
Value of
Securities | | Value of
Cash
Collateral | | Value of
Non-Cash
Collateral* | | Total
Collateral |
| | | |
| $24,162,811 | | $ | 24,802,889 | | $ | — | | $ | 24,802,889 |
* The Portfolio cannot repledge or resell this collateral. The non-cash collateral is typically comprised of government securities and/or bank letters of credit.
17
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
7. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $ | 6,273,503 | | $ | 520,755 | | $ | 2,305,753 | | $ | 73,028 | | $ | 8,579,256 | | $ | 593,783 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards | | | Total | |
| | | | |
| $ | 1,755,424 | | $ | — | | $ | (42,644,230 | ) | | $ | (21,858,551 | ) | | $ | (62,747,357 | ) |
8. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
9. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
18
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
19
| | |
| Goldman Sachs Mid Cap Value Portfolio | | For the period ended 6/30/09 |
| Managed by Goldman Sachs Asset Management, L.P. | | |
Portfolio Manager Commentary
Performance
During the period ended June 30, 2009, the Portfolio had a return of 4.88% and 4.82% for Class A and B Shares, respectively, versus 3.19% for its benchmark, the Russell Midcap® Value Index.
Market Environment/Conditions
After generating weak results to start the year, the U.S. equity markets soared in the second quarter of 2009, as equity indices jumped from March 9th lows. Driven by a renewed tolerance for risk, investors propelled the S&P 500® Index back to a modest gain for the year-to-date period ended June 30, 2009. Headlines continued to focus on the relative health of banks, as well as the effects of government stimulus.
Equity market volatility declined from record levels, but remained above normal. Economic indicators seem to indicate a deceleration in the pace of the economic slowdown. Crude oil prices appreciated and the housing market has shown some stability as existing home sales rose from April to May. The June unemployment rate was little changed at 9.5% as the four-week moving average of jobless claims declined. Consumer confidence reflected a more pessimistic view in June after improving in April and May.
Portfolio Review/Current Positioning
The Portfolio outperformed the Russell Midcap® Value Index (gross) during the six month period ended June 30, 2009. The Portfolio’s performance trends year-to-date have been consistent with the long term, historical patterns of the strategy; outperforming in weak and trading range markets, while lagging in exuberant rallies. As risk aversion receded, every sector in the Russell Midcap® Value Index snapped back from recent losses to post record gains since the first quarter of 2009. Sectors that performed the worst in the first quarter reversed course and led the rally in the second quarter—i.e., Basic Materials and REITs. Stocks with low returns on assets/equity, low earnings prospects, low dividend yields and high betas fueled the rally over the second quarter. In the Portfolio, stock selection was strong in energy, basic materials and services, while our holdings in Insurance, consumer staples and technology experienced weakness.
The second quarter of 2009 was dominated by robust returns in cyclical industries sensitive to an improved economy, such as retailers, hotel and leisure, and auto-related companies. Over the past year, the Portfolio has had limited exposure to these types of companies which, despite the recent rally, remain well below last year’s levels. Similarly we have been cautiously positioned in REITs, which also performed well for during the second quarter but still lag over a longer timeframe. At the stock level, shares of H&R Block, Inc. (1.8% of the Portfolio) declined as the macroeconomic environment has reduced the number of tax return filers. Our investment in Entergy Corp. (2.0%), a large holding, was also challenged as pricing came under pressure. Insurance company W.R. Berkley Corp. (2.0%) detracted from performance after industry pricing trends suggested a later than expected pricing cycle. Despite this near term setback, we believe the disciplined underwriter is well positioned to capitalize on the troubles
of its peers in the industry. Range Resources Corp. (2.1%), a top contributor during the first quarter, was flat over the last three months and lagged the benchmark. We continue to believe that, in the long term, low-cost oil and gas producers will benefit from the constrained supply in these markets.
Our top performing investments were in companies that were in a favorable position to benefit from the prospects of an economic recovery. Our holding in CommScope, Inc. (1.0%) a technology company that provides infrastructure solutions for communication networks, recovered from trough level valuations ranking it as a top performer. Shares of Johnson Controls, Inc. (0.8%) also improved from earlier weakness, as this leading auto-parts supplier continued to increase market share and improve its competitive positioning despite difficult economic conditions. The Portfolio experienced strong results in services, largely driven by DISH Network Corp. (1.6%). This stock was a top performer due to its improved, low cost high-definition channel line-up, which drove higher subscription rates and average revenue per user growth, bolstering its share price. Shares of Weatherford International (0.9%) steadily climbed after the company bolstered its oil service positioning in attractive regional markets. We believe Weatherford is well positioned to gain during an early cycle recovery in energy fundamentals.
We continue to expect increased stock-level differentiation going forward, distinguishing higher quality companies with robust business models from those likely to remain challenged. As fundamental stock pickers, we welcome such volatility. In our view, this environment should allow businesses with competitive advantages to take market share from weaker competitors and benefit from improved pricing power. While we cannot predict the near-term direction of the ongoing recession or the broader markets, we are encouraged by recent developments such as the strengthened balance sheets of banks.
Team Managed
Andrew Braun
Sean Gallagher
Dolores Bamford, CFA
Scott Carroll, CFA
Goldman Sachs Asset Management, L.P.
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The
1
| | |
| Goldman Sachs Mid Cap Value Portfolio | | For the period ended 6/30/09 |
| Managed by Goldman Sachs Asset Management, L.P. | | |
Portfolio Manager Commentary (continued)
views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
PPL Corp. | | 2.41% |
Invesco, Ltd. | | 2.37% |
Newfield Exploration Co. | | 2.20% |
Range Resources Corp. | | 2.06% |
W.R. Berkley Corp. | | 1.99% |
Entergy Corp. | | 1.99% |
Activision Blizzard, Inc. | | 1.92% |
Republic Services, Inc. | | 1.85% |
H&R Block, Inc. | | 1.81% |
DISH Network Corp.—Class A | | 1.63% |
Portfolio Composition (% of portfolio market value)
As of 6/30/09
2
| | |
| Goldman Sachs Mid Cap Value Portfolio | | For the period ended 6/30/09 |
| Managed by Goldman Sachs Asset Management, L.P. | | |
Portfolio Manager Commentary (continued)
Goldman Sachs Mid Cap Value Portfolio managed by
Goldman Sachs Asset Management, L.P. vs. Russell Midcap® Value Index1
Growth Based on $10,000+
| | | | | | | | | | | | |
| | | | | Average Annual Return2 (for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | 3 Year | | 5 Year | | Since
Inception3 |
| — | | Goldman Sachs
Mid Cap Value Portfolio—Class A | | 4.88% | | -30.45% | | -8.35% | | 0.70% | | 1.85% |
| | Class B | | 4.82% | | -30.55% | | -8.56% | | 0.47% | | 1.63% |
| - - | | Russell Midcap® Value Index1 | | 3.19% | | -30.52% | | -11.07% | | -0.43% | | 0.66% |
+The chart reflects the performance of Class A shares of the Portfolio. The performance of Class A shares will differ from that of the other class of shares because of the difference in expenses paid by policyholders investing in the different share classes.
1The Russell Midcap® Value Index is an unmanaged measure the performance of those Russell Midcap companies (the 800 smallest companies in the Russell 1000® Index) with lower price-to-book ratios and lower forecasted growth values.
2“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
3Inception of the Class A and Class B shares is 5/1/04. Index returns are based on an inception date of 5/1/04.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Index does not include fees or expenses and is not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| Goldman Sachs Mid Cap Value Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.75% | | $ | 1,000.00 | | $ | 1,048.80 | | $ | 3.81 |
Hypothetical | | 0.75% | | | 1,000.00 | | | 1,021.08 | | | 3.76 |
| | | | | | | | | | | |
| | | | |
Class B | | | | | | | | | | | |
Actual | | 1.00% | | $ | 1,000.00 | | $ | 1,048.20 | | $ | 5.08 |
Hypothetical | | 1.00% | | | 1,000.00 | | | 1,019.84 | | | 5.01 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
4
Met Investors Series Trust
Goldman Sachs Mid Cap Value Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | |
| Common Stocks - 95.6% | | | | | |
| Aerospace & Defense - 0.6% | | | | | |
Alliant Techsystems, Inc.*(a) | | 28,251 | | $ | 2,326,752 |
| | | | | |
| Auto Components - 0.8% | | | | | |
Johnson Controls, Inc.(a) | | 154,087 | | | 3,346,770 |
| | | | | |
| Beverages - 0.8% | | | | | |
Coca-Cola Enterprises, Inc. | | 99,639 | | | 1,658,989 |
Molson Coors Brewing Co. - Class B | | 39,650 | | | 1,678,385 |
| | | | | |
| | | | | 3,337,374 |
| | | | | |
| Biotechnology - 0.4% | | | | | |
Biogen Idec, Inc.* | | 40,713 | | | 1,838,192 |
| | | | | |
| Building Products - 0.4% | | | | | |
Lennox International, Inc.(a) | | 47,401 | | | 1,522,046 |
| | | | | |
| Capital Markets - 4.0% | | | | | |
Invesco, Ltd. | | 548,262 | | | 9,770,029 |
Janus Capital Group, Inc. | | 318,340 | | | 3,629,076 |
Lazard, Ltd. - Class A | | 42,273 | | | 1,137,989 |
Northern Trust Corp. | | 30,011 | | | 1,610,991 |
Raymond James Financial, Inc. | | 31,930 | | | 549,515 |
| | | | | |
| | | | | 16,697,600 |
| | | | | |
| Chemicals - 3.4% | | | | | |
Airgas, Inc. | | 99,997 | | | 4,052,879 |
Celanese Corp. | | 135,671 | | | 3,222,186 |
Intrepid Potash, Inc.*(a) | | 159,060 | | | 4,466,405 |
Terra Industries, Inc. | | 89,129 | | | 2,158,704 |
| | | | | |
| | | | | 13,900,174 |
| | | | | |
| Commercial & Professional Services - 3.1% |
Iron Mountain, Inc.* | | 178,106 | | | 5,120,548 |
Republic Services, Inc. | | 313,174 | | | 7,644,577 |
| | | | | |
| | | | | 12,765,125 |
| | | | | |
| Commercial Banks - 2.3% |
Fifth Third Bancorp | | 121,570 | | | 863,147 |
KeyCorp | | 285,294 | | | 1,494,940 |
M&T Bank Corp.(a) | | 22,587 | | | 1,150,356 |
Regions Financial Corp. | | 732,340 | | | 2,958,654 |
SunTrust Banks, Inc. | | 120,610 | | | 1,984,034 |
Synovus Financial Corp. | | 319,006 | | | 953,828 |
| | | | | |
| | | | | 9,404,959 |
| | | | | |
| Communications Equipment - 1.0% |
CommScope, Inc.*(a) | | 160,638 | | | 4,218,354 |
| | | | | |
| Construction Materials - 0.9% |
Vulcan Materials Co. | | 91,723 | | | 3,953,261 |
| | | | | |
| Consumer Finance - 1.2% |
Discover Financial Services | | 198,422 | | | 2,037,794 |
SLM Corp.* | | 296,124 | | | 3,041,193 |
| | | | | |
| | | | | 5,078,987 |
| | | | | |
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Diversified Consumer Services - 1.8% |
H&R Block, Inc. | | 432,277 | | $ | 7,448,133 |
| | | | | |
| Diversified Financial Services - 0.5% |
Nasdaq OMX Group, Inc. (The)* | | 95,442 | | | 2,033,869 |
| | | | | |
| Diversified Telecommunication Services - 0.8% |
Embarq Corp. | | 75,527 | | | 3,176,666 |
| | | | | |
| Electric Utilities - 9.8% |
American Electric Power Co., Inc. | | 215,038 | | | 6,212,448 |
DPL, Inc.(a) | | 212,872 | | | 4,932,244 |
Edison International | | 196,006 | | | 6,166,349 |
Entergy Corp. | | 106,005 | | | 8,217,508 |
FirstEnergy Corp. | | 93,751 | | | 3,632,851 |
NV Energy, Inc. | | 107,170 | | | 1,156,364 |
PPL Corp. | | 302,090 | | | 9,956,886 |
| | | | | |
| | | | | 40,274,650 |
| | | | | |
| Electrical Equipment - 1.0% |
Cooper Industries, Ltd. - Class A | | 81,643 | | | 2,535,015 |
Rockwell Automation, Inc. | | 46,227 | | | 1,484,811 |
| | | | | |
| | | | | 4,019,826 |
| | | | | |
| Electronic Equipment, Instruments & Components - 1.3% |
Amphenol Corp. - Class A | | 166,233 | | | 5,259,612 |
| | | | | |
| Energy Equipment & Services - 3.5% |
Dril-Quip, Inc.* | | 102,415 | | | 3,902,012 |
Pride International, Inc.* | | 101,452 | | | 2,542,387 |
Smith International, Inc.(a) | | 163,558 | | | 4,211,618 |
Weatherford International, Ltd.* | | 190,500 | | | 3,726,180 |
| | | | | |
| | | | | 14,382,197 |
| | | | | |
| Food & Staples Retailing - 0.5% |
Safeway, Inc. | | 98,810 | | | 2,012,760 |
| | | | | |
| Food Products - 2.0% |
Campbell Soup Co. | | 37,850 | | | 1,113,547 |
ConAgra Foods, Inc. | | 161,072 | | | 3,070,032 |
H.J. Heinz Co. | | 53,248 | | | 1,900,954 |
J.M. Smucker Co. (The) | | 48,746 | | | 2,371,980 |
| | | | | |
| | | | | 8,456,513 |
| | | | | |
| Gas Utilities - 0.9% |
EQT Corp. | | 111,255 | | | 3,883,912 |
| | | | | |
| Health Care Equipment & Supplies - 3.0% |
Becton, Dickinson & Co. | | 30,842 | | | 2,199,343 |
C.R. Bard, Inc. | | 26,690 | | | 1,987,071 |
Edwards Lifesciences Corp.* | | 66,347 | | | 4,513,586 |
Kinetic Concepts, Inc.*(a) | | 131,938 | | | 3,595,310 |
| | | | | |
| | | | | 12,295,310 |
| | | | | |
| Health Care Providers & Services - 1.8% |
Laboratory Corporation of America Holdings*(a) | | 23,989 | | | 1,626,214 |
WellPoint, Inc.* | | 114,684 | | | 5,836,269 |
| | | | | |
| | | | | 7,462,483 |
| | | | | |
See accompanying notes to financial statements
5
Met Investors Series Trust
Goldman Sachs Mid Cap Value Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Hotels, Restaurants & Leisure - 0.8% |
Starwood Hotels & Resorts Worldwide, Inc.(a) | | 143,410 | | $ | 3,183,702 |
| | | | | |
| Household Durables - 3.3% |
Fortune Brands, Inc. | | 82,056 | | | 2,850,626 |
M.D.C. Holdings, Inc. | | 32,263 | | | 971,439 |
Mohawk Industries, Inc.*(a) | | 30,346 | | | 1,082,745 |
Newell Rubbermaid, Inc. | | 203,135 | | | 2,114,635 |
NVR, Inc.*(a) | | 9,108 | | | 4,575,768 |
Snap-on, Inc. | | 66,206 | | | 1,902,761 |
| | | | | |
| | | | | 13,497,974 |
| | | | | |
| Household Products - 1.5% |
Clorox Co.(a) | | 90,360 | | | 5,044,799 |
Energizer Holdings, Inc.* | | 18,679 | | | 975,791 |
| | | | | |
| | | | | 6,020,590 |
| | | | | |
| Insurance - 12.0% |
Arch Capital Group, Ltd.* | | 73,217 | | | 4,289,052 |
Everest Reinsurance Group, Ltd. | | 83,136 | | | 5,950,043 |
Hartford Financial Services Group, Inc. (The) | | 119,960 | | | 1,423,925 |
Lincoln National Corp. | | 181,827 | | | 3,129,243 |
Marsh & McLennan Cos., Inc. | | 264,743 | | | 5,329,277 |
PartnerRe, Ltd. | | 36,872 | | | 2,394,836 |
Principal Financial Group, Inc. | | 155,630 | | | 2,932,069 |
Progressive Corp. (The)* | | 356,753 | | | 5,390,538 |
Torchmark Corp. | | 47,843 | | | 1,772,105 |
Unum Group | | 179,603 | | | 2,848,504 |
W.R. Berkley Corp. | | 383,041 | | | 8,223,890 |
Willis Group Holdings, Ltd. | | 165,490 | | | 4,258,058 |
XL Capital, Ltd. - Class A | | 155,270 | | | 1,779,394 |
| | | | | |
| | | | | 49,720,934 |
| | | | | |
| Internet Software & Services - 0.6% |
IAC/InterActiveCorp* | | 152,440 | | | 2,446,662 |
| | | | | |
| IT Services - 0.9% |
Affiliated Computer Services, Inc. - Class A* | | 43,036 | | | 1,911,659 |
Hewitt Associates, Inc. - Class A* | | 57,523 | | | 1,713,035 |
| | | | | |
| | | | | 3,624,694 |
| | | | | |
| Machinery - 2.3% |
Cummins, Inc. | | 70,670 | | | 2,488,291 |
Eaton Corp. | | 90,983 | | | 4,058,752 |
Parker Hannifin Corp. | | 64,894 | | | 2,787,846 |
| | | | | |
| | | | | 9,334,889 |
| | | | | |
| Media - 2.7% |
DISH Network Corp. - Class A* | | 413,790 | | | 6,707,536 |
Viacom, Inc. - Class B* | | 202,047 | | | 4,586,467 |
| | | | | |
| | | | | 11,294,003 |
| | | | | |
| Metals & Mining - 1.7% |
Steel Dynamics, Inc. | | 287,771 | | | 4,238,867 |
Walter Energy, Inc. | | 83,250 | | | 3,016,980 |
| | | | | |
| | | | | 7,255,847 |
| | | | | |
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Multi-Utilities - 1.6% |
CMS Energy Corp.(a) | | 213,393 | | $ | 2,577,788 |
PG&E Corp. | | 36,403 | | | 1,399,331 |
Sempra Energy | | 26,762 | | | 1,328,198 |
Xcel Energy, Inc. | | 65,500 | | | 1,205,855 |
| | | | | |
| | | | | 6,511,172 |
| | | | | |
| Multiline Retail - 1.7% |
JC Penney Co., Inc.(a) | | 144,524 | | | 4,149,284 |
Kohl’s Corp.* | | 69,015 | | | 2,950,391 |
| | | | | |
| | | | | 7,099,675 |
| | | | | |
| Oil, Gas & Consumable Fuels - 6.8% |
Newfield Exploration Co.* | | 278,264 | | | 9,090,885 |
Noble Energy, Inc. | | 104,953 | | | 6,189,078 |
Range Resources Corp. | | 205,516 | | | 8,510,418 |
Whiting Petroleum Corp.*(a) | | 117,840 | | | 4,143,254 |
| | | | | |
| | | | | 27,933,635 |
| | | | | |
| Personal Products - 0.1% |
Alberto-Culver Co. | | 15,540 | | | 395,182 |
| | | | | |
| Real Estate Investment Trusts (REITs) - 4.3% |
Alexandria Real Estate Equities, Inc.(a) | | 84,328 | | | 3,018,099 |
Boston Properties, Inc.(a) | | 86,248 | | | 4,114,030 |
Douglas Emmett, Inc.(a) | | 264,848 | | | 2,380,983 |
Essex Property Trust, Inc.(a) | | 29,882 | | | 1,859,557 |
Federal Realty Investment Trust(a) | | 39,350 | | | 2,027,312 |
Health Care REIT, Inc. | | 58,930 | | | 2,009,513 |
Host Hotels & Resorts, Inc. | | 271,192 | | | 2,275,301 |
| | | | | |
| | | | | 17,684,795 |
| | | | | |
| Road & Rail - 0.9% |
Landstar System, Inc.(a) | | 52,348 | | | 1,879,817 |
Norfolk Southern Corp. | | 49,283 | | | 1,856,490 |
| | | | | |
| | | | | 3,736,307 |
| | | | | |
| Semiconductors & Semiconductor Equipment - 1.1% |
KLA-Tencor Corp. | | 63,606 | | | 1,606,052 |
Linear Technology Corp.(a) | | 66,506 | | | 1,552,915 |
Teradyne, Inc.*(a) | | 215,900 | | | 1,481,074 |
| | | | | |
| | | | | 4,640,041 |
| | | | | |
| Software - 2.9% |
Activision Blizzard, Inc.* | | 628,147 | | | 7,933,496 |
CA, Inc. | | 95,490 | | | 1,664,391 |
Parametric Technology Corp.* | | 200,690 | | | 2,346,066 |
| | | | | |
| | | | | 11,943,953 |
| | | | | |
| Specialty Retail - 2.8% |
AutoZone, Inc.*(a) | | 9,579 | | | 1,447,483 |
Ross Stores, Inc.(a) | | 85,657 | | | 3,306,360 |
TJX Cos., Inc. (The) | | 167,550 | | | 5,271,123 |
Urban Outfitters, Inc.*(a) | | 81,440 | | | 1,699,653 |
| | | | | |
| | | | | 11,724,619 |
| | | | | |
| Thrifts & Mortgage Finance - 0.7% |
New York Community Bancorp, Inc. | | 256,658 | | | 2,743,674 |
| | | | | |
See accompanying notes to financial statements
6
Met Investors Series Trust
Goldman Sachs Mid Cap Value Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | | |
Security
Description | | Shares/Par
Amount | | Value | |
| | | | | | | |
|
| Wireless Telecommunication Services - 1.1% | |
Sprint Nextel Corp.* | | | 970,852 | | $ | 4,669,798 | |
| | | | | | | |
Total Common Stocks
(Cost $426,725,775) | | | | | | 394,557,671 | |
| | | | | | | |
|
| Short-Term Investments - 14.5% | |
| Mutual Funds - 11.2% | |
State Street Navigator Securities Lending Trust Prime Portfolio(b) | | | 45,992,442 | | | 45,992,442 | |
| | | | | | | |
| Repurchase Agreement - 3.3% | |
State Street Bank & Trust Co., Repurchase Agreement, dated 06/30/09 at 0.010% to be repurchased at $13,665,004 on 07/01/09 collateralized by $13,520,000 FHLMC at 2.875% due 11/23/10 with a value of $13,942,500. | | $ | 13,665,000 | | | 13,665,000 | |
| | | | | | | |
Total Short-Term Investments
(Cost $59,657,442) | | | | | | 59,657,442 | |
| | | | | | | |
| | |
TOTAL INVESTMENTS - 110.1%
(Cost $486,383,217) | | | | | | 454,215,113 | |
| | | | | | | |
| | |
| Other Assets and Liabilities (net) - (10.1)% | | | | | | (41,721,181 | ) |
| | | | | | | |
| | |
| NET ASSETS - 100.0% | | | | | $ | 412,493,932 | |
| | | | | | | |
Portfolio Footnotes:
| * | | Non-income producing security. |
| (a) | | All or a portion of security is on loan. |
| (b) | | Represents investment of collateral received from securities lending transactions. |
FHLMC - Federal Home Loan Mortgage Corporation
See accompanying notes to financial statements
7
Met Investors Series Trust
Goldman Sachs Mid Cap Value Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
| Level 1—quoted | | prices in active markets for identical securities |
| Level 2—other | | significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.) |
| Level 3—significant | | unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments) |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
| Common Stocks | | | | | | | | | | | | |
Aerospace & Defense | | $ | 2,326,752 | | $ | — | | $ | — | | $ | 2,326,752 |
Auto Components | | | 3,346,770 | | | — | | | — | | | 3,346,770 |
Beverages | | | 3,337,374 | | | — | | | — | | | 3,337,374 |
Biotechnology | | | 1,838,192 | | | — | | | — | | | 1,838,192 |
Building Products | | | 1,522,046 | | | — | | | — | | | 1,522,046 |
Capital Markets | | | 16,697,600 | | | — | | | — | | | 16,697,600 |
Chemicals | | | 13,900,174 | | | — | | | — | | | 13,900,174 |
Commercial & Professional Services | | | 12,765,125 | | | — | | | — | | | 12,765,125 |
Commercial Banks | | | 9,404,959 | | | — | | | — | | | 9,404,959 |
Communications Equipment | | | 4,218,354 | | | — | | | — | | | 4,218,354 |
Construction Materials | | | 3,953,261 | | | — | | | — | | | 3,953,261 |
Consumer Finance | | | 5,078,987 | | | — | | | — | | | 5,078,987 |
Diversified Consumer Services | | | 7,448,133 | | | — | | | — | | | 7,448,133 |
Diversified Financial Services | | | 2,033,869 | | | — | | | — | | | 2,033,869 |
Diversified Telecommunication Services | | | 3,176,666 | | | — | | | — | | | 3,176,666 |
Electric Utilities | | | 40,274,650 | | | — | | | — | | | 40,274,650 |
Electrical Equipment | | | 4,019,826 | | | — | | | — | | | 4,019,826 |
Electronic Equipment, Instruments & Components | | | 5,259,612 | | | — | | | — | | | 5,259,612 |
Energy Equipment & Services | | | 14,382,197 | | | — | | | — | | | 14,382,197 |
Food & Staples Retailing | | | 2,012,760 | | | — | | | — | | | 2,012,760 |
Food Products | | | 8,456,513 | | | — | | | — | | | 8,456,513 |
Gas Utilities | | | 3,883,912 | | | — | | | — | | | 3,883,912 |
Health Care Equipment & Supplies | | | 12,295,310 | | | — | | | — | | | 12,295,310 |
Health Care Providers & Services | | | 7,462,483 | | | — | | | — | | | 7,462,483 |
Hotels, Restaurants & Leisure | | | 3,183,702 | | | — | | | — | | | 3,183,702 |
Household Durables | | | 13,497,974 | | | — | | | — | | | 13,497,974 |
Household Products | | | 6,020,590 | | | — | | | — | | | 6,020,590 |
Insurance | | | 49,720,934 | | | — | | | — | | | 49,720,934 |
Internet Software & Services | | | 2,446,662 | | | — | | | — | | | 2,446,662 |
IT Services | | | 3,624,694 | | | — | | | — | | | 3,624,694 |
Machinery | | | 9,334,889 | | | — | | | — | | | 9,334,889 |
Media | | | 11,294,003 | | | — | | | — | | | 11,294,003 |
Metals & Mining | | | 7,255,847 | | | — | | | — | | | 7,255,847 |
Multi-Utilities | | | 6,511,172 | | | — | | | — | | | 6,511,172 |
Multiline Retail | | | 7,099,675 | | | — | | | — | | | 7,099,675 |
See accompanying notes to financial statements
8
Met Investors Series Trust
Goldman Sachs Mid Cap Value Portfolio
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Oil, Gas & Consumable Fuels | | $ | 27,933,635 | | $ | — | | $ | — | | $ | 27,933,635 |
Personal Products | | | 395,182 | | | — | | | — | | | 395,182 |
Real Estate Investment Trusts (REITs) | | | 17,684,795 | | | — | | | — | | | 17,684,795 |
Road & Rail | | | 3,736,307 | | | — | | | — | | | 3,736,307 |
Semiconductors & Semiconductor Equipment | | | 4,640,041 | | | — | | | — | | | 4,640,041 |
Software | | | 11,943,953 | | | — | | | — | | | 11,943,953 |
Specialty Retail | | | 11,724,619 | | | — | | | — | | | 11,724,619 |
Thrifts & Mortgage Finance | | | 2,743,674 | | | — | | | — | | | 2,743,674 |
Wireless Telecommunication Services | | | 4,669,798 | | | — | | | — | | | 4,669,798 |
Total Common Stocks | | | 394,557,671 | | | — | | | — | | | 394,557,671 |
| Short-Term Investments | | | | | | | | | | | | |
Mutual Funds | | | 45,992,442 | | | — | | | — | | | 45,992,442 |
Repurchase Agreement | | | — | | | 13,665,000 | | | — | | | 13,665,000 |
Total Short-Term Investments | | | 45,992,442 | | | 13,665,000 | | | — | | | 59,657,442 |
| TOTAL INVESTMENTS | | $ | 440,550,113 | | $ | 13,665,000 | | $ | — | | $ | 454,215,113 |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| Goldman Sachs Mid Cap Value Portfolio | | | |
| Assets | | | | |
Investments, at value (a)(b) | | $ | 440,550,113 | |
Repurchase Agreement | | | 13,665,000 | |
Cash | | | 9,358 | |
Receivable for investments sold | | | 15,507,211 | |
Receivable for Trust shares sold | | | 25,990 | |
Dividends receivable | | | 713,761 | |
Interest receivable | | | 4 | |
| | | | |
Total assets | | | 470,471,437 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 11,614,620 | |
Trust shares redeemed | | | 19,967 | |
Distribution and services fees—Class B | | | 19,607 | |
Collateral for securities on loan | | | 45,992,442 | |
Management fee | | | 246,519 | |
Administration fee | | | 2,473 | |
Custodian and accounting fees | | | 29,471 | |
Deferred trustee fee | | | 3,427 | |
Accrued expenses | | | 48,979 | |
| | | | |
Total liabilities | | | 57,977,505 | |
| | | | |
| Net Assets | | $ | 412,493,932 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 578,662,022 | |
Accumulated net realized loss | | | (136,924,878 | ) |
Unrealized depreciation on investments | | | (32,168,104 | ) |
Undistributed net investment income | | | 2,924,892 | |
| | | | |
Total | | $ | 412,493,932 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 317,938,356 | |
| | | | |
Class B | | | 94,555,576 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 38,619,154 | |
| | | | |
Class B | | | 11,480,774 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 8.23 | |
| | | | |
Class B | | | 8.24 | |
| | | | |
| | | | | |
(a) Investments at cost, excluding repurchase agreement | | $ | 472,718,217 | |
(b) Includes cash collateral for securities loaned of | | | 45,992,442 | |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009
| | | | |
| Goldman Sachs Mid Cap Value Portfolio | | | |
| Investment Income | | | | |
Dividends | | $ | 4,153,381 | |
Interest (1) | | | 188,627 | |
| | | | |
Total investment income | | | 4,342,008 | |
| | | | |
| Expenses | | | | |
Management fee | | | 1,325,019 | |
Administration fees | | | 16,268 | |
Custodian and accounting fees | | | 21,985 | |
Distribution and services fees—Class B | | | 111,504 | |
Audit and tax services | | | 21,301 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 19,578 | |
Insurance | | | 5,041 | |
Other | | | 3,397 | |
| | | | |
Total expenses | | | 1,550,526 | |
Less broker commission recapture | | | (72,070 | ) |
| | | | |
Net expenses | | | 1,478,456 | |
| | | | |
Net investment income | | | 2,863,552 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments | | | | |
Net realized loss on: | | | | |
Investments | | | (62,823,236 | ) |
| | | | |
Net realized loss on investments | | | (62,823,236 | ) |
| | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 78,322,130 | |
| | | | |
Net change in unrealized appreciation on investments | | | 78,322,130 | |
| | | | |
Net realized and unrealized gain on investments | | | 15,498,894 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 18,362,446 | |
| | | | |
| | | | | |
(1) Interest income includes securities lending net income of: | | $ | 188,108 | |
See accompanying notes to financial statements
11
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
Goldman Sachs Mid Cap Value Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 2,863,552 | | | $ | 7,282,399 | |
Net realized loss on investments | | | (62,823,236 | ) | | | (73,681,520 | ) |
Net change in unrealized appreciation (depreciation) on investments | | | 78,322,130 | | | | (135,779,302 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 18,362,446 | | | | (202,178,423 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | (4,893,374 | ) | | | (3,729,926 | ) |
Class B | | | (1,211,267 | ) | | | (1,209,963 | ) |
From net realized gains | | | | | | | | |
Class A | | | — | | | | (28,189,463 | ) |
Class B | | | — | | | | (13,093,820 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (6,104,641 | ) | | | (46,223,172 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 33,144,003 | | | | 79,814,056 | |
Class B | | | 938,176 | | | | 10,724,237 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | 4,893,374 | | | | 31,919,389 | |
Class B | | | 1,211,267 | | | | 14,303,783 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (8,783,244 | ) | | | (41,671,191 | ) |
Class B | | | (7,192,765 | ) | | | (49,330,322 | ) |
| | | | | | | | |
Net increase in net assets from capital share transactions | | | 24,210,811 | | | | 45,759,952 | |
| | | | | | | | |
| Net Increase (Decrease) in Net Assets | | | 36,468,616 | | | | (202,641,643 | ) |
Net assets at beginning of period | | | 376,025,316 | | | | 578,666,959 | |
| | | | | | | | |
Net assets at end of period | | $ | 412,493,932 | | | $ | 376,025,316 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 2,924,892 | | | $ | 6,165,981 | |
| | | | | | | | |
See accompanying notes to financial statements
12
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Goldman Sachs Mid Cap Value Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004(b) | |
| Net Asset Value, Beginning of Period | | $ | 7.99 | | | $ | 13.57 | | | $ | 14.43 | | | $ | 12.54 | | | $ | 11.94 | | | $ | 10.00 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.06 | | | | 0.17 | | | | 0.18 | | | | 0.14 | | | | 0.15 | | | | 0.09 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.32 | | | | (4.65 | ) | | | 0.39 | | | | 1.86 | | | | 1.38 | | | | 2.01 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.38 | | | | (4.48 | ) | | | 0.57 | | | | 2.00 | | | | 1.53 | | | | 2.10 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.14 | ) | | | (0.13 | ) | | | (0.10 | ) | | | — | | | | (0.11 | ) | | | (0.05 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (0.97 | ) | | | (1.33 | ) | | | (0.11 | ) | | | (0.82 | ) | | | (0.11 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.14 | ) | | | (1.10 | ) | | | (1.43 | ) | | | (0.11 | ) | | | (0.93 | ) | | | (0.16 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 8.23 | | | $ | 7.99 | | | $ | 13.57 | | | $ | 14.43 | | | $ | 12.54 | | | $ | 11.94 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 4.88 | % | | | (35.92 | )% | | | 3.37 | % | | | 16.02 | % | | | 12.76 | % | | | 20.98 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.75 | %* | | | 0.75 | % | | | 0.75 | % | | | 0.79 | % | | | 0.79 | % | | | 0.97 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.79 | %* | | | 0.75 | % | | | 0.77 | % | | | 0.81 | % | | | 0.79 | % | | | 0.98 | %* |
Ratio of Net investment Income to Average Net Assets | | | 1.64 | %* | | | 1.56 | % | | | 1.27 | % | | | 1.02 | % | | | 1.15 | % | | | 1.19 | %* |
Portfolio Turnover Rate | | | 58.5 | % | | | 98.5 | % | | | 83.6 | % | | | 67.2 | % | | | 51.4 | % | | | 40.8 | % |
Net Assets, End of Period (in millions) | | $ | 317.9 | | | $ | 278.9 | | | $ | 383.0 | | | $ | 277.9 | | | $ | 285.0 | | | $ | 126.0 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004(b) | |
| Net Asset Value, Beginning of Period | | $ | 7.97 | | | $ | 13.53 | | | $ | 14.40 | | | $ | 12.55 | | | $ | 11.95 | | | $ | 10.00 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.05 | | | | 0.14 | | | | 0.14 | | | | 0.11 | | | | 0.11 | | | | 0.05 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.33 | | | | (4.64 | ) | | | 0.39 | | | | 1.85 | | | | 1.39 | | | | 2.04 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.38 | | | | (4.50 | ) | | | 0.53 | | | | 1.96 | | | | 1.50 | | | | 2.09 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.11 | ) | | | (0.09 | ) | | | (0.07 | ) | | | — | | | | (0.08 | ) | | | (0.03 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (0.97 | ) | | | (1.33 | ) | | | (0.11 | ) | | | (0.82 | ) | | | (0.11 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.11 | ) | | | (1.06 | ) | | | (1.40 | ) | | | (0.11 | ) | | | (0.90 | ) | | | (0.14 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 8.24 | | | $ | 7.97 | | | $ | 13.53 | | | $ | 14.40 | | | $ | 12.55 | | | $ | 11.95 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 4.82 | % | | | (36.07 | )% | | | 3.10 | % | | | 15.69 | % | | | 12.54 | % | | | 20.85 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 1.00 | %* | | | 1.00 | % | | | 1.00 | % | | | 1.05 | % | | | 1.03 | % | | | 1.14 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 1.04 | %* | | | 1.01 | % | | | 1.02 | % | | | 1.07 | % | | | 1.03 | % | | | 1.14 | %* |
Ratio of Net Investment Income to Average Net Assets | | | 1.37 | %* | | | 1.26 | % | | | 0.97 | % | | | 0.83 | % | | | 0.87 | % | | | 0.71 | %* |
Portfolio Turnover Rate | | | 58.5 | % | | | 98.5 | % | | | 83.6 | % | | | 67.2 | % | | | 51.4 | % | | | 40.8 | % |
Net Assets, End of Period (in millions) | | $ | 94.6 | | | $ | 97.1 | | | $ | 195.7 | | | $ | 192.6 | | | $ | 137.1 | | | $ | 104.0 | |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations 05/01/2004. |
See accompanying notes to financial statements
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is Goldman Sachs Mid Cap Value Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A and B Shares are currently offered by the Portfolio. Class C and E Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | |
Expiring
12/31/2016 | | Total |
| |
| $ | 67,009,921 | | $67,009,921 |
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
G. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
H. Directed Brokerage Agreement - The Trust has entered into a directed brokerage arrangement with State Street Global Markets (“SSGM”). Under this arrangement, the Portfolio directs certain trades to SSGM in return for a recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to the Portfolio are shown separately as an expense reduction on the Statement of Operations of the Portfolio.
I. Futures Contracts - The Portfolio may buy and sell futures contracts (on recognized exchanges) as a hedge, to maintain exposure to the broad equity markets or to enhance return. The Portfolio may be subject to equity price risk, interest rate risk, and foreign currency exchange rate risk in the normal course of pursuing its investment objectives. Futures contracts are agreements to buy or sell a security, or deliver a final cash settlement price in connection with an index, interest rate, currency, or other contracts not calling for physical delivery, for a set price in the future. The Portfolio must post an amount equal to a portion of the total market value of the futures contract as futures variation margin, which is returned when the Portfolio’s obligations under the contract have been satisfied. From time to time thereafter, the Portfolio may have to post
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
variation margin to maintain this amount as the market value of the contract fluctuates. Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with Goldman Sachs Asset Management, L.P. (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
$1,325,019 | | 0.75 | % | | First $200 Million |
| | |
| | 0.70 | % | | Over $200 Million |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A and Class B Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B distribution plan provides that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% of the average net assets of the Portfolio attributable to its Class B Shares in respect to activities primarily intended to result in the sale of Class B Shares. However, under the Class B distribution agreement, payments to the Distributor for activities pursuant to the Class B distribution plan are currently limited to payments at an annual rate equal to 0.25% of average daily net assets of the Portfolio attributable to its Class B Shares.
Under terms of the Class B distribution plan and distribution agreement, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B Shares for such entities’ fees or expenses incurred.
During the period ended June 30, 2009 the Portfolio paid brokerage commissions to affiliated brokers/dealers:
| | | |
Affiliate | | Commission |
| |
| Goldman Sachs & Co. | | $ | 36,171 |
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
16
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
(Decrease)
in Shares
Outstanding | | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 34,897,498 | | 4,283,939 | | 646,416 | | (1,208,699 | ) | | 3,721,656 | | | 38,619,154 |
12/31/2008 | | 28,220,667 | | 7,702,793 | | 2,574,144 | | (3,600,106 | ) | | 6,676,831 | | | 34,897,498 |
| | | | | | |
Class B | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 12,177,906 | | 121,868 | | 160,009 | | (979,009 | ) | | (697,132 | ) | | 11,480,774 |
12/31/2008 | | 14,463,348 | | 877,593 | | 1,154,462 | | (4,317,497 | ) | | (2,285,442 | ) | | 12,177,906 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 217,768,169 | | $ | — | | $ | 204,088,433 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $486,383,217 | | $ | 20,025,344 | | $ | (52,193,448 | ) | | $ | (32,168,104 | ) |
6. Securities Lending
As of June 30, 2009, the Portfolio had loaned securities which were collateralized by short term investments. The value of securities on loan and the value of the related collateral were as follows:
| | | | | | | | | |
Value of
Securities | | Value of
Cash
Collateral | | Value of
Non-Cash
Collateral* | | Total
Collateral |
| | | |
| $44,851,638 | | $ | 45,992,442 | | $ | — | | $ | 45,992,442 |
* The Portfolio cannot repledge or resell this collateral. The non-cash collateral is typically comprised of government securities and/or bank letters of credit.
7. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $ | 12,522,850 | | $ | 13,138,912 | | $ | 33,700,322 | | $ | 35,193,750 | | $ | 46,223,172 | | $ | 48,332,662 |
17
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
7. Distributions to Shareholders - continued
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards | | | Total | |
| | | | |
| $ | 6,166,117 | | $ | — | | $ | (117,581,956 | ) | | $ | (67,009,921 | ) | | $ | (178,425,760 | ) |
8. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
9. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
18
| | |
| Harris Oakmark International Portfolio | | For the period ended 6/30/09 |
| Managed by Harris Associates L.P. | | |
Portfolio Manager Commentary
Performance
For the six months ended June 30, 2009, the Portfolio had a return of 19.34%, 19.26% and 19.31% for Class A, B and E Shares, respectively, versus 7.95% for its benchmark, the MSCI EAFE® Index.
Market Environment/Conditions
Markets are still recovering from the price destruction that began during the second half of 2007. This harsh decline in equity prices was fueled by a loss of liquidity and of confidence in the credit markets, which was followed by a severe—and, we would argue, a somewhat exaggerated—downturn in the real economy. The current “bounce” in equity prices reflects both the stabilizing credit markets and the belief that we have avoided global economic Armageddon.
Worries remain about the nature of the economic recovery as well as authorities’ ability to maintain price stability. Both variables affect equity market value and valuation growth.
Fears involve the nature of the economic recovery. The severe contraction began because weak consumer spending prompted the corporate world to abruptly stop producing goods. This knee-jerk reaction was evident in trade figures as well as shipping and transport data, which dropped as if they had fallen off of a cliff. And, of course, production declines caused employment reductions that reverberated back into the economy in the form of less consumer confidence and spending. In the past, certain consumers, like those in the U.S. and the U.K., were spending more than they could sustain. The good news is that in other places, like China, Japan and most of Western Europe, consumers were not over-extended at all. In fact, the savings rate in China remains at approximately 20%. The ranks of the middle class, who have a significant amount of disposable income, are increasing around the world, and we view this as a significant positive for the economy.
Because we remain stock pickers who make investment decisions on value, the macro environment is just one of many factors we look at when analyzing a business. And, ironically, painful short-term swings in the macro-economic environment often provide us with opportunities to achieve our key objective: finding quality at low prices.
Portfolio Review/Current Positioning
At June 30, 2009, the Portfolio held 53 securities across a variety of industries. Over the past six months, positions added include Atlas Copco, Compass Group, EnCana, Koninklijke Philips Electronics, Nestle, Sodexo, and Tyco International while we removed Lloyds Banking Group from the Portfolio.
Signet Jewelers, Credit Suisse, and BNP Paribas had the most positive impact on performance during the period. Signet Jewelers, the top performer for the quarter, returned over 142% for the six-month period. Despite industry weakness, Signet has not had to rely heavily on discounts and promotions as have its peers. Though the company’s same store sales were stronger in the U.S. than in the U.K., both
markets performed better than expected, off only 2.6% and 4.2%, respectively. Management continues to deliver on its cost savings plan and recognized $32 million of its estimated $100 million in total savings in its first quarter alone. Cash generation improved greatly over the past year, highlighting management’s ability to react swiftly to changing market conditions. With struggling competitors and with management’s excellent performance, we believe Signet is poised to emerge from this environment in an exceptionally strong position.
While many other investment banks are still struggling, Credit Suisse announced very strong first half results, especially in investment banking. To put this in perspective, first quarter profits were half the level of full year profits in 2006 (a peak year). Strong profits were driven by positive spreads, strong trading conditions in March, and market share gains as certain competitors are now out of business. All this was done despite taking lower risks. Net new money continued in the private banking business despite headlines of new secrecy rules. Finally, capital continued to build, making Credit Suisse one of the best capitalized banks in the world.
BNP Paribas’ stock climbed much of the first half of the year. In April the bank’s proposed deal to acquire Fortis Bank was approved by shareholders, and we believe this should be a good deal for BNP. Additionally, the firm reported strong results for its first quarter of 2009, with the investment banking division earning more in this quarter than any quarter since the beginning of the credit crisis (second quarter 2007). Fixed income revenues were three times higher than the previous record and accounted for 30% of the group’s revenues.
Television Francaise 1 (TF1), UBS and Novartis had the most negative impact on performance during the period. Television Francaise 1 (TF1) was the largest detractor for the semi-annual period. We can’t ignore that this is a challenging environment for advertising and television programming; however, we believe the market has severely over-reacted, which in turn has created a unique investment opportunity. In the short term, as the market leader and premium provider, TF1 has suffered through the advertising downturn. However, TF1 commands the dominant position in television advertising and has a leading media franchise in its market. Additionally, across the organization, dramatic shifts in management and culture have produced greater focus on margins and cash generation. The French government’s continued media regulation reform should also benefit the business. From a valuation perspective, if you deduct the value of assets unrelated to the company’s core business operations, TF1 is trading at just 5.5x trailing earnings before income taxes (“EBIT”). While we recognize the cyclical nature of TF1’s industry, we believe that the company’s current valuations constitute an unwarranted discount compared to its peers in the television and radio industries and is priced significantly below the company’s intrinsic value.
Early in the year, UBS reported its fourth quarter results that were worse than analysts’ estimates. With a quarterly loss of over 8 billion Swiss Francs, the bank said it would cut 2,700 jobs to refocus on its home market. However the report did contain some positives showing
1
| | |
| Harris Oakmark International Portfolio | | For the period ended 6/30/09 |
| Managed by Harris Associates L.P. | | |
Portfolio Manager Commentary (continued)
incremental improvements. Though outflows in the Private Bank were more than expected, the amount of outflows decreased throughout the quarter, and for January the bank showed a modest net inflow. Despite the tough revenue environment, UBS reported higher than expected operating profitability in its Private Bank, largely due to cost cutting. There were numerous one-off charges included in the report and, those aside, U.S. Wealth Management posted what we consider to be decent results for the period. A significant change in leadership occurred during the quarter when Marcus Rohner stepped down as CEO and was replaced by Oswald Gruebel. Mr. Gruebel successfully ran Credit Suisse and should be a strong force to address UBS’ numerous problems and make improvements. Lastly, the bank launched a tender offer for some of its lower tier two capital instruments that are now discounted to unprecedented price levels, and repurchasing these would position UBS to profit substantially.
Novartis’ share price fell during the first three months of the year after having performed well for the two preceding quarters. Investors likely retrieved some profits as the firm reported quarterly results that were largely as, or better than, expected. Novartis reported growth in both its pharma and generics areas. The firm is facing challenges with regard to its purchase of Alcon along with negative currency transaction issues; however we believe these difficulties are temporary and continue to see significant upside potential with this investment.
David G. Herro, CFA
Partner and Chief Investment Officer, International Equity
Robert A. Taylor, CFA
Partner, Director of International Research and Portfolio Manager
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of Net Assets |
Signet Jewelers, Ltd. | | 3.79% |
Compagnie Financiere Richemont S.A. | | 3.52% |
Daiwa Securities Group, Inc. | | 3.42% |
Allianz SE | | 3.13% |
Daimler AG | | 2.97% |
UBS AG | | 2.92% |
Publicis Groupe | | 2.91% |
Adecco S.A. | | 2.73% |
Credit Suisse Group AG | | 2.71% |
Rohm Co., Ltd. | | 2.69% |
Portfolio Composition (% of portfolio market value)
As of 6/30/09
2
| | |
| Harris Oakmark International Portfolio | | For the period ended 6/30/09 |
| Managed by Harris Associates L.P. | | |
Portfolio Manager Commentary (continued)
Harris Oakmark International Portfolio managed by
Harris Associates L.P. vs. MSCI EAFE® Index (net)1
Growth Based on $10,000+
| | | | | | | | | | | | |
| | | | | Average Annual Return2 (for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | 3 Year | | 5 Year | | Since
Inception3 |
| | Harris Oakmark International Portfolio— Class A | | 19.34% | | -13.04% | | -6.73% | | 3.34% | | 4.56% |
| — | | Class B | | 19.26% | | -13.22% | | -6.95% | | 3.08% | | 5.39% |
| | Class E | | 19.31% | | -13.18% | | -6.86% | | 3.18% | | 4.70% |
| - - | | MSCI EAFE® Index (net)1 | | 7.95% | | -31.35% | | -7.98% | | 2.31% | | 4.63% |
+The chart reflects the performance of Class B shares of the Portfolio. The performance of Class B shares will differ from that of the other classes because of the difference in expenses paid by policyholders investing in the different share classes.
1The Morgan Stanley Capital International Europe, Australasia and Far East Index (“MSCI EAFE® Index”) is an unmanaged free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the U.S. and Canada.
2“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
3Inception of the Class A shares is 1/2/02. Inception of the Class B shares is 10/9/01. Inception of the Class E shares is 4/01/02. Index returns are based on an inception date of 10/9/01.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Index does not include fees or expenses and is not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| Harris Oakmark International Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.86% | | $ | 1,000.00 | | $ | 1,193.40 | | $ | 4.68 |
Hypothetical | | 0.86% | | | 1,000.00 | | | 1,020.53 | | | 4.31 |
| | | | | | | | | | | |
| | | | |
Class B | | | | | | | | | | | |
Actual | | 1.11% | | $ | 1,000.00 | | $ | 1,192.60 | | $ | 6.03 |
Hypothetical | | 1.11% | | | 1,000.00 | | | 1,019.29 | | | 5.56 |
| | | | | | | | | | | |
| | | | |
Class E | | | | | | | | | | | |
Actual | | 1.01% | | $ | 1,000.00 | | $ | 1,193.10 | | $ | 5.49 |
Hypothetical | | 1.01% | | | 1,000.00 | | | 1,019.79 | | | 5.06 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
4
Met Investors Series Trust
Harris Oakmark International Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value
|
| | | | | |
| | |
| Common Stocks - 97.4% | | | | | |
| Canada - 3.6% | | | | | |
Canadian National Railway Co. | | 177,300 | | $ | 7,616,808 |
EnCana Corp. | | 441,700 | | | 21,850,899 |
Thomson Reuters Plc(a) | | 864,100 | | | 24,651,070 |
| | | | | |
| | | | | 54,118,777 |
| | | | | |
| Finland - 0.4% | | | | | |
Kone Oyj - Class B | | 177,400 | | | 5,444,949 |
| | | | | |
| France - 10.3% | | | | | |
BNP Paribas(a) | | 458,274 | | | 29,721,149 |
LVMH Moet Hennessy Louis Vuitton S.A.(a) | | 312,200 | | | 23,881,616 |
Publicis Groupe(a) | | 1,436,400 | | | 43,829,844 |
Societe Television Francaise 1(a) | | 3,527,000 | | | 39,652,459 |
Sodexo | | 368,000 | | | 18,917,056 |
| | | | | |
| | | | | 156,002,124 |
| | | | | |
| Germany - 10.2% | | | | | |
Allianz SE | | 510,600 | | | 47,187,453 |
Bayerische Motoren Werke (BMW) AG(a) | | 767,200 | | | 28,957,359 |
Daimler AG(a) | | 1,238,500 | | | 44,784,195 |
SAP AG(a) | | 832,900 | | | 33,558,734 |
| | | | | |
| | | | | 154,487,741 |
| | | | | |
| Ireland - 3.1% | | | | | |
Bank of Ireland Plc* | | 9,838,700 | | | 23,272,368 |
Experian Group, Ltd. | | 3,066,700 | | | 22,978,468 |
| | | | | |
| | | | | 46,250,836 |
| | | | | |
| Israel - 0.2% | | | | | |
Orbotech, Ltd.*(a) | | 265,000 | | | 2,292,250 |
| | | | | |
| Italy - 1.9% | | | | | |
Bulgari S.p.A.(a) | | 737,000 | | | 3,970,159 |
Luxottica Group S.p.A.*(a) | | 1,198,500 | | | 24,910,778 |
| | | | | |
| | | | | 28,880,937 |
| | | | | |
| Japan - 13.6% | | | | | |
Canon, Inc.(a) | | 1,044,800 | | | 33,971,570 |
Daiwa Securities Group, Inc.(a) | | 8,730,300 | | | 51,549,133 |
Honda Motor Co., Ltd.(a) | | 343,200 | | | 9,387,950 |
Meitec Corp.(a) | | 432,800 | | | 7,431,577 |
OMRON Corp.(a) | | 2,336,000 | | | 33,556,942 |
Rohm Co., Ltd. | | 558,200 | | | 40,504,040 |
Toyota Motor Corp. | | 781,100 | | | 29,499,844 |
| | | | | |
| | | | | 205,901,056 |
| | | | | |
| Mexico - 3.7% | | | | | |
Fomento Economico Mexicano, S.A.B de C.V. (ADR) | | 660,000 | | | 21,278,400 |
Grupo Televisa S.A. (ADR)(a) | | 1,996,400 | | | 33,938,800 |
| | | | | |
| | | | | 55,217,200 |
| | | | | |
| | | | | |
Security
Description | | Shares | | Value
|
| | | | | |
| | |
| Netherlands - 3.7% | | | | | |
Akzo Nobel N.V.(a) | | 635,000 | | $ | 27,926,284 |
ASML Holding N.V.(a) | | 474,100 | | | 10,277,114 |
Koninklijke (Royal) Philips Electronics N.V.(a) | | 981,600 | | | 18,140,076 |
| | | | | |
| | | | | 56,343,474 |
| | | | | |
| South Korea - 1.3% | | | | | |
Samsung Electronics Co., Ltd. | | 42,900 | | | 19,867,975 |
| | | | | |
| Spain - 2.0% | | | | | |
Gestevision Telecinco S.A.(a) | | 3,225,446 | | | 30,235,137 |
| | | | | |
| Sweden - 3.2% | | | | | |
Assa Abloy AB - Class B(a) | | 2,784,400 | | | 38,725,121 |
Atlas Copco AB | | 978,200 | | | 8,837,072 |
| | | | | |
| | | | | 47,562,193 |
| | | | | |
| Switzerland - 24.6% | | | | | |
Adecco S.A.(a) | | 987,300 | | | 41,218,801 |
Compagnie Financiere Richemont S.A. | | 2,550,500 | | | 53,126,928 |
Credit Suisse Group AG | | 895,700 | | | 40,877,119 |
Geberit AG(a) | | 172,200 | | | 21,217,137 |
Givaudan S.A.(a) | | 54,999 | | | 33,681,905 |
Kuehne & Nagel International AG(a) | | 326,000 | | | 25,584,045 |
Nestle S.A. | | 577,600 | | | 21,793,273 |
Novartis AG | | 878,400 | | | 35,678,193 |
Swatch Group AG(a) | | 218,500 | | | 35,125,459 |
Tyco International, Ltd.(a) | | 695,300 | | | 18,063,894 |
UBS AG* | | 3,604,447 | | | 44,087,290 |
| | | | | |
| | | | | 370,454,044 |
| | | | | |
| United Kingdom - 15.6% | | | |
British Sky Broadcasting Group Plc(a) | | 4,402,400 | | | 33,019,644 |
Compass Group Plc | | 2,423,200 | | | 13,652,201 |
Diageo Plc | | 2,187,500 | | | 31,408,789 |
G4S Plc | | 8,245,000 | | | 28,348,307 |
GlaxoSmithKline Plc | | 1,864,300 | | | 32,823,511 |
Johnston Press Plc*(a) | | 11,919,062 | | | 3,877,352 |
Schroders Plc(a) | | 2,601,042 | | | 35,202,601 |
Signet Jewelers, Ltd. | | 2,749,254 | | | 57,239,468 |
| | | | | |
| | | | | 235,571,873 |
| | | | | |
Total Common Stocks
(Cost $1,839,499,115) | | | | | 1,468,630,566 |
| | | | | |
| |
| Short-Term Investments - 21.1% | | | |
| Mutual Funds - 19.2% | | | | | |
State Street Navigator Securities Lending Trust Prime Portfolio(b) | | 289,798,757 | | | 289,798,757 |
See accompanying notes to financial statements
5
Met Investors Series Trust
Harris Oakmark International Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | | |
Security
Description | | Par
Amount | | Value
| |
| | | | | | | |
| Repurchase Agreement - 1.9% | | | | | | | |
State Street Bank & Trust Co., Repurchase Agreement, dated 06/30/09 at 0.010% to be repurchased at $29,482,008 on 07/01/09 collateralized by $29,925,000 FNMA at 1.722% due 05/10/11 with a value of $30,074,625. | | $ | 29,482,000 | | $ | 29,482,000 | |
| | | | | | | |
Total Short-Term Investments
(Cost $319,280,757) | | | | | | 319,280,757 | |
| | | | | | | |
| |
TOTAL INVESTMENTS - 118.5%
(Cost $2,158,779,872) | | | 1,787,911,323 | |
| | | | | | | |
| |
| Other Assets and Liabilities (net) - (18.5)% | | | (279,585,686 | ) |
| | | | | | | |
| | |
| NET ASSETS - 100.0% | | | | | $ | 1,508,325,637 | |
| | | | | | | |
Portfolio Footnotes:
| * | | Non-income producing security. |
| (a) | | All or a portion of security is on loan. |
| (b) | | Represents investment of collateral received from securities lending transactions. |
ADR - American Depositary Receipt
FNMA - Federal National Mortgage Association
The following table summarizes the top ten sector diversification of the portfolio holdings of Harris Oakmark International Portfolio at June 30, 2009.
| | |
Ten Largest Industries as of
June 30, 2009 (Unaudited) | | Percent of Total
Net Assets |
Media | | 13.9% |
Capital Markets | | 11.4% |
Textiles, Apparel & Luxury Goods | | 9.3% |
Automobiles | | 7.5% |
Professional Services | | 4.7% |
Semiconductors & Semiconductor Equipment | | 4.7% |
Pharmaceuticals | | 4.5% |
Chemicals | | 4.1% |
Building Products | | 4.0% |
Specialty Retail | | 3.8% |
See accompanying notes to financial statements
6
Met Investors Series Trust
Harris Oakmark International Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1—quoted prices in active markets for identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets (Level 1) | | Significant
Other
Observable
Inputs (Level 2) | | | Significant
Unobservable
Inputs (Level 3) | | Total | |
Common Stocks | | | | | | | | | | | | | | |
Canada | | $ | 29,467,707 | | $ | 24,651,070 | | | $ | — | | $ | 54,118,777 | |
Finland | | | — | | | 5,444,949 | | | | — | | | 5,444,949 | |
France | | | — | | | 156,002,124 | | | | — | | | 156,002,124 | |
Germany | | | — | | | 154,487,741 | | | | — | | | 154,487,741 | |
Ireland | | | — | | | 46,250,836 | | | | — | | | 46,250,836 | |
Israel | | | 2,292,250 | | | — | | | | — | | | 2,292,250 | |
Italy | | | — | | | 28,880,937 | | | | — | | | 28,880,937 | |
Japan | | | — | | | 205,901,056 | | | | — | | | 205,901,056 | |
Mexico | | | 55,217,200 | | | — | | | | — | | | 55,217,200 | |
Netherlands | | | — | | | 56,343,474 | | | | — | | | 56,343,474 | |
South Korea | | | — | | | 19,867,975 | | | | — | | | 19,867,975 | |
Spain | | | — | | | 30,235,137 | | | | — | | | 30,235,137 | |
Sweden | | | — | | | 47,562,193 | | | | — | | | 47,562,193 | |
Switzerland | | | 18,063,894 | | | 352,390,150 | | | | — | | | 370,454,044 | |
United Kingdom | | | 57,239,468 | | | 178,332,405 | | | | — | | | 235,571,873 | |
Total Common Stocks | | | 162,280,519 | | | 1,306,350,047 | | | | — | | | 1,468,630,566 | |
Short-Term Investments | | | | | | | | | | | | | | |
Mutual Funds | | | 289,798,757 | | | — | | | | — | | | 289,798,757 | |
Repurchase Agreement | | | — | | | 29,482,000 | | | | — | | | 29,482,000 | |
Total Short-Term Investments | | | 289,798,757 | | | 29,482,000 | | | | — | | | 319,280,757 | |
TOTAL INVESTMENTS | | $ | 452,079,276 | | $ | 1,335,832,047 | | | $ | — | | $ | 1,787,911,323 | |
Forward Contracts | | | | | | | | | | | | | | |
Forward Currency Contracts | | $ | — | | $ | (543,691 | ) | | $ | — | | $ | (543,691 | ) |
See accompanying notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| Harris Oakmark International Portfolio | | | |
| Assets | | | | |
Investments, at value (a)(b) | | $ | 1,758,429,323 | |
Repurchase Agreement | | | 29,482,000 | |
Cash | | | 991 | |
Cash denominated in foreign currencies (c) | | | 974,367 | |
Receivable for investments sold | | | 13,485,389 | |
Receivable for Trust shares sold | | | 471,710 | |
Dividends receivable | | | 1,731,005 | |
Interest receivable | | | 8 | |
Unrealized appreciation on forward currency contracts | | | 1,267,599 | |
| | | | |
Total assets | | | 1,805,842,392 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 2,843,588 | |
Trust shares redeemed | | | 1,245,100 | |
Unrealized depreciation on forward currency contracts | | | 1,811,290 | |
Distribution and services fees—Class B | | | 108,037 | |
Distribution and services fees—Class E | | | 11,348 | |
Collateral for securities on loan | | | 289,798,757 | |
Management fee | | | 976,162 | |
Administration fee | | | 9,474 | |
Custodian and accounting fees | | | 546,575 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 162,997 | |
| | | | |
Total liabilities | | | 297,516,755 | |
| | | | |
| Net Assets | | $ | 1,508,325,637 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 2,325,064,660 | |
Accumulated net realized loss | | | (455,587,129 | ) |
Unrealized depreciation on investments and foreign currency | | | (371,348,580 | ) |
Undistributed net investment income | | | 10,196,686 | |
| | | | |
Total | | $ | 1,508,325,637 | |
| | | | |
| NET ASSETS | | | | |
Class A | | $ | 902,041,934 | |
| | | | |
Class B | | | 516,142,311 | |
| | | | |
Class E | | | 90,141,392 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 97,521,350 | |
| | | | |
Class B | | | 56,370,193 | |
| | | | |
Class E | | | 9,810,839 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 9.25 | |
| | | | |
Class B | | | 9.16 | |
| | | | |
Class E | | | 9.19 | |
| | | | |
| | | | | |
(a) Investments at cost, excluding repurchase agreement | | $ | 2,129,297,872 | |
(b) Includes cash collateral for securities loaned of | | | 289,798,757 | |
(c) Cost of cash denominated in foreign currencies | | | 979,061 | |
See accompanying notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| Harris Oakmark International Portfolio | | | |
| Investment Income | | | | |
Dividends (1) | | $ | 22,719,896 | |
Interest (2) | | | 1,609,672 | |
| | | | |
Total investment income | | | 24,329,568 | |
| | | | |
| Expenses | | | | |
Management fee | | | 4,857,428 | |
Administration fees | | | 50,251 | |
Custodian and accounting fees | | | 229,858 | |
Distribution and services fees—Class B | | | 541,759 | |
Distribution and services fees—Class E | | | 58,098 | |
Audit and tax services | | | 10,847 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 88,313 | |
Insurance | | | 17,037 | |
Other | | | 7,262 | |
| | | | |
Total expenses | | | 5,887,286 | |
Less management fee waiver | | | (29,535 | ) |
| | | | |
Net expenses | | | 5,857,751 | |
| | | | |
Net investment income | | | 18,471,817 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | (221,517,616 | ) |
Foreign currency | | | 26,689,936 | |
| | | | |
Net realized loss on investments and foreign currency | | | (194,827,680 | ) |
| | | | |
Net change in unrealized appreciation (depreciation) on: | | | | |
Investments | | | 424,069,831 | |
Foreign currency | | | (8,878,144 | ) |
| | | | |
Net change in unrealized appreciation on investments and foreign currency | | | 415,191,687 | |
| | | | |
Net realized and unrealized gain on investments and foreign currency | | | 220,364,007 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 238,835,824 | |
| | | | |
| | | | | |
(1) Dividend income is net of foreign withholding taxes of: | | $ | 3,041,615 | |
(2) Interest income includes securities lending net income of: | | | 1,617,152 | |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| Harris Oakmark International Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 18,471,817 | | | $ | 57,629,985 | |
Net realized loss on investments, futures contracts and foreign currency | | | (194,827,680 | ) | | | (195,010,856 | ) |
Net change in unrealized appreciation (depreciation) on investments and foreign currency | | | 415,191,687 | | | | (787,241,345 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 238,835,824 | | | | (924,622,216 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | (67,860,377 | ) | | | (24,588,124 | ) |
Class B | | | (41,341,914 | ) | | | (10,662,017 | ) |
Class E | | | (7,308,464 | ) | | | (2,405,114 | ) |
From net realized gains | | | | | | | | |
Class A | | | — | | | | (210,513,151 | ) |
Class B | | | — | | | | (111,016,014 | ) |
Class E | | | — | | | | (23,620,917 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (116,510,755 | ) | | | (382,805,337 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 157,285,679 | | | | 295,556,962 | |
Class B | | | 35,128,044 | | | | 69,439,982 | |
Class E | | | 5,613,483 | | | | 10,113,911 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | 67,860,377 | | | | 235,101,275 | |
Class B | | | 41,341,914 | | | | 121,678,031 | |
Class E | | | 7,308,464 | | | | 26,026,031 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (73,324,140 | ) | | | (540,397,491 | ) |
Class B | | | (35,560,983 | ) | | | (177,292,291 | ) |
Class E | | | (10,886,153 | ) | | | (61,271,810 | ) |
| | | | | | | | |
Net increase (decrease) in net assets from capital share transactions | | | 194,766,685 | | | | (21,045,400 | ) |
| | | | | | | | |
| Net Increase (Decrease) in Net Assets | | | 317,091,754 | | | | (1,328,472,953 | ) |
Net assets at beginning of period | | | 1,191,233,883 | | | | 2,519,706,836 | |
| | | | | | | | |
Net assets at end of period | | $ | 1,508,325,637 | | | $ | 1,191,233,883 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 10,196,686 | | | $ | 108,235,624 | |
| | | | | | | | |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Harris Oakmark International Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 8.57 | | | $ | 17.27 | | | $ | 19.03 | | | $ | 16.23 | | | $ | 14.36 | | | $ | 11.89 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.13 | | | | 0.40 | | | | 0.33 | | | | 0.31 | | | | 0.21 | | | | 0.04 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 1.39 | | | | (6.46 | ) | | | (0.35 | ) | | | 4.20 | | | | 1.87 | | | | 2.43 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 1.52 | | | | (6.06 | ) | | | (0.02 | ) | | | 4.51 | | | | 2.08 | | | | 2.47 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.84 | ) | | | (0.28 | ) | | | (0.18 | ) | | | (0.49 | ) | | | (0.02 | ) | | | (0.00 | )+ |
Distributions from Net Realized Capital Gains | | | — | | | | (2.36 | ) | | | (1.56 | ) | | | (1.22 | ) | | | (0.19 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.84 | ) | | | (2.64 | ) | | | (1.74 | ) | | | (1.71 | ) | | | (0.21 | ) | | | (0.00 | )+ |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 9.25 | | | $ | 8.57 | | | $ | 17.27 | | | $ | 19.03 | | | $ | 16.23 | | | $ | 14.36 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 19.34 | % | | | (40.72 | )% | | | (0.86 | )% | | | 29.20 | % | | | 14.48 | % | | | 20.80 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.86 | %* | | | 0.85 | % | | | 0.86 | % | | | 0.97 | % | | | 0.94 | % | | | 1.04 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.86 | %* | | | 0.85 | % | | | 0.86 | % | | | 0.98 | % | | | 0.96 | % | | | 1.03 | %(b) |
Ratio of Net Investment Income to Average Net Assets | | | 3.14 | %* | | | 3.18 | % | | | 1.76 | % | | | 1.77 | % | | | 1.37 | % | | | 0.32 | % |
Portfolio Turnover Rate | | | 22.7 | % | | | 52.7 | % | | | 49.6 | % | | | 45.9 | % | | | 11.5 | % | | | 11.3 | % |
Net Assets, End of Period (in millions) | | $ | 902.0 | | | $ | 676.3 | | | $ | 1,458.3 | | | $ | 1,037.0 | | | $ | 644.5 | | | $ | 276.4 | |
| + | | Rounds to less than $0.005 per share. |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Excludes effect of deferred expense reimbursement. |
See accompanying notes to financial statements
11
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Harris Oakmark International Portfolio | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 8.47 | | | $ | 17.09 | | | $ | 18.87 | | | $ | 16.11 | | | $ | 14.27 | | | $ | 11.84 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.12 | | | | 0.36 | | | | 0.30 | | | | 0.26 | | | | 0.17 | | | | 0.16 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 1.37 | | | | (6.39 | ) | | | (0.36 | ) | | | 4.17 | | | | 1.86 | | | | 2.27 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 1.49 | | | | (6.03 | ) | | | (0.06 | ) | | | 4.43 | | | | 2.03 | | | | 2.43 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.80 | ) | | | (0.23 | ) | | | (0.16 | ) | | | (0.45 | ) | | | — | | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | (2.36 | ) | | | (1.56 | ) | | | (1.22 | ) | | | (0.19 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.80 | ) | | | (2.59 | ) | | | (1.72 | ) | | | (1.67 | ) | | | (0.19 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 9.16 | | | $ | 8.47 | | | $ | 17.09 | | | $ | 18.87 | | | $ | 16.11 | | | $ | 14.27 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 19.26 | % | | | (40.88 | )% | | | (1.12 | )% | | | 28.85 | % | | | 14.24 | % | | | 20.52 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 1.11 | %* | | | 1.10 | % | | | 1.10 | % | | | 1.22 | % | | | 1.19 | % | | | 1.23 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 1.12 | %* | | | 1.10 | % | | | 1.10 | % | | | 1.23 | % | | | 1.20 | % | | | 1.22 | %(b) |
Ratio of Net Investment Income to Average Net Assets | | | 2.85 | %* | | | 2.93 | % | | | 1.60 | % | | | 1.49 | % | | | 1.11 | % | | | 1.27 | % |
Portfolio Turnover Rate | | | 22.7 | % | | | 52.7 | % | | | 49.6 | % | | | 45.9 | % | | | 11.5 | % | | | 11.3 | % |
Net Assets, End of Period (in millions) | | $ | 516.1 | | | $ | 433.4 | | | $ | 862.6 | | | $ | 856.2 | | | $ | 554.3 | | | $ | 483.9 | |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Excludes effect of deferred expense reimbursement. |
See accompanying notes to financial statements
12
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Harris Oakmark International Portfolio | | Class E | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 8.50 | | | $ | 17.14 | | | $ | 18.91 | | | $ | 16.14 | | | $ | 14.30 | | | $ | 11.85 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.12 | | | | 0.38 | | | | 0.33 | | | | 0.27 | | | | 0.19 | | | | 0.17 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 1.38 | | | | (6.42 | ) | | | (0.37 | ) | | | 4.18 | | | | 1.85 | | | | 2.28 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 1.50 | | | | (6.04 | ) | | | (0.04 | ) | | | 4.45 | | | | 2.04 | | | | 2.45 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.81 | ) | | | (0.24 | ) | | | (0.17 | ) | | | (0.46 | ) | | | (0.01 | ) | | | (0.00 | )+ |
Distributions from Net Realized Capital Gains | | | — | | | | (2.36 | ) | | | (1.56 | ) | | | (1.22 | ) | | | (0.19 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.81 | ) | | | (2.60 | ) | | | (1.73 | ) | | | (1.68 | ) | | | (0.20 | ) | | | (0.00 | )+ |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 9.19 | | | $ | 8.50 | | | $ | 17.14 | | | $ | 18.91 | | | $ | 16.14 | | | $ | 14.30 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 19.31 | % | | | (40.82 | )% | | | (1.00 | )% | | | 28.98 | % | | | 14.27 | % | | | 20.69 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 1.01 | %* | | | 1.00 | % | | | 1.00 | % | | | 1.13 | % | | | 1.09 | % | | | 1.14 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 1.02 | %* | | | 1.00 | % | | | 1.00 | % | | | 1.13 | % | | | 1.10 | % | | | 1.12 | %(b) |
Ratio of Net Investment Income to Average Net Assets | | | 2.89 | %* | | | 3.07 | % | | | 1.75 | % | | | 1.54 | % | | | 1.25 | % | | | 1.31 | % |
Portfolio Turnover Rate | | | 22.7 | % | | | 52.7 | % | | | 49.6 | % | | | 45.9 | % | | | 11.5 | % | | | 11.3 | % |
Net Assets, End of Period (in millions) | | $ | 90.1 | | | $ | 81.5 | | | $ | 198.8 | | | $ | 221.0 | | | $ | 130.4 | | | $ | 75.5 | |
| + | | Rounds to less than $0.005 per share. |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Excludes effect of deferred expense reimbursement. |
See accompanying notes to financial statements
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is Harris Oakmark International Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A, B and E Shares are currently offered by the Portfolio. Class C shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | | | | | | |
Expiring
12/31/2011 | | | Expiring
12/31/2016 | | Total |
| | |
| $ | 4,044,771 | * | | $ | 211,525,343 | | $ | 215,570,114 |
* The Portfolio acquired losses in the merger with Mondrian International Stock Portfolio, a series of Travelers Series Trust, on May 1, 2006, which are subject to an annual limitation of $8,141,231.
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Financial Derivative Instruments - Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133, (“FAS 161” or the “Statement”) requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. The disclosure requirements of FAS 161 distinguish between derivatives which are accounted for as “hedges” under FAS 133 and those that do not qualify for such accounting. The Portfolio reflects derivatives at fair value and recognizes changes in fair value through the Statement of Operations, and as such do not qualify for FAS 133 hedge accounting treatment.
G. Forward Foreign Currency Contracts - The Portfolio may enter into forward foreign currency contracts to hedge its portfolio holdings against future movements in certain foreign currency exchange rates. A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a set price. Forward currency contracts are valued at the forward rate and are marked-to-market daily. The change in market value is recorded by the Portfolio as an unrealized gain or loss. When the contract is closed, the Portfolio recognizes a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.
The use of forward foreign currency contracts does not eliminate fluctuations in the underlying prices of the securities of the Portfolio, but it does establish a rate of exchange that can be achieved in the future. Although forward foreign currency contracts to sell limit the risk of loss due to a decline in the value of the currency holdings, they also limit any potential gain that might result should the value of the currency increase. In addition, the Portfolio could be exposed to risks if the counterparties to the contracts are unable to meet the terms of the contracts.
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
At June 30, 2009, the Portfolio had following derivatives (not designated as hedging instruments under SFAS No.133), grouped into appropriate risk categories that illustrate how and why the Portfolio uses derivative instruments:
| | | | | | | | | | | |
| | | Asset Derivatives | | Liability Derivatives | |
Derivatives not accounted for as
hedging instruments under Statement 133 | | Balance Sheet Location | | Fair Value | | Balance Sheet Location | | Fair Value | |
| | | | |
Foreign Exchange Contracts | | Unrealized appreciation on Forward Foreign Currency | | $ | 1,267,599 | | Unrealized depreciation on Forward Currency Contract | | $ | (1,811,290 | ) |
| | | | | | | | | | | |
| | | | |
Total | | | | $ | 1,267,599 | | | | $ | (1,811,290 | ) |
| | | | | | | | | | | |
Transactions in derivative instruments during the six months ended June 30, 2009, were as follows:
| | | | |
Derivatives not accounted for as hedging instruments under Statement 133 | |
Location | | Foreign Exchange
Contracts | |
| |
Statement of Operations—Change in Unrealized Gain (Loss) | | | | |
| |
Foreign Currency—net | | $ | (8,788,361 | ) |
| | | | |
| |
Total | | $ | (8,788,361 | ) |
| | | | |
H. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
I. Foreign Currency Translation - The books and records of the Portfolio are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars on a daily basis using prevailing exchange rates. Purchases and sales of securities are translated at the rates of exchange prevailing when such securities were acquired or sold. Income is translated at rates of exchange prevailing when interest is accrued or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in forward foreign currency contracts; sales of foreign currencies; currency gains or losses realized between the trade and settlement dates on securities transactions; and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Portfolio’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end; from changes in the exchange rates of foreign currency held; and from changes in the contract value of forward foreign currency contracts.
16
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
J. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
K. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with Harris Associates L.P. (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $4,857,428 | | 0.85 | % | | First $100 Million |
| | |
| | 0.80 | % | | $100 Million to $1 Billion |
| | |
| | 0.75 | % | | Over $1 Billion |
Effective January 1, 2009, the Adviser has agreed to reduce the advisory fee it charges to the Manager for managing the Portfolio. This fee change will reduce the advisory fee charged on the Portfolio’s average daily net assets in excess of $1 billion. In connection with this change in the advisory fee, the Manager has agreed, under certain circumstances, to waive a portion of the management fee chargeable to the Portfolio.
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The amount waived for the period ended June 30, 2009 is shown as management fee waiver in the Statement of Operations of the Portfolio.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A, Class B and Class E Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B and Class E distribution plans provide that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%, respectively, of the average net assets of the Portfolio attributable to its Class B and Class E Shares in respect to activities primarily intended to result in the sale of Class B and Class E Shares. However, under the Class B and Class E distribution agreements, payments to the Distributor for activities pursuant to the Class B and Class E distribution plans are currently limited to payments at an annual rate equal to 0.25% and 0.15% of average daily net assets of the Portfolio attributable to its Class B and Class E Shares, respectively.
17
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
Under terms of the Class B and Class E distribution plans and distribution agreements, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B and Class E Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
(Decrease)
in Shares
Outstanding | | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 78,942,227 | | 19,024,627 | | 8,579,062 | | (9,024,566 | ) | | 18,579,123 | | | 97,521,350 |
12/31/2008 | | 84,463,465 | | 22,934,252 | | 17,337,852 | | (45,793,342 | ) | | (5,521,238 | ) | | 78,942,227 |
| | | | | | |
Class B | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 51,179,378 | | 4,254,724 | | 5,279,938 | | (4,343,847 | ) | | 5,190,815 | | | 56,370,193 |
12/31/2008 | | 50,482,950 | | 5,705,608 | | 9,060,166 | | (14,069,346 | ) | | 696,428 | | | 51,179,378 |
| | | | | | |
Class E | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 9,585,377 | | 664,029 | | 929,830 | | (1,368,397 | ) | | 225,462 | | | 9,810,839 |
12/31/2008 | | 11,598,308 | | 853,760 | | 1,932,148 | | (4,798,839 | ) | | (2,012,931 | ) | | 9,585,377 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 375,730,363 | | $— | | $ | 270,885,778 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $2,158,779,872 | | $ | 50,764,053 | | $ | (421,632,602 | ) | | $ | (370,868,549 | ) |
18
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
6. Securities Lending
As of June 30, 2009, the Portfolio had loaned securities which were collateralized by short-term investments. The value of securities on loan and the value of the related collateral were as follows:
| | | | | | | | | |
Value of
Securities | | Value of
Cash
Collateral | | Value of
Non-Cash
Collateral* | | Total
Collateral |
| | | |
| $281,558,686 | | $ | 289,798,757 | | $ | 5,864,614 | | $ | 295,663,371 |
* The Portfolio cannot repledge or resell this collateral. The non-cash collateral is typically comprised of government securities and/or bank letters of credit.
7. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $ | 77,794,274 | | $ | 54,241,042 | | $ | 305,011,063 | | $ | 152,225,703 | | $ | 382,805,337 | | $ | 206,466,745 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards | | | Total | |
| | | | |
| $116,510,695 | | $ | — | | $ | (840,004,673 | ) | | $ | (215,570,114 | ) | | $ | (939,064,092 | ) |
8. Forward Foreign Currency Contracts
Forward Foreign Currency Contracts to Sell:
| | | | | | | | | | | | | | | |
Settlement Date | | Counterparty | | Contracts to Deliver | | | Value at
June 30, 2009 | | In Exchange for U.S.$ | | Net Unrealized
Appreciation/
(Depreciation) | |
| | | | | |
3/3/2010 | | State Street Bank and Trust Co. | | 30,000,000 | CHF | | $ | 27,717,389 | | $ | 26,002,167 | | $ | (1,715,222 | ) |
| | | | | |
6/4/2010 | | State Street Bank and Trust Co. | | 66,000,000 | CHF | | | 61,126,048 | | | 62,393,647 | | | 1,267,599 | |
| | | | | |
3/3/2010 | | State Street Bank and Trust Co. | | 2,230,000,000 | JPY | | | 23,212,781 | | | 23,116,713 | | | (96,068 | ) |
| | | | | | | | | | | | | | | |
| | | | | |
| | | | | | | | | | | | | $ | (543,691 | ) |
| | | | | | | | | | | | | | | |
CHF - Swiss Franc
JPY - - Japanese Yen
9. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
10. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and
19
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
10. Market, Credit and Counterparty Risk - continued
price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
11. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
12. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
20
Janus Forty Portfolio | For the period ended 6/30/09 |
Managed by Janus Capital Management LLC
Portfolio Manager Commentary
Performance Overview
For the six months ended June 30, 2009, the Portfolio outperformed its benchmarks. The Portfolio had a return of 19.86%, 19.69% and 19.76% for Class A, B and E Shares, respectively, versus 11.53% and 3.16% return of the benchmarks, the Russell 1000® Growth Index and S&P 500® Index.
Market Environment/Conditions
Equity markets began 2009 sharply lower bringing some indices to multi-year lows before rebounding in April and May. The rally paused in June but not before many broad market indices moved into positive territory for the year. Mid-cap indices significantly outperformed small caps and large caps, which performed similarly. Growth-style indices posted strong gains, while value indices recorded losses for the period across the market capitalization spectrum. Commodities generally performed strongly led by copper and crude oil, although natural gas was sharply lower in the period.
Portfolio Review/Current Positioning
Strong stock selection across a number of sectors drove Portfolio outperformance during the period. Holdings within information technology, consumer staples and financials provided the largest boost to relative results. On the downside, selections within healthcare weighed on comparable returns during the period.
Starting with technology, Apple Inc. and Research In Motion were among the largest contributors to relative results. We think Apple’s elegant product line demands a premium from consumers. We believe its integration of hardware and software will help Apple gain market share in its product offerings, from laptops and desktops to mobile devices. Meanwhile, Research In Motion remained a top contributor despite losing ground late in the period. We believe the leading supplier of smart phones will gain share in a growing market. We believe it offers a compelling cost benefit to wireless carriers while giving consumers attractive phones and applications.
Anheuser-Busch InBev (ABI) was another top contributor. The world’s largest beer company is the dominant brewer in the U.S. and Brazil, two of the largest beer markets. We think the beer industry is a great industry with consolidation and rational pricing. ABI is growing its market share and cutting costs in an attempt to improve its returns on capital.
Two biotechnology names, Celgene Corp. and Gilead Sciences Inc., topped the list of detractors during the period. We think Celgene will benefit from its cancer fighting drug Revlimid, which is still early in its launch cycle. Given this, we like its growth profile and think it could maintain pricing power, even in an environment of more aggressive healthcare reform. We believe Gilead similarly has a strong differentiated drug franchise with its HIV fighting drug Truvada, which had no alternatives or substitutes through the end of June. We also think the market for this drug is large and growing given indications of increased effectiveness when used earlier in treatment. In addition, Truvada has a long treatment cycle and we like Gilead’s growth prospects.
Markets and economies had stabilized somewhat through the end of June. Markets were no longer discounting a collapse in the financial system at period end. We continue to look for stock specific results to drive performance. We are positioning the Portfolio in companies that we think have taken advantage of the recent dislocation and that can improve their competitive positions.
Ron Sachs, CFA
Portfolio Manager
Janus Capital Management LLC
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
Apple, Inc. | | 9.70% |
Research In Motion, Ltd. | | 8.29% |
Celgene Corp. | | 8.22% |
Gilead Sciences, Inc. | | 6.43% |
CVS Caremark Corp. | | 6.30% |
Oracle Corp. | | 5.32% |
ABB, Ltd. | | 4.02% |
Anheuser-Busch InBev N.V. | | 3.86% |
Cisco Systems, Inc. | | 3.78% |
JPMorgan Chase & Co. | | 3.33% |
1
Janus Forty Portfolio | For the period ended 6/30/09 |
Managed by Janus Capital Management LLC
Portfolio Manager Commentary (continued)
Portfolio Composition (% of portfolio market value)
As of 6/30/09
2
Janus Forty Portfolio | For the period ended 6/30/09 |
Managed by Janus Capital Management LLC
Portfolio Manager Commentary (continued)
Janus Forty Portfolio managed by Janus Capital Management LLC vs.
Russell 1000® Growth Index1 and
S&P 500® Index2
Growth Based on $10,000+
| | | | | | | | | | | | | | |
| | | | | Average Annual Return3 (for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | 3 Year | | 5 Year | | 10 Year | | Since
Inception4 |
| — | | Janus Forty Portfolio— Class A | | 19.86% | | -31.72% | | 0.63% | | 4.78% | | -0.55% | | — |
| | Class B | | 19.69% | | -31.90% | | — | | — | | — | | -7.27% |
| | Class E | | 19.76% | | -31.83% | | — | | — | | — | | -7.17% |
| — | | Russell 1000® Growth Index1 | | 11.53% | | -24.50% | | -5.45% | | -1.83% | | -4.18% | | — |
| - - | | S&P 500® Index2 | | 3.16% | | -26.21% | | -8.22% | | -2.24% | | -2.22% | | — |
+The chart reflects the performance of Class A shares of the Portfolio. The performance of Class A shares will differ from that of the other classes of shares because of the difference in expenses paid by policyholders investing in the different share classes.
1The Russell 1000® Growth Index is an unmanaged measure the performance of the largest capitalized U.S. companies, with the Russell 1000® companies, that have higher price-to-book ratios and higher forecasted growth values.
2The S&P 500® Index is an unmanaged index consisting of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-weighted index (stock price times number of shares outstanding), with each stock’s weight in the Index proportionate to its market value.
3“Average Annual Return” is calculated including reinvestment of all income dividends and capital gains distributions.
4Inception of Class A shares is 03/19/1982. Inception of Class B and Class E shares is 04/28/2007.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Indexes do not include fees or expenses and are not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| Janus Forty Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.68% | | $ | 1,000.00 | | $ | 1,198.60 | | $ | 3.71 |
Hypothetical | | 0.68% | | | 1,000.00 | | | 1,021.42 | | | 3.41 |
| | | | | | | | | | | |
Class B | | | | | | | | | | | |
Actual | | 0.94% | | $ | 1,000.00 | | $ | 1,196.90 | | $ | 5.12 |
Hypothetical | | 0.94% | | | 1,000.00 | | | 1,020.13 | | | 4.71 |
| | | | | | | | | | | |
Class E | | | | | | | | | | | |
Actual | | 0.84% | | $ | 1,000.00 | | $ | 1,197.60 | | $ | 4.58 |
Hypothetical | | 0.84% | | | 1,000.00 | | | 1,020.63 | | | 4.21 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
4
Met Investors Series Trust
Janus Forty Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | |
| Common Stocks - 94.6% | | | | | |
| Aerospace & Defense - 1.9% | | | | | |
Precision Castparts Corp. | | 347,525 | | $ | 25,379,751 |
| | | | | |
| Air Freight & Logistics - 1.3% | | | | | |
United Parcel Service, Inc. - Class B(a) | | 344,480 | | | 17,220,555 |
| | | | | |
| Beverages - 3.9% | | | | | |
Anheuser-Busch InBev N.V.(a) | | 1,413,122 | | | 51,127,614 |
| | | | | |
| Biotechnology - 15.4% | | | | | |
Celgene Corp.*(a) | | 2,275,877 | | | 108,877,956 |
Gilead Sciences, Inc.* | | 1,820,290 | | | 85,262,383 |
Vertex Pharmaceuticals, Inc.*(a) | | 291,825 | | | 10,400,643 |
| | | | | |
| | | | | 204,540,982 |
| | | | | |
| Capital Markets - 2.4% | | | | | |
Goldman Sachs Group, Inc. (The) | | 217,465 | | | 32,063,040 |
| | | | | |
| Chemicals - 3.2% | | | | | |
Israel Chemicals, Ltd. | | 660,605 | | | 6,483,316 |
Monsanto Co. | | 481,775 | | | 35,815,154 |
Syngenta AG | | 1 | | | 232 |
| | | | | |
| | | | | 42,298,702 |
| | | | | |
| Communications Equipment - 12.1% | | | | | |
Cisco Systems, Inc.* | | 2,688,865 | | | 50,120,444 |
Research In Motion, Ltd.* | | 1,545,785 | | | 109,828,024 |
| | | | | |
| | | | | 159,948,468 |
| | | | | |
| Computers & Peripherals - 9.7% | | | | | |
Apple, Inc.* | | 902,152 | | | 128,493,509 |
| | | | | |
| Diversified Financial Services - 5.6% | | | | | |
CME Group, Inc. | | 97,785 | | | 30,421,891 |
JPMorgan Chase & Co. | | 1,295,215 | | | 44,179,784 |
| | | | | |
| | | | | 74,601,675 |
| | | | | |
| Diversified Telecommunication Services - 1.0% |
Time Warner Telecom, Inc. - Class A*(a) | | 1,232,655 | | | 12,659,367 |
| | | | | |
| Electrical Equipment & Services - 4.0% | | | |
ABB, Ltd.* | | 3,386,837 | | | 53,295,776 |
| | | | | |
| Electronic Equipment, Instruments & Components - 1.0% |
Corning, Inc. | | 840,805 | | | 13,503,328 |
| | | | | |
| Food & Staples Retailing - 6.3% | | | | | |
CVS Caremark Corp. | | 2,620,505 | | | 83,515,494 |
| | | | | |
| Food Products - 1.1% | | | | | |
Bunge, Ltd.(a) | | 234,230 | | | 14,112,358 |
| | | | | |
| Health Care Equipment & Supplies - 1.8% | | | |
Alcon, Inc. | | 203,835 | | | 23,669,320 |
| | | | | |
| Health Care Providers & Services - 1.3% | | | |
UnitedHealth Group, Inc. | | 713,740 | | | 17,829,225 |
| | | | | |
| Hotels, Restaurants & Leisure - 0.4% | | | |
Boyd Gaming Corp.*(a) | | 675,505 | | | 5,741,793 |
| | | | | |
| | | | | | |
Security
Description | | Shares/Par
Amount | | Value |
| | | | | | |
| |
| Household Products - 2.1% | | | |
Colgate-Palmolive Co.(a) | | | 190,250 | | $ | 13,458,285 |
Reckitt Benckiser Group Plc | | | 300,120 | | | 13,675,192 |
| | | | | | |
| | | | | | 27,133,477 |
| | | | | | |
| Insurance - 1.6% | | | | | | |
ACE, Ltd. | | | 485,605 | | | 21,478,309 |
| | | | | | |
| Internet Software & Services - 3.2% | | | |
Google, Inc. - Class A*(a) | | | 101,900 | | | 42,960,021 |
| | | | | | |
| Media - 1.3% | | | |
News Corp. - Class A(a) | | | 1,935,695 | | | 17,634,181 |
| | | | | | |
| Metals & Mining - 1.8% | | | |
Vale S.A. (ADR)(a) | | | 1,326,965 | | | 23,394,393 |
| | | | | | |
| Multiline Retail - 0.7% | | | |
Kohl’s Corp.*(a) | | | 227,710 | | | 9,734,603 |
| | | | | | |
| Oil, Gas & Consumable Fuels - 1.9% | | | |
Petroleo Brasileiro S.A. (ADR) | | | 615,560 | | | 25,225,649 |
| | | | | | |
| Pharmaceuticals - 1.3% | | | |
Roche Holdings AG | | | 123,746 | | | 16,830,842 |
| | | | | | |
| Software - 6.3% | | | |
Electronic Arts, Inc.*(a) | | | 617,210 | | | 13,405,801 |
Oracle Corp.(a) | | | 3,292,445 | | | 70,524,172 |
| | | | | | |
| | | | | | 83,929,973 |
| | | | | | |
| Wireless Telecommunication Services - 2.0% | | | |
America Movil S.A.B. de C.V. (ADR) | | | 221,995 | | | 8,595,646 |
Crown Castle International Corp.*(a) | | | 722,075 | | | 17,344,242 |
| | | | | | |
| | | | | | 25,939,888 |
| | | | | | |
Total Common Stocks
(Cost $1,211,406,487) | | | | | | 1,254,262,293 |
| | | | | | |
| | |
| Short-Term Investments - 15.1% | | | | | | |
| Mutual Funds - 9.7% | | | | | | |
State Street Navigator Securities Lending Trust Prime Portfolio(b) | | | 128,206,494 | | | 128,206,494 |
| | | | | | |
| Repurchase Agreements - 5.4% | | | | | | |
State Street Bank & Trust Co., Repurchase Agreement, dated 06/30/09 at 0.010% to be repurchased at $8,847,411 on 07/01/09 collateralized by $8,385,000 FNMA at 6.250% due 02/01/11 with a value of $9,024,356. | | $ | 8,847,408 | | | 8,847,408 |
See accompanying notes to financial statements
5
Met Investors Series Trust
Janus Forty Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | | |
Security
Description | | Par
Amount | | Value | |
| | | | | | | |
| | |
| Repurchase Agreements - continued | | | | | | | |
State Street Bank & Trust Co., Repurchase Agreement, dated 06/30/09 at 0.010% to be repurchased at $62,622,609 on 07/01/09 collateralized by $61,940,000 FHLMC at 2.875% due 11/23/10 with a value of $63,875,625. | | $ | 62,622,592 | | $ | 62,622,592 | |
| | | | | | | |
Total Short-Term Investments
(Cost $199,676,494) | | | | | | 199,676,494 | |
| | | | | | | |
| | |
TOTAL INVESTMENTS - 109.7%
(Cost $1,411,082,981) | | | | | | 1,453,938,787 | |
| | | | | | | |
| |
| Other Assets and Liabilities (net) - (9.7)% | | | (128,729,484 | ) |
| | | | | | | |
| | |
| NET ASSETS - 100.0% | | | | | $ | 1,325,209,303 | |
| | | | | | | |
Portfolio Footnotes:
| * | | Non-income producing security. |
| (a) | | All or a portion of security is on loan. |
| (b) | | Represents investment of collateral received from securities lending transactions. |
ADR - American Depositary Receipt
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
See accompanying notes to financial statements
6
Met Investors Series Trust
Janus Forty Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
| Level 1—quoted | | prices in active markets for identical securities |
| Level 2—other | | significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.) |
| Level 3—significant | | unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments) |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
| Common Stocks | | | | | | | | | | | | |
Aerospace & Defense | | $ | 25,379,751 | | $ | — | | $ | — | | $ | 25,379,751 |
Air Freight & Logistics | | | 17,220,555 | | | — | | | — | | | 17,220,555 |
Beverages | | | — | | | 51,127,614 | | | — | | | 51,127,614 |
Biotechnology | | | 204,540,982 | | | — | | | — | | | 204,540,982 |
Capital Markets | | | 32,063,040 | | | — | | | — | | | 32,063,040 |
Chemicals | | | 35,815,154 | | | 6,483,548 | | | — | | | 42,298,702 |
Communications Equipment | | | 159,948,468 | | | — | | | — | | | 159,948,468 |
Computers & Peripherals | | | 128,493,509 | | | — | | | — | | | 128,493,509 |
Diversified Financial Services | | | 74,601,675 | | | — | | | — | | | 74,601,675 |
Diversified Telecommunication Services | | | 12,659,367 | | | — | | | — | | | 12,659,367 |
Electronic Equipment, Instruments & Components | | | 13,503,328 | | | — | | | — | | | 13,503,328 |
Electronic Equipment & Services | | | — | | | 53,295,776 | | | — | | | 53,295,776 |
Food & Staples Retailing | | | 83,515,494 | | | — | | | — | | | 83,515,494 |
Food Products | | | 14,112,358 | | | — | | | — | | | 14,112,358 |
Health Care Equipment & Supplies | | | 23,669,320 | | | — | | | — | | | 23,669,320 |
Health Care Providers & Services | | | 17,829,225 | | | — | | | — | | | 17,829,225 |
Hotels, Restaurants & Leisure | | | 5,741,793 | | | — | | | — | | | 5,741,793 |
Household Products | | | 13,458,285 | | | 13,675,192 | | | — | | | 27,133,477 |
Insurance | | | 21,478,309 | | | — | | | — | | | 21,478,309 |
Internet Software & Services | | | 42,960,021 | | | — | | | — | | | 42,960,021 |
Media | | | 17,634,181 | | | — | | | — | | | 17,634,181 |
Metals & Mining | | | 23,394,393 | | | — | | | — | | | 23,394,393 |
Multiline Retail | | | 9,734,603 | | | — | | | — | | | 9,734,603 |
Oil, Gas & Consumable Fuels | | | 25,225,649 | | | — | | | — | | | 25,225,649 |
Pharmaceuticals | | | — | | | 16,830,842 | | | — | | | 16,830,842 |
Software | | | 83,929,973 | | | — | | | — | | | 83,929,973 |
Wireless Telecommunication Services | | | 25,939,888 | | | — | | | — | | | 25,939,888 |
Total Common Stocks | | | 1,112,849,321 | | | 141,412,972 | | | — | | | 1,254,262,293 |
| Short-Term Investments | | | | | | | | | | | | |
Mutual Funds | | | 128,206,494 | | | — | | | — | | | 128,206,494 |
Repurchase Agreement | | | — | | | 71,470,000 | | | — | | | 71,470,000 |
Total Short-Term Investments | | | 128,206,494 | | | 71,470,000 | | | — | | | 199,676,494 |
| TOTAL INVESTMENTS | | $ | 1,241,055,815 | | $ | 212,882,972 | | $ | — | | $ | 1,453,938,787 |
See accompanying notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| Janus Forty Portfolio | | | |
| Assets | | | | |
Investments, at value (a)(b) | | $ | 1,382,468,787 | |
Repurchase Agreement | | | 71,470,000 | |
Cash | | | 336 | |
Cash denominated in foreign currencies (c) | | | 9,742 | |
Receivable for Trust shares sold | | | 565,744 | |
Dividends receivable | | | 477,987 | |
Interest receivable | | | 20 | |
| | | | |
Total assets | | | 1,454,992,616 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Trust shares redeemed | | | 622,205 | |
Distribution and services fees—Class B | | | 43,828 | |
Distribution and services fees—Class E | | | 4,810 | |
Collateral for securities on loan | | | 128,206,494 | |
Management fee | | | 696,122 | |
Administration fee | | | 7,954 | |
Custodian and accounting fees | | | 12,194 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 186,279 | |
| | | | |
Total liabilities | | | 129,783,313 | |
| | | | |
| Net Assets | | $ | 1,325,209,303 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 1,520,644,645 | |
Accumulated net realized loss | | | (231,322,201 | ) |
Unrealized appreciation on investments and foreign currency | | | 42,861,001 | |
Distributions in excess of net investment income | | | (6,974,142 | ) |
| | | | |
Total | | $ | 1,325,209,303 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 1,069,381,115 | |
| | | | |
Class B | | | 217,014,888 | |
| | | | |
Class E | | | 38,813,300 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 19,731,851 | |
| | | | |
Class B | | | 4,165,980 | |
| | | | |
Class E | | | 732,728 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 54.20 | |
| | | | |
Class B | | | 52.09 | |
| | | | |
Class E | | | 52.97 | |
| | | | |
| | | | | |
(a) Investments at cost, excluding repurchase agreements | | $ | 1,339,612,981 | |
(b) Includes cash collateral for securities loaned of | | | 128,206,494 | |
(c) Cost of cash denominated in foreign currencies | | | 9,728 | |
See accompanying notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009
| | | | |
| Janus Forty Portfolio | | | |
| Investment Income | | | | |
Dividends (1) | | $ | 3,738,803 | |
Interest (2) | | | 217,847 | |
| | | | |
Total investment income | | | 3,956,650 | |
| | | | |
| Expenses | | | | |
Management fee | | | 3,046,326 | |
Administration fees | | | 39,036 | |
Custodian and accounting fees | | | 52,510 | |
Distribution and services fees—Class B | | | 206,855 | |
Distribution and services fees—Class E | | | 22,843 | |
Audit and tax services | | | 21,287 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 45,672 | |
Other | | | 4,502 | |
| | | | |
Total expenses | | | 3,465,464 | |
Less broker commission recapture | | | (2,934 | ) |
| | | | |
Net expenses | | | 3,462,530 | |
| | | | |
Net investment income | | | 494,120 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | (1,552,343 | ) |
Foreign currency | | | 49,172 | |
| | | | |
Net realized loss on investments and foreign currency | | | (1,503,171 | ) |
| | | | |
Net change in unrealized appreciation (depreciation) on: | | | | |
Investments | | | 178,845,680 | |
Foreign currency | | | (114,383 | ) |
| | | | |
Net change in unrealized appreciation on investments and foreign currency | | | 178,731,297 | |
| | | | |
Net realized and unrealized gain on investments and foreign currency | | | 177,228,126 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 177,722,246 | |
| | | | |
| | | | | |
(1) Dividend income is net of foreign withholding taxes of: | | $ | 231,416 | |
(2) Interest income includes securities lending net income of: | | | 214,427 | |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| Janus Forty Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income (loss) | | $ | 494,120 | | | $ | (174,693 | ) |
Net realized gain (loss) on investments and foreign currency | | | (1,503,171 | ) | | | 20,473,212 | |
Net change in unrealized appreciation (depreciation) on investments and foreign currency | | | 178,731,297 | | | | (579,555,381 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 177,722,246 | | | | (559,256,862 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | — | | | | (57,849,419 | ) |
Class B | | | — | | | | (5,956,735 | ) |
Class E | | | — | | | | (1,765,046 | ) |
From net realized gains | | | | | | | | |
Class A | | | — | | | | (25,037,267 | ) |
Class B | | | — | | | | (2,586,132 | ) |
Class E | | | — | | | | (765,595 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | — | | | | (93,960,194 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 360,611,913 | | | | 142,982,223 | |
Class B | | | 59,566,411 | | | | 211,031,955 | |
Class E | | | 11,294,589 | | | | 49,176,894 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | — | | | | 82,886,686 | |
Class B | | | — | | | | 8,542,867 | |
Class E | | | — | | | | 2,530,641 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (59,520,933 | ) | | | (181,371,854 | ) |
Class B | | | (10,809,143 | ) | | | (40,142,740 | ) |
Class E | | | (5,676,737 | ) | | | (14,452,956 | ) |
| | | | | | | | |
Net increase in net assets from capital share transactions | | | 355,466,100 | | | | 261,183,716 | |
| | | | | | | | |
| Net Increase (Decrease) in Net Assets | | | 533,188,346 | | | | (392,033,340 | ) |
Net assets at beginning of period | | | 792,020,957 | | | | 1,184,054,297 | |
| | | | | | | | |
Net assets at end of period | | $ | 1,325,209,303 | | | $ | 792,020,957 | |
| | | | | | | | |
Net assets at end of period includes distributions in excess of net investment income | | $ | (6,974,142 | ) | | $ | (7,468,262 | ) |
| | | | | | | | |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
|
| Selected Per Share Data for the Year or Period Ended: | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Janus Forty Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004++ | |
| Net Asset Value, Beginning of Period | | $ | 45.22 | | | $ | 83.81 | | | $ | 77.64 | | | $ | 78.28 | | | $ | 66.23 | | | $ | 55.41 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income (Loss)(a) | | | 0.04 | | | | 0.02 | | | | 0.17 | | | | 0.14 | | | | (0.04 | ) | | | (0.09 | ) |
Net Realized/Unrealized Gain (Loss) on Investments | | | 8.94 | | | | (32.34 | ) | | | 20.21 | | | | 2.13 | | | | 12.09 | | | | 10.91 | (a) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 8.98 | | | | (32.32 | ) | | | 20.38 | | | | 2.27 | | | | 12.05 | | | | 10.82 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | (4.38 | ) | | | (0.15 | ) | | | — | | | | — | | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | (1.89 | ) | | | (14.06 | ) | | | (2.91 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | — | | | | (6.27 | ) | | | (14.21 | ) | | | (2.91 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 54.20 | | | $ | 45.22 | | | $ | 83.81 | | | $ | 77.64 | | | $ | 78.28 | | | $ | 66.23 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 19.86 | % | | | (41.85 | )% | | | 30.46 | % | | | 3.08 | % | | | 18.19 | % | | | 19.53 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.68 | %* | | | 0.67 | % | | | 0.69 | % | | | 0.73 | % | | | 0.78 | % | | | 0.82 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.68 | %* | | | 0.67 | % | | | 0.70 | % | | | 0.73 | % | | | 0.78 | % | | | 0.82 | % |
Ratio of Net Investment Income (Loss) to Average Net Assets | | | 0.15 | %* | | | 0.02 | % | | | 0.23 | % | | | 0.19 | % | | | (0.06 | )% | | | (0.15 | )% |
Portfolio Turnover Rate | | | 6.2 | % | | | 61.2 | % | | | 30.1 | % | | | 60.5 | % | | | 30.0 | % | | | 16.0 | % |
Net Assets, End of Period (in millions) | | $ | 1,069.4 | | | $ | 627.8 | | | $ | 1,122.3 | | | $ | 990.1 | | | $ | 1,137.0 | | | $ | 1,042.0 | |
| | | | | | | | | | | | |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years
Ended
December 31, | |
| | | | 2008 | | | 2007(b) | |
| Net Asset Value, Beginning of Period | | $ | 43.52 | | | $ | 81.06 | | | $ | 66.33 | |
| | | | | | | | | | | | |
| Income (Loss) from Investment Operations: | | | | | | | | | | | | |
Net Investment Loss(a) | | | (0.02 | ) | | | (0.17 | ) | | | (0.11 | ) |
Net Realized/Unrealized Gain (Loss) on Investments | | | 8.59 | | | | (31.12 | ) | | | 14.84 | |
| | | | | | | | | | | | |
Total from Investment Operations | | | 8.57 | | | | (31.29 | ) | | | 14.73 | |
| | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | (4.36 | ) | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | (1.89 | ) | | | — | |
| | | | | | | | | | | | |
Total Distributions | | | — | | | | (6.25 | ) | | | — | |
| | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 52.09 | | | $ | 43.52 | | | $ | 81.06 | |
| | | | | | | | | | | | |
| Total Return | | | 19.69 | % | | | (41.99 | )% | | | 22.21 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.94 | %* | | | 0.93 | % | | | 0.96 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.94 | %* | | | 0.93 | % | | | 0.96 | %* |
Ratio of Net Investment Loss to Average Net Assets | | | (0.08 | )%* | | | (0.27 | )% | | | (0.21 | )%* |
Portfolio Turnover Rate | | | 6.2 | % | | | 61.2 | % | | | 30.1 | % |
Net Assets, End of Period (in millions) | | $ | 217.0 | | | $ | 136.4 | | | $ | 47.2 | |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—04/28/2007. |
| ++ | | Audited by other auditors Independent Registered Public Accounting Firm. |
See accompanying notes to financial statements
11
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | |
| | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | |
| | | |
| | | | | | | | | | |
| Janus Forty Portfolio | | Class E | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years
Ended
December 31, | |
| | | | 2008 | | | 2007(b) | |
| Net Asset Value, Beginning of Period | | $ | 44.23 | | | $ | 82.22 | | | $ | 67.23 | |
| | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | |
Net Investment Income (Loss)(a) | | | 0.00 | + | | | (0.10 | ) | | | (0.05 | ) |
Net Realized/Unrealized Gain (Loss) on Investments | | | 8.74 | | | | (31.63 | ) | | | 15.04 | |
| | | | | | | | | | | | |
Total from Investment Operations | | | 8.74 | | | | (31.73 | ) | | | 14.99 | |
| | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | (4.37 | ) | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | (1.89 | ) | | | — | |
| | | | | | | | | | | | |
Total Distributions | | | — | | | | (6.26 | ) | | | — | |
| | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 52.97 | | | $ | 44.23 | | | $ | 82.22 | |
| | | | | | | | | | | | |
| Total Return | | | 19.76 | % | | | (41.94 | )% | | | 22.30 | % |
Ratio of Expenses to Average Net Assets | | | 0.84 | %* | | | 0.82 | % | | | 0.86 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursements and Rebates | | | 0.84 | %* | | | 0.83 | % | | | 0.86 | %* |
Ratio of Net Investment Income (Loss) to Average Net Assets | | | 0.02 | %* | | | (0.15 | )% | | | (0.10 | )%* |
Portfolio Turnover Rate | | | 6.2 | % | | | 61.2 | % | | | 30.1 | % |
Net Assets, End of Period (in millions) | | $ | 38.8 | | | $ | 27.8 | | | $ | 14.6 | |
| + | | Rounds to less than $0.005 per share |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—04/28/2007. |
See accompanying notes to financial statements
12
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is Janus Forty Portfolio (the “Portfolio”), which is non-diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A, B and E Shares are currently offered by the Portfolio. Class C Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | | | | | | | | |
Expiring
12/31/2010 | | Expiring
12/31/2011 | | Expiring
12/31/2012 | | Total |
| | | |
| $ | 66,343,205 | | $ | 104,924,615 | | $ | 52,569,301 | | $ | 223,837,121 |
On May 1, 2006, the Capital Appreciation Fund, a series of The Travelers Series Trust, was reorganized into the Janus Capital Appreciation Portfolio, a series of the Trust. The Portfolio acquired capital losses of $338,668,642 which are subject to an annual limitation of $45,657,838.
On May 1, 2007, Janus Capital Appreciation Portfolio was renamed Janus Forty Portfolio.
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
G. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
H. Directed Brokerage Agreement - The Trust has entered into a directed brokerage arrangement with State Street Global Markets (“SSGM”). Under this arrangement, the Portfolio directs certain trades to SSGM in return for a recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to the Portfolio are shown separately as an expense reduction on the Statement of Operations of the Portfolio.
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
I. Foreign Currency Translation - The books and records of the Portfolio are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars on a daily basis using prevailing exchange rates. Purchases and sales of securities are translated at the rates of exchange prevailing when such securities were acquired or sold. Income is translated at rates of exchange prevailing when interest is accrued or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in forward foreign currency contracts; sales of foreign currencies; currency gains or losses realized between the trade and settlement dates on securities transactions; and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Portfolio’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end; from changes in the exchange rates of foreign currency held; and from changes in the contract value of forward foreign currency contracts.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with Janus Capital Management LLC (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $3,046,326 | | 0.65 | % | | First $1 Billion |
| | |
| | 0.60 | % | | Over $1 Billion |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A, Class B and Class E Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B and Class E distribution plans provide that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%, respectively, of the average net assets of the Portfolio attributable to its Class B and Class E Shares in respect to activities primarily intended to result in the sale of Class B and Class E Shares. However, under the Class B and Class E distribution agreements, payments to the Distributor for activities pursuant to the Class B and Class E distribution plans are currently limited to payments at an annual rate equal to 0.25% and 0.15% of average daily net assets of the Portfolio attributable to its Class B and Class E Shares, respectively.
Under terms of the Class B and Class E distribution plans and distribution agreements, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B and Class E Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
in Shares
Outstanding | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 13,884,250 | | 7,135,035 | | — | | (1,287,434 | ) | | 5,847,601 | | 19,731,851 |
12/31/2008 | | 13,390,399 | | 2,182,379 | | 1,027,096 | | (2,715,624 | ) | | 493,851 | | 13,884,250 |
| | | | | | |
Class B | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 3,134,192 | | 1,283,775 | | — | | (251,987 | ) | | 1,031,788 | | 4,165,980 |
12/31/2008 | | 582,032 | | 3,130,902 | | 109,806 | | (688,548 | ) | | 2,552,160 | | 3,134,192 |
| | | | | | |
Class E | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 627,996 | | 232,552 | | — | | (127,820 | ) | | 104,732 | | 732,728 |
12/31/2008 | | 177,442 | | 654,688 | | 32,026 | | (236,160 | ) | | 450,554 | | 627,996 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $336,129,555 | | $ | — | | $ | 56,685,914 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Appreciation |
| | | |
| $1,411,082,981 | | $ | 162,163,627 | | $ | (119,307,821 | ) | | $ | 42,855,806 |
6. Securities Lending
As of June 30, 2009, the Portfolio had loaned securities which were collateralized by short-term investments. The value of securities on loan and the value of the related collateral were as follows:
| | | | | | | | | |
Value of
Securities | | Value of
Cash
Collateral | | Value of
Non-Cash
Collateral* | | Total
Collateral |
| | | |
| $125,058,560 | | $ | 128,206,494 | | $ | — | | $ | 128,206,494 |
* The Portfolio cannot repledge or resell this collateral. The non-cash collateral is typically comprised of government securities and/or bank letters of credit.
7. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | | |
Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $ | 65,571,203 | | $ | 1,749,977 | | $ | 28,388,991 | | $ | 168,276,133 | | $ | 93,960,194 | | $ | 170,026,110 |
16
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
7. Distributions to Shareholders - continued
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards | | | Total | |
| | | | |
| $— | | $ | — | | $ | (149,325,903 | ) | | $ | (223,837,121 | ) | | $ | (373,163,024 | ) |
8. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
9. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
17
| | |
| Lazard Mid Cap Portfolio | | For the period ended 6/30/09 |
| Managed by Lazard Asset Management LLC | | |
Portfolio Manager Commentary
Performance
During the period ended June 30, 2009, the Portfolio had a return of 8.87%, 8.67% and 8.72% for Class A, B and E Shares, respectively, versus 9.96% for its benchmark, the Russell Midcap® Index.
Market Environment/Conditions
Equity markets ended the first half of 2009 in positive territory despite the constant flow of poor economic data earlier in the period, including rising unemployment figures and worse-than-expected GDP numbers, which called for concerted efforts to forestall further deterioration of the global economy. The United States joined the Bank of England and the Bank of Japan by initiating aggressive monetary measures in the form of quantitative easing. This move by the U.S. Federal Reserve brought an immediate effect, as long-dated Treasury yields fell, market sentiment improved, and the prospects for economic recovery looked better. These factors led to a strong rebound in March due to a growing sense of optimism, as reports showed signs of stabilization in economic activity after the sharp decline following the collapse of Lehman Brothers. Stocks continued the strong rebound through April and May amid continuing signs of stabilization in the economy, but declined slightly in June, as earlier optimism was tempered by concerns over the shape of the projected recovery. Market sentiment improved following the results of bank stress tests in May, which eased the fear of further systemic risk in the financials sector. Some leading economic indicators, such as manufacturing, durable goods orders, and housing starts, improved. However, not all the economic data was positive, as unemployment rose further and consumer confidence dipped. Aggressive spending programs by governments fueled concerns over the potential for higher inflation, which increased volatility in long-dated bond yields.
While more defensive sectors had outperformed during the market downturn, many of the best-performing sectors in the latter portion of the period were those that had been the hardest hit prior to the recent rally. The financial sector ended the period down, despite a steep rally in the sector due to improving expectations and continued stabilization in the credit markets. A sharp rebound in some cyclical sectors such as energy, information technology and consumer discretionary was enough to wipe out earlier losses as the economic outlook improved. The materials sector also witnessed strong gains overall due to robust demand from emerging markets, which displayed resilience amid the global recession. Meanwhile, defensive sectors such as health care, telecom services and consumer staples, outperformed during the downturn, but lagged as the market rallied.
Portfolio Review/Current Positioning
Conversely, stock selection in the industrials sector detracted from performance, as a position in Covanta, a company that converts waste into renewable energy, declined. The stock was under continued pressure, as the price of natural gas, which is an alternative source for power generation, remained low. Pitney Bowes, which sells mail and document management systems, declined during the period. The company announced a disappointing earnings report, as the economic slowdown depressed mail volumes and demand for new equipment. Stock selection in the energy sector also detracted from performance.
Shares of Sunoco declined, as the company experienced weak refining margins and a decline in its coking business for steel production due to the sharp drop in the global economy. We subsequently sold the position. Shares of oil refiner, Holly Corp., also lagged due to depressed refining margins amid weak demand for gasoline. Stock selection in the consumer staples sector also detracted from performance. Molson Coors Brewing declined during the first quarter after the company announced that its profits had fallen due to slower sales. However, the stock rebounded sharply after the company’s most recent earnings were better than expected, as cost savings from the Miller-Coors joint venture largely offset a decline in sales. The subsequent rally in shares was not enough to offset earlier declines and the stock was down for the overall period.
During the first half of the year stock selection and an underweight position in the financials sector contributed to performance. Waddell & Reed Financial added to returns during the period, as the asset manager performed well compared to its peers during the difficult environment due to solid performance results across key products and a strong distribution network. Additionally, the company’s most recent earnings results were better than expected. The Portfolio also benefited from an opportunistic purchase of PNC Financial Services Group after a sharp decline in the beginning of the year. Shares of PNC performed strongly from March lows after reporting better-than-expected earnings results for the most recent quarter. The stock continued to do well following completion of the government stress tests, which eliminated some of the uncertainty surrounding banks. We subsequently sold the position as it reached our valuation target. Stock selection in the consumer discretionary sector benefited performance, as holdings such as Darden Restaurants, JC Penney, and Starbucks outperformed. Darden was the largest contributor in the group as a result of two consecutive quarters of better-than-expected earnings results. Sales for the company have consistently outperformed its industry peers due to strong performance at its three major restaurants (Olive Garden, Red Lobster, and LongHorn Steakhouse) during the economic slowdown. The company’s earnings also benefited from margin expansion due to cost controls and lower food commodity costs. We subsequently sold the position as the stock reached our valuation target. The Portfolio also benefited from an underweight position in the utilities sector, as the historically more defensive sector lagged during the period.
Christopher Blake
Managing Director
Lazard Asset Management LLC
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views
1
| | |
| Lazard Mid Cap Portfolio | | For the period ended 6/30/09 |
| Managed by Lazard Asset Management LLC | | |
Portfolio Manager Commentary (continued)
expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
Hospira, Inc. | | 3.12% |
Ball Corp. | | 2.63% |
Symantec Corp. | | 2.41% |
Republic Services, Inc. | | 2.33% |
Ingram Micro, Inc.—Class A | | 2.20% |
Mattel, Inc. | | 2.18% |
Foster Wheeler AG | | 2.18% |
Molson Coors Brewing Co.—Class B | | 2.11% |
Packaging Corp. of America | | 2.11% |
McCormick & Co., Inc. | | 2.02% |
Portfolio Composition (% of portfolio market value)
As of 6/30/09
2
| | |
| Lazard Mid Cap Portfolio | | For the period ended 6/30/09 |
| Managed by Lazard Asset Management LLC | | |
Portfolio Manager Commentary (continued)
Lazard Mid Cap Portfolio managed by
Lazard Asset Management LLC vs. Russell Midcap® Index1
Growth Based on $10,000+
| | | | | | | | | | | | |
| | | | | Average Annual Return2 (for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | 3 Year | | 5 Year | | Since
Inception3 |
| | Lazard Mid Cap
Portfolio—Class A | | 8.87% | | -25.82% | | -9.91% | | -2.91% | | 0.82% |
| — | | Class B | | 8.67% | | -26.08% | | -10.14% | | -3.14% | | 1.80% |
| | Class E | | 8.72% | | -25.98% | | -10.06% | | -3.06% | | -0.06% |
| - - | | Russell Midcap® Index1 | | 9.96% | | -30.36% | | -9.25% | | -0.11% | | 4.72% |
+The chart reflects the performance of Class B shares of the Portfolio. The performance of Class B shares will differ from that of the other classes because of the difference in expenses paid by policyholders investing in the different share classes.
1The Russell Midcap® Index is an unmanaged measure of performance of the 800 smallest companies in the Russell 1000® Index.
2“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
3Inception of the Class A shares is 1/2/02. Inception of the Class B shares is 10/9/01. Inception of the Class E shares is 4/1/02. Index returns are based on an inception date of 10/9/01.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Index does not include fees or expenses and is not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| Lazard Mid Cap Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.69% | | $ | 1,000.00 | | $ | 1,088.70 | | $ | 3.57 |
Hypothetical | | 0.69% | | | 1,000.00 | | | 1,021.37 | | | 3.46 |
| | | | | | | | | | | |
| | | | |
Class B | | | | | | | | | | | |
Actual | | 0.95% | | $ | 1,000.00 | | $ | 1,086.70 | | $ | 4.92 |
Hypothetical | | 0.95% | | | 1,000.00 | | | 1,020.08 | | | 4.76 |
| | | | | | | | | | | |
| | | | |
Class E | | | | | | | | | | | |
Actual | | 0.85% | | $ | 1,000.00 | | $ | 1,087.20 | | $ | 4.40 |
Hypothetical | | 0.85% | | | 1,000.00 | | | 1,020.58 | | | 4.26 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
4
Met Investors Series Trust
Lazard Mid Cap Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | |
| Common Stocks - 94.5% | | | | | |
| Aerospace & Defense - 1.5% | | | | | |
Spirit Aerosystems Holdings, Inc.* | | 505,900 | | $ | 6,951,066 |
| | | | | |
| Beverages - 2.1% | | | | | |
Molson Coors Brewing Co. - Class B | | 234,000 | | | 9,905,220 |
| | | | | |
| Capital Markets - 3.6% | | | | | |
Ameriprise Financial, Inc. | | 372,500 | | | 9,040,575 |
Northern Trust Corp. | | 44,400 | | | 2,383,392 |
Waddell & Reed Financial, Inc. - Class A | | 212,500 | | | 5,603,625 |
| | | | | |
| | | | | 17,027,592 |
| | | | | |
| Chemicals - 2.7% | | | | | |
Air Products & Chemicals, Inc. | | 117,100 | | | 7,563,489 |
RPM International, Inc. | | 356,900 | | | 5,010,876 |
| | | | | |
| | | | | 12,574,365 |
| | | | | |
| Commercial & Professional Services - 6.6% | | | |
Cintas Corp. | | 231,300 | | | 5,282,892 |
Corrections Corp. of America* | | 518,600 | | | 8,811,014 |
Covanta Holding Corp.*(a) | | 361,300 | | | 6,127,648 |
Republic Services, Inc. | | 448,200 | | | 10,940,562 |
| | | | | |
| | | | | 31,162,116 |
| | | | | |
| Commercial Banks - 1.0% | | | | | |
City National Corp. | | 127,500 | | | 4,695,825 |
| | | | | |
| Communications Equipment - 1.2% | | | | | |
Juniper Networks, Inc.*(a) | | 248,100 | | | 5,855,160 |
| | | | | |
| Computers & Peripherals - 0.8% | | | | | |
NetApp, Inc.* | | 185,600 | | | 3,660,032 |
| | | | | |
| Construction & Engineering - 2.2% | | | | | |
Foster Wheeler AG* | | 430,200 | | | 10,217,250 |
| | | | | |
| Containers & Packaging - 6.0% | | | | | |
Ball Corp.(a) | | 273,600 | | | 12,355,776 |
Bemis Co., Inc. | | 226,000 | | | 5,695,200 |
Packaging Corp. of America | | 610,000 | | | 9,882,000 |
| | | | | |
| | | | | 27,932,976 |
| | | | | |
| Electric Utilities - 1.8% | | | | | |
American Electric Power Co., Inc. | | 295,700 | | | 8,542,773 |
| | | | | |
| Electronic Equipment, Instruments & Components - 4.0% |
Agilent Technologies, Inc.* | | 415,000 | | | 8,428,650 |
Ingram Micro, Inc. - Class A* | | 588,300 | | | 10,295,250 |
| | | | | |
| | | | | 18,723,900 |
| | | | | |
| Energy Equipment & Services - 3.3% | | | | | |
Patterson-UTI Energy, Inc.(a) | | 587,100 | | | 7,550,106 |
Pride International, Inc.*(a) | | 323,300 | | | 8,101,898 |
| | | | | |
| | | | | 15,652,004 |
| | | | | |
| Food Products - 5.5% | | | | | |
Campbell Soup Co. | | 211,100 | | | 6,210,562 |
J.M. Smucker Co. (The) | | 108,800 | | | 5,294,208 |
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | |
| Food Products - continued | | | | | |
McCormick & Co., Inc. | | 291,100 | | $ | 9,469,483 |
Sara Lee Corp. | | 499,100 | | | 4,871,216 |
| | | | | |
| | | | | 25,845,469 |
| | | | | |
| Gas Utilities - 1.0% | | | | | |
Energen Corp. | | 115,400 | | | 4,604,460 |
| | | | | |
| Health Care Equipment & Supplies - 4.7% | | | |
Hospira, Inc.* | | 379,600 | | | 14,622,192 |
Zimmer Holdings, Inc.* | | 176,300 | | | 7,510,380 |
| | | | | |
| | | | | 22,132,572 |
| | | | | |
| Health Care Providers & Services - 3.8% | | | |
Cardinal Health, Inc. | | 160,200 | | | 4,894,110 |
Omnicare, Inc. | | 288,900 | | | 7,442,064 |
Patterson Cos., Inc.*(a) | | 250,900 | | | 5,444,530 |
| | | | | |
| | | | | 17,780,704 |
| | | | | |
| Hotels, Restaurants & Leisure - 2.7% | | | | | |
Burger King Holdings, Inc. | | 294,400 | | | 5,084,288 |
Starbucks Corp.* | | 544,000 | | | 7,556,160 |
| | | | | |
| | | | | 12,640,448 |
| | | | | |
| Household Durables - 1.9% | | | | | |
Leggett & Platt, Inc.(a) | | 582,000 | | | 8,863,860 |
| | | | | |
| Insurance - 3.5% | | | | | |
Marsh & McLennan Cos., Inc. | | 231,600 | | | 4,662,108 |
PartnerRe, Ltd. | | 76,000 | | | 4,936,200 |
RenaissanceRe Holdings, Ltd. | | 143,200 | | | 6,664,528 |
| | | | | |
| | | | | 16,262,836 |
| | | | | |
| Internet Software & Services - 1.0% | | | | | |
VeriSign, Inc.*(a) | | 254,500 | | | 4,703,160 |
| | | | | |
| IT Services - 1.9% | | | | | |
Fidelity National Information Services, Inc.(a) | | 178,000 | | | 3,552,880 |
NeuStar, Inc. - Class A*(a) | | 231,100 | | | 5,121,176 |
| | | | | |
| | | | | 8,674,056 |
| | | | | |
| Leisure Equipment & Products - 2.2% | | | | | |
Mattel, Inc. | | 637,400 | | | 10,230,270 |
| | | | | |
| Life Sciences Tools & Services - 1.6% | | | | | |
Life Technologies Corp.* | | 180,439 | | | 7,527,915 |
| | | | | |
| Machinery - 2.7% | | | | | |
Dover Corp. | | 189,900 | | | 6,283,791 |
Parker Hannifin Corp. | | 148,000 | | | 6,358,080 |
| | | | | |
| | | | | 12,641,871 |
| | | | | |
| Media - 2.0% | | | | | |
Viacom, Inc. - Class B* | | 405,700 | | | 9,209,390 |
| | | | | |
| Multi-Utilities - 1.3% | | | | | |
Wisconsin Energy Corp. | | 150,500 | | | 6,126,855 |
| | | | | |
| Multiline Retail - 1.4% | | | | | |
JC Penney Co., Inc.(a) | | 230,800 | | | 6,626,268 |
| | | | | |
See accompanying notes to financial statements
5
Met Investors Series Trust
Lazard Mid Cap Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | |
| Oil, Gas & Consumable Fuels - 4.5% | | | | | |
Holly Corp.(a) | | 430,800 | | $ | 7,745,784 |
Massey Energy Co.(a) | | 193,950 | | | 3,789,783 |
Valero Energy Corp. | | 132,700 | | | 2,241,303 |
Williams Cos., Inc. (The) | | 480,500 | | | 7,500,605 |
| | | | | |
| | | | | 21,277,475 |
| | | | | |
| Personal Products - 1.2% | | | | | |
Avon Products, Inc. | | 226,700 | | | 5,844,326 |
| | | | | |
| Pharmaceuticals - 1.5% | | | | | |
Warner Chilcott, Ltd.* | | 518,400 | | | 6,816,960 |
| | | | | |
| Professional Services - 0.9% | | | | | |
Monster Worldwide, Inc.*(a) | | 343,700 | | | 4,059,097 |
| | | | | |
| Real Estate Investment Trusts (REITs) - 1.9% |
Public Storage | | 136,100 | | | 8,911,828 |
| | | | | |
| Real Estate Management & Development - 1.5% |
St. Joe Co. (The)*(a) | | 258,100 | | | 6,837,069 |
| | | | | |
| Semiconductors & Semiconductor Equipment - 3.1% |
Analog Devices, Inc. | | 381,800 | | | 9,461,004 |
Lam Research Corp.*(a) | | 199,700 | | | 5,192,200 |
| | | | | |
| | | | | 14,653,204 |
| | | | | |
| Software - 2.4% | | | | | |
Symantec Corp.* | | 725,500 | | | 11,288,780 |
| | | | | |
| Specialty Retail - 2.5% | | | | | |
Abercrombie & Fitch Co. - Class A(a) | | 243,700 | | | 6,187,543 |
Gap, Inc. (The) | | 334,700 | | | 5,489,080 |
| | | | | |
| | | | | 11,676,623 |
| | | | | |
| Thrifts & Mortgage Finance - 1.0% | | | | | |
Hudson City Bancorp, Inc. | | 365,500 | | | 4,857,496 |
| | | | | |
Total Common Stocks
(Cost $443,229,145) | | | | | 442,993,271 |
| | | | | |
| | | | | | | |
Security
Description | | Shares/Par
Amount | | Value | |
| | | | | | | |
| | |
| Short-Term Investments - 19.3% | | | | | | | |
| Mutual Funds - 14.0% | | | | | | | |
State Street Navigator Securities Lending Trust Prime Portfolio(b) | | | 65,811,387 | | $ | 65,811,387 | |
| | | | | | | |
| Repurchase Agreement - 5.3% | | | | | | | |
State Street Bank & Trust Co.,
Repurchase Agreement,
dated 06/30/09 at 0.010% to be repurchased at $24,772,007
on 07/01/09 collateralized by $25,145,000 FNMA at 1.722% due 05/10/11 with a value of $25,270,725. | | $ | 24,772,000 | | | 24,772,000 | |
| | | | | | | |
Total Short-Term Investments
(Cost $90,583,387) | | | | | | 90,583,387 | |
| | | | | | | |
| | |
TOTAL INVESTMENTS - 113.8%
(Cost $533,812,532) | | | | | | 533,576,658 | |
| | | | | | | |
| |
| Other Assets and Liabilities (net) - (13.8)% | | | (64,594,919 | ) |
| | | | | | | |
| | |
| NET ASSETS - 100.0% | | | | | $ | 468,981,739 | |
| | | | | | | |
Portfolio Footnotes:
| * | | Non-income producing security. |
| (a) | | All or a portion of security is on loan. |
| (b) | | Represents investment of collateral received from securities lending transactions. |
FNMA - Federal National Mortgage Association
See accompanying notes to financial statements
6
Met Investors Series Trust
Lazard Mid Cap Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1—quoted prices in active markets for identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
| Common Stocks | | | | | | | | | | | | |
Aerospace & Defense | | $ | 6,951,066 | | $ | — | | $ | — | | $ | 6,951,066 |
Beverages | | | 9,905,220 | | | — | | | — | | | 9,905,220 |
Capital Markets | | | 17,027,592 | | | — | | | — | | | 17,027,592 |
Chemicals | | | 12,574,365 | | | — | | | — | | | 12,574,365 |
Commercial & Professional Services | | | 31,162,116 | | | — | | | — | | | 31,162,116 |
Commercial Banks | | | 4,695,825 | | | — | | | — | | | 4,695,825 |
Communications Equipment | | | 5,855,160 | | | — | | | — | | | 5,855,160 |
Computers & Peripherals | | | 3,660,032 | | | — | | | — | | | 3,660,032 |
Construction & Engineering | | | 10,217,250 | | | — | | | — | | | 10,217,250 |
Containers & Packaging | | | 27,932,976 | | | — | | | — | | | 27,932,976 |
Electric Utilities | | | 8,542,773 | | | — | | | — | | | 8,542,773 |
Electronic Equipment, Instruments & Components | | | 18,723,900 | | | — | | | — | | | 18,723,900 |
Energy Equipment & Services | | | 15,652,004 | | | — | | | — | | | 15,652,004 |
Food Products | | | 25,845,469 | | | — | | | — | | | 25,845,469 |
Gas Utilities | | | 4,604,460 | | | — | | | — | | | 4,604,460 |
Health Care Equipment & Supplies | | | 22,132,572 | | | — | | | — | | | 22,132,572 |
Health Care Providers & Services | | | 17,780,704 | | | — | | | — | | | 17,780,704 |
Hotels, Restaurants & Leisure | | | 12,640,448 | | | — | | | — | | | 12,640,448 |
Household Durables | | | 8,863,860 | | | — | | | — | | | 8,863,860 |
Insurance | | | 16,262,836 | | | — | | | — | | | 16,262,836 |
Internet Software & Services | | | 4,703,160 | | | — | | | — | | | 4,703,160 |
IT Services | | | 8,674,056 | | | — | | | — | | | 8,674,056 |
Leisure Equipment & Products | | | 10,230,270 | | | — | | | — | | | 10,230,270 |
Life Sciences Tools & Services | | | 7,527,915 | | | — | | | — | | | 7,527,915 |
Machinery | | | 12,641,871 | | | — | | | — | | | 12,641,871 |
Media | | | 9,209,390 | | | — | | | — | | | 9,209,390 |
Multi-Utilities | | | 6,126,855 | | | — | | | — | | | 6,126,855 |
Multiline Retail | | | 6,626,268 | | | — | | | — | | | 6,626,268 |
Oil, Gas & Consumable Fuels | | | 21,277,475 | | | — | | | — | | | 21,277,475 |
Personal Products | | | 5,844,326 | | | — | | | — | | | 5,844,326 |
Pharmaceuticals | | | 6,816,960 | | | — | | | — | | | 6,816,960 |
Professional Services | | | 4,059,097 | | | — | | | — | | | 4,059,097 |
Real Estate Investment Trusts (REITs) | | | 8,911,828 | | | — | | | — | | | 8,911,828 |
Real Estate Management & Development | | | 6,837,069 | | | — | | | — | | | 6,837,069 |
Semiconductors & Semiconductor Equipment | | | 14,653,204 | | | — | | | — | | | 14,653,204 |
See accompanying notes to financial statements
7
Met Investors Series Trust
Lazard Mid Cap Portfolio
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Software | | $ | 11,288,780 | | $ | — | | $ | — | | $ | 11,288,780 |
Specialty Retail | | | 11,676,623 | | | — | | | — | | | 11,676,623 |
Thrifts & Mortgage Finance | | | 4,857,496 | | | — | | | — | | | 4,857,496 |
Total Common Stocks | | | 442,993,271 | | | — | | | — | | | 442,993,271 |
| Short-Term Investments | | | | | | | | | | | | |
Mutual Funds | | | 65,811,387 | | | — | | | — | | | 65,811,387 |
Repurchase Agreement | | | — | | | 24,772,000 | | | — | | | 24,772,000 |
Total Short-Term Investments | | | 65,811,387 | | | 24,772,000 | | | — | | | 90,583,387 |
| TOTAL INVESTMENTS | | $ | 508,804,658 | | $ | 24,772,000 | | $ | — | | $ | 533,576,658 |
See accompanying notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| Lazard Mid Cap Portfolio | | | |
| Assets | | | | |
Investments, at value (a)(b) | | $ | 508,804,658 | |
Repurchase Agreement | | | 24,772,000 | |
Cash | | | 367 | |
Cash denominated in foreign currencies (c) | | | 1 | |
Receivable for investments sold | | | 2,019,089 | |
Receivable for Trust shares sold | | | 108,313 | |
Dividends receivable | | | 524,776 | |
Interest receivable | | | 7 | |
| | | | |
Total assets | | | 536,229,211 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 716,128 | |
Trust shares redeemed | | | 228,291 | |
Distribution and services fees—Class B | | | 34,681 | |
Distribution and services fees—Class E | | | 2,271 | |
Collateral for securities on loan | | | 65,811,387 | |
Management fee | | | 269,724 | |
Administration fee | | | 2,809 | |
Custodian and accounting fees | | | 39,622 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 139,132 | |
| | | | |
Total liabilities | | | 67,247,472 | |
| | | | |
| Net Assets | | $ | 468,981,739 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 937,778,339 | |
Accumulated net realized loss | | | (472,294,851 | ) |
Unrealized depreciation on investments | | | (235,874 | ) |
Undistributed net investment income | | | 3,734,125 | |
| | | | |
Total | | $ | 468,981,739 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 282,297,491 | |
| | | | |
Class B | | | 168,433,615 | |
| | | | |
Class E | | | 18,250,633 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 38,004,488 | |
| | | | |
Class B | | | 22,793,526 | |
| | | | |
Class E | | | 2,462,670 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 7.43 | |
| | | | |
Class B | | | 7.39 | |
| | | | |
Class E | | | 7.41 | |
| | | | |
| | | | | |
(a) Investments at cost, excluding repurchase agreement | | $ | 509,040,532 | |
(b) Includes cash collateral for securities loaned of | | | 65,811,387 | |
(c) Cost of cash denominated in foreign currencies | | | 1 | |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| Lazard Mid Cap Portfolio | | | |
| Investment Income | | | | |
Dividends | | $ | 5,784,989 | |
Interest (1) | | | 292,722 | |
| | | | |
Total investment income | | | 6,077,711 | |
| | | | |
| Expenses | | | | |
Management fee | | | 2,142,771 | |
Administration fees | | | 26,659 | |
Custodian and accounting fees | | | 25,326 | |
Distribution and services fees—Class B | | | 185,470 | |
Distribution and services fees—Class E | | | 12,618 | |
Audit and tax services | | | 3,789 | |
Legal | | | 12,918 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 56,035 | |
Insurance | | | 1,613 | |
Other | | | 2,666 | |
| | | | |
Total expenses | | | 2,479,564 | |
Less broker commission recapture | | | (136,054 | ) |
| | | | |
Net expenses | | | 2,343,510 | |
| | | | |
Net investment income | | | 3,734,201 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments and Futures Contracts | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | (205,838,078 | ) |
Futures contracts | | | 1,666,445 | |
| | | | |
Net realized loss on investments and futures contracts | | | (204,171,633 | ) |
| | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 250,308,790 | |
| | | | |
Net change in unrealized appreciation on investments | | | 250,308,790 | |
| | | | |
Net realized and unrealized gain on investments and futures contracts | | | 46,137,157 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 49,871,358 | |
| | | | |
| | | | | |
(1) Interest income includes securities lending net income of: | | $ | 291,432 | |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| Lazard Mid Cap Portfolio | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 3,734,201 | | | $ | 15,223,624 | |
Net realized loss on investments, futures contracts and foreign currency | | | (204,171,633 | ) | | | (266,799,316 | ) |
Net change in unrealized appreciation (depreciation) on investments | | | 250,308,790 | | | | (173,048,714 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 49,871,358 | | | | (424,624,406 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | (8,943,558 | ) | | | (6,531,321 | ) |
Class B | | | (2,009,826 | ) | | | (1,928,151 | ) |
Class E | | | (234,130 | ) | | | (298,975 | ) |
From net realized gains | | | | | | | | |
Class A | | | — | | | | (39,790,584 | ) |
Class B | | | — | | | | (15,597,504 | ) |
Class E | | | — | | | | (2,208,439 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (11,187,514 | ) | | | (66,354,974 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 38,323,074 | | | | 363,296,406 | |
Class B | | | 17,361,157 | | | | 58,162,636 | |
Class E | | | 962,265 | | | | 3,321,019 | |
Net asset value of shares issued through acquisition | | | | | | | | |
Class A | | | — | | | | 125,899,280 | |
Class B | | | — | | | | — | |
Class E | | | — | | | | — | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | 8,943,558 | | | | 46,321,905 | |
Class B | | | 2,009,826 | | | | 17,525,655 | |
Class E | | | 234,130 | | | | 2,507,414 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (366,394,204 | ) | | | (145,808,747 | ) |
Class B | | | (12,464,094 | ) | | | (58,056,445 | ) |
Class E | | | (2,097,862 | ) | | | (11,344,458 | ) |
| | | | | | | | |
Net increase (decrease) in net assets from capital share transactions | | | (313,122,150 | ) | | | 401,824,665 | |
| | | | | | | | |
| Net Decrease in Net Assets | | | (274,438,306 | ) | | | (89,154,715 | ) |
Net assets at beginning of Period | | | 743,420,045 | | | | 832,574,760 | |
| | | | | | | | |
Net assets at end of Period | | $ | 468,981,739 | | | $ | 743,420,045 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 3,734,125 | | | $ | 11,187,438 | |
| | | | | | | | |
See accompanying notes to financial statements
11
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Lazard Mid Cap Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 6.93 | | | $ | 12.17 | | | $ | 13.74 | | | $ | 13.65 | | | $ | 14.13 | | | $ | 12.33 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.04 | | | | 0.17 | | | | 0.13 | | | | 0.10 | | | | 0.04 | | | | 0.08 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.57 | | | | (4.48 | ) | | | (0.33 | ) | | | 1.75 | | | | 1.16 | | | | 1.72 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.61 | | | | (4.31 | ) | | | (0.20 | ) | | | 1.85 | | | | 1.20 | | | | 1.80 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.11 | ) | | | (0.13 | ) | | | (0.09 | ) | | | (0.08 | ) | | | (0.06 | ) | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | (0.80 | ) | | | (1.28 | ) | | | (1.68 | ) | | | (1.62 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.11 | ) | | | (0.93 | ) | | | (1.37 | ) | | | (1.76 | ) | | | (1.68 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 7.43 | | | $ | 6.93 | | | $ | 12.17 | | | $ | 13.74 | | | $ | 13.65 | | | $ | 14.13 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 8.87 | % | | | (38.15 | )% | | | (2.47 | )% | | | 14.87 | % | | | 8.40 | % | | | 14.60 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.69 | %* | | | 0.72 | % | | | 0.75 | % | | | 0.77 | % | | | 0.79 | % | | | 0.85 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.74 | %* | | | 0.74 | % | | | 0.76 | % | | | 0.80 | % | | | 0.82 | % | | | 0.83 | %(b) |
Ratio of Net Investment Income to Average Net Assets | | | 1.26 | %* | | | 1.80 | % | | | 0.96 | % | | | 0.76 | % | | | 0.63 | % | | | 0.59 | % |
Portfolio Turnover Rate | | | 33.6 | % | | | 97.4 | % | | | 89.9 | % | | | 65.4 | % | | | 170.0 | % | | | 90.7 | % |
Net Assets, End of Period (in millions) | | $ | 282.3 | | | $ | 575.4 | | | $ | 550.8 | | | $ | 312.2 | | | $ | 89.0 | | | $ | 58.8 | |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Excludes effect of deferred expense reimbursement. |
See accompanying notes to financial statements
12
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Lazard Mid Cap Portfolio | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 6.89 | | | $ | 12.10 | | | $13.65 | | | $ | 13.57 | | | $ | 14.05 | | | $ | 12.29 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.04 | | | | 0.15 | | | 0.09 | | | | 0.06 | | | | 0.05 | | | | 0.02 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.55 | | | | (4.46 | ) | | (0.31 | ) | | | 1.74 | | | | 1.10 | | | | 1.74 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.59 | | | | (4.31 | ) | | (0.22 | ) | | | 1.80 | | | | 1.15 | | | | 1.76 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.09 | ) | | | (0.10 | ) | | (0.05 | ) | | | (0.04 | ) | | | (0.01 | ) | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | (0.80 | ) | | (1.28 | ) | | | (1.68 | ) | | | (1.62 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.09 | ) | | | (0.90 | ) | | (1.33 | ) | | | (1.72 | ) | | | (1.63 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 7.39 | | | $ | 6.89 | | | $12.10 | | | $ | 13.65 | | | $ | 13.57 | | | $ | 14.05 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 8.67 | % | | | (38.30 | )% | | (2.71 | )% | | | 14.67 | % | | | 8.06 | % | | | 14.32 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.95 | %* | | | 0.97 | % | | 0.99 | % | | | 1.02 | % | | | 1.03 | % | | | 1.08 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.99 | %* | | | 0.99 | % | | 1.00 | % | | | 1.05 | % | | | 1.07 | % | | | 1.03 | %(b) |
Ratio of Net Investment Income to Average Net Assets | | | 1.05 | %* | | | 1.50 | % | | 0.67 | % | | | 0.48 | % | | | 0.38 | % | | | 0.16 | % |
Portfolio Turnover Rate | | | 33.6 | % | | | 97.4 | % | | 89.9 | % | | | 65.4 | % | | | 170.0 | % | | | 90.7 | % |
Net Assets, End of Period (in millions) | | $ | 168.4 | | | $ | 150.0 | | | $243.6 | | | $ | 216.8 | | | $ | 200.4 | | | $ | 211.0 | |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Excludes effect of deferred expense reimbursement. |
See accompanying notes to financial statements
13
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Lazard Mid Cap Portfolio | | Class E | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 6.91 | | | $ | 12.13 | | | $ | 13.69 | | | $ | 13.61 | | | $ | 14.10 | | | $ | 12.32 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.04 | | | | 0.16 | | | | 0.10 | | | | 0.08 | | | | 0.07 | | | | 0.04 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.55 | | | | (4.47 | ) | | | (0.31 | ) | | | 1.74 | | | | 1.10 | | | | 1.74 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.59 | | | | (4.31 | ) | | | (0.21 | ) | | | 1.82 | | | | 1.17 | | | | 1.78 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.09 | ) | | | (0.11 | ) | | | (0.07 | ) | | | (0.06 | ) | | | (0.04 | ) | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | (0.80 | ) | | | (1.28 | ) | | | (1.68 | ) | | | (1.62 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.09 | ) | | | (0.91 | ) | | | (1.35 | ) | | | (1.74 | ) | | | (1.66 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 7.41 | | | $ | 6.91 | | | $ | 12.13 | | | $ | 13.69 | | | $ | 13.61 | | | $ | 14.10 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 8.72 | % | | | (38.24 | )% | | | (2.64 | )% | | | 14.74 | % | | | 8.23 | % | | | 14.45 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.85 | %* | | | 0.88 | % | | | 0.89 | % | | | 0.93 | % | | | 0.93 | % | | | 0.98 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.89 | %* | | | 0.89 | % | | | 0.90 | % | | | 0.95 | % | | | 0.97 | % | | | 0.94 | %(b) |
Ratio of Net Investment Income to Average Net Assets | | | 1.15 | %* | | | 1.58 | % | | | 0.76 | % | | | 0.58 | % | | | 0.49 | % | | | 0.29 | % |
Portfolio Turnover Rate | | | 33.6 | % | | | 97.4 | % | | | 89.9 | % | | | 65.4 | % | | | 170.0 | % | | | 90.7 | % |
Net Assets, End of Period (in millions) | | $ | 18.3 | | | $ | 18.0 | | | $ | 38.2 | | | $ | 36.0 | | | $ | 32.6 | | | $ | 30.5 | |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Excludes effect of deferred expense reimbursement. |
See accompanying notes to financial statements
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is Lazard Mid Cap Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A, B and E Shares are currently offered by the Portfolio. Class C Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | | |
Expiring
12/31/2016 | | Total |
| |
| $ | 247,739,494 | | $ | 247,739,494 |
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
G. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
H. Directed Brokerage Agreement - The Trust has entered into a directed brokerage arrangement with State Street Global Markets (“SSGM”). Under this arrangement, the Portfolio directs certain trades to SSGM in return for a recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to the Portfolio are shown separately as an expense reduction on the Statement of Operations of the Portfolio.
I. Financial Derivative Instruments - Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133, (“FAS 161” or the “Statement”) requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. The disclosure requirements of FAS 161 distinguish between derivatives which are accounted for as “hedges” under FAS 133 and those that do not qualify for such accounting. The Portfolio reflects derivatives at fair value and recognizes changes in fair value through the Statement of Operations, and as such do not qualify for FAS 133 hedge accounting treatment.
16
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
J. Futures Contracts - The Portfolio may buy and sell futures contracts (on recognized exchanges) as a hedge, to maintain exposure to the broad equity markets, manage exposure to the securities markets or to movements in interest rates or to enhance return. The Portfolio may be subject to equity price risk, interest rate risk, and foreign currency exchange rate risk in the normal course of pursuing its investment objectives. Futures contracts are agreements to buy or sell a security, or deliver a final cash settlement price in connection with an index, interest rate, currency, or other contracts not calling for physical delivery, for a set price in the future. The Portfolio must post an amount equal to a portion of the total market value of the futures contract as futures variation margin, which is returned when the Portfolio’s obligations under the contract have been satisfied. From time to time thereafter, the Portfolio may have to post variation margin to maintain this amount as the market value of the contract fluctuates. Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities. During the period ended June 30, 2009, the Portfolio entered into Equity Index Futures which were subject to equity price risk. At June 30, 2009, the Portfolio did not have any open futures contracts. For the period ended June 30, 2009, the Portfolio had realized gains in the amount of $1,666,445 which is located in Net realized gain (loss) on Futures Contracts in the Statement of Operations.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with Lazard Asset Management LLC (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| $2,142,771 | | 0.70 | % | | First $500 Million |
| | 0.675 | % | | $500 Million to $1 Billion |
| | 0.60 | % | | Over $1 Billion |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Manager has entered into an expense limitation agreement with the Trust (“Expense Limitation Agreement”) in the interest of limiting expenses of the Portfolio of the Trust. The Expense Limitation Agreement shall continue in effect with respect to the Portfolio until April 30, 2010. Pursuant to that Expense Limitation Agreement, the Manager has agreed to waive or limit its fees and to assume other expenses so that the total annual operating expenses of the Portfolio other than interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with accounting principles generally accepted in the United States of America, and other extraordinary expenses not incurred in the ordinary course of the Portfolio’s business, but including amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act, are limited to the following expense ratios as a percentage of the Portfolio’s average daily net assets:
| | | | | | |
Maximum Expense Ratio under current Expense Limitation Agreement | |
|
|
Class A | | Class B | | | Class E | |
| | |
| 0.80% | | 1.05 | % | | 0.95 | % |
If in any year in which the Management Agreement is still in effect, the estimated aggregate portfolio operating expenses of the Portfolio for the fiscal year are less than the Maximum Expense Ratios for that year, subject to approval by the Trust’s Board, the Manager shall be entitled to reimbursement by the Portfolio to the extent that the charge does not cause the expenses in such subsequent year to exceed the Maximum Expense Ratios as stated above. The Portfolio is not obligated to repay any expense paid by the Manager more than five years after the end of the fiscal year in which such expense was incurred.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A, Class B and Class E Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of
17
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
the Manager. The Class B and Class E distribution plans provide that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%, respectively, of the average net assets of the Portfolio attributable to its Class B and Class E Shares in respect to activities primarily intended to result in the sale of Class B and Class E Shares. However, under the Class B and Class E distribution agreements, payments to the Distributor for activities pursuant to the Class B and Class E distribution plans are currently limited to payments at an annual rate equal to 0.25% and 0.15% of average daily net assets of the Portfolio attributable to its Class B and Class E Shares, respectively.
Under terms of the Class B and Class E distribution plans and distribution agreements, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B and Class E Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Shares Issued
in Connection
with
Acquisition | | Reinvestments | | Redemptions | | | Net Increase
(Decrease)
in Shares
Outstanding | | | Ending
Shares |
| | | | | | | |
Class A | | | | | | | | | | | | | | | | |
| | | | | | | |
6/30/2009 | | 83,042,308 | | 5,763,302 | | — | | 1,305,629 | | (52,106,751 | ) | | (45,037,820 | ) | | 38,004,488 |
12/31/2008 | | 45,269,815 | | 36,191,944 | | 11,592,936 | | 4,265,369 | | (14,277,756 | ) | | 37,772,493 | | | 83,042,308 |
| | | | | | | |
Class B | | | | | | | | | | | | | | | | |
| | | | | | | |
6/30/2009 | | 21,777,825 | | 2,585,826 | | — | | 294,696 | | (1,864,821 | ) | | 1,015,701 | | | 22,793,526 |
12/31/2008 | | 20,135,331 | | 5,873,082 | | — | | 1,621,245 | | (5,851,833 | ) | | 1,642,494 | | | 21,777,825 |
| | | | | | | |
Class E | | | | | | | | | | | | | | | | |
| | | | | | | |
6/30/2009 | | 2,603,431 | | 142,598 | | — | | 34,230 | | (317,589 | ) | | (140,761 | ) | | 2,462,670 |
12/31/2008 | | 3,152,420 | | 349,186 | | — | | 231,311 | | (1,129,486 | ) | | (548,989 | ) | | 2,603,431 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
Purchases | | Sales |
U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
$— | | $ | 189,008,163 | | $ | — | | $ | 436,296,701 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $533,812,532 | | $ | 37,953,508 | | $ | (38,189,382 | ) | | $ | (235,874 | ) |
18
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
6. Securities Lending
As of June 30, 2009, the Portfolio had loaned securities which were collateralized by short term investments. The value of securities on loan and the value of the related collateral were as follows:
| | | | | | | | | |
Value of
Securities | | Value of
Cash
Collateral | | Value of
Non-Cash
Collateral* | | Total
Collateral |
| | | |
| $63,996,760 | | $ | 65,811,387 | | $ | — | | $ | 65,811,387 |
* The Portfolio cannot repledge or resell this collateral. The non-cash collateral is typically comprised of government securities and/or bank letters of credit.
7. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | |
Ordinary Income | | Long-Term Capital Gain | | Total |
2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $34,697,691 | | $ | 38,716,643 | | $ | 31,657,283 | | $ | 21,993,643 | | $ | 66,354,974 | | $ | 60,710,286 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards | | | Total | |
| | | | |
| $ | 11,187,438 | | $ | — | | $ | (270,928,388 | ) | | $ | (247,739,494 | ) | | $ | (507,480,444 | ) |
8. Acquisitions
As of the close of business on April 25, 2008, Lazard Mid Cap Portfolio (“Lazard”) acquired all the net assets of Batterymarch Mid Cap Stock Portfolio (“Batterymarch”), a series of the Trust, pursuant to a plan of reorganization approved by Batterymarch shareholders on February 28, 2008. The acquisition was accomplished by a tax-free exchange of 11,592,936 Class A shares of Lazard (valued at $125,899,280) in exchange for 8,385,887 Class A shares of Batterymarch outstanding on April 25, 2008. Battterymarch Class A net assets at that date ($125,899,280), including $7,937,924 of unrealized appreciation, were combined with those of Lazard Class A. The aggregate Class A net assets of Lazard immediately before the acquisition were $586,648,312. The aggregate Class A net assets of Batterymarch immediately before the acquisition were $125,899,280. The aggregate Class A net assets of Lazard immediately after the acquisition were $712,547,592.
9. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
10. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
11. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
19
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
12. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
20
| | |
| Legg Mason Partners Aggressive Growth Portfolio | | For the period ended 6/30/09 |
| Managed by ClearBridge Advisors, LLC | | |
Portfolio Manager Commentary
Performance
During the six-month period ended June 30, 2009, the Portfolio had a net return of 9.13%, 8.91% and 9.09% for Class A, B and E Shares, respectively, versus 11.52% for its benchmark, the Russell 3000® Growth Index.
Market Environment/Conditions
Over the six-month period, we reviewed two key junctures in U.S. history, particularly for the equity markets: 1973-74 and 1982. We cited similarities between the macroeconomic backdrops of those periods and now. Our intention was not to imply that today’s market was identical to those, but rather to illustrate that two of the most significant market bottoms in the last 100 years, both of which touched off new bull markets, occurred when the economic backdrop appeared the most dire.
Since the lows of early March of this year, the stock market has rallied dramatically, with the Dow Jones Industrials Average (DJIA), the S&P 500® Index, and Nasdaq Composite Index all recording gains in excess of 30%. The S&P 500® rose over 15% in the second quarter alone, its biggest quarterly gain in over a decade. Despite the substantial percentage move off of the lows, both the DJIA and the S&P 500® Index closed the second quarter within 5% of where they started the year, with the DJIA still lower on the year as of June 30, 2009.
We believe that much of the advance in the last four months was driven by the equities of the most credit-sensitive companies, i.e., those that investors feared did not have the wherewithal to pay down or refinance debt. Given the improvement seen during the quarter in both the debt and equity markets, many of these companies have been able to refinance and ease liquidity concerns. In addition, the Federal Reserve and the U.S. Treasury have made it clear, through both words and actions, that they intend to bolster liquidity as necessary, and to keep interest rates low, in order to stimulate the economy and the housing market. The Fed’s goal is to repurchase $1.25 trillion of mortgage-backed bonds, $300 billion in Treasuries and $200 billion in Agency bonds, by December of this year. Unlike the situations in 1974 and 1982, the current extraordinarily low short term interest rate environment encourages investors to move into riskier assets, including stocks.
Portfolio Review/Current Positioning
The Portfolio experienced positive performance for the six month period (both gross and net of fees), led primarily by the more cyclical holdings. Our Energy sector holdings rose as commodity prices rallied—driven at least in part by reflationary fiscal policies in the U.S. and around the world. In addition, our energy drilling/service industry holdings benefited from increased opportunities internationally. We also saw a sharp rebound in some of our cable television and media holdings (in the consumer discretionary sector), due in large part to the stabilization in the credit markets referenced above.
Health care sector equities lagged the broader market during the period, but the industry remains an important component of the
Portfolio going forward. While there has been much debate surrounding health care reform, we believe that at current prices, many stocks are discounting a more punitive outcome than is likely. We feel that the health care plan that will ultimately be passed is likely to be a bipartisan effort, and will not be as Draconian as some fear. In addition, we have focused our health care sector holdings in those companies that we believe promote novel therapeutics for unmet medical needs.
For the first half of 2009, overall stock selection made a positive contribution to the Portfolio’s performance relative to the benchmark index, while overall sector allocation detracted from relative performance.
In particular, stock selection in the energy, information technology and materials sectors helped the Portfolio’s relative performance, while stock selection in the Health Care, Consumer Discretionary and Industrials sectors hurt relative performance. The Portfolio’s underweight positions in the information technology, materials and financials sectors and its overweight position in the health care sector detracted from relative performance, while underweight positions in consumer staples, industrials and utilities sectors and an overweight position in the consumer discretionary sectors enhanced relative performance. The Portfolio had no significant holdings in the utilities sector.
Among individual stock holdings in the Portfolio, Weatherford International, Ltd. and Anadarko Petroleum Corp. in the energy sector, Broadcom Corp. and Seagate Technology, Inc. in the information technology sector and Liberty Media (Series A Liberty Entertainment) were the leading positive contributors to Portfolio performance. Genzyme Corp., Amgen, Inc. and UnitedHealthGroup, Inc. in the health care sector, Comcast Corp. (Class A Special) in the consumer discretionary sector and L-3 Communications Holdings, Inc. in the industrials sector were leading detractors from Portfolio performance during the six-month period.
| | |
Richard Freeman Senior Portfolio Manager ClearBridge Advisors, LLC | | Evan Bauman
Portfolio Manager ClearBridge Advisors, LLC |
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the
1
| | |
| Legg Mason Partners Aggressive Growth Portfolio | | For the period ended 6/30/09 |
| Managed by ClearBridge Advisors, LLC | | |
Portfolio Manager Commentary (continued)
Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
Anadarko Petroleum Corp. | | 9.19% |
Weatherford International, Ltd. | | 8.28% |
UnitedHealth Group, Inc. | | 7.41% |
Amgen, Inc. | | 6.93% |
Genzyme Corp. | | 6.91% |
Biogen Idec, Inc. | | 6.77% |
Forest Laboratories, Inc. | | 5.37% |
Comcast Corp.—Special Class A | | 4.50% |
Cablevision Systems Corp.—Class A | | 3.90% |
L-3 Communications Holdings, Inc. | | 3.48% |
Portfolio Composition (% of portfolio market value)
As of 6/30/09
2
| | |
| Legg Mason Partners Aggressive Growth Portfolio | | For the period ended 6/30/09 |
| Managed by ClearBridge Advisors, LLC | | |
Portfolio Manager Commentary (continued)
Legg Mason Partners Aggressive Growth Portfolio managed by
ClearBridge Advisors, LLC vs. Russell 3000® Growth Index1
Growth Based on $10,000+
| | | | | | | | | | | | |
| | | | | Average Annual Return2 (for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | 3 Year | | 5 Year | | Since Inception3 |
| | Legg Mason Partners Aggressive Growth Portfolio—Class A | | 9.13% | | -27.51% | | -11.80% | | -4.31% | | -3.13% |
| — | | Class B | | 8.91% | | -27.66% | | -12.00% | | -4.53% | | -6.40% |
| | Class E | | 9.09% | | -27.65% | | -11.89% | | -4.44% | | 0.36% |
| - - | | Russell 3000® Growth Index1 | | 11.52% | | -24.53% | | -5.65% | | -1.78% | | -3.75% |
+The chart reflects the performance of Class B shares of the Portfolio. The performance of Class B shares will differ from that of the other classes because of the difference in expenses paid by policyholders investing in the different share classes.
1The Russell 3000® Growth Index is an unmanaged measure of performance of those Russell 3000® Index companies with higher price-to- book ratios and higher forecasted growth values.
2“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
3Inception of Class A shares is 1/2/02. Inception of Class B shares is 2/12/01. Inception of Class E shares is 4/17/03. Index returns are based on an inception date of 2/12/01.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Index does not include fees or expenses and is not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000=8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| Legg Mason Partners Aggressive Growth Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.68% | | $ | 1,000.00 | | $ | 1,091.30 | | $ | 3.53 |
Hypothetical | | 0.68% | | | 1,000.00 | | | 1,021.42 | | | 3.41 |
| | | | | | | | | | | |
| | | | |
Class B | | | | | | | | | | | |
Actual | | 0.93% | | $ | 1,000.00 | | $ | 1,089.10 | | $ | 4.82 |
Hypothetical | | 0.93% | | | 1,000.00 | | | 1,020.18 | | | 4.66 |
| | | | | | | | | | | |
| | | | |
Class E | | | | | | | | | | | |
Actual | | 0.83% | | $ | 1,000.00 | | $ | 1,090.90 | | $ | 4.30 |
Hypothetical | | 0.83% | | | 1,000.00 | | | 1,020.68 | | | 4.16 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
4
Met Investors Series Trust
Legg Mason Partners Aggressive Growth Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | | | | |
| | |
| Common Stocks - 94.3% | | | | | |
| Aerospace & Defense - 3.5% | | | | | |
L-3 Communications Holdings, Inc. | | 269,000 | | $ | 18,663,220 |
| | | | | |
| Biotechnology - 21.7% |
Amgen, Inc.* | | 701,700 | | | 37,147,998 |
Biogen Idec, Inc.* | | 803,500 | | | 36,278,025 |
Genzyme Corp.* | | 665,430 | | | 37,044,488 |
Vertex Pharmaceuticals, Inc.*(a) | | 166,700 | | | 5,941,188 |
| | | | | |
| | | | | 116,411,699 |
| | | | | |
| Communications Equipment - 1.2% |
Arris Group, Inc.* | | 122,915 | | | 1,494,646 |
Nokia Oyj (ADR)(a) | | 325,700 | | | 4,748,706 |
| | | | | |
| | | | | 6,243,352 |
| | | | | |
| Computers & Peripherals - 2.5% |
SanDisk Corp.* | | 412,600 | | | 6,061,094 |
Seagate Technology | | 688,600 | | | 7,202,756 |
| | | | | |
| | | | | 13,263,850 |
| | | | | |
| Construction & Engineering - 0.2% |
Fluor Corp. | | 22,610 | | | 1,159,667 |
| | | | | |
| Diversified Financial Services - 0.5% |
Bank of America Corp. | | 214,647 | | | 2,833,340 |
| | | | | |
| Electronic Equipment, Instruments & Components - 1.8% |
Dolby Laboratories, Inc. - Class A*(a) | | 50,000 | | | 1,864,000 |
Tyco Electronics, Ltd.(a) | | 415,825 | | | 7,730,187 |
| | | | | |
| | | | | 9,594,187 |
| | | | | |
| Energy Equipment & Services - 11.5% |
Core Laboratories N.V.(a) | | 100,000 | | | 8,715,000 |
National-Oilwell Varco, Inc.* | | 259,678 | | | 8,481,084 |
Weatherford International, Ltd.* | | 2,268,400 | | | 44,369,904 |
| | | | | |
| | | | | 61,565,988 |
| | | | | |
| Health Care Equipment & Supplies - 2.8% |
Covidien Plc | | 402,925 | | | 15,085,512 |
| | | | | |
| Health Care Providers & Services - 7.4% |
UnitedHealth Group, Inc. | | 1,589,300 | | | 39,700,714 |
| | | | | |
| Industrial Conglomerates - 2.1% |
Tyco Electronics, Ltd. | | 423,325 | | | 10,997,984 |
| | | | | |
| Internet & Catalog Retail - 0.4% |
Liberty Media Holding Corp. - Interactive - Class A* | | 455,800 | | | 2,283,558 |
| | | | | |
| Machinery - 1.4% |
Pall Corp. | | 290,200 | | | 7,707,712 |
| | | | | |
| Media - 13.7% |
Cablevision Systems Corp. - Class A | | 1,077,600 | | | 20,916,216 |
CBS Corp. | | 79,400 | | | 549,448 |
Comcast Corp. - Class A | | 159,000 | | | 2,303,910 |
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | | | | |
|
| Media - continued |
Comcast Corp. - Special Class A | | 1,711,300 | | $ | 24,129,330 |
Liberty Global, Inc.*(a) | | 52,900 | | | 840,581 |
Liberty Media Corp. - Capital* | | 146,600 | | | 1,987,896 |
Liberty Media Corp. - Entertainment* | | 444,900 | | | 11,901,075 |
Time Warner Cable, Inc. | | 10 | | | 317 |
Time Warner, Inc. | | 33 | | | 831 |
Viacom, Inc. - Class B* | | 79,600 | | | 1,806,920 |
Walt Disney Co. (The) | | 376,500 | | | 8,783,745 |
| | | | | |
| | | | | 73,220,269 |
| | | | | |
| Metals & Mining - 0.8% |
Freeport-McMoRan Copper & Gold, Inc. | | 33,700 | | | 1,688,707 |
Nucor Corp. | | 56,600 | | | 2,514,738 |
| | | | | |
| | | | | 4,203,445 |
| | | | | |
| Oil, Gas & Consumable Fuels - 9.2% |
Anadarko Petroleum Corp. | | 1,085,360 | | | 49,264,490 |
| | | | | |
| Pharmaceuticals - 8.0% |
BioMimetic Therapeutics, Inc.*(a) | | 145,000 | | | 1,339,800 |
Forest Laboratories, Inc.* | | 1,146,800 | | | 28,796,148 |
Teva Pharmaceutical Industries, Ltd. (ADR) | | 84,100 | | | 4,149,494 |
Valeant Pharmaceuticals International*(a) | | 325,100 | | | 8,361,572 |
| | | | | |
| | | | | 42,647,014 |
| | | | | |
| Semiconductors & Semiconductor Equipment - 4.9% |
Broadcom Corp. - Class A* | | 582,700 | | | 14,445,133 |
Cirrus Logic, Inc.* | | 291,400 | | | 1,311,300 |
Cree, Inc.*(a) | | 135,300 | | | 3,976,467 |
DSP Group, Inc.*(a) | | 106,400 | | | 719,264 |
Intel Corp. | | 347,500 | | | 5,751,125 |
| | | | | |
| | | | | 26,203,289 |
| | | | | |
| Software - 0.6% |
Autodesk, Inc.* | | 179,700 | | | 3,410,706 |
| | | | | |
| Specialty Retail - 0.1% |
Charming Shoppes, Inc.*(a) | | 177,100 | | | 658,812 |
| | | | | |
Total Common Stocks
(Cost $664,800,564) | | | | | 505,118,808 |
| | | | | |
| Investment Company Security - 1.2% |
PowerShares QQQ(a)
(Cost - $4,931,928) | | 170,000 | | | 6,184,600 |
| | | | | |
See accompanying notes to financial statements
5
Met Investors Series Trust
Legg Mason Partners Aggressive Growth Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | | |
Security
Description | | Shares/Par
Amount | | Value | |
| | | | | | | |
|
| Short-Term Investments - 8.1% | |
| Mutual Funds - 3.4% | |
State Street Navigator Securities Lending Trust Prime Portfolio(b) | | | 18,498,666 | | $ | 18,498,666 | |
| | | | | | | |
| Repurchase Agreement - 4.7% | |
State Street Bank & Trust Co.,
Repurchase Agreement
dated 06/30/09 at 0.00% to be
repurchased at $25,147,000
on 07/01/09 collateralized by
$25,525,000 FNMA at 1.722% due 05/10/11 with a value of $25,652,625. | | $ | 25,147,000 | | | 25,147,000 | |
| | | | | | | |
Total Short-Term Investments
(Cost $43,645,666) | | | | | | 43,645,666 | |
| | | | | | | |
| | |
TOTAL INVESTMENTS - 103.6%
(Cost $713,378,158) | | | | | | 554,949,074 | |
| | | | | | | |
| | |
| Other Assets and Liabilities (net) - (3.6)% | | | | | | (19,087,629 | ) |
| | | | | | | |
| | |
| NET ASSETS - 100.0% | | | | | $ | 535,861,445 | |
| | | | | | | |
Portfolio Footnotes:
| * | | Non-income producing security. |
| (a) | | All or a portion of security is on loan. |
| (b) | | Represents investment of collateral received from securities lending transactions. |
ADR - American Depositary Receipt
FNMA - Federal National Mortgage Association
See accompanying notes to financial statements
6
Met Investors Series Trust
Legg Mason Partners Aggressive Growth Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
| Level 1—quoted | | prices in active markets for identical securities |
| Level 2—other | | significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.) |
| Level 3—significant | | unobservable inputs (including the Portfolio's own assumptions in determining the fair value of investments) |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
| Common Stocks | | | | | | | | | | | | |
Aerospace & Defense | | $ | 18,663,220 | | $ | — | | $ | — | | $ | 18,663,220 |
Biotechnology | | | 116,411,699 | | | — | | | — | | | 116,411,699 |
Communications Equipment | | | 6,243,352 | | | — | | | — | | | 6,243,352 |
Computers & Peripherals | | | 13,263,850 | | | — | | | — | | | 13,263,850 |
Construction & Engineering | | | 1,159,667 | | | — | | | — | | | 1,159,667 |
Diversified Financial Services | | | 2,833,340 | | | — | | | — | | | 2,833,340 |
Electronic Equipment, Instruments & Components | | | 9,594,187 | | | — | | | — | | | 9,594,187 |
Energy Equipment & Services | | | 61,565,988 | | | — | | | — | | | 61,565,988 |
Health Care Equipment & Supplies | | | 15,085,512 | | | — | | | — | | | 15,085,512 |
Health Care Providers & Services | | | 39,700,714 | | | — | | | — | | | 39,700,714 |
Industrial Conglomerates | | | 10,997,984 | | | — | | | — | | | 10,997,984 |
Internet & Catalog Retail | | | 2,283,558 | | | — | | | — | | | 2,283,558 |
Machinery | | | 7,707,712 | | | — | | | — | | | 7,707,712 |
Media | | | 73,220,269 | | | — | | | — | | | 73,220,269 |
Metals & Mining | | | 4,203,445 | | | — | | | — | | | 4,203,445 |
Oil, Gas & Consumable Fuels | | | 49,264,490 | | | — | | | — | | | 49,264,490 |
Pharmaceuticals | | | 42,647,014 | | | — | | | — | | | 42,647,014 |
Semiconductors & Semiconductor Equipment | | | 26,203,289 | | | — | | | — | | | 26,203,289 |
Software | | | 3,410,706 | | | — | | | — | | | 3,410,706 |
Specialty Retail | | | 658,812 | | | — | | | — | | | 658,812 |
Total Common Stocks | | | 505,118,808 | | | — | | | — | | | 505,118,808 |
Investment Company Security | | | 6,184,600 | | | — | | | — | | | 6,184,600 |
| Short-Term Investments | | | | | | | | | | | | |
Mutual Funds | | | 18,498,666 | | | — | | | — | | | 18,498,666 |
Repurchase Agreement | | | — | | | 25,147,000 | | | — | | | 25,147,000 |
Total Short-Term Investments | | | 18,498,666 | | | 25,147,000 | | | — | | | 43,645,666 |
| TOTAL INVESTMENTS | | $ | 529,802,074 | | $ | 25,147,000 | | $ | — | | $ | 554,949,074 |
See accompanying notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| Legg Mason Partners Aggressive Growth Portfolio | | | |
| Assets | | | | |
Investments, at value (a)(b) | | $ | 529,802,074 | |
Repurchase Agreement | | | 25,147,000 | |
Cash | | | 445 | |
Receivable for Trust shares sold | | | 82,286 | |
Dividends receivable | | | 34,195 | |
| | | | |
Total assets | | | 555,066,000 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Trust shares redeemed | | | 158,727 | |
Distribution and services fees—Class B | | | 26,770 | |
Distribution and services fees—Class E | | | 324 | |
Collateral for securities on loan | | | 18,498,666 | |
Management fee | | | 289,222 | |
Administration fee | | | 3,245 | |
Custodian and accounting fees | | | 143,643 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 80,531 | |
| | | | |
Total liabilities | | | 19,204,555 | |
| | | | |
| Net Assets | | $ | 535,861,445 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 884,595,461 | |
Accumulated net realized loss | | | (190,597,517 | ) |
Unrealized depreciation on investments | | | (158,429,084 | ) |
Undistributed net investment income | | | 292,585 | |
| | | | |
Total | | $ | 535,861,445 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 405,624,189 | |
| | | | |
Class B | | | 127,651,937 | |
| | | | |
Class E | | | 2,585,319 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 81,395,818 | |
| | | | |
Class B | | | 26,086,581 | |
| | | | |
Class E | | | 525,283 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 4.98 | |
| | | | |
Class B | | | 4.89 | |
| | | | |
Class E | | | 4.92 | |
| | | | |
| | | | | |
(a) Investments at cost, excluding repurchase agreement | | $ | 688,231,158 | |
(b) Includes cash collateral for securities loaned of | | | 18,498,666 | |
See accompanying notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| Legg Mason Partners Aggressive Growth Portfolio | | | |
| Investment Income | | | | |
Dividends (1) | | $ | 2,302,173 | |
Interest (2) | | | 210,718 | |
| | | | |
Total investment income | | | 2,512,891 | |
| | | | |
| Expenses | | | | |
Management fee | | | 1,946,675 | |
Administration fees | | | 26,165 | |
Custodian and accounting fees | | | 16,661 | |
Distribution and services fees—Class B | | | 147,385 | |
Distribution and services fees—Class E | | | 1,788 | |
Audit and tax services | | | 21,069 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 32,529 | |
Insurance | | | 9,291 | |
Other | | | 4,313 | |
| | | | |
Total expenses | | | 2,232,309 | |
Less broker commission recapture | | | (12,055 | ) |
| | | | |
Net expenses | | | 2,220,254 | |
| | | | |
Net investment income | | | 292,637 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments and Futures Contracts | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | (132,736,611 | ) |
Futures contracts | | | 1,047,032 | |
| | | | |
Net realized loss on investments and futures contracts | | | (131,689,579 | ) |
| | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 179,093,675 | |
| | | | |
Net change in unrealized appreciation on investments | | | 179,093,675 | |
| | | | |
Net realized and unrealized gain on investments and futures contracts | | | 47,404,096 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 47,696,733 | |
| | | | |
| | | | | |
(1) Dividend income is net of foreign withholding taxes of: | | $ | 38,939 | |
(2) Interest income includes securities lending net income of: | | | 209,439 | |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| Legg Mason Partners Aggressive Growth Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 292,637 | | | $ | 779,052 | |
Net realized loss on investments and futures contracts | | | (131,689,579 | ) | | | (57,759,048 | ) |
Net change in unrealized appreciation (depreciation) on investments | | | 179,093,675 | | | | (372,628,102 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 47,696,733 | | | | (429,608,098 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | (778,848 | ) | | | (105,866 | ) |
Class B | | | — | | | | — | |
Class E | | | — | | | | — | |
From net realized gains | | | | | | | | |
Class A | | | — | | | | (5,911,432 | ) |
Class B | | | — | | | | (1,455,657 | ) |
Class E | | | — | | | | (29,445 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (778,848 | ) | | | (7,502,400 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 23,548,705 | | | | 140,398,748 | |
Class B | | | 6,509,922 | | | | 15,394,589 | |
Class E | | | 201,823 | | | | 421,900 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | 778,848 | | | | 6,017,298 | |
Class B | | | — | | | | 1,455,657 | |
Class E | | | — | | | | 29,445 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (235,969,057 | ) | | | (86,468,387 | ) |
Class B | | | (9,624,787 | ) | | | (36,962,881 | ) |
Class E | | | (294,585 | ) | | | (925,860 | ) |
| | | | | | | | |
Net increase (decrease) in net assets from capital share transactions | | | (214,849,131 | ) | | | 39,360,509 | |
| | | | | | | | |
| Net Decrease in Net Assets | | | (167,931,246 | ) | | | (397,749,989 | ) |
Net assets at beginning of Period | | | 703,792,691 | | | | 1,101,542,680 | |
| | | | | | | | |
Net assets at end of Period | | $ | 535,861,445 | | | $ | 703,792,691 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 292,585 | | | $ | 778,796 | |
| | | | | | | | |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
|
| Selected Per Share Data for the Year or Period Ended: | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Legg Mason Partners Aggressive Growth Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 4.57 | | | $ | 7.54 | | | $ | 8.09 | | | $ | 8.70 | | | $ | 7.65 | | | $ | 7.03 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.00 | + | | | 0.01 | | | | 0.01 | | | | 0.03 | | | | 0.00 | + | | | 0.01 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.42 | | | | (2.93 | ) | | | 0.22 | | | | (0.14 | ) | | | 1.06 | | | | 0.61 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.42 | | | | (2.92 | ) | | | 0.23 | | | | (0.11 | ) | | | 1.06 | | | | 0.62 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net investment income | | | (0.01 | ) | | | (0.00 | )+ | | | (0.02 | ) | | | — | | | | — | | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | (0.05 | ) | | | (0.76 | ) | | | (0.50 | ) | | | (0.01 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.01 | ) | | | (0.05 | ) | | | (0.78 | ) | | | (0.50 | ) | | | (0.01 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 4.98 | | | $ | 4.57 | | | $ | 7.54 | | | $ | 8.09 | | | $ | 8.70 | | | $ | 7.65 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 9.13 | % | | | (38.95 | )% | | | 2.60 | % | | | (1.60 | )% | | | 13.84 | % | | | 8.82 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.68 | %* | | | 0.65 | % | | | 0.67 | % | | | 0.73 | % | | | 0.72 | % | | | 0.90 | % |
Ratio of Expenses to Average Net Assets After Broker Rebates | | | N/A | | | | N/A | | | | 0.67 | % | | | 0.73 | % | | | N/A | | | | N/A | |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.69 | %* | | | 0.65 | % | | | 0.67 | % | | | 0.75 | % | | | 0.72 | %(b) | | | 0.85 | %(b) |
Ratio of Net Investment Income to Average Net Assets | | | 0.15 | %* | | | 0.13 | % | | | 0.07 | % | | | 0.33 | % | | | 0.00 | %++ | | | 0.15 | % |
Portfolio Turnover Rate | | | 0.6 | % | | | 6.2 | % | | | 0.7 | % | | | 190.3 | % | | | 121.0 | % | | | 104.7 | % |
Net Assets, End of Period (in millions) | | $ | 405.6 | | | $ | 580.9 | | | $ | 874.6 | | | $ | 607.7 | | | $ | 500.4 | | | $ | 250.8 | |
| + | | Rounds to less than $0.005 per share. |
| ++ | | Rounds to less than 0.005%. |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Excludes effect of deferred expense reimbursement. |
See accompanying notes to financial statements
11
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Legg Mason Partners Aggressive Growth Portfolio | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 4.49 | | | $ | 7.42 | | | $ | 7.98 | | | $ | 8.60 | | | $ | 7.58 | | | $ | 6.99 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income (Loss)(a) | | | (0.00 | )+ | | | (0.01 | ) | | | (0.01 | ) | | | 0.01 | | | | (0.02 | ) | | | (0.01 | ) |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.40 | | | | (2.87 | ) | | | 0.21 | | | | (0.13 | ) | | | 1.05 | | | | 0.60 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.40 | | | | (2.88 | ) | | | 0.20 | | | | (0.12 | ) | | | 1.03 | | | | 0.59 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | (0.05 | ) | | | (0.76 | ) | | | (0.50 | ) | | | (0.01 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | — | | | | (0.05 | ) | | | (0.76 | ) | | | (0.50 | ) | | | (0.01 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 4.89 | | | $ | 4.49 | | | $ | 7.42 | | | $ | 7.98 | | | $ | 8.60 | | | $ | 7.58 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 8.91 | % | | | (39.05 | )% | | | 2.27 | % | | | (1.74 | )% | | | 13.58 | % | | | 8.44 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.93 | %* | | | 0.90 | % | | | 0.92 | % | | | 0.98 | % | | | 0.97 | % | | | 1.15 | % |
Ratio of Expenses to Average Net Assets After Broker Rebates | | | N/A | | | | N/A | | | | 0.92 | % | | | 0.98 | % | | | N/A | | | | N/A | |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.94 | %* | | | 0.90 | % | | | 0.92 | % | | | 1.00 | % | | | 0.97 | %(b) | | | 1.08 | %(b) |
Ratio of Net Investment Income (Loss) to Average Net Assets | | | (0.13 | )%* | | | (0.13 | )% | | | (0.18 | )% | | | 0.10 | % | | | (0.25 | )% | | | (0.11 | )% |
Portfolio Turnover Rate | | | 0.6 | % | | | 6.2 | % | | | 0.7 | % | | | 190.3 | % | | | 121.0 | % | | | 104.7 | % |
Net Assets, End of Period (in millions) | | $ | 127.7 | | | $ | 120.4 | | | $ | 222.3 | | | $ | 254.0 | | | $ | 277.8 | | | $ | 339.5 | |
| + | | Rounds to less than $0.005 per share. |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Excludes effect of deferred expense reimbursement. |
See accompanying notes to financial statements
12
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Legg Mason Partners Aggressive Growth Portfolio | | Class E | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 4.51 | | | $ | 7.45 | | | $ | 8.01 | | | $ | 8.62 | | | $ | 7.59 | | | $ | 6.99 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income (Loss)(a) | | | (0.00 | )+ | | | (0.00 | )+ | | | (0.01 | ) | | | 0.02 | | | | (0.01 | ) | | | (0.00 | )+ |
Net Realized/Unrealized Gain (Loss) on Investment activities | | | 0.41 | | | | (2.89 | ) | | | 0.21 | | | | (0.13 | ) | | | 1.05 | | | | 0.60 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.41 | | | | (2.89 | ) | | | 0.20 | | | | (0.11 | ) | | | 1.04 | | | | 0.60 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | — | | | | (0.00 | )+ | | | — | | | | — | | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | (0.05 | ) | | | (0.76 | ) | | | (0.50 | ) | | | (0.01 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | — | | | | (0.05 | ) | | | (0.76 | ) | | | (0.50 | ) | | | (0.01 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 4.92 | | | $ | 4.51 | | | $ | 7.45 | | | $ | 8.01 | | | $ | 8.62 | | | $ | 7.59 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 9.09 | % | | | (39.03 | )% | | | 2.32 | % | | | (1.61 | )% | | | 13.69 | % | | | 8.58 | % |
Ratio of Expenses to Average Net Assets | | | 0.83 | %* | | | 0.80 | % | | | 0.82 | % | | | 0.88 | % | | | 0.87 | % | | | 1.05 | % |
Ratio of Expenses to Average Net Assets After Broker Rebates | | | N/A | | | | N/A | | | | 0.82 | % | | | 0.88 | % | | | N/A | | | | N/A | |
Ratio of Expenses to Average Net Assets Before Reimbursements and Rebates | | | 0.84 | %* | | | 0.80 | % | | | 0.82 | % | | | 0.90 | % | | | 0.87 | %(b) | | | 0.98 | %(b) |
Ratio of Net Investment Income (Loss) to Average Net Assets | | | (0.03 | )%* | | | (0.03 | )% | | | (0.08 | )% | | | 0.20 | % | | | (0.15 | )% | | | (0.05 | )% |
Portfolio Turnover Rate | | | 0.6 | % | | | 6.2 | % | | | 0.7 | % | | | 190.3 | % | | | 121.0 | % | | | 104.7 | % |
Net Assets, End of Period (in millions) | | $ | 2.6 | | | $ | 2.5 | | | $ | 4.6 | | | $ | 5.9 | | | $ | 6.4 | | | $ | 5.5 | |
| + | | Rounds to less than $0.005 per share. |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Excludes effect of deferred expense reimbursement. |
See accompanying notes to financial statements
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is Legg Mason Partners Aggressive Growth Portfolio (the “Portfolio”), which is non-diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A, B and E Shares are currently offered by the Portfolio. Class C Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | | | | |
Expiring
12/31/2009 | | Expiring
12/31/2010 | | Expiring
12/31/2016 | | Total |
| | | |
| $974,417 | | $1,182,381 | | $55,844,851 | | $58,001,649 |
Legg Mason Partners Aggressive Growth Portfolio (formerly Janus Aggressive Growth Fund) acquired losses of $7,266,413 in the merger with Janus Growth Portfolio on April 28, 2003 which are subject to an annual limitation of $1,021,923.
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
G. Short Sales - The Portfolio may enter into a “short sale” of securities in circumstances in which, at the time the short position is open, the Portfolio owns an equal amount of the securities sold short or owns preferred stocks or debt securities, convertible or exchangeable without payment of further consideration, into an equal number of securities sold short. This kind of short sale, which is referred to as one “against the box,” may be entered into by the Portfolio to, for example, lock in a sale price for a security the Portfolio does not wish to sell immediately.
The Portfolio may also make short sales of a security it does not own, in anticipation of a decline in the market value of that security. To complete such a transaction, the Portfolio must borrow the security to make delivery to the buyer. The Portfolio then is obligated to replace the security borrowed by purchasing it at market price at the time of replacement. The price at such time may be more or less than the price at which the security was sold by the Portfolio. Until the security is replaced, the Portfolio is required to pay to the lender any dividends or interest which accrue during the period of the loan. To borrow the security, the Portfolio also may be required to pay a premium, which would increase the cost of the security sold. The proceeds of the short sale will be retained by the broker, to the extent necessary to meet margin requirements, until the short position is closed out. Until the Portfolio replaces a borrowed security, the Portfolio will segregate with its custodian, or earmark, cash or other liquid assets at such a level that (i) the amount segregated, or earmarked, plus the amount deposited with the broker as collateral will equal the current value of the security sold short and (ii) the amount segregated plus the amount deposited with the broker as collateral will not be less
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
than the market value of the security at the time it was sold short. The Portfolio will incur a loss as a result of the short sale if the price of the security increases between the date of the short sale and the date on which the Portfolio replaces the borrowed security. The Portfolio will realize a gain if the security declines in price between those dates. This result is the opposite of what one would expect from a cash purchase of a long position in a security. The amount of any gain will be decreased, and the amount of any loss increased, by the amount of any premium, dividends or interest the Portfolio may be required to pay in connection with a short sale. No more than one third of the Portfolio’s net assets will be, when added together: (i) deposited as collateral for the obligation to replace securities borrowed to effect short sales; and (ii) segregated in connection with short sales.
H. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
I. Foreign Currency Translation - The books and records of the Portfolio are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars on a daily basis using prevailing exchange rates. Purchases and sales of securities are translated at the rates of exchange prevailing when such securities were acquired or sold. Income is translated at rates of exchange prevailing when interest is accrued or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in forward foreign currency contracts; sales of foreign currencies; currency gains or losses realized between the trade and settlement dates on securities transactions; and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Portfolio’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end; from changes in the exchange rates of foreign currency held; and from changes in the contract value of forward foreign currency contracts.
J. Financial Derivative Instruments - Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133, (“FAS 161” or the “Statement”) requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. The disclosure requirements of FAS 161 distinguish between derivatives which are accounted for as “hedges” under FAS 133 and those that do not qualify for such accounting. The Portfolio reflects derivatives at fair value and recognizes changes in fair value through the Statement of Operations, and as such do not qualify for FAS 133 hedge accounting treatment.
K. Forward Foreign Currency Contracts - The Portfolio may enter into forward foreign currency contracts to hedge its portfolio holdings against future movements in certain foreign currency exchange rates. A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a set price. Forward currency contracts are valued at the forward rate and are marked-to-market daily. The change in market value is recorded by the Portfolio as an unrealized gain or loss. When the contract is closed, the Portfolio recognizes a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.
The use of forward foreign currency contracts does not eliminate fluctuations in the underlying prices of the securities of the Portfolio, but it does establish a rate of exchange that can be achieved in the future. Although forward foreign currency contracts to sell limit the risk of loss due to a decline in the value of the currency holdings, they also limit any potential gain that might result should the value of the currency increase. In addition, the Portfolio could be exposed to risks if the counterparties to the contracts are unable to meet the terms of the contracts.
L. Futures Contracts - The Portfolio may buy and sell futures contracts (on recognized exchanges) as a hedge, to maintain exposure to the broad equity markets, manage exposure to the securities markets or to movements in interest rates or to enhance return. The Portfolio may be subject to equity price risk, interest rate risk, and foreign currency exchange rate risk in the normal course of pursuing its investment objectives. Futures contracts are agreements to buy or sell a security, or deliver a final cash settlement price in connection with an index, interest rate, currency, or other contracts not calling for physical delivery, for a set price in the future. The Portfolio must post an amount equal to a portion of the total market value of the futures contract as futures variation margin, which is returned when the Portfolio’s obligations under the contract have been satisfied. From time to time thereafter, the Portfolio may have to post variation margin to maintain this amount as the market value of the contract fluctuates. Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities. During the period
16
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
ended June 30, 2009, the Portfolio entered into Equity Index Futures which were subject to equity price risk. At June 30, 2009, the Portfolio did not have any open futures contracts. For the period ended June 30, 2009, the Portfolio had realized gains in the amount of $1,047,032 which is located in Net realized gain (loss) on Futures Contracts in the Statement of Operations.
M. Directed Brokerage Agreement - The Trust has entered into a directed brokerage arrangement with State Street Global Markets (“SSGM”). Under this arrangement, the Portfolio directs certain trades to SSGM in return for a recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to the Portfolio are shown separately as an expense reduction on the Statement of Operations of the Portfolio.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with ClearBridge Advisors, LLC (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | |
Management Fees earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | Average Daily Net Assets |
| | |
| $1,946,675 | | 0.65% | | First $500 Million |
| | |
| | 0.60% | | $500 Million to $1 Billion |
| | |
| | 0.55% | | $1 Billion to $2 Billion |
| | |
| | 0.50% | | Over $2 Billion |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A, Class B and Class E Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B and Class E distribution plans provide that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%, respectively, of the average net assets of the Portfolio attributable to its Class B and Class E Shares in respect to activities primarily intended to result in the sale of Class B and Class E Shares. However, under the Class B and Class E distribution agreements, payments to the Distributor for activities pursuant to the Class B and Class E distribution plans are currently limited to payments at an annual rate equal to 0.25% and 0.15% of average daily net assets of the Portfolio attributable to its Class B and Class E Shares, respectively.
Under terms of the Class B and Class E distribution plans and distribution agreements, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B and Class E Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
17
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
(Decrease)
in Shares
Outstanding | | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 127,046,090 | | 5,104,445 | | 172,312 | | (50,927,029 | ) | | (45,650,272 | ) | | 81,395,818 |
12/31/2008 | | 116,011,689 | | 23,516,784 | | 829,972 | | (13,312,355 | ) | | 11,034,401 | | | 127,046,090 |
| | | | | | |
Class B | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 26,832,211 | | 1,419,221 | | — | | (2,164,851 | ) | | (745,630 | ) | | 26,086,581 |
12/31/2008 | | 29,971,698 | | 2,531,189 | | 204,159 | | (5,874,835 | ) | | (3,139,487 | ) | | 26,832,211 |
| | | | | | |
Class E | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 547,545 | | 43,947 | | — | | (66,209 | ) | | (22,262 | ) | | 525,283 |
12/31/2008 | | 615,318 | | 74,056 | | 4,112 | | (145,941 | ) | | (67,773 | ) | | 547,545 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 3,211,527 | | $ | — | | $ | 151,225,046 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $713,378,158 | | $ | 14,242,023 | | $ | (172,671,107 | ) | | $ | (158,429,084 | ) |
6. Securities Lending
As of June 30, 2009, the Portfolio had loaned securities which were collateralized by short-term investments. The value of securities on loan and the value of the related collateral were as follows:
| | | | | | | | | |
Value of
Securities | | Value of
Cash
Collateral | | Value of
Non-Cash
Collateral* | | Total
Collateral |
| | | |
| $24,756,943 | | $ | 18,498,666 | | $ | 6,903,992 | | $ | 25,402,658 |
* The Portfolio cannot repledge or resell this collateral. The non-cash collateral is typically comprised of government securities and/or bank letters of credit.
7. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $ | 6,625,384 | | $ | 7,292,175 | | $ | 877,016 | | $ | 79,115,380 | | $ | 7,502,400 | | $ | 86,407,555 |
18
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
7. Distributions to Shareholders - continued
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards | | | Total | |
| | | | |
| $778,796 | | $ | — | | $ | (338,429,049 | ) | | $ | (58,001,649 | ) | | $ | (395,651,902 | ) |
8. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
9. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
19
| | |
| Legg Mason Value Equity Portfolio | | For the period ended 6/30/09 |
| Managed by Legg Mason Capital Management, Inc. | | |
Portfolio Manager Commentary
Performance
During the period ended June 30, 2009, the Portfolio had a return of 11.52%, 11.67% and 11.71% for Class A, B and E Shares, respectively, versus 3.16% for its benchmark, the S&P 500® Index.
Market Environment/Conditions
The first six months of 2009 witnessed extreme volatility in the equity markets. After investors breathed a sigh of relief to close the book on 2008, the bear market showed it was not yet finished, taking stocks down substantially during the first two months of the year. A bottom was hit in early March, and a monster rebound ensued. Overall, lower quality names and smaller stocks led the way higher, in part because they sold off the most during the market decline. The rally tapered into the end of June, but by some measures the move off the March bottom was still one of the sharpest since the Great Depression. Many asset classes—from junk bonds to emerging market equities to domestic large caps—are back above water and then some for the year. For the period, small caps led the way higher, as the Russell 2000® gained +11.4%. The midcap S&P 400® Index posted a respectable +8.5% move, and the large cap S&P 500® gained +3.2%.
Portfolio Review/Current Positioning
The Portfolio performed well for the year-to-date period through the end of June, realizing strength in power producer AES and outperformance among retail-exposed stocks like Amazon.com, Sears Holdings and eBay. The Portfolio also benefited mightily from the financial-led rally that began in early March, with Aflac, Goldman Sachs, Wells Fargo and State Street among the top performers for the six-month period. On the other side of the ledger, positions in troubled financial institutions hurt portfolio performance by the greatest amount, with Citigroup and Bank of America topping the list. General Electric also hurt performance, due to the problems experienced by its finance business, GE Capital. Finally, managed-care stocks such as Aetna and UnitedHealth detracted from returns, as investors began to discount the plans of the new administration to overhaul the way healthcare works in the US.
Mary Chris Gay
Portfolio Manager, Senior Vice President
Legg Mason Capital Management, Inc.
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may
not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
AES Corp. | | 9.95% |
Aetna, Inc. | | 4.30% |
eBay, Inc. | | 4.25% |
Sears Holdings Corp. | | 4.19% |
UnitedHealth Group, Inc. | | 4.11% |
State Street Corp. | | 3.65% |
Yahoo!, Inc. | | 3.60% |
Hewlett-Packard Co. | | 3.46% |
Aflac, Inc. | | 3.28% |
Cisco Systems, Inc. | | 3.22% |
Portfolio Composition (% of portfolio market value)
As of 6/30/09
1
| | |
| Legg Mason Value Equity Portfolio | | For the period ended 6/30/09 |
| Managed by Legg Mason Capital Management, Inc. | | |
Portfolio Manager Commentary (continued)
Legg Mason Value Equity Portfolio managed by
Legg Mason Capital Management, Inc. vs. S&P 500® Index1
Growth Based on $10,000+
| | | | | | | | | | |
| | | | | Average Annual Return2
(for the period ended 6/30/09) |
| | | | | 6 Month | | 1 Year | | 3 Year | | Since
Inception3 |
| | Legg Mason Value Equity
Portfolio—Class A | | 11.52% | | -29.69% | | -18.71% | | -15.26% |
| — | | Class B | | 11.67% | | -29.80% | | -18.90% | | -15.43% |
| | Class E | | 11.71% | | -29.72% | | -18.81% | | -18.91% |
| - - | | S&P 500® Index1 | | 3.16% | | -26.21% | | -8.22% | | -5.14% |
+The chart reflects the performance of Class B shares of the Portfolio. The performance of Class B shares will differ from that of the other classes because of the difference in expenses paid by policyholders investing in the different share classes.
1The S&P 500® Index is an unmanaged index consisting of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value weighted index (stock price times number of shares outstanding), with each stock’s weight in the Index proportionate to its market value.
2“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
3Inception of Class A and Class B shares is 11/1/05. Inception of Class E shares is 5/1/06. Index returns are based on an inception date of 11/1/05.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Index does not include fees or expenses and is not available for direct investment.
2
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000=8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| Legg Mason Value Equity Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.65% | | $ | 1,000.00 | | $ | 1,115.20 | | $ | 3.41 |
Hypothetical | | 0.65% | | | 1,000.00 | | | 1,021.57 | | | 3.26 |
| | | | | | | | | | | |
| | | | |
Class B | | | | | | | | | | | |
Actual | | 0.97% | | $ | 1,000.00 | | $ | 1,116.70 | | $ | 5.09 |
Hypothetical | | 0.97% | | | 1,000.00 | | | 1,019.98 | | | 4.86 |
| | | | | | | | | | | |
| | | | |
Class E | | | | | | | | | | | |
Actual | | 0.86% | | $ | 1,000.00 | | $ | 1,117.10 | | $ | 4.51 |
Hypothetical | | 0.86% | | | 1,000.00 | | | 1,020.53 | | | 4.31 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
3
Met Investors Series Trust
Legg Mason Value Equity Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | | | | |
| | |
| Common Stocks - 98.0% | | | | | |
| Aerospace & Defense - 0.5% | | | |
Boeing Co. (The) | | 16,000 | | $ | 680,000 |
| | | | | |
| Beverages - 0.4% | | | |
PepsiCo, Inc. | | 9,300 | | | 511,128 |
| | | | | |
| Biotechnology - 2.6% | | | |
Amgen, Inc.* | | 62,700 | | | 3,319,338 |
| | | | | |
| Capital Markets - 6.3% | | | |
Goldman Sachs Group, Inc. (The) | | 22,300 | | | 3,287,912 |
State Street Corp. | | 98,000 | | | 4,625,600 |
| | | | | |
| | | | | 7,913,512 |
| | | | | |
| Commercial Banks - 2.2% | | | |
Wells Fargo & Co. | | 116,600 | | | 2,828,716 |
| | | | | |
| Communications Equipment - 3.2% | | | |
Cisco Systems, Inc.* | | 218,500 | | | 4,072,840 |
| | | | | |
| Computers & Peripherals - 7.4% | | | |
EMC Corp.* | | 90,200 | | | 1,181,620 |
Hewlett-Packard Co. | | 113,400 | | | 4,382,910 |
International Business Machines Corp. | | 36,216 | | | 3,781,675 |
| | | | | |
| | | | | 9,346,205 |
| | | | | |
| Consumer Finance - 3.1% | | | |
American Express Co. | | 50,900 | | | 1,182,916 |
Capital One Financial Corp. | | 126,086 | | | 2,758,762 |
| | | | | |
| | | | | 3,941,678 |
| | | | | |
| Diversified Financial Services - 7.6% | | | |
Bank of America Corp. | | 181,500 | | | 2,395,800 |
CME Group, Inc. | | 4,600 | | | 1,431,106 |
JPMorgan Chase & Co. | | 81,406 | | | 2,776,759 |
NYSE Euronext | | 110,800 | | | 3,019,300 |
| | | | | |
| | | | | 9,622,965 |
| | | | | |
| Diversified Telecommunication Services - 0.7% |
AT&T, Inc. | | 36,500 | | | 906,660 |
| | | | | |
| Electric Utilities - 0.2% | | | | | |
Exelon Corp. | | 4,500 | | | 230,445 |
| | | | | |
| Health Care Equipment & Supplies - 0.8% |
Medtronic, Inc. | | 27,900 | | | 973,431 |
| | | | | |
| Health Care Providers & Services - 8.4% |
Aetna, Inc. | | 217,366 | | | 5,445,018 |
UnitedHealth Group, Inc. | | 208,541 | | | 5,209,354 |
| | | | | |
| | | | | 10,654,372 |
| | | | | |
| Independent Power Producers & Energy Traders - 10.0% |
AES Corp.* | | 1,085,200 | | | 12,599,172 |
| | | | | |
| Industrial Conglomerates - 1.1% | | | | | |
3M Co. | | 13,600 | | | 817,360 |
General Electric Co. | | 46,500 | | | 544,980 |
| | | | | |
| | | | | 1,362,340 |
| | | | | |
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Insurance - 5.7% |
Aflac, Inc. | | 133,500 | | $ | 4,150,515 |
Allstate Corp. (The) | | 60,500 | | | 1,476,200 |
Prudential Financial, Inc. | | 42,900 | | | 1,596,738 |
| | | | | |
| | | | | 7,223,453 |
| | | | | |
| Internet & Catalog Retail - 3.1% |
Amazon.com, Inc.* | | 47,639 | | | 3,985,479 |
| | | | | |
| Internet Software & Services - 10.0% |
eBay, Inc.* | | 314,000 | | | 5,378,820 |
Google, Inc. - Class A* | | 6,400 | | | 2,698,176 |
Yahoo!, Inc.*(a) | | 290,700 | | | 4,552,362 |
| | | | | |
| | | | | 12,629,358 |
| | | | | |
| Leisure Equipment & Products - 1.3% |
Eastman Kodak Co.(a) | | 558,305 | | | 1,652,583 |
| | | | | |
| Machinery - 0.6% |
Deere & Co. | | 17,600 | | | 703,120 |
| | | | | |
| Media - 3.8% |
Time Warner Cable, Inc. | | 35,653 | | | 1,129,130 |
Time Warner, Inc. | | 143,700 | | | 3,619,803 |
| | | | | |
| | | | | 4,748,933 |
| | | | | |
| Metals & Mining - 1.2% |
Nucor Corp. | | 33,600 | | | 1,492,848 |
| | | | | |
| Multiline Retail - 6.2% |
JC Penney Co., Inc.(a) | | 90,673 | | | 2,603,222 |
Sears Holdings Corp.* | | 79,700 | | | 5,301,644 |
| | | | | |
| | | | | 7,904,866 |
| | | | | |
| Oil, Gas & Consumable Fuels - 1.4% |
Chesapeake Energy Corp. | | 32,400 | | | 642,492 |
ConocoPhillips | | 27,300 | | | 1,148,238 |
| | | | | |
| | | | | 1,790,730 |
| | | | | |
| Personal Products - 0.9% |
Avon Products, Inc. | | 43,700 | | | 1,126,586 |
| | | | | |
| Pharmaceuticals - 0.5% |
Merck & Co., Inc. | | 23,500 | | | 657,060 |
| | | | | |
| Semiconductors & Semiconductor Equipment - 3.0% |
Texas Instruments, Inc. | | 180,328 | | | 3,840,986 |
| | | | | |
| Software - 5.8% |
CA, Inc. | | 228,150 | | | 3,976,654 |
Electronic Arts, Inc.* | | 100,172 | | | 2,175,736 |
Microsoft Corp. | | 48,700 | | | 1,157,599 |
| | | | | |
| | | | | 7,309,989 |
| | | | | |
Total Common Stocks
(Cost $101,681,051) | | | | | 124,028,793 |
| | | | | |
See accompanying notes to financial statements
4
Met Investors Series Trust
Legg Mason Value Equity Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | | |
Security
Description | | Shares/Par
Amount | | Value | |
|
| Short-Term Investments - 8.7% | |
| Mutual Funds - 5.7% | |
State Street Navigator Securities Lending Trust Prime Portfolio(b) | | | 7,243,516 | | $ | 7,243,516 | |
| | | | | | | |
| Repurchase Agreement - 3.0% | |
State Street Bank & Trust Co.,
Repurchase Agreement, dated 06/30/09 at 0.010% to be repurchased at $3,787,001 on 07/01/09 collateralized by $3,750,000 FHLMC at 2.875% due 11/23/10 with a value of $3,867,188. | | $ | 3,787,000 | | | 3,787,000 | |
| | | | | | | |
Total Short-Term Investments
(Cost $11,030,516) | | | | | | 11,030,516 | |
| | | | | | | |
| | |
TOTAL INVESTMENTS - 106.7%
(Cost $112,711,567) | | | | | | 135,059,309 | |
| | | | | | | |
| |
| Other Assets and Liabilities (net) - (6.7)% | | | (8,456,247 | ) |
| | | | | | | |
| | |
| NET ASSETS - 100.0% | | | | | $ | 126,603,062 | |
| | | | | | | |
Portfolio Footnotes:
| * | | Non-income producing security. |
| (a) | | All or a portion of security is on loan. |
| (b) | | Represents investment of collateral received from securities lending transactions. |
FHLMC - Federal Home Loan Mortgage Corporation
See accompanying notes to financial statements
5
Met Investors Series Trust
Legg Mason Value Equity Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
| Level 1—quoted | | prices in active markets for identical securities |
| Level 2—other | | significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.) |
| Level 3—significant | | unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments) |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
| Common Stocks | | | | | | | | | | | | |
Aerospace & Defense | | $ | 680,000 | | $ | — | | $ | — | | $ | 680,000 |
Beverages | | | 511,128 | | | — | | | — | | | 511,128 |
Biotechnology | | | 3,319,338 | | | — | | | — | | | 3,319,338 |
Capital Markets | | | 7,913,512 | | | — | | | — | | | 7,913,512 |
Commercial Banks | | | 2,828,716 | | | — | | | — | | | 2,828,716 |
Communications Equipment | | | 4,072,840 | | | — | | | — | | | 4,072,840 |
Computers & Peripherals | | | 9,346,205 | | | — | | | — | | | 9,346,205 |
Consumer Finance | | | 3,941,678 | | | — | | | — | | | 3,941,678 |
Diversified Financial Services | | | 9,622,965 | | | — | | | — | | | 9,622,965 |
Diversified Telecommunication Services | | | 906,660 | | | — | | | — | | | 906,660 |
Electric Utilities | | | 230,445 | | | — | | | — | | | 230,445 |
Health Care Equipment & Supplies | | | 973,431 | | | — | | | — | | | 973,431 |
Health Care Providers & Services | | | 10,654,372 | | | — | | | — | | | 10,654,372 |
Independent Power Producers & Energy Traders | | | 12,599,172 | | | — | | | — | | | 12,599,172 |
Industrial Conglomerates | | | 1,362,340 | | | — | | | — | | | 1,362,340 |
Insurance | | | 7,223,453 | | | — | | | — | | | 7,223,453 |
Internet & Catalog Retail | | | 3,985,479 | �� | | — | | | — | | | 3,985,479 |
Internet Software & Services | | | 12,629,358 | | | — | | | — | | | 12,629,358 |
Leisure Equipment & Products | | | 1,652,583 | | | — | | | — | | | 1,652,583 |
Machinery | | | 703,120 | | | — | | | — | | | 703,120 |
Media | | | 4,748,933 | | | — | | | — | | | 4,748,933 |
Metals & Mining | | | 1,492,848 | | | — | | | — | | | 1,492,848 |
Multiline Retail | | | 7,904,866 | | | — | | | — | | | 7,904,866 |
Oil, Gas & Consumable Fuels | | | 1,790,730 | | | — | | | — | | | 1,790,730 |
Personal Products | | | 1,126,586 | | | — | | | — | | | 1,126,586 |
Pharmaceuticals | | | 657,060 | | | — | | | — | | | 657,060 |
Semiconductors & Semiconductor Equipment | | | 3,840,986 | | | — | | | — | | | 3,840,986 |
Software | | | 7,309,989 | | | — | | | — | | | 7,309,989 |
Total Common Stocks | | | 124,028,793 | | | — | | | — | | | 124,028,793 |
| Short-Term Investments | | | | | | | | | | | | |
Mutual Funds | | | 7,243,516 | | | — | | | — | | | 7,243,516 |
Repurchase Agreement | | | — | | | 3,787,000 | | | — | | | 3,787,000 |
Total Short-Term Investments | | | 7,243,516 | | | 3,787,000 | | | — | | | 11,030,516 |
TOTAL INVESTMENTS | | $ | 131,272,309 | | $ | 3,787,000 | | $ | — | | $ | 135,059,309 |
See accompanying notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| Legg Mason Value Equity Portfolio | | | |
| Assets | | | | |
Investments, at value (a)(b) | | $ | 131,272,309 | |
Repurchase Agreement | | | 3,787,000 | |
Cash | | | 749 | |
Receivable for Trust shares sold | | | 160,053 | |
Dividends receivable | | | 62,272 | |
Interest receivable | | | 1 | |
| | | | |
Total assets | | | 135,282,384 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 1,102,803 | |
Trust shares redeemed | | | 120,025 | |
Distribution and services fees—Class B | | | 19,868 | |
Distribution and services fees—Class E | | | 1,203 | |
Collateral for securities on loan | | | 7,243,516 | |
Management fee | | | 67,648 | |
Administration fee | | | 720 | |
Custodian and accounting fees | | | 33,207 | |
Deferred trustee fees | | | 7,827 | |
Accrued expenses | | | 82,505 | |
| | | | |
Total liabilities | | | 8,679,322 | |
| | | | |
| Net Assets | | $ | 126,603,062 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 1,140,186,661 | |
Accumulated net realized loss | | | (1,039,156,351 | ) |
Unrealized appreciation on investments | | | 22,347,742 | |
Undistributed net investment income | | | 3,225,010 | |
| | | | |
Total | | $ | 126,603,062 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 19,756,357 | |
| | | | |
Class B | | | 97,147,280 | |
| | | | |
Class E | | | 9,699,425 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 3,939,502 | |
| | | | |
Class B | | | 19,405,974 | |
| | | | |
Class E | | | 1,933,302 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 5.01 | |
| | | | |
Class B | | | 5.01 | |
| | | | |
Class E | | | 5.02 | |
| | | | |
| | | | | |
(a) Investments at cost, excluding repurchase agreement | | $ | 108,924,567 | |
(b) Includes cash collateral for securities loaned of | | | 7,243,516 | |
See accompanying notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| Legg Mason Value Equity Portfolio | | | |
| Investment Income | | | | |
Dividends | | $ | 3,613,083 | |
Interest (1) | | | 1,561,968 | |
| | | | |
Total investment income | | | 5,175,051 | |
| | | | |
| Expenses | | | | |
Management fee | | | 1,768,825 | |
Administration fees | | | 24,611 | |
Custodian and accounting fees | | | 25,849 | |
Distribution and services fees—Class B | | | 100,296 | |
Distribution and services fees—Class E | | | 6,484 | |
Audit and tax services | | | 22,478 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 46,155 | |
Other | | | 5,087 | |
| | | | |
Total expenses | | | 2,026,218 | |
Less broker commission recapture | | | (76,299 | ) |
| | | | |
Net expenses | | | 1,949,919 | |
| | | | |
Net investment income | | | 3,225,132 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments and Futures Contracts | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | (550,426,733 | ) |
Futures contracts | | | 3,159,932 | |
| | | | |
Net realized loss on investments and futures contracts | | | (547,266,801 | ) |
| | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 566,617,814 | |
| | | | |
Net change in unrealized appreciation on investments | | | 566,617,814 | |
| | | | |
Net realized and unrealized gain on investments and futures contracts | | | 19,351,013 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 22,576,145 | |
| | | | |
| | | | | |
(1) Interest income includes securities lending net income of: | | $ | 1,560,723 | |
See accompanying notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| Legg Mason Value Equity Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
Increase (Decrease) in Net Assets: | | | | | | | | |
Operations | | | | | | | | |
Net investment income | | $ | 3,225,132 | | | $ | 18,142,258 | |
Net realized loss on investments, futures contracts and foreign currency | | | (547,266,801 | ) | | | (488,194,774 | ) |
Net change in unrealized appreciation (depreciation) on investments | | | 566,617,814 | | | | (451,981,833 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 22,576,145 | | | | (922,034,349 | ) |
| | | | | | | | |
Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | (16,195,577 | ) | | | (3,645,413 | ) |
Class B | | | (1,493,589 | ) | | | (17,277 | ) |
Class E | | | (161,680 | ) | | | (13,296 | ) |
From net realized gains | | | | | | | | |
Class A | | | — | | | | (49,689,956 | ) |
Class B | | | — | | | | (4,228,978 | ) |
Class E | | | — | | | | (650,974 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (17,850,846 | ) | | | (58,245,894 | ) |
| | | | | | | | |
Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 92,079,821 | | | | 398,796,599 | |
Class B | | | 18,759,751 | | | | 58,866,993 | |
Class E | | | 384,623 | | | | 2,798,574 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | 16,195,577 | | | | 53,335,369 | |
Class B | | | 1,493,589 | | | | 4,246,255 | |
Class E | | | 161,680 | | | | 664,270 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (787,261,727 | ) | | | (263,754,166 | ) |
Class B | | | (9,488,709 | ) | | | (26,100,509 | ) |
Class E | | | (912,966 | ) | | | (3,306,155 | ) |
| | | | | | | | |
Net increase (decrease) in net assets from capital share transactions | | | (668,588,361 | ) | | | 225,547,230 | |
| | | | | | | | |
Net Decrease in Net Assets | | | (663,863,062 | ) | | | (754,733,013 | ) |
Net assets at beginning of period | | | 790,466,124 | | | | 1,545,199,137 | |
| | | | | | | | |
Net assets at end of period | | $ | 126,603,062 | | | $ | 790,466,124 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 3,225,010 | | | $ | 17,850,724 | |
| | | | | | | | |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | |
| | | | | |
| | | | | | | | | | | | | | | | |
| Legg Mason Value Equity Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005(b) | |
| Net Asset Value, Beginning of Period | | $ | 4.59 | | | $ | 10.50 | | | $ | 11.15 | | | $ | 10.65 | | | $ | 10.00 | |
| | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations: | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.03 | | | | 0.11 | | | | 0.03 | | | | 0.03 | | | | 0.00 | + |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.48 | | | | (5.65 | ) | | | (0.67 | ) | | | 0.70 | | | | 0.65 | |
| | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.51 | | | | (5.54 | ) | | | (0.64 | ) | | | 0.73 | | | | 0.65 | |
| | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.09 | ) | | | (0.03 | ) | | | (0.00 | )+ | | | (0.02 | ) | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | (0.34 | ) | | | (0.01 | ) | | | (0.21 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.09 | ) | | | (0.37 | ) | | | (0.01 | ) | | | (0.23 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 5.01 | | | $ | 4.59 | | | $ | 10.50 | | | $ | 11.15 | | | $ | 10.65 | |
| | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 11.52 | % | | | (54.43 | )% | | | (5.72 | )% | | | 6.83 | % | | | 6.50 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.65 | %* | | | 0.64 | % | | | 0.66 | % | | | 0.72 | % | | | 0.80 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.68 | %* | | | 0.67 | % | | | 0.67 | % | | | 0.74 | %(c) | | | 8.27 | %* |
Ratio of Net Investment Income to Average Net Assets | | | 1.24 | %* | | | 1.53 | % | | | 0.30 | % | | | 0.26 | % | | | 0.08 | %* |
Portfolio Turnover Rate | | | 39.7 | % | | | 47.4 | % | | | 27.5 | % | | | 38.7 | % | | | 9.1 | % |
Net Assets, End of Period (in millions) | | $ | 19.8 | | | $ | 703.9 | | | $ | 1,403.6 | | | $ | 972.7 | | | $ | 3.2 | |
| |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005(b) | |
| Net Asset Value, Beginning of Period | | $ | 4.57 | | | $ | 10.47 | | | $ | 11.14 | | | $ | 10.65 | | | $ | 10.00 | |
| | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations: | | | | | | | | | | | | | | | | | | | | |
Net Investment Income (Loss)(a) | | | 0.02 | | | | 0.09 | | | | 0.00 | + | | | (0.01 | ) | | | (0.01 | ) |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.50 | | | | (5.65 | ) | | | (0.66 | ) | | | 0.71 | | | | 0.66 | |
| | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.52 | | | | (5.56 | ) | | | (0.66 | ) | | | 0.70 | | | | 0.65 | |
| | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.08 | ) | | | (0.00 | )+ | | | (0.00 | )+ | | | — | | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | (0.34 | ) | | | (0.01 | ) | | | (0.21 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.08 | ) | | | (0.34 | ) | | | (0.01 | ) | | | (0.21 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 5.01 | | | $ | 4.57 | | | $ | 10.47 | | | $ | 11.14 | | | $ | 10.65 | |
| | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 11.67 | % | | | (54.61 | )% | | | (5.91 | )% | | | 6.58 | % | | | 6.50 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.97 | %* | | | 0.89 | % | | | 0.91 | % | | | 1.05 | % | | | 1.05 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.99 | %* | | | 0.92 | % | | | 0.92 | % | | | 1.06 | %(c) | | | 4.54 | %* |
Ratio of Net Investment Income (Loss) to Average Net Assets | | | 0.75 | %* | | | 1.31 | % | | | 0.03 | % | | | (0.09 | )% | | | (0.36 | )%* |
Portfolio Turnover Rate | | | 39.7 | % | | | 47.4 | % | | | 27.5 | % | | | 38.7 | % | | | 9.1 | % |
Net Assets, End of Period (in millions) | | $ | 97.1 | | | $ | 77.3 | | | $ | 121.1 | | | $ | 113.5 | | | $ | 4.9 | |
| + | | Rounds to less than $0.005 per share. |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—11/01/2005. |
| (c) | | Excludes effect of deferred expense reimbursement. |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | |
| | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | |
| Legg Mason Value Equity Portfolio | | Class E | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006(b) | |
| Net Asset Value, Beginning of Period | | $ | 4.58 | | | $ | 10.49 | | | $ | 11.15 | | | $ | 10.55 | |
| | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.02 | | | | 0.10 | | | | 0.01 | | | | 0.01 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.50 | | | | (5.66 | ) | | | (0.66 | ) | | | 0.81 | |
| | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.52 | | | | (5.56 | ) | | | (0.65 | ) | | | 0.82 | |
| | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.08 | ) | | | (0.01 | ) | | | (0.00 | )+ | | | (0.01 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (0.34 | ) | | | (0.01 | ) | | | (0.21 | ) |
| | | | | | | | | | | | | | | | |
Total Distributions | | | (0.08 | ) | | | (0.35 | ) | | | (0.01 | ) | | | (0.22 | ) |
| | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 5.02 | | | $ | 4.58 | | | $ | 10.49 | | | $ | 11.15 | |
| | | | | | | | | | | | | | | | |
| Total Return | | | 11.71 | % | | | (54.57 | )% | | | (5.81 | )% | | | 7.74 | % |
Ratio of Expenses to Average Net Assets | | | 0.86 | %* | | | 0.79 | % | | | 0.80 | % | | | 0.86 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursements and Rebates | | | 0.89 | %* | | | 0.82 | % | | | 0.82 | % | | | 0.87 | %(c)* |
Ratio of Net Investment Income to Average Net Assets | | | 0.88 | %* | | | 1.38 | % | | | 0.13 | % | | | 0.12 | %* |
Portfolio Turnover Rate | | | 39.7 | % | | | 47.4 | % | | | 27.5 | % | | | 38.7 | % |
Net Assets, End of Period (in millions) | | $ | 9.7 | | | $ | 9.3 | | | $ | 20.6 | | | $ | 24.0 | |
| + | | Rounds to less than $0.005 per share. |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—05/01/2006. |
| (c) | | Excludes effect of deferred expense reimbursement. |
See accompanying notes to financial statements
11
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is Legg Mason Value Equity Portfolio (the “Portfolio”), which is non-diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A, B and E Shares are currently offered by the Portfolio. Class C Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
12
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | | |
Expiring
12/31/2016 | | Total |
| |
| $ | 415,887,597 | | $ | 415,887,597 |
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Forward Foreign Currency Contracts - The Portfolio may enter into forward foreign currency contracts to hedge its portfolio holdings against future movements in certain foreign currency exchange rates. A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a set price. Forward currency contracts are valued at the forward rate and are marked-to-market daily. The change in market value is recorded by the Portfolio as an unrealized gain or loss. When the contract is closed, the Portfolio recognizes a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.
The use of forward foreign currency contracts does not eliminate fluctuations in the underlying prices of the securities of the Portfolio, but it does establish a rate of exchange that can be achieved in the future. Although forward foreign currency contracts to sell limit the risk of loss due to a decline in the value of the currency holdings, they also limit any potential gain that might result should the value of the currency increase. In addition, the Portfolio could be exposed to risks if the counterparties to the contracts are unable to meet the terms of the contracts.
G. Foreign Currency Translation - The books and records of the Portfolio are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars on a daily basis using prevailing exchange rates. Purchases and sales of securities are translated at the rates of exchange prevailing when such securities were acquired or sold. Income is translated at rates of exchange prevailing when interest is accrued or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in forward foreign currency contracts; sales of foreign currencies; currency gains or losses realized between the trade and settlement dates on securities transactions; and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Portfolio’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end; from changes in the exchange rates of foreign currency held; and from changes in the contract value of forward foreign currency contracts.
H. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
I. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
J. Directed Brokerage Agreement - The Trust has entered into a directed brokerage arrangement with State Street Global Markets (“SSGM”). Under this arrangement, the Portfolio directs certain trades to SSGM in return for a recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to the Portfolio are shown separately as an expense reduction on the Statement of Operations of the Portfolio.
K. Financial Derivative Instruments - Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133, (“FAS 161” or the “Statement”) requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. The disclosure requirements of FAS 161 distinguish between derivatives which are accounted for as “hedges” under FAS 133 and those that do not qualify for such accounting. The Portfolio reflects derivatives at fair value and recognizes changes in fair value through the Statement of Operations, and as such do not qualify for FAS 133 hedge accounting treatment.
L. Futures Contracts - The Portfolio may buy and sell futures contracts (on recognized exchanges) as a hedge, to maintain exposure to the broad equity markets, manage exposure to the securities markets or to movements in interest rates or to enhance return. The Portfolio may be subject to equity price risk, interest rate risk, and foreign currency exchange rate risk in the normal course of pursuing its investment objectives. Futures contracts are agreements to buy or sell a security, or deliver a final cash settlement price in connection with an index, interest rate, currency, or other contracts not calling for physical delivery, for a set price in the future. The Portfolio must post an amount equal to a portion of the total market value of the futures contract as futures variation margin, which is returned when the Portfolio’s obligations under the contract have been satisfied. From time to time thereafter, the Portfolio may have to post variation margin to maintain this amount as the market value of the contract fluctuates. Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities. During the period ended June 30, 2009, the Portfolio entered into Equity Index Futures which were subject to equity price risk. At June 30, 2009, the Portfolio did not have any open futures contracts. For the period ended June 30, 2009, the Portfolio had realized gains in the amount of $3,159,932 which is located in Net realized gain (loss) on Futures Contracts in the Statement of Operations.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with Legg Mason Capital Management, Inc. (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | Average Daily Net Assets |
| | |
| $1,768,825 | | 0.65% | | First $200 Million |
| | |
| | 0.63% | | Over $200 Million |
Effective September 1, 2008, the Manager has agreed to voluntarily waive a portion of the management fee it charges to the Portfolio, provided the Portfolio’s average daily net assets are equal to or greater than $1 billion, such that the management fee charged on all of the Portfolio’s average daily net assets is 0.57%. This voluntary fee waiver only applies if the Portfolio’s average daily net assets are equal to or greater than $1 billion.
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A, Class B and Class E Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B and Class E distribution plans provide that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%, respectively, of the average net assets of the Portfolio attributable to its Class B and Class E Shares in respect to activities primarily intended to result in the sale of Class B and Class E Shares. However, under the Class B and Class E distribution agreements, payments to the Distributor for activities pursuant to the Class B and Class E distribution plans are currently limited to payments at an annual rate equal to 0.25% and 0.15% of average daily net assets of the Portfolio attributable to its Class B and Class E Shares, respectively.
Under terms of the Class B and Class E distribution plans and distribution agreements, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B and Class E Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
(Decrease)
in Shares
Outstanding | | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 153,446,065 | | 21,978,291 | | 3,723,121 | | (175,207,975 | ) | | (149,506,563 | ) | | 3,939,502 |
12/31/2008 | | 133,645,043 | | 52,402,168 | | 6,187,398 | | (38,788,544 | ) | | 19,801,022 | | | 153,446,065 |
| | | | | | |
Class B | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 16,919,109 | | 4,314,288 | | 343,354 | | (2,170,777 | ) | | 2,486,865 | | | 19,405,974 |
12/31/2008 | | 11,566,558 | | 8,484,296 | | 493,177 | | (3,624,922 | ) | | 5,352,551 | | | 16,919,109 |
| | | | | | |
Class E | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 2,020,343 | | 88,167 | | 37,082 | | (212,290 | ) | | (87,041 | ) | | 1,933,302 |
12/31/2008 | | 1,960,729 | | 429,195 | | 77,061 | | (446,642 | ) | | 59,614 | | | 2,020,343 |
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 183,242,716 | | $ | — | | $ | 525,674,091 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Appreciation |
| | | |
| $112,711,567 | | $ | 27,265,537 | | $ | (4,917,795 | ) | | $ | 22,347,742 |
6. Securities Lending
As of June 30, 2009, the Portfolio had loaned securities which were collateralized by short term investments. The value of securities on loan and the value of the related collateral were as follows:
| | | | | | | | | |
Value of
Securities | | Value of
Cash
Collateral | | Value of
Non-Cash
Collateral* | | Total
Collateral |
| | | |
| $6,962,001 | | $ | 7,243,516 | | $ | — | | $ | 7,243,516 |
* The Portfolio cannot repledge or resell this collateral. The non-cash collateral is typically comprised of government securities and/or bank letters of credit.
7. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | | |
| Ordinary Income | | Long Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $ | 3,676,001 | | $ | 1,093,460 | | $ | 54,569,893 | | $ | 302,992 | | $ | 58,245,894 | | $ | 1,396,452 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforward
and Deferrals | | | Total | |
| | | | |
| $17,850,724 | | $ | — | | $ | (620,272,025 | ) | | $ | (415,887,597 | ) | | $ | (1,018,308,898 | ) |
8. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
9. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the
16
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
9. Market, Credit and Counterparty Risk - continued
general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
17
| | |
| Loomis Sayles Global Markets Portfolio | | For the period ended 6/30/09 |
| Managed by Loomis, Sayles & Company, L.P. | | |
Portfolio Manager Commentary
Portfolio Performance
For the six-month period ended June 30, 2009, the Portfolio returned 14.77% and 14.63% for Class A and B Shares, respectively, versus 6.35% and (1.50)% for the benchmarks, the MSCI World Index (net)SM and Citigroup World Government Bond Index (WGBI), respectively.
Equity Market Environment/Conditions
There is a general understanding that markets (and individual stocks) often overshoot on the upside and on the downside when they correct. Panic induced selling we witnessed in January and February felt overdone, but even with this view, most investors weren’t comfortable making a stand. We’re not sure what triggered the reversal in March. There were affirming bank stress tests, hints that global stimulus efforts were gaining traction and nascent signs of improvement or at least stabilization in the hardest hit areas of the economy. Valuations were also severely depressed and discounted a fairly dire outlook. Any or all of these factors could have played a role. Most important is that it appears that fear has receded and a market floor has been established. The rally erased many severe valuation anomalies and the market now appears reasonably valued for the current economic environment. In short, we’re in a market where a focus on stock picking could be rewarding.
Fixed Income Market Environment/Conditions
Renewed risk appetite dominated market sentiment for much of the first half of 2009. From January until mid-February, investors reacted to the attractive value proposition of corporate credits. Investor sentiment began to shift in the latter half of February, however, as equity markets experienced sharp downturns and worries surrounding the global economy and the global banking system resurfaced. As the second quarter began, the theme of economic recovery replaced investor fear of a “Great Depression II,” underpinning explosive equity, emerging market and credit spread rebounds. Data continued to reflect weak but stabilizing levels of economic activity, with a notable improvement in expectations manifested in robust risk appetite. In the bond markets, credit soared while U.S. Treasurys slumped. The trade-weighted U.S. dollar dropped to new lows for the year, as the monetary and fiscal expansion policies in the U.S. have encouraged foreign exchange reserve managers to explore U.S. dollar alternatives.
Equity Portfolio Review
In light of shifting equity market conditions and early signs of economic recovery, we made changes to the equity segment of the Portfolio to concentrate on opportunities that we believe will be medium-term winners coming out of this deep, global recession. We significantly reduced our weight in the healthcare sector as product pipelines came into question and growth opportunities appeared to be limited. The majority of proceeds were redeployed into the financials sector as early signs of stabilization emerged in the marketplace and the possibility of a more normal financial environment became apparent. We also reduced our consumer discretionary weight modestly and shifted the mix of geographic exposure towards Asia where stronger growth trends have been emerging.
An underweight in consumer staples contributed positively to performance for the six-month period as investors rotated out of more defensive sectors. Energy was driven primarily by Petrobras Petroleo and Southwestern Energy. Brazil’s state run oil firm, Petrobras was up in June. The company announced that commercial oil production at the Tupi field had begun. Southwestern Energy reported a strong second quarter, 2009, as the natural gas company increased production and lowered costs.
Consumer discretionary and healthcare had the most negative impact on performance for the six-month period. The consumer sector trailed the Benchmark as many of the deep cyclical, operationally challenged names rallied big in the second quarter. Positions in Best Buy and Darden Restaurants lagged as investors moved away from companies that had been performing well. Healthcare detracted from performance primarily due to holding Myriad Genetics. Myriad Genetics fell in April amidst concern surrounding the operating margins for the company’s diagnostic division as expenses rose.
During the six-month period, we continued to focus on strong, fundamentally driven opportunities around the world with little specific regard for sector or country/region of origin. Certain positions in companies with investment thesis confirming results and positive earnings per share (“EPS”) revision were added to while positions that showed signs of fundamental deterioration were either trimmed or eliminated. There has been no change to the underlying Portfolio strategy.
Fixed Income Portfolio Review
Security selection and sector allocation were primary drivers of excess return versus the fixed income Benchmark during the six-month period. The Portfolio’s overweight corporate positioning, and corresponding underweight in U.S. Treasurys and securitized assets, was performance additive. Investment grade credit spreads tightened during the period as risk appetite increased, with high yield and emerging markets also strongly outperforming U.S. Treasurys on a relative and absolute basis. Investment grade corporates in the U.S. experienced spread tightening of 255 basis points in the April to June period and tightened by 273 basis points year-to-date. The best-performing individual issues in local currency terms were dominated by high yield, high beta names, while financial issues were buoyed by the U.S. government’s stress test results and the related capital raising that was done by banks. From a currency perspective, we increased our exposure to the Norwegian krone, as we believed the currency was trading below fair value. This positioning helped performance.
Team Managed
Mark B. Baribeau, CFA, a Vice President of Loomis Sayles, joined the firm in 1989. He is the Growth portfolio manager of the domestic equity securities sector and international equity securities sector of the Portfolio.
Daniel J. Fuss, CFA, CIC, Executive Vice President and Vice Chairman of Loomis Sayles has been with the firm since 1976. He is the portfolio manager of the domestic fixed income securities sector of the Portfolio.
1
| | |
| Loomis Sayles Global Markets Portfolio | | For the period ended 6/30/09 |
| Managed by Loomis, Sayles & Company, L.P. | | |
Portfolio Manager Commentary (continued)
Warren N. Koontz, CFA, a Vice President of Loomis Sayles, joined the firm in 1995. He is the Value portfolio manager of the domestic equity securities sector and international equity securities sector of the Portfolio.
David Rolley, CFA, Vice President of Loomis Sayles, has been with the firm since 1994. He is the portfolio manager of the international fixed income securities sector of the Portfolio.
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
Apple, Inc. | | 3.21% |
Standard Chartered Plc | | 2.47% |
QUALCOMM, Inc. | | 2.46% |
China Overseas Land & Investment, Ltd. | | 2.12% |
Petroleo Brasileiro S.A. | | 1.99% |
Visa, Inc.—Class A | | 1.77% |
Wells Fargo & Co. | | 1.69% |
Goldman Sachs Group, Inc. (The) | | 1.67% |
Oracle Corp. | | 1.53% |
JPMorgan Chase & Co. | | 1.51% |
Portfolio Composition (% of portfolio market value)
As of 6/30/09
2
| | |
| Loomis Sayles Global Markets Portfolio | | For the period ended 6/30/09 |
| Managed by Loomis, Sayles & Company, L.P. | | |
Portfolio Manager Commentary (continued)
Loomis Sayles Global Markets Portfolio managed by
Loomis, Sayles & Company, L.P. vs. Morgan Stanley Capital International (MSCI) World Index (net)SM 1 and Citigroup World Government Bond Index (WGBI)2
Growth Based on $10,000+
| | | | | | | | | | |
| | | | | Average Annual Return3
(for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | 3 Year | | Since
Inception4 |
| — | | Loomis Sayles Global Markets
Portfolio—Class A | | 14.77% | | -23.87% | | 0.17% | | -2.01% |
| | Class B | | 14.63% | | -24.07% | | -0.07% | | -2.29% |
| - - | | Morgan Stanley Capital International (MSCI) World Index (net)SM1 | | 6.35% | | -29.50% | | -8.02% | | -8.62% |
| — | | Citigroup World Government Bond Index (WGBI)2 | | -1.50% | | 4.00% | | 7.77% | | 7.60% |
+The chart reflects the performance of Class A shares of the Portfolio. The performance of Class A shares will differ from that of the other class of shares because of the difference in expenses paid by policyholders investing in the different share classes.
1The Morgan Stanley Capital International (MSCI) World Index (net)SM is an unmanaged free-float adjusted market capitalization index that is designed to measure global developed market equity performance.
2The Citigroup World Government Bond Index (WGBI) is market capitalization weighted and tracks total returns of government bonds in 21 countries globally. Local bond market returns are from country subindexes of the Citigroup WGBI.
3“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
4Inception of Class A and Class B shares is 5/1/06. Index returns are based on an inception date of 5/1/06.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Indexes do not include fees or expenses and are not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000=8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| Loomis Sayles Global Markets Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.75% | | $ | 1,000.00 | | $ | 1,147.70 | | $ | 3.99 |
Hypothetical | | 0.75% | | | 1,000.00 | | | 1,021.08 | | | 3.76 |
| | | | | | | | | | | |
| | | | |
Class B | | | | | | | | | | | |
Actual | | 1.00% | | $ | 1,000.00 | | $ | 1,146.30 | | $ | 5.32 |
Hypothetical | | 1.00% | | | 1,000.00 | | | 1,019.84 | | | 5.01 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
4
Met Investors Series Trust
Loomis Sayles Global Markets Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| | |
| Municipal Bond - 0.2% | | | | | | |
| Virginia - 0.2% | | | | | | |
Tobacco Settlement Financing Corp.
6.706%, due 06/01/46
(Cost - $1,364,691) | | $ | 1,365,000 | | $ | 844,567 |
| | | | | | |
| Asset-Backed Securities - 0.3% | | | | | | |
Citibank Credit Card Issuance Trust
5.375%, due 04/10/13(h) | | | 600,000 | | | 831,695 |
MBNA Credit Card Master Note
4.150%, due 04/19/10(h) | | | 665,000 | | | 930,093 |
| | | | | | |
| Total Asset-Backed Securities (Cost $1,680,875) | | | | | | 1,761,788 |
| | | | | | |
| |
| Domestic Bonds & Debt Securities - 33.1% | | | |
| Aerospace & Defense - 0.2% | | | | | | |
Finmeccanica SpA
4.875%, due 03/24/25(h) | | | 750,000 | | | 855,657 |
| | | | | | |
| Agriculture - 0.3% | | | | | | |
Bunge Ltd. Finance Corp.
8.500%, due 06/15/19 | | | 370,000 | | | 387,542 |
Embraer Overseas, Ltd.
6.375%, due 01/24/17 | | | 1,470,000 | | | 1,385,475 |
| | | | | | |
| | | | | | 1,773,017 |
| | | | | | |
| Airlines - 0.5% | | | | | | |
Delta Air Lines, Inc.
8.954%, due 08/10/14 | | | 1,944,160 | | | 1,263,704 |
8.021%, due 08/10/22 | | | 1,947,792 | | | 1,236,848 |
| | | | | | |
| | | | | | 2,500,552 |
| | | | | | |
| Auto Components - 0.2% | | | | | | |
Goodyear Tire & Rubber Co.
7.000%, due 03/15/28 | | | 1,228,000 | | | 951,700 |
| | | | | | |
| Automobiles - 0.7% | | | | | | |
Ford Motor Co.
6.625%, due 10/01/28 | | | 5,610,000 | | | 3,057,450 |
7.450%, due 07/16/31(a) | | | 1,400,000 | | | 833,000 |
| | | | | | |
| | | | | | 3,890,450 |
| | | | | | |
| Beverages - 0.2% |
Anheuser-Busch InBev Worldwide, Inc.
7.750%, due 01/15/19 (144A)(c) | | | 900,000 | | | 985,970 |
| | | | | | |
| Building Products - 0.4% | | | | | | |
Lafarge S.A.
5.375%, due 06/26/17(h) | | | 350,000 | | | 431,472 |
4.750%, due 03/23/20(h) | | | 275,000 | | | 312,139 |
Owens Corning, Inc.
6.500%, due 12/01/16 | | | 90,000 | | | 79,002 |
7.000%, due 12/01/36 | | | 140,000 | | | 99,463 |
USG Corp.
6.300%, due 11/15/16 | | | 195,000 | | | 145,275 |
9.250%, due 01/15/18 | | | 1,495,000 | | | 1,278,225 |
| | | | | | |
| | | | | | 2,345,576 |
| | | | | | |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| | |
| Capital Markets - 2.7% | | | | | | |
Goldman Sachs Group, Inc. (The)
1.609%, due 05/23/16(b)(h) | | $ | 1,650,000 | | $ | 1,934,811 |
6.150%, due 04/01/18 | | | 1,715,000 | | | 1,672,461 |
6.750%, due 10/01/37 | | | 800,000 | | | 713,279 |
6.875%, due 01/18/38(j) | | | 500,000 | | | 682,880 |
Jefferies Group, Inc.
8.500%, due 07/15/19 | | | 2,150,000 | | | 2,136,285 |
Morgan Stanley
5.375%, due 11/14/13(j) | | | 1,110,000 | | | 1,748,959 |
4.750%, due 04/01/14 | | | 1,515,000 | | | 1,432,542 |
5.375%, due 10/15/15 | | | 3,900,000 | | | 3,826,434 |
5.450%, due 01/09/17 | | | 820,000 | | | 787,412 |
| | | | | | |
| | | | | | 14,935,063 |
| | | | | | |
| Chemicals - 0.3% | | | | | | |
Hercules, Inc.
6.500%, due 06/30/29 | | | 10,000 | | | 5,450 |
LPG International, Inc.
7.250%, due 12/20/15 | | | 400,000 | | | 402,000 |
Lubrizol Corp.
6.500%, due 10/01/34 | | | 1,500,000 | | | 1,329,433 |
| | | | | | |
| | | | | | 1,736,883 |
| | | | | | |
| Commercial & Professional Services - 0.1% | | | |
United Rentals North America, Inc.
7.750%, due 11/15/13(a) | | | 410,000 | | | 352,600 |
7.000%, due 02/15/14(a) | | | 590,000 | | | 485,275 |
| | | | | | |
| | | | | | 837,875 |
| | | | | | |
| Commercial Banks - 1.7% | | | | | | |
Asian Development Bank
2.350%, due 06/21/27(k) | | | 80,000,000 | | | 813,610 |
Barclays Financial LLC
4.060%, due 09/16/10 (144A)(c)(l) | | | 1,240,000,000 | | | 976,129 |
Canara Bank (London Branch)
6.365%, due 11/28/21 | | | 1,700,000 | | | 1,496,683 |
Export-Import Bank of Korea
8.125%, due 01/21/14 | | | 1,000,000 | | | 1,095,674 |
ICICI Bank, Ltd.
6.375%, due 04/30/22 (144A)(b)(c) | | | 1,955,000 | | | 1,528,998 |
Kreditanstalt fuer Wiederaufbau
2.600%, due 06/20/37(k) | | | 84,000,000 | | | 836,584 |
Santander Issuances S.A Unipersonal 4.750%, due 05/29/19(b)(h) | | | 450,000 | | | 568,069 |
4.500%, due 09/30/19(b)(h) | | | 300,000 | | | 373,889 |
Standard Chartered Bank
5.875%, due 09/26/17(h) | | | 750,000 | | | 956,423 |
Wells Fargo & Co.
4.625%, due 11/02/35(j) | | | 515,000 | | | 683,896 |
| | | | | | |
| | | | | | 9,329,955 |
| | | | | | |
See accompanying notes to financial statements
5
Met Investors Series Trust
Loomis Sayles Global Markets Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| |
| Communications Equipment - 0.1% | | | |
Motorola, Inc.
6.500%, due 09/01/25-11/15/28 | | $ | 305,000 | | $ | 208,570 |
6.625%, due 11/15/37 | | | 355,000 | | | 241,998 |
5.220%, due 10/01/97 | | | 170,000 | | | 75,897 |
| | | | | | |
| | | | | | 526,465 |
| | | | | | |
| Construction Materials - 0.1% | | | | | | |
Cemex Finance Europe B.V.
4.750%, due 03/05/14(h) | | | 450,000 | | | 414,104 |
| | | | | | |
| Consumer Finance - 2.7% | | | | | | |
Caterpillar Financial Services Corp. 6.125%, due 02/17/14 | | | 1,835,000 | | | 1,959,347 |
5.450%, due 04/15/18 | | | 295,000 | | | 281,336 |
Ford Motor Credit Co. LLC
5.700%, due 01/15/10 | | | 840,000 | | | 810,827 |
9.750%, due 09/15/10 | | | 160,000 | | | 153,305 |
8.625%, due 11/01/10 | | | 2,070,000 | | | 1,946,224 |
7.000%, due 10/01/13 | | | 7,160,000 | | | 5,761,831 |
GMAC LLC
7.250%, due 03/02/11 (144A)(c) | | | 303,000 | | | 280,275 |
6.875%, due 09/15/11-08/28/12 (144A)(c) | | | 309,000 | | | 264,385 |
6.000%, due 12/15/11 (144A)(c) | | | 1,167,000 | | | 1,009,455 |
7.000%, due 02/01/12 (144A)(a)(c) | | | 281,000 | | | 241,098 |
6.625%, due 05/15/12 (144A)(c) | | | 563,000 | | | 475,735 |
7.500%, due 12/31/13 (144A)(c) | | | 191,000 | | | 149,935 |
6.750%, due 12/01/14 (144A)(c) | | | 675,000 | | | 536,625 |
8.000%, due 12/31/18-11/01/31 (144A)(c) | | | 1,184,000 | | | 811,520 |
| | | | | | |
| | | | | | 14,681,898 |
| | | | | | |
| Containers & Packaging - 0.1% |
OI European Group B.V.
6.875%, due 03/31/17 (144A)(c)(h) | | | 100,000 | | | 123,376 |
Owens Brockway Glass Container, Inc.
6.750%, due 12/01/14(h)(a) | | | 300,000 | | | 382,746 |
| | | | | | |
| | | | | | 506,122 |
| | | | | | |
| Distributors - 0.2% |
Marfrig Overseas, Ltd.
9.625%, due 11/16/16 (144A)(c) | | | 1,380,000 | | | 1,138,500 |
| | | | | | |
| Diversified Financial Services - 2.9% |
Bank of America Corp.
4.750%, due 05/06/19(b)(h) | | | 750,000 | | | 730,878 |
CIT Group, Inc.
7.625%, due 11/30/12 | | | 3,117,000 | | | 2,135,790 |
5.400%, due 03/07/13 | | | 493,000 | | | 305,769 |
12.000%, due 12/18/18 (144A)(c) | | | 5,554,000 | | | 2,611,724 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Diversified Financial Services - continued |
General Electric Capital Corp.
1.450%, due 11/10/11(k) | | $ | 35,000,000 | | $ | 344,478 |
1.000%, due 03/21/12(k) | | | 60,000,000 | | | 576,676 |
4.875%, due 03/04/15(a) | | | 2,105,000 | | | 2,050,388 |
5.625%, due 05/01/18 | | | 120,000 | | | 113,687 |
5.875%, due 01/14/38 | | | 300,000 | | | 238,133 |
Level 3 Financing, Inc.
9.250%, due 11/01/14 | | | 50,000 | | | 41,250 |
8.750%, due 02/15/17 | | | 55,000 | | | 42,075 |
SLM Corp.
4.500%, due 07/26/10 | | | 20,000 | | | 18,905 |
5.400%, due 10/25/11 | | | 80,000 | | | 71,989 |
5.125%, due 08/27/12 | | | 90,000 | | | 77,053 |
5.375%, due 01/15/13-05/15/14 | | | 595,000 | | | 487,200 |
5.000%, due 10/01/13-06/15/18 | | | 3,635,000 | | | 2,771,781 |
5.050%, due 11/14/14 | | | 790,000 | | | 611,902 |
8.450%, due 06/15/18 | | | 1,775,000 | | | 1,520,728 |
5.625%, due 08/01/33 | | | 1,340,000 | | | 827,103 |
| | | | | | |
| | | | | | 15,577,509 |
| | | | | | |
| Diversified Telecommunication Services - 2.5% |
Axtel S.A.B. de C.V.
7.625%, due 02/01/17 (144A)(c) | | | 1,660,000 | | | 1,332,150 |
Bell Canada
6.100%, due 03/16/35 (144A)(c)(i) | | | 750,000 | | | 577,718 |
GTE Corp.
6.940%, due 04/15/28 | | | 55,000 | | | 55,291 |
SK Broadband Co., Ltd.
7.000%, due 02/01/12 (144A)(c) | | | 2,300,000 | | | 2,317,250 |
Level 3 Communications, Inc.
3.500%, due 06/15/12 | | | 1,320,000 | | | 930,600 |
New England Telephone and Telegraph Co.
7.875%, due 11/15/29 | | | 415,000 | | | 427,189 |
Qtel International Finance, Ltd.
7.875%, due 06/10/19 (144A)(c) | | | 300,000 | | | 308,392 |
Qwest Capital Funding, Inc.
6.500%, due 11/15/18 | | | 870,000 | | | 674,250 |
7.625%, due 08/03/21 | | | 1,070,000 | | | 823,900 |
6.875%, due 07/15/28 | | | 835,000 | | | 571,975 |
7.750%, due 02/15/31 | | | 1,445,000 | | | 1,033,175 |
Qwest Corp.
6.875%, due 09/15/33 | | | 970,000 | | | 712,950 |
Royal KPN N.V.
4.750%, due 01/17/17(h) | | | 550,000 | | | 768,279 |
Sprint Capital Corp.
6.900%, due 05/01/19 | | | 1,015,000 | | | 844,988 |
6.875%, due 11/15/28 | | | 970,000 | | | 693,550 |
8.750%, due 03/15/32 | | | 350,000 | | | 283,500 |
See accompanying notes to financial statements
6
Met Investors Series Trust
Loomis Sayles Global Markets Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Diversified Telecommunication Services - continued |
Telecom Italia Capital S.A.
4.950%, due 09/30/14 | | $ | 310,000 | | $ | 297,105 |
6.000%, due 09/30/34 | | | 350,000 | | | 296,491 |
Telecom Italia S.p.A.
5.375%, due 01/29/19(h) | | | 100,000 | | | 130,133 |
Telefonica Emisiones SAU
4.375%, due 02/02/16(h) | | | 240,000 | | | 333,741 |
Verizon Maryland, Inc.
5.125%, due 06/15/33 | | | 130,000 | | | 96,603 |
| | | | | | |
| | | | | | 13,509,230 |
| | | | | | |
| Electric Utilities - 1.0% |
Abu Dhabi National Energy Co.
7.250%, due 08/01/18 (144A)(c) | | | 1,070,000 | | | 1,044,912 |
6.500%, due 10/27/36 (144A)(c) | | | 1,300,000 | | | 1,108,281 |
Exelon Corp.
4.900%, due 06/15/15 | | | 2,750,000 | | | 2,563,704 |
Korea Hydro & Nuclear Power Co., Ltd.
6.250%, due 06/17/14 (144A)(c) | | | 700,000 | | | 699,733 |
Ohio Edison Co.
6.875%, due 07/15/36 | | | 320,000 | | | 323,979 |
| | | | | | |
| | | | | | 5,740,609 |
| | | | | | |
| Energy Resources - 0.4% |
NGPL PipeCo LLC
7.768%, due 12/15/37 (144A)(c) | | | 1,545,000 | | | 1,692,898 |
Southern Natural Gas Co.
7.350%, due 02/15/31 | | | 365,000 | | | 356,682 |
| | | | | | |
| | | | | | 2,049,580 |
| | | | | | |
| Food Products - 0.8% |
Albertson’s, Inc.
7.450%, due 08/01/29 | | | 5,470,000 | | | 4,512,750 |
| | | | | | |
| Gas Utilities - 0.1% |
Transportadora de Gas del Sur S.A.
7.875%, due 05/14/17 (144A)(c) | | | 865,000 | | | 635,775 |
| | | | | | |
| Health Care Providers & Services - 2.2% |
DASA Finance Corp.
8.750%, due 05/29/18 (144A)(c) | | | 1,030,000 | | | 1,018,464 |
HCA, Inc.
6.750%, due 07/15/13 | | | 100,000 | | | 88,500 |
6.375%, due 01/15/15 | | | 345,000 | | | 282,038 |
7.190%, due 11/15/15 | | | 1,150,000 | | | 889,073 |
8.360%, due 04/15/24 | | | 1,025,000 | | | 681,828 |
7.690%, due 06/15/25 | | | 755,000 | | | 467,426 |
7.500%, due 12/15/23-11/06/33 | | | 5,375,000 | | | 3,116,257 |
8.750%, due 11/01/10(j) | | | 375,000 | | | 619,921 |
6.300%, due 10/01/12 | | | 1,105,000 | | | 1,019,362 |
6.250%, due 02/15/13 | | | 260,000 | | | 228,800 |
5.750%, due 03/15/14 | | | 195,000 | | | 156,975 |
6.500%, due 02/15/16 | | | 2,185,000 | | | 1,775,312 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Health Care Providers & Services - continued |
7.580%, due 09/15/25 | | $ | 625,000 | | $ | 387,956 |
7.050%, due 12/01/27 | | | 80,000 | | | 49,125 |
7.750%, due 07/15/36 | | | 1,420,000 | | | 851,225 |
Tenet Healthcare Corp.
6.875%, due 11/15/31 | | | 910,000 | | | 550,550 |
6.500%, due 06/01/12(a) | | | 55,000 | | | 54,768 |
7.375%, due 02/01/13 | | | 45,000 | | | 40,725 |
| | | | | | |
| | | | | | 12,278,305 |
| | | | | | |
| Household Durables - 1.6% |
Desarrolladora Homex S.A. de C.V.
7.500%, due 09/28/15 | | | 985,000 | | | 852,025 |
K. Hovnanian Enterprises, Inc.
7.750%, due 05/15/13(a) | | | 30,000 | | | 13,650 |
6.375%, due 12/15/14 | | | 170,000 | | | 89,250 |
8.875%, due 04/01/12 | | | 150,000 | | | 93,750 |
6.250%, due 01/15/15-01/15/16 | | | 1,810,000 | | | 919,350 |
7.500%, due 05/15/16 | | | 15,000 | | | 7,425 |
Lennar Corp.
5.125%, due 10/01/10 | | | 160,000 | | | 154,400 |
5.500%, due 09/01/14 | | | 195,000 | | | 156,975 |
5.600%, due 05/31/15 | | | 4,405,000 | | | 3,490,962 |
6.500%, due 04/15/16(a) | | | 535,000 | | | 430,675 |
Pulte Homes, Inc. | | | | | | |
5.200%, due 02/15/15 | | | 35,000 | | | 29,400 |
6.375%, due 05/15/33 | | | 1,580,000 | | | 1,050,700 |
6.000%, due 02/15/35 | | | 1,925,000 | | | 1,260,875 |
| | | | | | |
| | | | | | 8,549,437 |
| | | | | | |
| Industrial Conglomerates - 0.8% |
Bombardier, Inc.
7.250%, due 11/15/16 (144A)(h)(c) | | | 400,000 | | | 482,288 |
Borden, Inc. | | | | | | |
8.375%, due 04/15/16 | | | 3,030,000 | | | 802,950 |
9.200%, due 03/15/21 | | | 1,910,000 | | | 506,150 |
7.875%, due 02/15/23 | | | 899,000 | | | 238,235 |
Hutchison Whampoa International 09, Ltd.
7.625%, due 04/09/19 (144A)(c) | | | 400,000 | | | 445,211 |
Textron, Inc.
3.875%, due 03/11/13(h) | | | 650,000 | | | 741,661 |
Wendel
4.875%, due 05/26/16(h) | | | 750,000 | | | 739,022 |
4.375%, due 08/09/17(h) | | | 450,000 | | | 432,167 |
| | | | | | |
| | | | | | 4,387,684 |
| | | | | | |
| Insurance - 0.1% | | | | | | |
PPR
4.000%, due 01/29/13(h) | | | 250,000 | | | 343,233 |
| | | | | | |
See accompanying notes to financial statements
7
Met Investors Series Trust
Loomis Sayles Global Markets Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| | |
| Machinery - 0.1% | | | | | | |
Cummins, Inc.
6.750%, due 02/15/27 | | $ | 509,000 | | $ | 399,909 |
| | | | | | |
| Media - 0.5% | | | | | | |
Bertelsmann AG
4.750%, due 09/26/16(h) | | | 450,000 | | | 549,100 |
News America, Inc.
6.150%, due 03/01/37 | | | 305,000 | | | 259,461 |
Time Warner Cable, Inc. | | | | | | |
5.850%, due 05/01/17 | | | 435,000 | | | 435,066 |
6.750%, due 07/01/18 | | | 505,000 | | | 526,877 |
Time Warner, Inc.
6.500%, due 11/15/36 | | | 45,000 | | | 39,523 |
Wolters Kluwer N.V.
6.375%, due 04/10/18(h) | | | 300,000 | | | 436,686 |
WPP Plc
6.000%, due 04/04/17(j) | | | 250,000 | | | 356,519 |
| | | | | | |
| | | | | | 2,603,232 |
| | | | | | |
| Metals & Mining - 0.8% | | | | | | |
Ispat Inland ULC
9.750%, due 04/01/14 | | | 1,092,000 | | | 1,145,211 |
Ranhill Labuan, Ltd.
12.500%, due 10/26/11 (144A)(c) | | | 1,230,000 | | | 885,600 |
United States Steel Corp.
6.650%, due 06/01/37 | | | 2,080,000 | | | 1,575,665 |
Vale Overseas, Ltd.
6.875%, due 11/21/36 | | | 1,044,000 | | | 993,893 |
| | | | | | |
| | | | | | 4,600,369 |
| | | | | | |
| Multiline Retail - 0.5% | | | | | | |
JC Penney Corp., Inc. | | | | | | |
5.750%, due 02/15/18 | | | 230,000 | | | 202,193 |
6.375%, due 10/15/36 | | | 3,180,000 | | | 2,359,910 |
7.400%, due 04/01/37(a) | | | 210,000 | | | 166,149 |
7.625%, due 03/01/97 | | | 250,000 | | | 167,827 |
| | | | | | |
| | | | | | 2,896,079 |
| | | | | | |
| Office Electronics - 0.9% | | | | | | |
Xerox Corp. | | | | | | |
6.750%, due 02/01/17 | | | 1,240,000 | | | 1,130,026 |
6.350%, due 05/15/18 | | | 4,115,000 | | | 3,678,629 |
| | | | | | |
| | | | | | 4,808,655 |
| | | | | | |
| Oil & Gas Exploration & Production - 0.4% |
Petroleos Mexicanos
8.000%, due 05/03/19 (144A)(c) | | | 1,000,000 | | | 1,090,000 |
Valero Energy Corp.
6.625%, due 06/15/37 | | | 1,396,000 | | | 1,194,391 |
| | | | | | |
| | | | | | 2,284,391 |
| | | | | | |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Oil, Gas & Consumable Fuels - 2.1% |
Anadarko Petroleum Corp. | | | | | | |
5.950%, due 09/15/16 | | $ | 365,000 | | $ | 360,638 |
6.450%, due 09/15/36 | | | 1,442,000 | | | 1,300,139 |
Chesapeake Energy Corp. | | | | | | |
6.250%, due 01/15/17(h) | | | 650,000 | | | 806,500 |
6.500%, due 08/15/17 | | | 155,000 | | | 130,975 |
6.875%, due 11/15/20 | | | 600,000 | | | 486,000 |
Colorado Interstate Gas Co.
6.800%, due 11/15/15 | | | 5,000 | | | 5,161 |
El Paso Corp.
6.950%, due 06/01/28 | | | 5,000 | | | 3,787 |
Hilcorp Energy I LP/Hilcorp Finance Co.
7.750%, due 11/01/15 (144A)(c) | | | 850,000 | | | 722,500 |
Midamerican Energy Holdings Co.
6.500%, due 09/15/37 | | | 595,000 | | | 619,548 |
NGC Corp. Capital Trust, Series B
8.316%, due 06/01/27(a) | | | 540,000 | | | 251,100 |
Noble Group, Ltd.
8.500%, due 05/30/13 (144A)(c) | | | 300,000 | | | 285,461 |
Tennessee Gas Pipeline Co. | | | | | | |
7.000%, due 03/15/27 | | | 870,000 | | | 835,008 |
7.000%, due 10/15/28(a) | | | 4,635,000 | | | 4,439,931 |
TXU Corp. | | | | | | |
5.550%, due 11/15/14 | | | 630,000 | | | 400,945 |
6.500%, due 11/15/24 | | | 1,620,000 | | | 819,851 |
6.550%, due 11/15/34 | | | 120,000 | | | 58,291 |
| | | | | | |
| | | | | | 11,525,835 |
| | | | | | |
| Paper & Forest Products - 1.1% |
Georgia-Pacific Corp. | | | | | | |
8.000%, due 01/15/24 | | | 2,300,000 | | | 1,966,500 |
7.375%, due 12/01/25 | | | 415,000 | | | 323,700 |
7.250%, due 06/01/28 | | | 120,000 | | | 90,300 |
7.750%, due 11/15/29 | | | 1,995,000 | | | 1,571,062 |
8.875%, due 05/15/31 | | | 1,960,000 | | | 1,705,200 |
Sappi Papier Holding AG
7.500%, due 06/15/32 (144A)(c) | | | 243,000 | | | 102,355 |
| | | | | | |
| | | | | | 5,759,117 |
| | | | | | |
| Real Estate - 0.2% | | | | | | |
Highwoods Properties, Inc.
5.850%, due 03/15/17 | | | 1,445,000 | | | 1,152,461 |
| | | | | | |
| Real Estate Investment Trusts (REITs) - 0.5% |
Colonial Realty LP
6.050%, due 09/01/16 | | | 175,000 | | | 138,134 |
iStar Financial, Inc. | | | | | | |
5.650%, due 09/15/11 | | | 180,000 | | | 104,446 |
5.500%, due 06/15/12 | | | 115,000 | | | 58,396 |
8.625%, due 06/01/13 | | | 3,255,000 | | | 1,693,765 |
5.950%, due 10/15/13(a) | | | 955,000 | | | 420,527 |
See accompanying notes to financial statements
8
Met Investors Series Trust
Loomis Sayles Global Markets Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Real Estate Investment Trusts (REITs) - continued |
5.700%, due 03/01/14 | | $ | 125,000 | | $ | 52,544 |
6.050%, due 04/15/15 | | | 40,000 | | | 16,015 |
5.875%, due 03/15/16 | | | 40,000 | | | 16,017 |
| | | | | | |
| | | | | | 2,499,844 |
| | | | | | |
| Road & Rail - 0.2% |
DP World, Ltd.
6.850%, due 07/02/37 (144A)(c) | | | 1,300,000 | | | 868,590 |
| | | | | | |
| Semiconductors & Semiconductor Equipment - 0.0% |
Amkor Technology, Inc.
7.750%, due 05/15/13 | | | 105,000 | | | 96,731 |
| | | | | | |
| Specialty Retail - 1.7% |
Edcon Proprietary, Ltd. | | | | | | |
4.527%, due 06/15/14 (144A)(b)(c)(h) | | | 870,000 | | | 713,548 |
4.527%, due 06/15/14(b)(h)(a) | | | 610,000 | | | 500,303 |
Home Depot, Inc. | | | | | | |
5.400%, due 03/01/16 | | | 430,000 | | | 429,829 |
5.875%, due 12/16/36 | | | 5,230,000 | | | 4,628,906 |
Toys R Us, Inc. | | | | | | |
7.875%, due 04/15/13(a) | | | 565,000 | | | 474,600 |
7.375%, due 10/15/18 | | | 3,615,000 | | | 2,602,800 |
| | | | | | |
| | | | | | 9,349,986 |
| | | | | | |
| Thrifts & Mortgage Finance - 0.2% |
Countrywide Home Loans, Inc., Series L 4.000%, due 03/22/11 | | | 454,000 | | | 448,234 |
Odebrecht Finance, Ltd.
7.500%, due 10/18/17 (144A)(c) | | | 400,000 | | | 398,000 |
| | | | | | |
| | | | | | 846,234 |
| | | | | | |
| Tobacco - 0.2% |
Imperial Tobacco Finance Plc
4.375%, due 11/22/13(h) | | | 550,000 | | | 743,530 |
Reynolds American, Inc. | | | | | | |
6.750%, due 06/15/17 | | | 510,000 | | | 476,900 |
7.250%, due 06/15/37 | | | 125,000 | | | 103,467 |
| | | | | | |
| | | | | | 1,323,897 |
| | | | | | |
| Water Utilities - 0.1% |
Veolia Environnement
5.125%, due 05/24/22(h) | | | 565,000 | | | 690,619 |
| | | | | | |
| Wireless Telecommunication Services - 0.7% |
Nextel Communications, Inc. | | | | | | |
6.875%, due 10/31/13 | | | 477,000 | | | 397,103 |
7.375%, due 08/01/15 | | | 2,125,000 | | | 1,705,312 |
Series F 5.950%, 03/15/14 | | | 754,000 | | | 597,545 |
SK Telecom Co., Ltd.
6.625%, due 07/20/27 (144A)(c) | | | 1,175,000 | | | 1,091,342 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Wireless Telecommunication Services - continued |
Sprint Nextel Corp.
6.000%, due 12/01/16 | | $ | 109,000 | | $ | 89,653 |
| | | | | | |
| | | | | | 3,880,955 |
| | | | | | |
| Total Domestic Bonds & Debt Securities (Cost $201,622,319) | | | | | | 180,580,803 |
| | | | | | |
| U. S. Government & Agency Obligations - 1.1% |
U.S. Treasury Note | | | | | | |
0.875%, due 02/28/11(a) | | | 1,400,000 | | | 1,399,458 |
1.125%, due 12/15/11(a) | | | 4,770,000 | | | 4,747,643 |
| | | | | | |
Total U.S. Government & Agency Obligations
(Cost $6,195,076) | | | | | | 6,147,101 |
| | | | | | |
|
| Foreign Bonds & Debt Securities - 1.3% |
| Australia - 0.1% |
New South Wales Treasury Corp.
7.000%, due 12/01/10(f) | | | 645,000 | | | 542,098 |
| | | | | | |
| Brazil - 0.0% |
ISA Capital do Brasil S.A.
7.875%, due 01/30/12 (144A)(c) | | | 105,000 | | | 108,675 |
| | | | | | |
| Canada - 0.1% |
Canadian Government Bond
4.500%, due 06/01/15(i) | | | 775,000 | | | 731,270 |
| | | | | | |
| Norway - 0.4% |
Norwegian Government Bond | | | | | | |
6.500%, due 05/15/13(n) | | | 8,805,000 | | | 1,538,482 |
4.250%, due 05/19/17(n) | | | 1,950,000 | | | 310,389 |
| | | | | | |
| | | | | | 1,848,871 |
| | | | | | |
| South Africa - 0.3% |
South Africa Government International Bond
4.500%, due 04/05/16(h) | | | 1,320,000 | | | 1,681,306 |
| | | | | | |
| Uruguay - 0.4% |
Uruguay Government International Bond
4.250%, due 04/05/27(o) | | | 68,000,000 | | | 2,391,886 |
| | | | | | |
Total Foreign Bonds & Debt Securities
(Cost $7,939,934) | | | | | | 7,304,106 |
| | | | | | |
|
| Foreign Bonds & Debt Securites - Emerging Markets - 1.1% |
| Sovereign - 1.1% |
Banco Nacional de Desenvolvimento Economico e Social
6.500%, due 06/10/19 (144A)(c) | | | 400,000 | | | 400,691 |
Brazil Notas do Tesouro Nacional,
Series F
10.000%, due 01/01/14(g) | | | 270,000 | | | 1,277,640 |
See accompanying notes to financial statements
9
Met Investors Series Trust
Loomis Sayles Global Markets Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Shares/Par
Amount | | Value |
| | | | | | |
|
| Sovereign - continued |
Indonesia Government International Bond | | | | | | |
11.625%, due 03/04/19
(144A)(c) | | $ | 500,000 | | $ | 635,625 |
7.750%, due 01/17/38 (144A)(c) | | | 1,750,000 | | | 1,610,000 |
MDC-GMTN B.V.
7.625%, due 05/06/19 (144A)(c) | | | 250,000 | | | 242,166 |
Mexican Bonos
9.000%, due 12/24/09(m) | | | 20,000,000 | | | 1,547,304 |
Republic of Indonesia
6.625%, due 02/17/37 (144A)(c) | | | 200,000 | | | 166,000 |
| | | | | | |
| | | | | | 5,879,426 |
| | | | | | |
Total Foreign Bonds & Debt Securites - Emerging Markets
(Cost $5,236,818) | | | | | | 5,879,426 |
| | | | | | |
|
| Convertible Bonds - 0.6% |
| Diversified Telecommunication Services - 0.2% |
Level 3 Communications, Inc. | | | | | | |
5.250%, due 12/15/11 | | | 255,000 | | | 209,100 |
7.000%, due 03/15/15 (144A)(d) | | | 1,015,000 | | | 1,086,050 |
| | | | | | |
| | | | | | 1,295,150 |
| | | | | | |
| Pharmaceuticals - 0.1% |
Valeant Pharmaceuticals
3.000%, due 08/16/10 | | | 385,000 | | | 394,144 |
| | | | | | |
| Real Estate Investment Trusts (REITs) - 0.1% |
iStar Financial, Inc.
1.708%, due 10/01/12(b) | | | 1,150,000 | | | 440,680 |
| | | | | | |
| Semiconductors & Semiconductor Equipment - 0.1% |
Kulicke & Soffa Industries, Inc.
0.875%, due 06/01/12(a) | | | 910,000 | | | 588,087 |
| | | | | | |
| Wireless Telecommunication Services - 0.1% |
NII Holdings, Inc.
3.125%, due 06/15/12 | | | 400,000 | | | 309,500 |
| | | | | | |
Total Convertible Bonds
(Cost $3,847,075) | | | | | | 3,027,561 |
| | | | | | |
|
| Common Stocks - 58.1% |
| Aerospace & Defense - 0.8% |
Goodrich Corp. | | | 89,350 | | | 4,464,820 |
| | | | | | |
| Automobiles - 1.7% |
Dongfeng Motor Group Co., Ltd. | | | 4,914,000 | | | 4,157,661 |
Honda Motor Co., Ltd.(a) | | | 188,861 | | | 5,166,136 |
| | | | | | |
| | | | | | 9,323,797 |
| | | | | | |
| Biotechnology - 1.0% |
CSL, Ltd. | | | 96,627 | | | 2,496,172 |
Vertex Pharmaceuticals, Inc.* | | | 86,480 | | | 3,082,147 |
| | | | | | |
| | | | | | 5,578,319 |
| | | | | | |
| | | | | |
Security
Description | | Shares
| | Value |
| | | | | |
|
| Capital Markets - 2.8% |
Credit Suisse Group AG | | 131,222 | | $ | 5,988,587 |
Goldman Sachs Group, Inc. (The) | | 61,761 | | | 9,106,042 |
| | | | | |
| | | | | 15,094,629 |
| | | | | |
| Chemicals - 1.1% |
Sociedad Quimica y Minera de Chile S.A. (ADR)(a) | | 161,062 | | | 5,828,834 |
| | | | | |
| Commercial Banks - 4.2% |
Standard Chartered Plc | | 717,241 | | | 13,506,474 |
Wells Fargo & Co. | | 380,586 | | | 9,233,016 |
| | | | | |
| | | | | 22,739,490 |
| | | | | |
| Communications Equipment - 4.7% |
Cisco Systems, Inc.* | | 243,187 | | | 4,533,006 |
Nokia Oyj (ADR)(a) | | 188,612 | | | 2,749,963 |
QUALCOMM, Inc. | | 296,721 | | | 13,411,789 |
Research In Motion, Ltd.* | | 70,966 | | | 5,042,134 |
| | | | | |
| | | | | 25,736,892 |
| | | | | |
| Computers & Peripherals - 4.6% |
Apple, Inc.* | | 123,084 | | | 17,530,854 |
International Business Machines Corp. | | 75,490 | | | 7,882,666 |
| | | | | |
| | | | | 25,413,520 |
| | | | | |
| Construction & Engineering - 0.6% |
URS Corp.* | | 65,981 | | | 3,267,379 |
| | | | | |
| Construction Materials - 1.1% | | | | | |
China National Building Material Co., Ltd. | | 3,078,000 | | | 5,944,606 |
| | | | | |
| Diversified Financial Services - 4.6% |
Bank of America Corp. | | 420,567 | | | 5,551,484 |
BM&F BOVESPA S.A. | | 896,198 | | | 5,371,261 |
Hong Kong Exchanges & Clearing, Ltd. | | 400,500 | | | 6,218,683 |
JPMorgan Chase & Co. | | 241,221 | | | 8,228,048 |
| | | | | |
| | | | | 25,369,476 |
| | | | | |
| Electrical Equipment - 3.4% | | | | | |
ABB, Ltd.* | | 506,496 | | | 7,967,233 |
First Solar, Inc.*(a) | | 47,104 | | | 7,636,500 |
Gamesa Corporacion Tecnologica S.A. | | 150,530 | | | 2,856,029 |
| | | | | |
| | | | | 18,459,762 |
| | | | | |
| Electronic Equipment, Instruments & Components - 0.7% |
Corning, Inc. | | 249,732 | | | 4,010,696 |
| | | | | |
| Food & Staples Retailing - 0.8% |
BIM Birlesik Magazalar A.S. | | 122,270 | | | 4,280,058 |
| | | | | |
| Food Products - 0.5% |
Want Want China Holdings, Ltd. | | 5,138,470 | | | 2,875,614 |
| | | | | |
| Health Care Equipment & Supplies - 0.5% |
Covidien Plc | | 69,981 | | | 2,620,089 |
| | | | | |
| Industrial Conglomerates - 1.0% |
Siemens AG | | 80,069 | | | 5,539,852 |
| | | | | |
See accompanying notes to financial statements
10
Met Investors Series Trust
Loomis Sayles Global Markets Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares
| | Value |
| | | | | |
|
| Internet & Catalog Retail - 2.4% |
Amazon.com, Inc.* | | 90,841 | | $ | 7,599,758 |
Priceline.com, Inc.*(a) | | 47,611 | | | 5,311,007 |
| | | | | |
| | | | | 12,910,765 |
| | | | | |
| Internet Software & Services - 1.4% |
Google, Inc. - Class A* | | 18,802 | | | 7,926,735 |
| | | | | |
| IT Services - 1.8% |
Visa, Inc. - Class A(a) | | 154,880 | | | 9,642,829 |
| | | | | |
| Metals & Mining - 1.8% |
Freeport-McMoRan Copper & Gold, Inc. | | 119,628 | | | 5,994,559 |
Vale S.A. (ADR) | | 211,647 | | | 3,731,337 |
| | | | | |
| | | | | 9,725,896 |
| | | | | |
| Oil, Gas & Consumable Fuels - 4.9% |
BG Group Plc | | 269,686 | | | 4,530,421 |
Petroleo Brasileiro S.A. | | 533,699 | | | 10,885,776 |
Range Resources Corp. | | 99,656 | | | 4,126,755 |
Southwestern Energy Co.* | | 181,102 | | | 7,035,813 |
| | | | | |
| | | | | 26,578,765 |
| | | | | |
| Personal Products - 1.2% | | | | | |
Natura Cosmeticos S.A. | | 489,000 | | | 6,433,752 |
| | | | | |
| Pharmaceuticals - 0.9% | | | | | |
Abbott Laboratories | | 103,677 | | | 4,876,966 |
| | | | | |
| Professional Services - 0.7% | | | | | |
Capita Group Plc | | 330,706 | | | 3,898,060 |
| | | | | |
| Real Estate Management & Development - 2.1% |
China Overseas Land & Investment, Ltd. | | 5,019,611 | | | 11,544,487 |
| | | | | |
| Road & Rail - 0.7% |
Union Pacific Corp. | | 78,280 | | | 4,075,257 |
| | | | | |
| Semiconductors & Semiconductor Equipment - 2.2% |
Broadcom Corp. - Class A* | | 170,841 | | | 4,235,148 |
MediaTek, Inc. | | 280,194 | | | 3,333,007 |
Samsung Electronics Co., Ltd. | | 9,900 | | | 4,584,917 |
| | | | | |
| | | | | 12,153,072 |
| | | | | |
| Software - 2.9% |
McAfee, Inc.*(a) | | 175,646 | | | 7,410,505 |
Oracle Corp. | | 390,385 | | | 8,362,046 |
| | | | | |
| | | | | 15,772,551 |
| | | | | |
| Specialty Retail - 1.0% |
Industria de Diseno Textil S.A. | | 108,878 | | | 5,229,224 |
| | | | | |
Total Common Stocks
(Cost $286,244,817) | | | | | 317,316,192 |
| | | | | |
| | |
| Preferred Stocks - 1.0% | | | | | |
| Commercial Banks - 0.9% | | | | | |
Itau Unibanco Banco Multiplo S.A. | | 326,928 | | | 5,172,964 |
| | | | | |
| Diversified Financial Services - 0.1% |
Preferred Blocker, Inc.
7.000% (144A)(c) | | 906 | | | 389,637 |
| | | | | |
| | | | | | | |
Security
Description | | Shares/Par
Amount | | Value | |
| | | | | | | |
|
| Thrifts & Mortgage Finance - 0.0% | |
Federal Home Loan Mortgage Corp.* | | | 52,166 | | $ | 60,643 | |
Federal National Mortgage Assoc.(a) | | | 71,600 | | | 95,944 | |
| | | | | | | |
| | | | | | 156,587 | |
| | | | | | | |
Total Preferred Stocks
(Cost $7,481,655) | | | | | | 5,719,188 | |
| | | | | | | |
|
| Convertible Preferred Stocks - 0.3% | |
| Consumer Finance - 0.0% | | | | | | | |
SLM Corp.
6.000%, due 12/15/43 | | | 6,350 | | | 94,615 | |
| | | | | | | |
| Diversified Telecommunication Services - 0.3% | |
Lucent Technologies Capital Trust
I 7.750%, due 03/15/17 | | | 2,063 | | | 1,258,430 | |
| | | | | | | |
Total Convertible Preferred Stocks
(Cost $1,600,636) | | | | | | 1,353,045 | |
| | | | | | | |
| Short-Term Investments - 6.8% | |
| Mutual Funds - 4.9% | | | | | | | |
State Street Navigator Securities Lending Trust Prime Portfolio(e) | | | 26,757,072 | | | 26,757,072 | |
| | | | | | | |
| Repurchase Agreements - 1.9% | | | | | | | |
State Street Bank & Trust Co., Repurchase Agreement, dated 06/30/09 at 0.010% to be repurchased at $7,333,409 on 07/01/09 collateralized by $6,910,000 FHLB at 5.600% due 06/28/11 with a value of $7,480,075. | | $ | 7,333,407 | | | 7,333,407 | |
State Street Bank & Trust Co., Repurchase Agreement, dated 06/30/09 at 0.010% to be repurchased at $259,191 on 07/01/09 collateralized by $250,000 FNMA at 5.250% due 08/01/12 with a value of $264,375. | | | 259,191 | | | 259,191 | |
State Street Bank & Trust Co., Repurchase Agreement, dated 06/30/09 at 0.010% to be repurchased at $3,002,403 on 07/01/09 collateralized by $3,050,000 FNMA at 1.722% due 05/10/11 with a value of $3,065,250. | | | 3,002,402 | | | 3,002,402 | |
| | | | | | | |
Total Short-Term Investments
(Cost $37,352,072) | | | | | | 37,352,072 | |
| | | | | | | |
| | |
TOTAL INVESTMENTS - 103.9%
(Cost $560,565,968) | | | | | | 567,285,849 | |
| | | | | | | |
| | |
| Other Assets and Liabilities (net) - (3.9)% | | | | | | (21,469,340 | ) |
| | | | | | | |
| | |
| NET ASSETS - 100.0% | | | | | $ | 545,816,509 | |
| | | | | | | |
See accompanying notes to financial statements
11
Met Investors Series Trust
Loomis Sayles Global Markets Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
Portfolio Footnotes:
| * | | Non-income producing security. |
| (a) | | All or a portion of security is on loan. |
| (b) | | Variable or floating rate security. The stated rate represents the rate at June 30, 2009. |
| (c) | | Securities that may be resold to “qualified institutional buyers” under Rule 144A or securities offered pursuant to Section 4(2) of the Securities Act of 1933, as amended. These securities have been determined to be liquid under the guidelines established by the Board of Trustees. These securities represent in the aggregate $32,506,987 of net assets. |
| (d) | | Securities that may be resold to “qualified institutional buyers” under Rule 144A or securities offered pursuant to Section 4(2) of the Securities Act of 1933, as amended. These securities have been determined to be illiquid by the Portfolio’s adviser. These securities represent in the aggregate $1,086,050 of net assets. |
| (e) | | Represents investment of collateral received from securities lending transactions. |
| (f) | | Par shown in Australian Dollar. Value is shown in USD. |
| (g) | | Par shown in Brazilian Real. Value is shown in USD. |
| (h) | | Par shown in Euro Currency. Value is shown in USD. |
| (i) | | Par shown in Canadian Dollar. Value is shown in USD. |
| (j) | | Par shown in Pound Sterling. Value is shown in USD. |
| (k) | | Par shown in Japanese Yen. Value is shown in USD. |
| (l) | | Par shown in South Korean Won. Value is shown in USD. |
| (m) | | Par shown in Mexican Peso. Value is shown in USD. |
| (n) | | Par shown in Norwegian Krone. Value is shown in USD. |
| (o) | | Par shown in Uruguayan Peso. Value is shown in USD. |
ADR - American Depositary Receipts
FHLB - Federal Home Loan Bank
FNMA - Federal National Mortgage Association
See accompanying notes to financial statements
12
Met Investors Series Trust
Loomis Sayles Global Markets Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
| Level 1—quoted | | prices in active markets for identical securities |
| Level 2—other | | significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.) |
| Level 3—significant | | unobservable inputs (including the Porfolio’s own assumptions in determining the fair value of investments) |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
| Municipal Bond | | | | | | | | | | | | |
Virginia | | $ | — | | $ | 844,567 | | $ | — | | $ | 844,567 |
Asset-Backed Securities | | | — | | | 1,761,788 | | | — | | | 1,761,788 |
Domestic Bonds & Debt Securities | | | | | | | | | | | | |
Aerospace & Defense | | | — | | | 855,657 | | | — | | | 855,657 |
Agriculture | | | — | | | 1,773,017 | | | — | | | 1,773,017 |
Airlines | | | — | | | 2,500,552 | | | — | | | 2,500,552 |
Auto Components | | | — | | | 951,700 | | | — | | | 951,700 |
Automobiles | | | — | | | 3,890,450 | | | — | | | 3,890,450 |
Beverages | | | — | | | 985,970 | | | — | | | 985,970 |
Building Products | | | — | | | 2,345,576 | | | — | | | 2,345,576 |
Capital Markets | | | — | | | 14,935,063 | | | — | | | 14,935,063 |
Chemicals | | | — | | | 1,736,883 | | | — | | | 1,736,883 |
Commercial & Professional Services | | | — | | | 837,875 | | | — | | | 837,875 |
Commercial Banks | | | — | | | 9,329,955 | | | — | | | 9,329,955 |
Communications Equipment | | | — | | | 526,465 | | | — | | | 526,465 |
Construction Materials | | | — | | | 414,104 | | | — | | | 414,104 |
Consumer Finance | | | — | | | 14,681,898 | | | — | | | 14,681,898 |
Containers & Packaging | | | — | | | 506,122 | | | — | | | 506,122 |
Distributors | | | — | | | 1,138,500 | | | — | | | 1,138,500 |
Diversified Financial Services | | | — | | | 15,577,509 | | | — | | | 15,577,509 |
Diversified Telecommunication Services | | | — | | | 13,509,230 | | | — | | | 13,509,230 |
Electric Utilities | | | — | | | 5,740,609 | | | — | | | 5,740,609 |
Energy Resources | | | — | | | 2,049,580 | | | — | | | 2,049,580 |
Food Products | | | — | | | 4,512,750 | | | — | | | 4,512,750 |
Gas Utilities | | | — | | | 635,775 | | | — | | | 635,775 |
Health Care Providers & Services | | | — | | | 12,278,305 | | | — | | | 12,278,305 |
Household Durables | | | — | | | 8,549,437 | | | — | | | 8,549,437 |
Industrial Conglomerates | | | — | | | 4,387,684 | | | — | | | 4,387,684 |
Insurance | | | — | | | 343,233 | | | — | | | 343,233 |
Machinery | | | — | | | 399,909 | | | — | | | 399,909 |
Media | | | — | | | 2,603,232 | | | — | | | 2,603,232 |
Metals & Mining | | | — | | | 4,600,369 | | | — | | | 4,600,369 |
Multiline Retail | | | — | | | 2,896,079 | | | — | | | 2,896,079 |
Office Electronics | | | — | | | 4,808,655 | | | — | | | 4,808,655 |
Oil & Gas Exploration & Production | | | — | | | 2,284,391 | | | — | | | 2,284,391 |
See accompanying notes to financial statements
13
Met Investors Series Trust
Loomis Sayles Global Markets Portfolio
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Oil, Gas & Consumable Fuels | | $ | — | | $ | 11,525,835 | | $ | — | | $ | 11,525,835 |
Paper & Forest Products | | | — | | | 5,759,117 | | | — | | | 5,759,117 |
Real Estate | | | — | | | 1,152,461 | | | — | | | 1,152,461 |
Real Estate Investment Trusts (REITs) | | | — | | | 2,499,844 | | | — | | | 2,499,844 |
Road & Rail | | | — | | | 868,590 | | | — | | | 868,590 |
Semiconductors & Semiconductor Equipment | | | — | | | 96,731 | | | — | | | 96,731 |
Specialty Retail | | | — | | | 9,349,986 | | | — | | | 9,349,986 |
Thrifts & Mortgage Finance | | | — | | | 846,234 | | | — | | | 846,234 |
Tobacco | | | — | | | 1,323,897 | | | — | | | 1,323,897 |
Water Utilities | | | — | | | 690,619 | | | — | | | 690,619 |
Wireless Telecommunication Services | | | — | | | 3,880,955 | | | — | | | 3,880,955 |
Total Domestic Bonds & Debt Securities | | | — | | | 180,580,803 | | | — | | | 180,580,803 |
U. S. Government & Agency Obligations | | | — | | | 6,147,101 | | | — | | | 6,147,101 |
| Foreign Bonds & Debt Securities | | | | | | | | | | | | |
Australia | | | — | | | 542,098 | | | — | | | 542,098 |
Brazil | | | — | | | 108,675 | | | — | | | 108,675 |
Canada | | | — | | | 731,270 | | | — | | | 731,270 |
Norway | | | — | | | 1,848,871 | | | — | | | 1,848,871 |
South Africa | | | — | | | 1,681,306 | | | — | | | 1,681,306 |
Uruguay | | | — | | | 2,391,886 | | | — | | | 2,391,886 |
Total Foreign Bonds & Debt Securities | | | — | | | 7,304,106 | | | — | | | 7,304,106 |
| Foreign Bonds & Debt Securites - Emerging Markets | | | | | | | | | | | | |
Sovereign | | | — | | | 5,879,426 | | | — | | | 5,879,426 |
Total Foreign Bonds & Debt Securites - Emerging Markets | | | — | | | 5,879,426 | | | — | | | 5,879,426 |
| Convertible Bonds | | | | | | | | | | | | |
Diversified Telecommunication Services | | | — | | | 1,295,150 | | | — | | | 1,295,150 |
Pharmaceuticals | | | — | | | 394,144 | | | — | | | 394,144 |
Real Estate Investment Trusts (REITs) | | | — | | | 440,680 | | | — | | | 440,680 |
Semiconductors & Semiconductor Equipment | | | — | | | 588,087 | | | — | | | 588,087 |
Wireless Telecommunication Services | | | — | | | 309,500 | | | — | | | 309,500 |
Total Convertible Bonds | | | — | | | 3,027,561 | | | — | | | 3,027,561 |
| Common Stocks | | | | | | | | | | | | |
Aerospace & Defense | | | 4,464,820 | | | — | | | — | | | 4,464,820 |
Automobiles | | | — | | | 9,323,797 | | | — | | | 9,323,797 |
Biotechnology | | | 3,082,147 | | | 2,496,172 | | | — | | | 5,578,319 |
Capital Markets | | | 9,106,042 | | | 5,988,587 | | | — | | | 15,094,629 |
Chemicals | | | 5,828,834 | | | — | | | — | | | 5,828,834 |
Commercial Banks | | | 9,233,016 | | | 13,506,474 | | | — | | | 22,739,490 |
Communications Equipment | | | 25,736,892 | | | — | | | — | | | 25,736,892 |
Computers & Peripherals | | | 25,413,520 | | | — | | | — | | | 25,413,520 |
Construction & Engineering | | | 3,267,379 | | | — | | | — | | | 3,267,379 |
Construction Materials | | | — | | | 5,944,606 | | | — | | | 5,944,606 |
Diversified Financial Services | | | 19,150,793 | | | 6,218,683 | | | — | | | 25,369,476 |
Electrical Equipment | | | 7,636,500 | | | 10,823,262 | | | — | | | 18,459,762 |
See accompanying notes to financial statements
14
Met Investors Series Trust
Loomis Sayles Global Markets Portfolio
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Electronic Equipment, Instruments & Components | | $ | 4,010,696 | | $ | — | | $ | — | | $ | 4,010,696 |
Food & Staples Retailing | | | — | | | 4,280,058 | | | — | | | 4,280,058 |
Food Products | | | — | | | 2,875,614 | | | — | | | 2,875,614 |
Health Care Equipment & Supplies | | | 2,620,089 | | | — | | | — | | | 2,620,089 |
Industrial Conglomerates | | | — | | | 5,539,852 | | | — | | | 5,539,852 |
Internet & Catalog Retail | | | 12,910,765 | | | — | | | — | | | 12,910,765 |
Internet Software & Services | | | 7,926,735 | | | — | | | — | | | 7,926,735 |
IT Services | | | 9,642,829 | | | — | | | — | | | 9,642,829 |
Metals & Mining | | | 9,725,896 | | | — | | | — | | | 9,725,896 |
Oil, Gas & Consumable Fuels | | | 22,048,344 | | | 4,530,421 | | | — | | | 26,578,765 |
Personal Products | | | 6,433,752 | | | — | | | — | | | 6,433,752 |
Pharmaceuticals | | | 4,876,966 | | | — | | | — | | | 4,876,966 |
Professional Services | | | — | | | 3,898,060 | | | — | | | 3,898,060 |
Real Estate Management & Development | | | — | | | 11,544,487 | | | — | | | 11,544,487 |
Road & Rail | | | 4,075,257 | | | — | | | — | | | 4,075,257 |
Semiconductors & Semiconductor Equipment | | | 4,235,148 | | | 7,917,924 | | | — | | | 12,153,072 |
Software | | | 15,772,551 | | | — | | | — | | | 15,772,551 |
Specialty Retail | | | — | | | 5,229,224 | | | — | | | 5,229,224 |
Total Common Stocks | | | 217,198,971 | | | 100,117,221 | | | — | | | 317,316,192 |
| Preferred Stocks | | | | | | | | | | | | |
Commercial Banks | | | 5,172,964 | | | — | | | — | | | 5,172,964 |
Diversified Financial Services | | | — | | | 389,637 | | | — | | | 389,637 |
Thrifts & Mortgage Finance | | | 95,944 | | | 60,643 | | | — | | | 156,587 |
Total Preferred Stocks | | | 5,268,908 | | | 450,280 | | | — | | | 5,719,188 |
| Convertible Preferred Stocks | | | | | | | | | | | | |
Consumer Finance | | | 94,615 | | | — | | | — | | | 94,615 |
Telecommunication Services - Diversified | | | 1,258,430 | | | — | | | — | | | 1,258,430 |
Total Convertible Preferred Stocks | | | 1,353,045 | | | — | | | — | | | 1,353,045 |
Short-Term Investments | | | | | | | | | | | | |
Mutual Funds | | | 26,757,072 | | | — | | | — | | | 26,757,072 |
Repurchase Agreement | | | — | | | 10,595,000 | | | — | | | 10,595,000 |
Total Short-Term Investments | | | 26,757,072 | | | 10,595,000 | | | — | | | 37,352,072 |
| TOTAL INVESTMENTS | | $ | 250,577,996 | | $ | 316,707,853 | | $ | — | | $ | 567,285,849 |
FAS 157 Level 3 Reconciliation Disclosure
Following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value:
Asset Valuation Inputs
| | | | | | | | | | | | | | | | |
| Investments in Securities | | Balance as of
December 31,
2008 | | Discounts | | Realized Loss | | Net Transfers
out of Level 3 | | | Balance as of
June 30,
2009 |
| Domestic Bonds & Debt | | | | | | | | | | | | | | | | |
Metals & Mining | | $ | 405,900 | | $ | 630 | | $ | 479,070 | | $ | (885,600 | ) | | $ | — |
| Total | | $ | 405,900 | | $ | 630 | | $ | 479,070 | | $ | (885,600 | ) | | $ | — |
See accompanying notes to financial statements
15
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| Loomis Sayles Global Markets Portfolio | | | |
| Assets | | | | |
Investments, at value (a)(b) | | $ | 556,690,849 | |
Repurchase Agreement | | | 10,595,000 | |
Cash | | | 44,223 | |
Cash denominated in foreign currencies (c) | | | 2,454,594 | |
Receivable for investments sold | | | 1,139,839 | |
Receivable for Trust shares sold | | | 47,558 | |
Dividends receivable | | | 176,893 | |
Interest receivable | | | 4,136,961 | |
| | | | |
Total assets | | | 575,285,917 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 2,151,702 | |
Trust shares redeemed | | | 101,961 | |
Distribution and services fees—Class B | | | 14,355 | |
Collateral for securities on loan | | | 26,757,072 | |
Management fee | | | 312,645 | |
Administration fee | | | 3,279 | |
Deferred Trustee fees | | | 3,427 | |
Custodian and accounting fees | | | 41,292 | |
Accrued expenses | | | 83,675 | |
| | | | |
Total liabilities | | | 29,469,408 | |
| | | | |
| Net Assets | | $ | 545,816,509 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 798,771,613 | |
Accumulated net realized loss | | | (271,823,209 | ) |
Unrealized appreciation on investments and foreign currency | | | 6,736,852 | |
Undistributed net investment income | | | 12,131,253 | |
| | | | |
Total | | $ | 545,816,509 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 475,516,904 | |
| | | | |
Class B | | | 70,299,605 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 58,424,275 | |
| | | | |
Class B | | | 8,673,587 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 8.14 | |
| | | | |
Class B | | | 8.11 | |
| | | | |
| | | | | |
(a) Investments at cost, excluding repurchase agreements | | $ | 549,970,968 | |
(b) Includes cash collateral for securities loaned of | | | 26,757,072 | |
(c) Cost of cash denominated in foreign currencies | | | 2,463,138 | |
See accompanying notes to financial statements
16
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| Loomis Sayles Global Markets Portfolio | | | |
| Investment Income | | | | |
Dividends (1) | | $ | 3,197,446 | |
Interest (2) | | | 11,824,997 | |
| | | | |
Total investment income | | | 15,022,443 | |
| | | | |
| Expenses | | | | |
Management fee | | | 2,232,322 | |
Administration fees | | | 27,897 | |
Custodian and accounting fees | | | 97,500 | |
Distribution and services fees—Class B | | | 75,053 | |
Audit and tax services | | | 37,135 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 35,499 | |
Insurance | | | 4,139 | |
Other | | | 3,684 | |
| | | | |
Total expenses | | | 2,539,662 | |
Less broker commission recapture | | | (46,863 | ) |
| | | | |
Net expenses | | | 2,492,799 | |
| | | | |
Net investment income | | | 12,529,644 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments, Futures Contracts and Foreign Currency | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | (104,410,302 | ) |
Futures contracts | | | 1,468,281 | |
Foreign currency | | | 311,140 | |
| | | | |
Net realized loss on investments, futures contracts and foreign currency | | | (102,630,881 | ) |
| | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 173,737,889 | |
Foreign currency | | | 143,672 | |
| | | | |
Net change in unrealized appreciation on investments and foreign currency | | | 173,881,561 | |
| | | | |
Net realized and unrealized gain on investments, futures contracts and foreign currency | | | 71,250,680 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 83,780,324 | |
| | | | |
| | | | | |
(1) Dividend income is net of foreign withholding taxes of: | | $ | 175,205 | |
(2) Interest income includes securities lending net income of: | | | 244,663 | |
See accompanying notes to financial statements
17
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| Loomis Sayles Global Markets Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 12,529,644 | | | $ | 23,207,190 | |
Net realized loss on investments, future contracts and foreign currency | | | (102,630,881 | ) | | | (149,616,031 | ) |
Net change in unrealized appreciation (depreciation) on investments and foreign currency | | | 173,881,561 | | | | (317,136,537 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 83,780,324 | | | | (443,545,378 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | (18,634,278 | ) | | | (43,394,836 | ) |
Class B | | | (1,427,323 | ) | | | (3,634,646 | ) |
From net realized gains | | | | | | | | |
Class A | | | — | | | | (55,981,114 | ) |
Class B | | | — | | | | (4,770,811 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (20,061,601 | ) | | | (107,781,407 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 37,239,994 | | | | 192,281,757 | |
Class B | | | 10,432,463 | | | | 60,558,015 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | 18,634,278 | | | | 99,375,950 | |
Class B | | | 1,427,323 | | | | 8,405,457 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (316,940,314 | ) | | | (114,039,220 | ) |
Class B | | | (7,816,020 | ) | | | (42,327,855 | ) |
| | | | | | | | |
Net increase (decrease) in net assets from capital share transactions | | | (257,022,276 | ) | | | 204,254,104 | |
| | | | | | | | |
| Net Decrease in Net Assets | | | (193,303,553 | ) | | | (347,072,681 | ) |
Net assets at beginning of period | | | 739,120,062 | | | | 1,086,192,743 | |
| | | | | | | | |
Net assets at end of period | | $ | 545,816,509 | | | $ | 739,120,062 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 12,131,253 | | | $ | 19,663,210 | |
| | | | | | | | |
See accompanying notes to financial statements
18
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | |
| | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | |
| Loomis Sayles Global Markets Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006(b) | |
| Net Asset Value, Beginning of Period | | $ | 7.29 | | | $ | 13.27 | | | $ | 10.36 | | | $ | 10.00 | |
| | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations: | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.14 | | | | 0.25 | | | | 0.24 | | | | 0.11 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.91 | | | | (5.00 | ) | | | 2.67 | | | | 0.36 | |
| | | | | | | | | | | | | | | | |
Total From Investment Operations | | | 1.05 | | | | (4.75 | ) | | | 2.91 | | | | 0.47 | |
| | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.20 | ) | | | (0.54 | ) | | | — | | | | (0.11 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (0.69 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
Total Distributions | | | (0.20 | ) | | | (1.23 | ) | | | — | | | | (0.11 | ) |
| | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 8.14 | | | $ | 7.29 | | | $ | 13.27 | | | $ | 10.36 | |
| | | | | | | | | | | | | | | | |
| Total Return | | | 14.77 | % | | | (39.10 | )% | | | 28.09 | % | | | 4.66 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.75 | %* | | | 0.72 | % | | | 0.74 | % | | | 0.87 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.76 | %* | | | 0.73 | % | | | 0.74 | % | | | 0.88 | %* |
Ratio of Net Investment Income to Average Net Assets | | | 3.93 | %* | | | 2.48 | % | | | 2.05 | % | | | 1.72 | %* |
Portfolio Turnover Rate | | | 56.6 | % | | | 134.4 | % | | | 120.4 | % | | | 45.9 | % |
Net Assets, End of Period (in millions) | | $ | 475.5 | | | $ | 680.0 | | | $ | 1,007.2 | | | $ | 523.5 | |
| |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006(b) | |
| Net Asset Value, Beginning of Period | | $ | 7.24 | | | $ | 13.22 | | | $ | 10.34 | | | $ | 10.00 | |
| | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations: | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.13 | | | | 0.22 | | | | 0.23 | | | | 0.09 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.92 | | | | (4.98 | ) | | | 2.65 | | | | 0.35 | |
| | | | | | | | | | | | | | | | |
Total From Investment Operations | | | 1.05 | | | | (4.76 | ) | | | 2.88 | | | | 0.44 | |
| | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.18 | ) | | | (0.53 | ) | | | — | | | | (0.10 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (0.69 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
Total Distributions | | | (0.18 | ) | | | (1.22 | ) | | | — | | | | (0.10 | ) |
| | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 8.11 | | | $ | 7.24 | | | $ | 13.22 | | | $ | 10.34 | |
| | | | | | | | | | | | | | | | |
| Total Return | | | 14.63 | % | | | (39.26 | )% | | | 27.85 | % | | | 4.37 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 1.00 | %* | | | 0.97 | % | | | 1.02 | % | | | 1.15 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 1.01 | %* | | | 0.98 | % | | | 1.02 | % | | | 1.16 | %* |
Ratio of Net Investment to Average Net Assets | | | 3.65 | %* | | | 2.23 | % | | | 1.94 | % | | | 1.36 | %* |
Portfolio Turnover Rate | | | 56.6 | % | | | 134.4 | % | | | 120.4 | % | | | 45.9 | % |
Net Assets, End of Period (in millions) | | $ | 70.3 | | | $ | 59.1 | | | $ | 79.0 | | | | $9.8 | |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—05/01/2006. |
See accompanying notes to financial statements
19
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is Loomis Sayles Global Markets Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A and B Shares are currently offered by the Portfolio. Class C and E Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
20
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2006 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | |
Expiring
12/31/2016 | | Total |
| |
| $ | 158,723,345 | | $158,723,345 |
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Forward Foreign Currency Contracts - The Portfolio may enter into forward foreign currency contracts to hedge its portfolio holdings against future movements in certain foreign currency exchange rates. A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a set price. Forward currency contracts are valued at the forward rate and are marked-to-market daily. The change in market value is recorded by the Portfolio as an unrealized gain or loss. When the contract is closed, the Portfolio recognizes a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.
The use of forward foreign currency contracts does not eliminate fluctuations in the underlying prices of the securities of the Portfolio, but it does establish a rate of exchange that can be achieved in the future. Although forward foreign currency contracts to sell limit the risk of loss due to a decline in the value of the currency holdings, they also limit any potential gain that might result should the value of the currency increase. In addition, the Portfolio could be exposed to risks if the counterparties to the contracts are unable to meet the terms of the contracts.
G. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
H. Foreign Currency Translation - The books and records of the Portfolio are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars on a daily basis using prevailing exchange rates. Purchases and sales of securities are translated at the rates of exchange prevailing when such securities were acquired or sold. Income is translated at rates of exchange prevailing when interest is accrued or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
21
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
Reported net realized foreign exchange gains or losses arise from activity in forward foreign currency contracts; sales of foreign currencies; currency gains or losses realized between the trade and settlement dates on securities transactions; and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Portfolio’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end; from changes in the exchange rates of foreign currency held; and from changes in the contract value of forward foreign currency contracts.
I. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
J. Forward Commitments, When-Issued and Delayed Delivery Securities - The Portfolio may purchase securities on a when-issued or delayed delivery basis and may purchase or sell securities on a forward commitment basis. Settlement of such transactions normally occurs within a month or more after the purchase or sale commitment is made. The Portfolio may purchase securities under such conditions only with the intention of actually acquiring them, but may enter into a separate agreement to sell the securities before the settlement date. Since the value of securities purchased may fluctuate prior to settlement, the Portfolio may be required to pay more at settlement than the security is worth. In addition, the purchaser is not entitled to any of the interest earned prior to settlement. Upon making a commitment to purchase a security on a when-issued, delayed delivery or forward commitment basis, the Portfolio will hold liquid assets in a segregated account at the Portfolio’s custodian bank worth at least the equivalent of the amount due. The liquid assets will be monitored on a daily basis and adjusted as necessary to maintain the necessary value.
K. Directed Brokerage Agreement - The Trust has entered into a directed brokerage arrangement with State Street Global Markets (“SSGM”). Under this arrangement, the Portfolio directs certain trades to SSGM in return for a recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to the Portfolio are shown separately as an expense reduction on the Statement of Operations of the Portfolio.
L. Futures Contracts - The Portfolio may buy and sell futures contracts (on recognized exchanges) as a hedge, to maintain exposure to the broad equity markets or to enhance return. The Portfolio may be subject to equity price risk, interest rate risk, and foreign currency exchange rate risk in the normal course of pursuing its investment objectives. Futures contracts are agreements to buy or sell a security, or deliver a final cash settlement price in connection with an index, interest rate, currency, or other contracts not calling for physical delivery, for a set price in the future. The Portfolio must post an amount equal to a portion of the total market value of the futures contract as futures variation margin, which is returned when the Portfolio’s obligations under the contract have been satisfied. From time to time thereafter, the Portfolio may have to post variation margin to maintain this amount as the market value of the contract fluctuates. Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities.
M. Mortgage Related and Other Asset Backed Securities - The Portfolio may invest in mortgage related or other asset-backed securities. These securities may include mortgage pass-through securities, collateralized mortgaged obligations (“CMOs”), commercial mortgage-backed securities, mortgage dollar rolls, CMO residuals, stripped mortgage backed securities (“SMBS”) and other securities that directly or indirectly represent a participation in, or are secured by a payable from, mortgage loans on real property or other receivables. The value of some mortgage or asset-backed securities may be particularly sensitive to changes in prevailing interest rates. Early repayment of principal on some mortgage-related securities may expose the Portfolio to a lower rate of return upon reinvestment of principal. The value of these securities may fluctuate in response to the market’s perception of the creditworthiness of the issuers. Additionally, although mortgages and mortgage-related securities are generally supported by some form of government or private guarantee and/or insurance, there is no assurance that private guarantors or insurers will meet their obligations.
One type of SMBS has one class receiving all of the interest from the mortgage assets (the interest-only or “IO” class), while the other class will receive all of the principal (the principal-only or “PO” class). Payments received for the IOs are included in interest income on the Statement of Operations of the Portfolio. Because principal will not be received at the maturity of an IO, adjustments are made to the book value on the security on a daily basis until maturity. These adjustments are included in interest income on the Statement of Operations of the Portfolio. Payments received for POs are treated as reductions to the cost and par value of the securities. Details of mortgage related and other asset-backed securities held at year end are included in the Portfolio’s Portfolio of Investments.
The Portfolio may invest a significant portion of its assets in securities of issuers that hold mortgage and asset backed securities and direct investments in securities backed by commercial and residential mortgage loans and other financial assets. The value and related income of these securities are sensitive to changes in economic conditions, including delinquencies and/or defaults, and may be negatively impacted by increased volatility of market prices and periods of illiquidity.
22
MET INVESTORS SERIES TRUST
Notes to Financial Statements June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with Loomis, Sayles & Company, L.P. (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $2,232,322 | | 0.70 | % | | First $500 Million |
| | |
| | 0.65 | % | | $500 Million to $1 Billion |
| | |
| | 0.60 | % | | Over $1 Billion |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A and Class B Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B distribution plan provides that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% of the average net assets of the Portfolio attributable to its Class B Shares in respect to activities primarily intended to result in the sale of Class B Shares. However, under the Class B distribution agreement, payments to the Distributor for activities pursuant to the Class B distribution plan are currently limited to payments at an annual rate equal to 0.25% of average daily net assets of the Portfolio attributable to its Class B Shares.
Under terms of the Class B distribution plan and distribution agreement, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | | |
| | | Beginning
Shares | |
Sales | | Reinvestments | | Redemptions | | | Net Increase
(Decrease)
in Shares
Outstanding | | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 93,340,210 | | 5,081,731 | | 2,577,355 | | (42,575,021 | ) | | (34,915,935 | ) | | 58,424,275 |
12/31/2008 | | 75,877,044 | | 19,735,181 | | 8,817,742 | | (11,089,757 | ) | | 17,463,166 | | | 93,340,210 |
| | | | | | |
Class B | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 8,166,106 | | 1,405,212 | | 198,239 | | (1,095,970 | ) | | 507,481 | | | 8,673,587 |
12/31/2008 | | 5,973,748 | | 5,573,304 | | 749,149 | | (4,130,095 | ) | | 2,192,358 | | | 8,166,106 |
23
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $2,999,776 | | $ | 338,258,922 | | $ | 1,598,995 | | $ | 497,018,352 |
At June 30, 2009 the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Appreciation |
| | | |
| $560,565,968 | | $ | 51,529,838 | | $ | (44,809,957 | ) | | $ | 6,719,881 |
6. Securities Lending
As of June 30, 2009 Portfolio had loaned securities which were collateralized by short-term investments. The value of securities on loan and the value of the related collateral were as follows:
| | | | | | | | |
Value of
Securities | | Value of
Cash
Collateral | | Value of
Non-Cash
Collateral* | | Total
Collateral |
| | | |
| $26,034,319 | | $ | 26,757,072 | | — | | $ | 26,757,072 |
* The Portfolio cannot repledge or resell this collateral. The non-cash collateral is typically comprised of government securities and/or bank letters of credit.
7. Distributions to Shareholders
The tax character of distributions paid for the period ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $ | 63,236,117 | | $ | — | | $ | 44,545,290 | | $ | — | | $ | 107,781,407 | | $ | — |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net Unrealized
Depreciation | | | Loss Carryforwards | | | Total | |
| | | | |
| $20,061,571 | | $ | — | | $ | (178,012,053 | ) | | $ | (158,723,345 | ) | | $ | (316,673,827 | ) |
8. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
9. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has
24
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
9. Market, Credit and Counterparty Risk - continued
unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
25
| | |
| Lord Abbett Bond Debenture Portfolio | | For the period ended 6/30/09 |
| Managed by Lord, Abbett & Co. LLC | | |
Portfolio Manager Commentary
Performance
During the period ended June 30, 2009, the Portfolio had a return of 17.20%, 16.95% and 17.07% for Class A, B and E Shares, respectively, versus 1.90% for its benchmark, the Barclays Capital U.S. Aggregate Bond Index, 29.88% for the Merrill Lynch High Yield Master II Constrained Index and 21.91% for the Hybrid Index, respectively.
Market Environment/Conditions
After the volatility of 2008, when investors sought the safety of U.S. government debt and Treasury yields fell significantly, investors moved away from risk-free assets in the first half of 2009.
As a consequence, prices on U.S. Treasury bonds fell and their yields rose in the six-month period ended June 30, 2009. Increased demand for risk-bearing assets—such as investment-grade and high-yield corporate bonds, floating rate loans, and municipal bonds—drove prices in that sector higher and sent yields lower in the same period.
During the six-month period, credit spreads on investment-grade corporate bonds tightened by 273 basis points. The improved sentiment regarding corporate debt led to a gain of 15.29% on the Barclays Capital Baa Corporate Index as of June 30, 2009. Companies with investment-grade credit ratings took advantage of the falling risk premiums to issue a significant amount of debt, which amounted to $709.4 billion through the end of May, up more than 54% compared with the end of May 2008.
Meanwhile, spreads on high-yield corporate bonds tightened by about 10 percentage points through June 2009, and the Merrill Lynch High Yield Master II Index climbed 29.37% during the first half of the year. Similar to investment-grade companies, those with high-yield credit ratings looked to raise capital, and they issued $42.6 billion in debt through May 2009, up nearly 47.8% compared with the same time period in 2008.
Proceeds from many of the high-yield bonds that companies issued were used to refinance existing debt within their capital structure. It was estimated that the proceeds from about 60% of the bonds issued through May were used to repay loans. In addition to those loan repayments, total first half issuance of floating rate loans, or leveraged loans, contracted by more than 38% when compared to the first half of 2008. The lack of new supply did not adversely affect the market for floating rate loans, however, as the Credit Suisse Leveraged Loan Index climbed 22.8% through the first half of 2009.
The tax-exempt market also outperformed Treasuries in the six-month period. The yield on an index of generic ‘AAA’ rated general obligation municipal bonds fell 39 basis points during the first half of the year, and the Barclays Capital Municipal Bond Index rose 6.42% as of June 30, 2009. The introduction of Build America Bonds, which were part of the American Reinvestment and Recovery Act, was one factor that helped the municipal bond market, as these taxable securities alleviated some concerns that the tax-exempt market would be saturated with new issue supply from various municipalities.
Yields on longer-term Treasuries rose in the six-month period, amid a rising federal deficit, increased bond supply, and concerns about future inflation. The higher yields on long-term Treasuries steepened the curve between 2 year and ten-year yields to a record level in the first six months of the year.
The various monetary policy initiatives implemented in 2008 remained in place during the first half of 2009, and although the Federal Reserve said data released during the quarter suggested that the pace of the contraction was slowing, it continued to hold the fed funds rate in a range of 0 - 0.25%. Many short-term lending markets showed signs of improvement during the first half of the year, and the Fed said it would continue to monitor the size and composition of its balance sheet and would make adjustments to its credit and liquidity programs as warranted.
Portfolio Review/Current Positioning
Among the top contributors to performance were the health services, gas distribution, and software services sectors. Within the health services sector, hospitals rallied driven by strong first quarter results. Tenet Healthcare Corp. and HCA, Inc. were among the top performers within health services. Gas distribution holdings continued to advance after a strong first quarter. The sector has benefited from improved liquidity through asset sales and bond and equity offerings. El Paso Corp. had a new bond offering at the end of 2008 and good first quarter earnings. Within the software services sector, SunGard Data Systems was a top performer, advancing on good earnings reports and an improved outlook regarding its customers’ capital spending.
Most industries contributed positively to performance, however printing & publishing and retailers were among those contributing the least. Within printing & publishing, yellow page directory publishers Idearc, Inc. and R.H. Donnelley have been negatively impacted by declining print advertising sales in the weak economic environment. Retailers have also suffered during the recession as consumers have cut back on spending. Same store sales at JC Penney and Limited Brands have continued to decline in recent months. The aerospace & defense sector detracted from performance with Hawker Beechcraft as a poor performer in the sector. The manufacturer of business and special mission aircraft reported that earnings results were negatively impacted by fewer commercial aircraft deliveries and charges associated with work force reductions.
Christopher J. Towle, CFA,
Partner and Director
Lord, Abbett & Co. LLC
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual
1
| | |
| Lord Abbett Bond Debenture Portfolio | | For the period ended 6/30/09 |
| Managed by Lord, Abbett & Co. LLC | | |
Portfolio Manager Commentary (continued)
outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
Ford Motor Credit Co. (7.250%, due 10/25/11) | | 0.81% |
Qwest Capital Funding, Inc. (7.900%, due 08/15/10) | | 0.80% |
Federal National Mortgage Assoc. (5.500%, due 01/01/37) | | 0.79% |
Cincinnati Bell, Inc. (8.375%, due 01/15/14) | | 0.74% |
General Motor Acceptance Corp. (7.250%, due 03/02/11) | | 0.74% |
Crown Cork & Seal, Inc. (7.375%, due 12/15/26) | | 0.70% |
Edison Mission Energy (7.750%, due 06/15/16) | | 0.68% |
Texas Competitive Electric Holdings Co. LLC (10.250%, due 11/01/15) | | 0.67% |
HCA, Inc. (9.125%, due 11/15/14) | | 0.66% |
Community Health Systems, Inc. (8.875%, due 06/15/15) | | 0.65% |
Portfolio Composition (% of portfolio market value)
As of 6/30/09
2
| | |
| Lord Abbett Bond Debenture Portfolio | | For the period ended 6/30/09 |
| Managed by Lord, Abbett & Co. LLC | | |
Portfolio Manager Commentary (continued)
Lord Abbett Bond Debenture Portfolio managed by Lord, Abbett & Co. LLC vs. Barclays Capital U.S. Aggregate Bond Index1, Merrill Lynch High Yield Master II Constrained Index2 and Hybrid Index3
Growth Based on $10,000+
| | | | | | | | | | | | | | |
| | | | | Average Annual Return4 (for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | 3 Year | | 5 Year | | 10 Year | | Since
Inception5 |
| — | | Lord Abbett Bond Debenture Portfolio—
Class A | | 17.20% | | -3.79% | | 2.95% | | 4.09% | | 4.62% | | — |
| | Class B | | 16.95% | | -4.03% | | 2.72% | | 3.84% | | — | | 4.64% |
| | Class E | | 17.07% | | -3.90% | | 2.82% | | 3.94% | | — | | 5.19% |
| - - | | Barclays Capital U.S. Aggregate Bond Index1 | | 1.90% | | 6.05% | | 6.43% | | 5.01% | | 5.98% | | — |
| - - | | Merrill Lynch High Yield Master II Constrained Index2 | | 29.88% | | -3.53% | | 1.81% | | 4.10% | | 4.44% | | — |
| — | | Hybrid Index3 | | 21.91% | | -4.44% | | 1.71% | | 3.53% | | 4.49% | | — |
+The chart reflects the performance of Class A shares of the Portfolio. The performance of Class A shares will differ from that of the other classes of shares because of the difference in expenses paid by policyholders investing in the different share classes.
1The Barclays Capital U.S. Aggregate Bond Index includes most obligations of the U.S. Treasury, agencies and quase-federal corporations, most publicly issued investment grade corporate bonds and most bonds backed by mortgage pools of GNMA, FNMA and FHLMC.
2The Merrill Lynch High Yield Master II Constrained Index is a market value-weighted index of all domestic and Yankee high-yield bonds, including deferred interest bonds and payment-in-kind securities. Issues included in the Index have maturities of one year or more and have a credit rating lower than BBB-/Baa3, but are not in default.
3The Hybrid Index is comprised of 60% Merrill Lynch High Yield Master II Constrained Index, 20% Barclays Capital U.S. Aggregate Bond Index, 20% Merrill Lynch All Convertible Index.
The Merrill Lynch All Convertible Index is composed of approximately 700 issues of only convertible bonds and preferreds of all qualities.
4“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
5Inception of Class A shares is 5/1/96. Inception of the Class B shares is 3/22/01. Inception of the Class E shares is 4/1/02.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Indexes do not include fees or expenses and are not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| Lord Abbett Bond Debenture Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.55% | | $ | 1,000.00 | | $ | 1,169.60 | | $ | 2.96 |
Hypothetical | | 0.55% | | | 1,000.00 | | | 1,022.07 | | | 2.76 |
| | | | | | | | | | | |
| | | | |
Class B | | | | | | | | | | | |
Actual | | 0.80% | | $ | 1,000.00 | | $ | 1,168.30 | | $ | 4.30 |
Hypothetical | | 0.80% | | | 1,000.00 | | | 1,020.83 | | | 4.01 |
| | | | | | | | | | | |
| | | | |
Class E | | | | | | | | | | | |
Actual | | 0.70% | | $ | 1,000.00 | | $ | 1,169.50 | | $ | 3.77 |
Hypothetical | | 0.70% | | | 1,000.00 | | | 1,021.32 | | | 3.51 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
4
Met Investors Series Trust
Lord Abbett Bond Debenture Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| | | | | | |
|
| Domestic Bonds & Debt Securities - 80.6% |
| Aerospace & Defense - 1.6% |
DigitalGlobe, Inc.
10.500%, due 05/01/14 (144A)(a) | | $ | 3,250,000 | | $ | 3,380,000 |
Esterline Technologies Corp. | | | | | | |
7.750%, due 06/15/13 | | | 3,000,000 | | | 2,925,000 |
6.625%, due 03/01/17 | | | 1,150,000 | | | 1,056,563 |
Honeywell International, Inc.
5.300%, due 03/01/18 | | | 5,640,000 | | | 5,900,404 |
L-3 Communications Corp. | | | | | | |
6.125%, due 01/15/14 | | | 6,000,000 | | | 5,610,000 |
6.375%, due 10/15/15 | | | 4,050,000 | | | 3,695,625 |
Vought Aircraft Industries, Inc.
8.000%, due 07/15/11 | | | 3,350,000 | | | 2,110,500 |
| | | | | | |
| | | | | | 24,678,092 |
| | | | | | |
| Agriculture - 0.1% |
Bunge NA Finance LP
5.900%, due 04/01/17 | | | 1,375,000 | | | 1,260,365 |
| | | | | | |
| Auto Components - 0.7% |
Cooper Standard Automotive, Inc.
8.375%, due 12/15/14(b) | | | 5,000,000 | | | 325,000 |
Goodyear Tire & Rubber Co. (The)
10.500%, due 05/15/16 | | | 1,775,000 | | | 1,801,625 |
Stanadyne Corp., Series 1
10.000%, due 08/15/14 | | | 2,075,000 | | | 1,628,875 |
Stanadyne Holdings, Inc.
0.000%/12.000% , due 02/15/15(c) | | | 2,750,000 | | | 1,251,250 |
Tenneco Automotive, Inc.
8.625%, due 11/15/14(b) | | | 3,375,000 | | | 2,446,875 |
TRW Automotive, Inc.
7.250%, due 03/15/17 (144A)(a) | | | 5,000,000 | | | 3,475,000 |
| | | | | | |
| | | | | | 10,928,625 |
| | | | | | |
| Automobiles - 0.2% |
Ford Motor Co. | | | | | | |
9.500%, due 09/15/11 | | | 500,000 | | | 417,500 |
7.450%, due 07/16/31(b) | | | 3,575,000 | | | 2,127,125 |
| | | | | | |
| | | | | | 2,544,625 |
| | | | | | |
| Beverages - 0.9% |
Anheuser-Busch InBev Worldwide, Inc.
7.750%, due 01/15/19 (144A)(a) | | | 6,000,000 | | | 6,573,132 |
Brown-Forman Corp. - Class B
5.000%, due 02/01/14(b) | | | 1,950,000 | | | 2,011,310 |
Constellation Brands, Inc.
7.250%, due 05/15/17(b) | | | 5,000,000 | | | 4,650,000 |
| | | | | | |
| | | | | | 13,234,442 |
| | | | | | |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Building Products - 0.1% |
NTK Holdings, Inc.
0.000%/10.750% , due 03/01/14(c) | | $ | 3,650,000 | | $ | 310,250 |
Owens Corning, Inc.
9.000%, due 06/15/19(b) | | | 1,625,000 | | | 1,578,739 |
William Lyon Homes, Inc.
10.750%, due 04/01/13 | | | 1,250,000 | | | 450,000 |
| | | | | | |
| | | | | | 2,338,989 |
| | | | | | |
| Chemicals - 2.8% | | | | | | |
Airgas, Inc. | | | | | | |
6.250%, due 07/15/14 | | | 4,000,000 | | | 3,790,000 |
7.125%, due 10/01/18 (144A)(a) | | | 1,600,000 | | | 1,504,000 |
Ashland, Inc.
9.125%, due 06/01/17 (144A)(a) | | | 2,400,000 | | | 2,502,000 |
Dow Chemical Co. (The)
8.550%, due 05/15/19(b) | | | 1,500,000 | | | 1,505,144 |
Equistar Chemicals LP
7.550%, due 02/15/26(d) | | | 7,815,000 | | | 2,500,800 |
Huntsman LLC
11.500%, due 07/15/12 | | | 1,320,000 | | | 1,343,100 |
IMC Global, Inc.
7.300%, due 01/15/28 | | | 4,900,000 | | | 4,184,281 |
Ineos Group Holdings Plc
8.500%, due 02/15/16 (144A)(a) | | | 9,000,000 | | | 2,835,000 |
MacDermid, Inc.
9.500%, due 04/15/17 (144A)(a) | | | 4,000,000 | | | 2,940,000 |
Mosaic Co. (The)
7.375%, due 12/01/14 (144A)(a) | | | 1,850,000 | | | 1,907,613 |
Nalco Co. | | | | | | |
8.875%, due 11/15/13(b) | | | 4,650,000 | | | 4,766,250 |
8.250%, due 05/15/17 (144A)(a) | | | 2,000,000 | | | 2,020,000 |
Rockwood Specialties Group, Inc.
7.500%, due 11/15/14(b) | | | 4,500,000 | | | 4,252,500 |
Terra Capital, Inc.
7.000%, due 02/01/17 | | | 6,000,000 | | | 5,512,500 |
| | | | | | |
| | | | | | 41,563,188 |
| | | | | | |
| Commercial & Professional Services - 3.0% |
Aleris International, Inc.
10.000%, due 12/15/16(d) | | | 4,330,000 | | | 113,663 |
Allied Waste North America, Inc. | | | | | | |
7.250%, due 03/15/15 | | | 8,500,000 | | | 8,637,487 |
7.875%, due 04/15/13 | | | 6,000,000 | | | 6,124,962 |
ARAMARK Corp.
4.528%, due 02/01/15(e) | | | 5,825,000 | | | 4,761,937 |
Ashtead Capital, Inc.
9.000%, due 08/15/16 (144A)(a) | | | 3,000,000 | | | 2,557,500 |
Corrections Corp. of America
7.750%, due 06/01/17(b) | | | 4,700,000 | | | 4,653,000 |
See accompanying notes to financial statements
5
Met Investors Series Trust
Lord Abbett Bond Debenture Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Commercial & Professional Services - continued |
Deluxe Corp.
7.375%, due 06/01/15(b) | | $ | 3,900,000 | | $ | 3,139,500 |
Hertz Corp.
8.875%, due 01/01/14(b) | | | 3,700,000 | | | 3,422,500 |
Iron Mountain, Inc.
7.750%, due 01/15/15 | | | 2,000,000 | | | 1,930,000 |
Rental Service Corp.
9.500%, due 12/01/14(b) | | | 4,650,000 | | | 3,754,875 |
RSC Equipment Rental, Inc.
10.000%, due 07/15/17 (144A)(a) | | | 1,550,000 | | | 1,557,750 |
United Rentals North America, Inc.
10.875%, due 06/15/16 (144A)(a)(b) | | | 4,000,000 | | | 3,860,000 |
| | | | | | |
| | | | | | 44,513,174 |
| | | | | | |
| Commercial Banks - 0.5% |
Royal Bank of Scotland Group Plc
5.000%, due 11/12/13 | | | 3,300,000 | | | 2,779,461 |
Wachovia Corp.
5.500%, due 05/01/13 | | | 3,500,000 | | | 3,618,612 |
Wells Fargo & Co.
5.625%, due 12/11/17(b) | | | 1,000,000 | | | 985,963 |
| | | | | | |
| | | | | | 7,384,036 |
| | | | | | |
| Communications Equipment - 0.4% |
Hughes Network Systems LLC
9.500%, due 04/15/14 (144A)(a) | | | 3,750,000 | | | 3,675,000 |
MasTec, Inc.
7.625%, due 02/01/17 | | | 3,000,000 | | | 2,613,750 |
| | | | | | |
| | | | | | 6,288,750 |
| | | | | | |
| Computers & Peripherals - 0.8% |
SunGard Data Systems, Inc. | | | | | | |
9.125%, due 08/15/13(b) | | | 6,975,000 | | | 6,626,250 |
10.250%, due 08/15/15(b) | | | 5,475,000 | | | 5,084,906 |
| | | | | | |
| | | | | | 11,711,156 |
| | | | | | |
| Consumer Finance - 2.8% |
American Express Bank FSB S.A.
5.500%, due 04/16/13 | | | 7,000,000 | | | 6,875,358 |
American Express Credit Corp.
7.300%, due 08/20/13 | | | 3,000,000 | | | 3,121,887 |
Ford Motor Credit Co. LLC | | | | | | |
7.375%, due 10/28/09 | | | 4,000,000 | | | 3,966,016 |
7.250%, due 10/25/11 | | | 14,000,000 | | | 12,115,208 |
9.750%, due 09/15/10(b) | | | 3,000,000 | | | 2,874,465 |
8.000%, due 06/01/14 | | | 3,000,000 | | | 2,429,661 |
General Motor Acceptance Corp.
7.250%, due 03/02/11 (144A)(a) | | | 12,000,000 | | | 11,100,000 |
| | | | | | |
| | | | | | 42,482,595 |
| | | | | | |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Containers & Packaging - 2.5% |
Ball Corp.
6.625%, due 03/15/18 | | $ | 5,000,000 | | $ | 4,587,500 |
Crown Americas LLC/Crown Americas Capital Corp. II
7.625%, due 05/15/17 (144A)(a)(b) | | | 1,125,000 | | | 1,091,250 |
Crown Cork & Seal, Inc.
7.375%, due 12/15/26(b) | | | 12,250,000 | | | 10,473,750 |
Graphic Packaging International, Inc. | | | | | | |
9.500%, due 08/15/13(b) | | | 8,750,000 | | | 8,400,000 |
9.500%, due 06/15/17 (144A)(a) | | | 475,000 | | | 470,250 |
Jefferson Smurfit Corp. | | | | | | |
8.250%, due 10/01/12(d) | | | 1,750,000 | | | 665,000 |
7.500%, due 06/01/13(b)(d) | | | 4,000,000 | | | 1,510,000 |
Owens Brockway Glass Container, Inc. | | | | | | |
6.750%, due 12/01/14 | | | 1,800,000 | | | 1,728,000 |
7.375%, due 05/15/16 (144A)(a) | | | 2,000,000 | | | 1,950,000 |
Sealed Air Corp.
7.875%, due 06/15/17 (144A)(a) | | | 1,125,000 | | | 1,116,585 |
Smurfit-Stone Container Enterprises, Inc.
8.000%, due 03/15/17(b)(d) | | | 5,000,000 | | | 1,875,000 |
Solo Cup Co.
8.500%, due 02/15/14 | | | 1,275,000 | | | 1,051,875 |
10.500%, due 11/01/13 (144A)(a) | | | 400,000 | | | 403,000 |
Vitro S.A.B. de C.V.
9.125%, due 02/01/17(d) | | | 5,500,000 | | | 2,145,000 |
| | | | | | |
| | | | | | 37,467,210 |
| | | | | | |
| Diversified Financial Services - 2.4% | | | |
Bank of America Corp.
5.750%, due 12/01/17(b) | | | 3,500,000 | | | 3,121,510 |
CIT Group, Inc.
5.200%, due 11/03/10(b) | | | 4,590,000 | | | 3,626,931 |
General Electric Capital Corp.
4.800%, due 05/01/13(b) | | | 5,000,000 | | | 5,009,770 |
Hughes Network Systems LLC/HNS Finance Corp.
9.500%, due 04/15/14 | | | 2,425,000 | | | 2,376,500 |
JPMorgan Chase & Co.
6.000%, due 01/15/18 | | | 5,000,000 | | | 4,975,225 |
7.900%, due 12/31/49(b)(e) | | | 2,650,000 | | | 2,325,454 |
Lazard Group LLC
7.125%, due 05/15/15(b) | | | 4,300,000 | | | 3,955,170 |
Morgan Stanley
6.000%, due 04/28/15 | | | 4,000,000 | | | 3,994,392 |
Nuveen Investments, Inc.
10.500%, due 11/15/15 (144A)(a) | | | 2,150,000 | | | 1,494,250 |
See accompanying notes to financial statements
6
Met Investors Series Trust
Lord Abbett Bond Debenture Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| |
| Diversified Financial Services - continued | | | |
Sensus Metering Systems, Inc.
8.625%, due 12/15/13 | | $ | 4,000,000 | | $ | 3,780,000 |
Washington Mutual Bank/Henderson NV 6.875%, due 06/15/11(d) | | | 6,000,000 | | | 7,500 |
ZFS Finance USA Trust V
6.500%, due 05/09/37 (144A)(a)(e) | | | 2,500,000 | | | 1,850,000 |
| | | | | | |
| | | | | | 36,516,702 |
| | | | | | |
| Diversified Telecommunication Services - 4.9% |
Ceridian Corp.
11.250%, due 11/15/15 | | | 3,825,000 | | | 3,217,781 |
Cincinnati Bell, Inc.
8.375%, due 01/15/14(b) | | | 12,000,000 | | | 11,160,000 |
7.000%, due 02/15/15 | | | 800,000 | | | 720,000 |
Hellas Telecommunications Luxembourg II
6.881%, due 01/15/15 (144A)(a)(e) | | | 4,000,000 | | | 1,040,000 |
Nordic Telephone Holdings Co.
8.875%, due 05/01/16 (144A)(a) | | | 10,000,000 | | | 9,700,000 |
Qwest Capital Funding, Inc.
7.900%, due 08/15/10(b) | | | 12,000,000 | | | 12,060,000 |
Qwest Communications International, Inc.
7.250%, due 02/15/11 | | | 8,750,000 | | | 8,531,250 |
Qwest Corp.
7.625%, due 06/15/15 | | | 2,000,000 | | | 1,890,000 |
Sprint Capital Corp. | | | | | | |
8.375%, due 03/15/12 | | | 3,000,000 | | | 2,970,000 |
6.900%, due 05/01/19(b) | | | 7,925,000 | | | 6,597,563 |
Syniverse Technologies, Inc.
7.750%, due 08/15/13 | | | 6,850,000 | | | 6,473,250 |
Valor Telecommunications Enterprises Finance Corp.
7.750%, due 02/15/15 | | | 2,325,000 | | | 2,280,262 |
Virgin Media Finance Plc
9.500%, due 08/15/16 | | | 1,200,000 | | | 1,185,000 |
Windstream Corp.
7.000%, due 03/15/19(b) | | | 7,425,000 | | | 6,496,875 |
| | | | | | |
| | | | | | 74,321,981 |
| | | | | | |
| Electric Utilities - 5.4% | | | | | | |
Central Illinois Light Co.
8.875%, due 12/15/13 | | | 4,550,000 | | | 5,000,659 |
Commonwealth Edison Co.
5.800%, due 03/15/18 | | | 7,000,000 | | | 7,120,659 |
Edison Mission Energy
7.750%, due 06/15/16 | | | 12,350,000 | | | 10,127,000 |
7.000%, due 05/15/17(b) | | | 12,000,000 | | | 9,270,000 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Electric Utilities - continued |
Electricite de France
6.500%, due 01/26/19(EDF) (144A)(a)(b) | | $ | 2,400,000 | | $ | 2,633,280 |
Mirant Americas Generation LLC
9.125%, due 05/01/31 | | | 9,000,000 | | | 6,525,000 |
Nevada Power Co.
5.875%, due 01/15/15 | | | 3,500,000 | | | 3,589,691 |
Nisource Finance Corp.
6.150%, due 03/01/13 | | | 2,180,000 | | | 2,168,732 |
Northeast Utilities
5.650%, due 06/01/13 | | | 6,000,000 | | | 6,034,422 |
Northern States Power/Minnesota
5.250%, due 03/01/18 | | | 7,000,000 | | | 7,297,990 |
Peco Energy Co.
5.350%, due 03/01/18 | | | 3,125,000 | | | 3,201,731 |
PSEG Energy Holdings LLC
8.500%, due 06/15/11 | | | 7,700,000 | | | 7,812,543 |
Texas Competitive Electric Holdings Co. LLC
10.250%, due 11/01/15(b) | | | 16,000,000 | | | 10,040,000 |
| | | | | | |
| | | | | | 80,821,707 |
| | | | | | |
| Electrical Equipment - 1.6% |
Baldor Electric Co.
8.625%, due 02/15/17(b) | | | 9,875,000 | | | 9,183,750 |
Belden, Inc.
7.000%, due 03/15/17 | | | 2,275,000 | | | 2,024,750 |
9.250%, due 06/15/19 (144A)(a) | | | 1,150,000 | | | 1,119,812 |
Emerson Electric Co.
5.250%, due 10/15/18 | | | 5,000,000 | | | 5,130,670 |
General Cable Corp.
7.125%, due 04/01/17(b) | | | 4,000,000 | | | 3,650,000 |
Roper Industries, Inc.
6.625%, due 08/15/13 | | | 3,200,000 | | | 3,198,570 |
| | | | | | |
| | | | | | 24,307,552 |
| | | | | | |
| Energy Equipment & Services - 2.1% |
Cameron International Corp.
6.375%, due 07/15/18 | | | 1,920,000 | | | 1,774,808 |
Complete Production Services, Inc.
8.000%, due 12/15/16(b) | | | 6,900,000 | | | 5,934,000 |
Dresser-Rand Group, Inc.
7.375%, due 11/01/14 | | | 4,750,000 | | | 4,619,375 |
E.ON International Finance BV
5.800%, due 04/30/18 (144A)(a) | | | 5,000,000 | | | 5,211,025 |
Hornbeck Offshore Services, Inc.
6.125%, due 12/01/14 | | | 2,920,000 | | | 2,660,850 |
Key Energy Services, Inc.
8.375%, due 12/01/14 | | | 3,525,000 | | | 3,128,438 |
National Oilwell Varco, Inc.
6.125%, due 08/15/15 | | | 5,500,000 | | | 5,241,945 |
See accompanying notes to financial statements
7
Met Investors Series Trust
Lord Abbett Bond Debenture Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Energy Equipment & Services - continued |
Pride International, Inc.
7.375%, due 07/15/14 | | $ | 3,000,000 | | $ | 2,992,500 |
| | | | | | |
| | | | | | 31,562,941 |
| | | | | | |
| Entertainment & Leisure - 0.5% |
Downstream Development Authority
12.000%, due 10/15/15 (144A)(a) | | | 2,000,000 | | | 1,090,000 |
WMG Acquisition Corp.
9.500%, due 06/15/16 (144A)(a) | | | 6,000,000 | | | 6,030,000 |
| | | | | | |
| | | | | | 7,120,000 |
| | | | | | |
| Food & Staples Retailing - 1.1% |
Denny’s Holdings, Inc.
10.000%, due 10/01/12 | | | 4,850,000 | | | 4,728,750 |
Ingles Markets, Inc.
8.875%, due 05/15/17 (144A)(a) | | | 4,000,000 | | | 3,950,000 |
Supervalu, Inc.
7.500%, due 11/15/14 | | | 7,500,000 | | | 7,237,500 |
| | | | | | |
| | | | | | 15,916,250 |
| | | | | | |
| Food Products - 1.8% | | | | | | |
Dole Food Co., Inc.
8.750%, due 07/15/13 | | | 8,500,000 | | | 7,862,500 |
General Mills, Inc.
5.200%, due 03/17/15 | | | 6,500,000 | | | 6,862,109 |
H.J. Heinz Co.
5.350%, due 07/15/13 | | | 3,000,000 | | | 3,139,506 |
Kraft Foods, Inc. - Class A
6.500%, due 08/11/17 | | | 1,900,000 | | | 2,004,285 |
Stater Brothers Holdings, Inc.
8.125%, due 06/15/12 | | | 7,675,000 | | | 7,598,250 |
| | | | | | |
| | | | | | 27,466,650 |
| | | | | | |
| Gas Utilities - 1.2% | | | | | | |
Ferrellgas LP
6.750%, due 05/01/14(b) | | | 5,500,000 | | | 4,785,000 |
Ferrellgas Partners LP
8.750%, due 06/15/12 | | | 4,000,000 | | | 3,740,000 |
National Fuel Gas Co.
6.500%, due 04/15/18 | | | 7,200,000 | | | 7,041,802 |
8.750%, due 05/01/19 | | | 1,750,000 | | | 1,978,536 |
| | | | | | |
| | | | | | 17,545,338 |
| | | | | | |
| Health Care Equipment & Supplies - 1.1% |
Bausch & Lomb, Inc.
9.875%, due 11/01/15(b) | | | 5,500,000 | | | 5,252,500 |
Baxter International, Inc.
5.375%, due 06/01/18 | | | 1,000,000 | | | 1,048,969 |
Biomet, Inc.
10.000%, due 10/15/17(b) | | | 6,500,000 | | | 6,646,250 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Health Care Equipment & Supplies - continued |
VWR Funding, Inc.
10.250%, due 07/15/15(f) | | $ | 4,000,000 | | $ | 3,180,000 |
| | | | | | |
| | | | | | 16,127,719 |
| | | | | | |
| Health Care Providers & Services - 5.1% |
Alliance Imaging
7.250%, due 12/15/12(b) | | | 2,975,000 | | | 2,900,625 |
Apria Healthcare Group, Inc.
11.250%, due 11/01/14 (144A)(a) | | | 1,350,000 | | | 1,309,500 |
Centene Corp.
7.250%, due 04/01/14 | | | 4,825,000 | | | 4,451,063 |
Community Health Systems, Inc.
8.875%, due 07/15/15 | | | 9,950,000 | | | 9,800,750 |
DaVita, Inc.
7.250%, due 03/15/15 | | | 7,500,000 | | | 7,087,500 |
Express Scripts, Inc.
6.250%, due 06/15/14 | | | 2,150,000 | | | 2,277,347 |
Hanger Orthopedic Group, Inc.
10.250%, due 06/01/14 | | | 2,950,000 | | | 3,060,625 |
HCA, Inc. | | | | | | |
6.375%, due 01/15/15 | | | 5,000,000 | | | 4,087,500 |
9.125%, due 11/15/14 | | | 10,000,000 | | | 9,925,000 |
9.875%, due 02/15/17 (144A)(a)(b) | | | 1,175,000 | | | 1,192,625 |
Select Medical Corp.
7.625%, due 02/01/15(b) | | | 4,700,000 | | | 3,842,250 |
Sun Healthcare Group, Inc.
9.125%, due 04/15/15(b) | | | 7,450,000 | | | 7,412,750 |
Tenet Healthcare Corp. | | | | | | |
9.250%, due 02/01/15(b) | | | 2,500,000 | | | 2,300,000 |
8.875%, due 07/01/19 (144A)(a) | | | 1,250,000 | | | 1,259,375 |
United Surgical Partners International, Inc.
8.875%, due 05/01/17(b) | | | 5,000,000 | | | 4,575,000 |
UnitedHealth Group, Inc.
4.875%, due 04/01/13 | | | 3,000,000 | | | 3,015,987 |
Vanguard Health Holding Co. II
9.000%, due 10/01/14 | | | 7,975,000 | | | 7,675,937 |
| | | | | | |
| | | | | | 76,173,834 |
| | | | | | |
| Hotels, Restaurants & Leisure - 4.6% |
AMC Entertainment, Inc.
8.000%, due 03/01/14 | | | 3,500,000 | | | 3,001,250 |
Ameristar Casinos, Inc.
9.250%, due 06/01/14 (144A)(a)(b) | | | 2,300,000 | | | 2,357,500 |
Boyd Gaming Corp.
7.125%, due 02/01/16(b) | | | 4,500,000 | | | 3,358,125 |
See accompanying notes to financial statements
8
Met Investors Series Trust
Lord Abbett Bond Debenture Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Hotels, Restaurants & Leisure - continued |
Gaylord Entertainment Co. | | | | | | |
8.000%, due 11/15/13 | | $ | 9,275,000 | | $ | 7,953,312 |
6.750%, due 11/15/14 | | | 2,400,000 | | | 1,806,000 |
Great Canadian Gaming Corp.
7.250%, due 02/15/15 (144A)(a) | | | 4,600,000 | | | 4,071,000 |
Harrah’s Operating Escrow LLC/Harrah’s Escrow Corp.
11.250%, due 06/01/17 (144A)(a) | | | 925,000 | | | 878,750 |
International Game Technology
7.500%, due 06/15/19(b) | | | 1,500,000 | | | 1,516,098 |
Isle of Capri Casinos, Inc.
7.000%, due 03/01/14(b) | | | 7,000,000 | | | 5,670,000 |
Las Vegas Sands Corp.
6.375%, due 02/15/15(b) | | | 5,000,000 | | | 3,725,000 |
Mandalay Resort Group
9.375%, due 02/15/10(b) | | | 1,500,000 | | | 1,432,500 |
McDonald’s Corp.
5.000%, due 02/01/19 | | | 4,100,000 | | | 4,211,254 |
River Rock Entertainment Authority
9.750%, due 11/01/11 | | | 4,850,000 | | | 3,661,750 |
Scientific Games Corp.
6.250%, due 12/15/12 | | | 2,500,000 | | | 2,396,875 |
Scientific Games International, Inc. 9.250%, due 06/15/19 (144A)(a) | | | 1,550,000 | | | 1,557,750 |
Seneca Gaming Corp.
7.250%, due 05/01/12 | | | 3,500,000 | | | 3,045,000 |
Snoqualmie Entertainment Authority 9.125%, due 02/01/15 (144A)(a) | | | 6,175,000 | | | 3,241,875 |
Speedway Motorsports, Inc.
8.750%, due 06/01/16 (144A)(a) | | | 3,200,000 | | | 3,256,000 |
Starwood Hotels & Resorts Worldwide, Inc. | | | | | | |
6.250%, due 02/15/13(b) | | | 1,225,000 | | | 1,140,153 |
6.750%, due 05/15/18 | | | 500,000 | | | 429,431 |
Station Casinos, Inc.
6.500%, due 02/01/14 | | | 4,500,000 | | | 112,500 |
Turning Stone Casino Resort Enterprise
9.125%, due 12/15/10 - 09/15/14 (144A)(a) | | | 7,350,000 | | | 6,702,625 |
Wendy’s/Arby’s Restaurants LLC
10.000%, due 07/15/16 (144A)(a) | | | 3,500,000 | | | 3,381,875 |
| | | | | | |
| | | | | | 68,906,623 |
| | | | | | |
| Household Durables - 0.7% |
Lennar Corp.
12.250%, due 06/01/17 (144A)(a)(b) | | | 4,000,000 | | | 4,220,000 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Household Durables - continued |
Newell Rubbermaid, Inc.
10.600%, due 04/15/19 | | $ | 2,025,000 | | $ | 2,332,500 |
Whirlpool Corp.
8.600%, due 05/01/14 | | | 3,177,000 | | | 3,323,222 |
| | | | | | |
| | | | | | 9,875,722 |
| | | | | | |
| Independent Power Producers & Energy Traders - 2.1% |
AES Corp. (The)
8.000%, due 10/15/17 | | | 7,000,000 | | | 6,545,000 |
Mirant North America LLC
7.375%, due 12/31/13 | | | 6,000,000 | | | 5,790,000 |
NRG Energy, Inc. | | | | | | |
7.250%, due 02/01/14 | | | 6,900,000 | | | 6,710,250 |
7.375%, due 01/15/17(b) | | | 5,500,000 | | | 5,197,500 |
PPL Energy Supply LLC
6.400%, due 11/01/11 | | | 2,000,000 | | | 2,107,628 |
RRI Energy, Inc. | | | | | | |
6.750%, due 12/15/14(b) | | | 1,912,000 | | | 1,852,250 |
7.875%, due 06/15/17(b) | | | 4,500,000 | | | 4,095,000 |
| | | | | | |
| | | | | | 32,297,628 |
| | | | | | |
| Insurance - 0.5% |
AXA S.A.
6.379%, due 12/14/49 (144A)(a)(e) | | | 2,325,000 | | | 1,491,613 |
HUB International Holdings, Inc.
9.000%, due 12/15/14 (144A)(a) | | | 3,200,000 | | | 2,628,000 |
Liberty Mutual Group, Inc.
10.750%, due 06/15/58 (144A)(a)(e) | | | 1,500,000 | | | 1,081,808 |
USI Holdings Corp.
4.758%, due 11/15/14 (144A)(a)(e) | | | 3,500,000 | | | 2,292,500 |
| | | | | | |
| | | | | | 7,493,921 |
| | | | | | |
| Internet & Catalog Retail - 0.3% |
Brookstone Co., Inc.
12.000%, due 10/15/12(b) | | | 3,950,000 | | | 1,599,750 |
Expedia, Inc.
8.500%, due 07/01/16 (144A)(a) | | | 3,125,000 | | | 3,015,625 |
| | | | | | |
| | | | | | 4,615,375 |
| | | | | | |
| IT Services - 0.2% |
Freescale Semiconductor, Inc.
8.875%, due 12/15/14(b) | | | 4,750,000 | | | 2,422,500 |
Unisys Corp.
8.000%, due 10/15/12 | | | 1,200,000 | | | 726,000 |
| | | | | | |
| | | | | | 3,148,500 |
| | | | | | |
| Leisure Equipment & Products - 0.3% |
Mattel, Inc. 5.625%, due 03/15/13 | | | 4,000,000 | | | 4,055,948 |
| | | | | | |
See accompanying notes to financial statements
9
Met Investors Series Trust
Lord Abbett Bond Debenture Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Life Sciences Tools & Services - 0.6% |
Bio-Rad Laboratories, Inc. | | | | | | |
6.125%, due 12/15/14 | | $ | 7,700,000 | | $ | 7,045,500 |
8.000%, due 09/15/16 (144A)(a) | | | 2,000,000 | | | 1,985,000 |
| | | | | | |
| | | | | | 9,030,500 |
| | | | | | |
| Machinery - 0.7% |
Actuant Corp.
6.875%, due 06/15/17 | | | 3,000,000 | | | 2,745,000 |
Gardner Denver, Inc.
8.000%, due 05/01/13 | | | 4,400,000 | | | 4,202,000 |
Mueller Water Products, Inc.
7.375%, due 06/01/17 | | | 5,550,000 | | | 4,120,875 |
| | | | | | |
| | | | | | 11,067,875 |
| | | | | | |
| Manufacturing - 0.8% |
Ingersoll-Rand Global Holding Co., Ltd. 9.500%, due 04/15/14 | | | 1,500,000 | | | 1,644,216 |
Park - Ohio Industries, Inc.
8.375%, due 11/15/14 | | | 3,925,000 | | | 1,942,875 |
RBS Global, Inc./Rexnord Corp. | | | | | | |
9.500%, due 08/01/14 | | | 9,100,000 | | | 7,826,000 |
11.750%, due 08/01/16 | | | 300,000 | | | 222,750 |
8.875%, due 09/01/16 | | | 100,000 | | | 71,500 |
| | | | | | |
| | | | | | 11,707,341 |
| | | | | | |
| Media - 4.1% | | | | | | |
Affinion Group, Inc. | | | | | | |
11.500%, due 10/15/15(b) | | | 4,300,000 | | | 3,698,000 |
10.125%, due 10/15/13 (144A)(a) | | | 1,225,000 | | | 1,148,438 |
Allbritton Communications Co.
7.750%, due 12/15/12 | | | 8,500,000 | | | 6,608,750 |
CBS Corp.
8.875%, due 05/15/19(b) | | | 1,600,000 | | | 1,561,886 |
CCH I Holdings LLC
0.000%/11.750%, due 05/15/14(d) | | | 7,800,000 | | | 87,750 |
CCH I LLC/CCH I Capital Corp.
11.000%, due 10/01/15(b)(d) | | | 12,600,000 | | | 1,575,000 |
CCH II LLC/CCH II Capital Corp.
10.250%, due 09/15/10(b)(d) | | | 2,540,000 | | | 2,692,400 |
Cinemark USA, Inc.
8.625%, due 06/15/19 (144A)(a) | | | 2,475,000 | | | 2,456,437 |
DirecTV Holdings LLC/DirecTV Financing Co.
6.375%, due 06/15/15(b) | | | 8,900,000 | | | 8,277,000 |
EchoStar DBS Corp.
7.125%, due 02/01/16(b) | | | 6,000,000 | | | 5,625,000 |
Grupo Televisa S.A.
6.000%, due 05/15/18 | | | 1,050,000 | | | 995,203 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| | |
| Media - continued | | | | | | |
Interpublic Group of Cos., Inc. | | | | | | |
6.250%, due 11/15/14 | | $ | 5,500,000 | | $ | 4,840,000 |
10.000%, due 07/15/17 (144A)(a)(b) | | | 1,400,000 | | | 1,417,500 |
Ion Media Networks, Inc.
8.381%, due 01/15/13 (144A)(a)(d)(e)(f) | | | 2,212,707 | | | 27,659 |
LIN Television Corp.
6.500%, due 05/15/13(b) | | | 5,000,000 | | | 3,625,000 |
Mediacom Broadband LLC
8.500%, due 10/15/15(b) | | | 3,275,000 | | | 2,963,875 |
Mediacom LLC/Mediacom Capital Corp.
9.500%, due 01/15/13(b) | | | 7,260,000 | | | 6,951,450 |
Nielsen Finance LLC/Nielsen Finance Co.
11.500%, due 05/01/16
(144A)(a)(b) | | | 625,000 | | | 610,938 |
Sinclair Broadcast Group, Inc.
8.000%, due 03/15/12 | | | 932,000 | | | 626,770 |
Time Warner Cable, Inc.
7.500%, due 04/01/14(b) | | | 1,000,000 | | | 1,102,701 |
Univision Communications, Inc.
9.750%, due 03/15/15
(144A)(a)(f) | | | 5,175,000 | | | 3,040,312 |
Warner Music Group
7.375%, due 04/15/14(b) | | | 2,000,000 | | | 1,702,500 |
| | | | | | |
| | | | | | 61,634,569 |
| | | | | | |
| Metals & Mining - 3.0% |
Algoma Acquisition Corp.
9.875%, due 06/15/15 (144A)(a) | | | 3,300,000 | | | 1,864,500 |
Allegheny Ludlum Corp.
6.950%, due 12/15/25 | | | 3,700,000 | | | 3,260,470 |
Anglo American Capital Plc
9.375%, due 04/08/14 (144A)(a) | | | 2,000,000 | | | 2,174,590 |
Barrick Gold Corp.
6.950%, due 04/01/19 | | | 1,500,000 | | | 1,683,037 |
Foundation Pennsylvania Coal Co.
7.250%, due 08/01/14 | | | 5,000,000 | | | 4,925,000 |
Freeport McMoRan Copper & Gold, Inc. | | | | | | |
8.250%, due 04/01/15 | | | 3,500,000 | | | 3,538,990 |
8.375%, due 04/01/17 | | | 9,300,000 | | | 9,382,937 |
Noranda Aluminium Acquisition Corp. 5.413%, due 05/15/15(e)(f) | | | 6,738,712 | | | 3,748,409 |
Peabody Energy Corp. | | | | | | |
5.875%, due 04/15/16 | | | 4,500,000 | | | 3,982,500 |
7.375%, due 11/01/16(b) | | | 3,500,000 | | | 3,325,000 |
Teck Resources, Ltd. | | | | | | |
9.750%, due 05/15/14 (144A)(a) | | | 2,275,000 | | | 2,400,125 |
10.750%, due 05/15/19 (144A)(a) | | | 4,375,000 | | | 4,768,750 |
| | | | | | |
| | | | | | 45,054,308 |
| | | | | | |
See accompanying notes to financial statements
10
Met Investors Series Trust
Lord Abbett Bond Debenture Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Multi-Utilities - 0.1% |
Pacific Energy Partners LP/Pacific Energy Finance Corp.
6.250%, due 09/15/15 | | $ | 1,000,000 | | $ | 960,392 |
| | | | | | |
| Multiline Retail - 0.7% |
JC Penney Corp., Inc.
7.125%, due 11/15/23 | | | 400,000 | | | 353,761 |
Macy’s Retail Holdings, Inc. | | | | | | |
8.875%, due 07/15/15(b) | | | 2,500,000 | | | 2,422,033 |
5.900%, due 12/01/16 | | | 5,000,000 | | | 4,079,210 |
6.375%, due 03/15/37 | | | 1,250,000 | | | 851,965 |
Nordstrom, Inc.
6.250%, due 01/15/18 | | | 3,500,000 | | | 3,444,451 |
| | | | | | |
| | | | | | 11,151,420 |
| | | | | | |
| Oil, Gas & Consumable Fuels - 9.6% |
Chesapeake Energy Corp. | | | | | | |
6.250%, due 01/15/18 | | | 7,000,000 | | | 5,845,000 |
7.250%, due 12/15/18 | | | 7,900,000 | | | 6,912,500 |
Cimarex Energy Co.
7.125%, due 05/01/17(b) | | | 7,950,000 | | | 7,035,750 |
Colorado Interstate Gas Co.
6.800%, due 11/15/15 | | | 2,107,000 | | | 2,175,025 |
Dynegy Holdings, Inc. | | | | | | |
6.875%, due 04/01/11(b) | | | 2,375,000 | | | 2,297,813 |
8.375%, due 05/01/16(b) | | | 9,500,000 | | | 8,098,750 |
7.750%, due 06/01/19(b) | | | 3,925,000 | | | 3,076,219 |
El Paso Corp. | | | | | | |
7.000%, due 06/15/17(b) | | | 7,000,000 | | | 6,410,278 |
12.000%, due 12/12/13(b) | | | 1,600,000 | | | 1,768,000 |
7.250%, due 06/01/18(b) | | | 1,600,000 | | | 1,485,256 |
El Paso Natural Gas Co.
5.950%, due 04/15/17 | | | 4,000,000 | | | 3,870,168 |
Forest Oil Corp.
8.500%, due 02/15/14 (144A)(a) | | | 2,575,000 | | | 2,542,813 |
7.250%, due 06/15/19(b) | | | 7,500,000 | | | 6,750,000 |
KCS Energy, Inc.
7.125%, due 04/01/12 | | | 5,000,000 | | | 4,737,500 |
Kerr-McGee Corp.
6.950%, due 07/01/24 | | | 6,850,000 | | | 6,370,219 |
Marathon Oil Corp.
7.500%, due 02/15/19(b) | | | 2,500,000 | | | 2,733,360 |
MarkWest Energy Partners LP/MarkWest Energy Finance Corp.
6.875%, due 11/01/14 | | | 5,000,000 | | | 4,200,000 |
8.750%, due 04/15/18 | | | 4,400,000 | | | 3,828,000 |
Nabors Industries, Inc.
6.150%, due 02/15/18 | | | 4,000,000 | | | 3,846,136 |
Newfield Exploration Co.
7.125%, due 05/15/18 | | | 4,800,000 | | | 4,386,000 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Oil, Gas & Consumable Fuels - continued |
Northwest Pipeline Corp.
7.000%, due 06/15/16 | | $ | 2,500,000 | | $ | 2,640,697 |
6.050%, due 06/15/18 | | | 900,000 | | | 903,285 |
Panhandle Eastern Pipeline Co.
7.000%, due 06/15/18 | | | 1,850,000 | | | 1,881,060 |
Petrobras International Finance Co.
5.875%, due 03/01/18(b) | | | 5,000,000 | | | 4,939,560 |
Pioneer Natural Resources Co.,
Series A
7.200%, due 01/15/28(b) | | | 1,510,000 | | | 1,188,883 |
Quicksilver Resources, Inc.
7.125%, due 04/01/16(b) | | | 2,400,000 | | | 1,884,000 |
8.250%, due 08/01/15(b) | | | 6,700,000 | | | 5,996,500 |
Range Resources Corp.
7.375%, due 07/15/13 | | | 2,575,000 | | | 2,539,594 |
7.250%, due 05/01/18 | | | 800,000 | | | 752,000 |
8.000%, due 05/15/19 | | | 1,775,000 | | | 1,755,031 |
Tennessee Gas Pipeline Co.
7.500%, due 04/01/17 | | | 3,500,000 | | | 3,679,364 |
Tesoro Corp. | | | | | | |
6.250%, due 11/01/12(b) | | | 5,750,000 | | | 5,491,250 |
9.750%, due 06/01/19 | | | 2,000,000 | | | 1,985,000 |
VeraSun Energy Corp.
9.375%, due 06/01/17(d) | | | 4,400,000 | | | 533,500 |
Williams Cos., Inc. (The)
7.875%, due 09/01/21 | | | 6,950,000 | | | 6,858,955 |
Williams Partners LP/Williams Partners Finance Corp.
7.250%, due 02/01/17(b) | | | 10,000,000 | | | 9,137,830 |
XTO Energy, Inc.
5.500%, due 06/15/18 | | | 3,500,000 | | | 3,513,352 |
| | | | | | |
| | | | | | 144,048,648 |
| | | | | | |
| Paper & Forest Products - 0.9% |
Buckeye Technologies, Inc.
8.000%, due 10/15/10(b) | | | 4,652,000 | | | 4,582,220 |
Cellu Tissue Holdings, Inc.
11.500%, due 06/01/14 (144A)(a) | | | 1,700,000 | | | 1,678,750 |
Georgia-Pacific LLC
8.250%, due 05/01/16 (144A)(a) | | | 3,000,000 | | | 2,925,000 |
International Paper Co.
7.950%, due 06/15/18 | | | 3,150,000 | | | 3,043,687 |
Norske Skog Canada, Ltd.
7.375%, due 03/01/14 | | | 2,050,000 | | | 881,500 |
| | | | | | |
| | | | | | 13,111,157 |
| | | | | | |
See accompanying notes to financial statements
11
Met Investors Series Trust
Lord Abbett Bond Debenture Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| | |
| Personal Products - 0.7% | | | | | | |
Elizabeth Arden, Inc.
7.750%, due 01/15/14(b) | | $ | 9,300,000 | | $ | 8,091,000 |
Estee Lauder Cos., Inc. (The) - Class A
7.750%, due 11/01/13 | | | 2,000,000 | | | 2,270,450 |
| | | | | | |
| | | | | | 10,361,450 |
| | | | | | |
| Pharmaceuticals - 0.9% | | | | | | |
Abbott Laboratories
5.125%, due 04/01/19 | | | 1,675,000 | | | 1,727,928 |
Axcan Intermediate Holdings, Inc.
12.750%, due 03/01/16 | | | 2,500,000 | | | 2,543,750 |
Novartis Securities Investment, Ltd.
5.125%, due 02/10/19(b) | | | 3,075,000 | | | 3,145,990 |
Warner Chilcott Corp.
8.750%, due 02/01/15 | | | 5,671,000 | | | 5,671,000 |
| | | | | | |
| | | | | | 13,088,668 |
| | | | | | |
| Real Estate Investment Trusts (REITs) - 0.9% |
Felcor Lodging LP
9.000%, due 06/01/11 | | | 3,710,000 | | | 3,283,350 |
Host Marriott LP
7.000%, due 08/15/12(b) | | | 7,800,000 | | | 7,566,000 |
6.375%, due 03/15/15(b) | | | 3,000,000 | | | 2,610,000 |
ProLogis
5.625%, due 11/15/16 | | | 1,129,000 | | | 869,080 |
| | | | | | |
| | | | | | 14,328,430 |
| | | | | | |
| Semiconductors & Semiconductor Equipment - 0.4% |
Advanced Micro Devices, Inc.
7.750%, due 11/01/12(b) | | | 5,500,000 | | | 3,671,250 |
Analog Devices, Inc.
5.000%, due 07/01/14 | | | 1,800,000 | | | 1,805,044 |
| | | | | | |
| | | | | | 5,476,294 |
| | | | | | |
| Software - 0.7% |
First Data Corp.
9.875%, due 09/24/15(b) | | | 3,600,000 | | | 2,574,000 |
Open Solutions, Inc.
9.750%, due 02/01/15 (144A)(a) | | | 3,500,000 | | | 1,452,500 |
Serena Software, Inc.
10.375%, due 03/15/16 | | | 2,425,000 | | | 1,940,000 |
Vangent, Inc.
9.625%, due 02/15/15 | | | 5,000,000 | | | 4,175,000 |
| | | | | | |
| | | | | | 10,141,500 |
| | | | | | |
| Specialty Retail - 0.7% |
Inergy LP/Inergy Finance Corp. | | | | | | |
8.250%, due 03/01/16 | | | 6,250,000 | | | 5,984,375 |
8.750%, due 03/01/15 (144A)(a) | | | 1,350,000 | | | 1,326,375 |
Limited Brands, Inc. | | | | | | |
5.250%, due 11/01/14 | | | 425,000 | | | 361,718 |
6.900%, due 07/15/17 | | | 2,475,000 | | | 2,144,783 |
8.500%, due 06/15/19 (144A)(a) | | | 1,425,000 | | | 1,367,508 |
| | | | | | |
| | | | | | 11,184,759 |
| | | | | | |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Textiles, Apparel & Luxury Goods - 1.0% |
INVISTA, Inc.
9.250%, due 05/01/12 (144A)(a) | | $ | 5,600,000 | | $ | 5,306,000 |
Levi Strauss & Co.
8.875%, due 04/01/16(b) | | | 6,300,000 | | | 6,126,750 |
Quiksilver, Inc.
6.875%, due 04/15/15(b) | | | 6,300,000 | | | 3,370,500 |
| | | | | | |
| | | | | | 14,803,250 |
| | | | | | |
| Trading Companies & Distributors - 0.4% |
Interline Brands, Inc.
8.125%, due 06/15/14 | | | 5,500,000 | | | 5,445,000 |
| | | | | | |
| Transportation - 0.6% |
Bristow Group, Inc. | | | | | | |
6.125%, due 06/15/13 | | | 7,000,000 | | | 6,370,000 |
7.500%, due 09/15/17 | | | 3,000,000 | | | 2,737,500 |
| | | | | | |
| | | | | | 9,107,500 |
| | | | | | |
| Wireless Telecommunication Services - 1.5% |
CC Holdings GS V LLC/Crown Castle GS III Corp.
7.750%, due 05/01/17 (144A)(a) | | | 6,475,000 | | | 6,345,500 |
Centennial Communications Corp. 10.000%, due 01/01/13(b) | | | 5,950,000 | | | 6,307,000 |
iPCS, Inc.
5.028%, due 05/01/14(b)(e)(f) | | | 4,000,000 | | | 2,660,000 |
MetroPCS Wireless, Inc.
9.250%, due 11/01/14 | | | 6,000,000 | | | 5,992,500 |
Telemar Norte Leste S.A.
9.500%, due 04/23/19 (144A)(a) | | | 1,000,000 | | | 1,092,500 |
| | | | | | |
| | | | | | 22,397,500 |
| | | | | | |
Total Domestic Bonds & Debt Securities
(Cost $1,374,614,543) | | | | | | 1,208,770,199 |
| | | | | | |
| U. S. Government & Agency Obligations - 0.8% |
Federal National Mortgage Assoc. | | | | | | |
5.500%, due 01/01/37 (Cost $11,629,710) | | | 11,495,891 | | | 11,892,746 |
| | | | | | |
| |
| Convertible Bonds - 12.0% | | | |
| Aerospace & Defense - 0.4% | | | |
GenCorp, Inc.
2.250%, due 11/15/24 | | | 3,560,000 | | | 1,748,850 |
L-3 Communications Corp.
3.000%, due 08/01/35 | | | 4,000,000 | | | 3,865,000 |
| | | | | | |
| | | | | | 5,613,850 |
| | | | | | |
| Airlines - 0.0% |
Frontier Airlines, Inc.
5.000%, due 12/15/25(d) | | | 1,000,000 | | | 175,000 |
| | | | | | |
| Beverages - 0.3% | | | | | | |
Molson Coors Brewing Co.
2.500%, due 07/30/13(b) | | | 5,000,000 | | | 5,362,500 |
| | | | | | |
See accompanying notes to financial statements
12
Met Investors Series Trust
Lord Abbett Bond Debenture Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| | |
| Biotechnology - 1.1% | | | | | | |
Amgen, Inc.
0.125%, due 02/01/11(b) | | $ | 4,000,000 | | $ | 3,820,000 |
BioMarin Pharmaceutical, Inc.
2.500%, due 03/29/13 | | | 3,500,000 | | | 3,828,125 |
Decode Genetics, Inc.
3.500%, due 04/15/11 | | | 1,666,000 | | | 133,280 |
Fisher Scientific International, Inc.
3.250%, due 03/01/24(b) | | | 2,500,000 | | | 3,053,125 |
Gilead Sciences, Inc.
0.625%, due 05/01/13 | | | 4,000,000 | | | 5,185,000 |
| | | | | | |
| | | | | | 16,019,530 |
| | | | | | |
| Chemicals - 0.1% |
Ferro Corp.
6.500%, due 08/15/13 | | | 3,280,000 | | | 1,672,800 |
| | | | | | |
| Commercial & Professional Services - 0.4% |
Charles River Associates, Inc.
2.875%, due 06/15/34 | | | 6,000,000 | | | 6,007,500 |
| | | | | | |
| Commercial Banks - 0.2% |
National City Corp.
4.000%, due 02/01/11 | | | 2,500,000 | | | 2,468,750 |
| | | | | | |
| Communications Equipment - 0.4% |
ADC Telecommunications, Inc.
1.593%, due 06/15/13(e) | | | 2,400,000 | | | 1,767,000 |
Ciena Corp.
0.250%, due 05/01/13 | | | 3,500,000 | | | 2,318,750 |
JDS Uniphase Corp.
1.000%, due 05/15/26(b) | | | 3,500,000 | | | 2,625,308 |
| | | | | | |
| | | | | | 6,711,058 |
| | | | | | |
| Computers & Peripherals - 0.3% |
EMC Corp./Massachusetts
1.750%, due 12/01/11(b) | | | 4,000,000 | | | 4,160,000 |
| | | | | | |
| Diversified Financial Services - 0.1% |
Ingersoll-Rand Co., Ltd. - Class A
4.500%, due 04/15/12 | | | 1,000,000 | | | 1,349,790 |
| | | | | | |
| Diversified Telecommunication Services - 0.3% |
Qwest Communications International, Inc.
3.500%, due 11/15/25 | | | 4,000,000 | | | 3,960,000 |
| | | | | | |
| Electrical Equipment - 0.8% |
Evergreen Solar, Inc.
4.000%, due 07/15/13 | | | 3,350,000 | | | 1,471,320 |
General Cable Corp.
1.000%, due 10/15/12(b) | | | 5,000,000 | | | 3,950,000 |
Roper Industries, Inc.
1.481%/0.00% , due 01/15/34(g) | | | 12,500,000 | | | 7,109,375 |
| | | | | | |
| | | | | | 12,530,695 |
| | | | | | |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Electronic Equipment, Instruments & Components - 0.3% |
Flir Systems, Inc.
3.000%, due 06/01/23 | | $ | 275,000 | | $ | 564,781 |
Itron, Inc.
2.500%, due 08/01/26 | | | 3,500,000 | | | 3,841,250 |
| | | | | | |
| | | | | | 4,406,031 |
| | | | | | |
| Energy Equipment & Services - 0.2% |
Hanover Compressor Co.
4.750%, due 01/15/14 | | | 3,500,000 | | | 2,695,000 |
| | | | | | |
| Food Products - 0.4% |
Archer-Daniels-Midland Co.
0.875%, due 02/15/14 | | | 7,500,000 | | | 6,862,500 |
| | | | | | |
| Health Care Equipment & Supplies - 0.1% |
Medtronic, Inc.
1.500%, due 04/15/11(b) | | | 1,500,000 | | | 1,458,750 |
| | | | | | |
| Health Care Providers & Services - 0.1% |
Five Star Quality Care, Inc.
3.750%, due 10/15/26 | | | 1,500,000 | | | 931,875 |
| | | | | | |
| Household Durables - 0.1% |
D.R. Horton, Inc.
2.000%, due 05/15/14(b) | | | 1,500,000 | | | 1,440,000 |
| | | | | | |
| Industrial Conglomerates - 0.1% | | | | | | |
Textron, Inc.
4.500%, due 05/01/13 | | | 1,600,000 | | | 1,612,000 |
| | | | | | |
| Internet Software & Services - 0.3% | | | |
Equinix, Inc.
2.500%, due 04/15/12(b) | | | 5,500,000 | | | 4,950,000 |
| | | | | | |
| Life Sciences Tools & Services - 0.5% | | | |
Millipore Corp.
3.750%, due 06/01/26(b) | | | 7,000,000 | | | 6,947,500 |
Nektar Therapeutics
3.250%, due 09/28/12 | | | 900,000 | | | 666,000 |
| | | | | | |
| | | | | | 7,613,500 |
| | | | | | |
| Machinery - 0.2% | | | | | | |
Actuant Corp.
2.000%, due 11/15/23 | | | 1,400,000 | | | 1,319,500 |
Danaher Corp.
0.694%, due 01/22/21(h) | | | 2,500,000 | | | 2,293,750 |
| | | | | | |
| | | | | | 3,613,250 |
| | | | | | |
| Media - 0.9% | | | | | | |
Liberty Media Corp.
3.250%, due 03/15/31 | | | 8,250,000 | | | 3,258,750 |
Omnicom Group, Inc.
0.000%, due 07/01/38(b)(h) | | | 3,000,000 | | | 2,902,500 |
Sinclair Broadcast Group, Inc.
6.000%, due 09/15/12 | | | 5,000,000 | | | 2,100,000 |
4.875%/2.000%, due 07/15/18(g) | | | 3,000,000 | | | 2,130,000 |
See accompanying notes to financial statements
13
Met Investors Series Trust
Lord Abbett Bond Debenture Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| | |
| Media - continued | | | | | | |
Virgin Media, Inc.
6.500%, due 11/15/16 (144A)(a) | | $ | 3,500,000 | | $ | 2,730,000 |
| | | | | | |
| | | | | | 13,121,250 |
| | | | | | |
| Metals & Mining - 0.9% | | | | | | |
Newmont Mining Corp.
1.250%, due 07/15/14(b) | | | 5,000,000 | | | 5,443,750 |
Placer Dome, Inc.
2.750%, due 10/15/23 | | | 5,550,000 | | | 7,825,500 |
| | | | | | |
| | | | | | 13,269,250 |
| | | | | | |
| Multiline Retail - 0.1% | | | | | | |
Saks, Inc.
7.500%, due 12/01/13 (144A)(a) | | | 1,300,000 | | | 1,363,375 |
| | | | | | |
| Oil, Gas & Consumable Fuels - 0.2% | | | |
Quicksilver Resources, Inc.
1.875%, due 11/01/24 | | | 3,000,000 | | | 2,748,750 |
| | | | | | |
| Pharmaceuticals - 1.1% | | | | | | |
Alza Corp.
0.601%, due 07/28/20(b)(h) | | | 7,000,000 | | | 6,063,750 |
Teva Pharmaceutical Finance Co. B.V.
1.750%, due 02/01/26(b) | | | 4,675,000 | | | 5,276,906 |
Teva Pharmaceutical Industries, Ltd.
0.250%, due 02/01/24 | | | 3,500,000 | | | 4,983,125 |
| | | | | | |
| | | | | | 16,323,781 |
| | | | | | |
| Professional Services - 0.6% | | | | | | |
FTI Consulting, Inc.
3.750%, due 07/15/12 | | | 5,000,000 | | | 8,475,000 |
| | | | | | |
| Real Estate Investment Trusts (REITs) - 0.2% |
ProLogis
2.250%, due 04/01/37 | | | 4,000,000 | | | 3,220,000 |
| | | | | | |
| Semiconductors & Semiconductor Equipment - 0.4% |
Advanced Micro Devices, Inc.
5.750%, due 08/15/12(b) | | | 1,975,000 | | | 1,236,153 |
Intel Corp.
2.950%, due 12/15/35 | | | 5,000,000 | | | 4,225,000 |
| | | | | | |
| | | | | | 5,461,153 |
| | | | | | |
| Software - 0.4% | | | | | | |
Cadence Design Systems, Inc.
1.375%, due 12/15/11 | | | 2,000,000 | | | 1,652,500 |
Symantec Corp.
0.750%, due 06/15/11 | | | 5,000,000 | | | 5,062,500 |
| | | | | | |
| | | | | | 6,715,000 |
| | | | | | |
|
| Wireless Telecommunication Services - 0.5% |
NII Holdings, Inc.
2.750%, due 08/15/25 | | | 3,500,000 | | | 3,290,000 |
| | | | | | |
Security
Description | | Shares/Par
Amount | | Value |
| | | | | | |
|
| Wireless Telecommunication Services - continued |
SBA Communications Corp.
4.000%, due 10/01/14 (144A)(a) | | $ | 4,000,000 | | $ | 4,040,000 |
| | | | | | |
| | | | | | 7,330,000 |
| | | | | | |
Total Convertible Bonds
(Cost $200,223,746) | | | | | | 179,641,938 |
| | | | | | |
| | |
| Common Stocks - 0.5% | | | | | | |
| Independent Power Producers & Energy Traders - 0.3% |
NRG Energy, Inc.*(b) | | | 150,000 | | | 3,894,000 |
| | | | | | |
| Media - 0.2% | | | | | | |
CCH I LLC | | | 188,669 | | | 3,537,544 |
| | | | | | |
| Paper & Forest Products - 0.0% | | | | | | |
Indah Kiat Pulp and Paper Corp.* | | | 1,867,500 | | | 317,076 |
| | | | | | |
Total Common Stocks
(Cost $7,504,846) | | | | | | 7,748,620 |
| | | | | | |
| | |
| Preferred Stock - 0.0% | | | | | | |
| Thrifts & Mortgage Finance - 0.0% | | | |
Federal National Mortgage Assoc. 0.000%(b)(e)
(Cost - $3,423,167) | | | 136,300 | | | 182,642 |
| | | | | | |
| |
| Convertible Preferred Stocks - 2.6% | | | |
| Commercial Banks - 0.4% | | | | | | |
Wells Fargo & Co., Series L
7.500%, due 12/31/49 | | | 7,500 | | | 5,887,275 |
| | | | | | |
| Diversified Financial Services - 1.0% | | | |
AMG Capital Trust I
5.100%, due 04/15/36 | | | 65,000 | | | 1,885,000 |
Bank of America Corp.
7.250%, due 12/31/49 | | | 9,000 | | | 7,524,270 |
Vale Capital, Ltd.
5.500%, due 06/15/10(b) | | | 160,725 | | | 5,906,644 |
| | | | | | |
| | | | | | 15,315,914 |
| | | | | | |
| Independent Power Producers & Energy Traders - 0.1% |
NRG Energy, Inc.
4.000%, due 12/31/49 | | | 900 | | | 1,169,100 |
| | | | | | |
| Metals & Mining - 0.1% | | | | | | |
Freeport-McMoRan Copper & Gold, Inc.
6.750%, due 05/01/10 | | | 20,000 | | | 1,588,600 |
| | | | | | |
| Oil, Gas & Consumable Fuels - 0.6% | | | |
El Paso Corp.
4.990%, due 12/31/49 | | | 5,500 | | | 4,339,940 |
Williams Holdings of Delaware, Inc.
5.500%, due 06/01/33 | | | 65,000 | | | 4,757,187 |
| | | | | | |
| | | | | | 9,097,127 |
| | | | | | |
See accompanying notes to financial statements
14
Met Investors Series Trust
Lord Abbett Bond Debenture Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | | |
Security
Description | | Shares/Par
Amount | | Value | |
| | | | | | | |
|
| Pharmaceuticals - 0.4% | |
Mylan, Inc. 6.500%, due 11/15/10 | | $ | 7,000 | | $ | 6,029,800 | |
| | | | | | | |
| Thrifts & Mortgage Finance - 0.0% | | | | |
Federal National Mortgage Assoc.
8.750%, due 05/13/11 | | | 125,000 | | | 114,475 | |
| | | | | | | |
Total Convertible Preferred Stocks
(Cost $51,578,481) | | | | | | 39,202,291 | |
| | | | | | | |
| |
| Escrowed Shares - 0.0% | | | | |
| Commercial Banks - 0.0% | | | | |
Premier Entertainment Biloxi LLC 10.750%, due 02/01/12*
(Cost - $0) | | | 3,100,000 | | | 0 | |
| | | | | | | |
| |
| Short-Term Investments - 12.5% | | | | |
| Mutual Funds - 10.6% | | | | |
State Street Navigator Securities Lending Trust Prime Portfolio (i) | | | 158,273,147 | | | 158,273,147 | |
| | | | | | | |
| Repurchase Agreement - 1.9% | | | | |
State Street Bank & Trust Co., Repurchase Agreement, dated 06/30/09 at 0.010% to be repurchased at $28,471,008 on 07/01/09 collateralized by $28,900,000 FHLB at
0.900% due 04/08/10 with a value
of $29,044,500. | | $ | 28,471,000 | | | 28,471,000 | |
| | | | | | | |
Total Short-Term Investments
(Cost $186,744,147) | | | | | | 186,744,147 | |
| | | | | | | |
| |
TOTAL INVESTMENTS - 109.0%
(Cost $1,835,718,640) | | | 1,634,182,583 | |
| | | | | | | |
| |
| Other Assets and Liabilities (net) - (9.0)% | | | (134,381,547 | ) |
| | | | | | | |
| | |
| NET ASSETS - 100.0% | | | | | $ | 1,499,801,036 | |
| | | | | | | |
Portfolio Footnotes:
| * | | Non-income producing security |
| (a) | | Securities that may be resold to “qualified institutional buyers” under Rule 144A or securities offered pursuant to Section 4(2) of the Securities Act of 1933, as amended. These securities have been determined to be liquid under the guidelines established by the Board of Trustees. These securities represent in the aggregate $187,039,438 of net assets. |
| (b) | | All or a portion of security is on loan. |
| (c) | | Security is a “step-up” bond where coupon increases or steps up at a predetermined date. Rates shown are current coupon and next coupon rate when security steps up. |
| (d) | | Security is in default and/or issuer is in bankruptcy. |
| (e) | | Variable or floating rate security. The stated rate represents the rate at June 30, 2009. |
| (f) | | Payment-in-kind security for which part of the income earned may be paid as additional principal. |
| (g) | | Security is a “step-down” bond where the coupon decreases or steps down at a predetermined date. Rates shown are current coupon and next coupon rate when a security steps down. |
| (h) | | Zero coupon bond—Interest rate represents current yield to maturity. |
| (i) | | Represents investment of collateral received from securities lending transactions. |
FHLB - Federal Home Loan Bank
See accompanying notes to financial statements
15
The following table summarizes the credit composition of the portfolio holdings of the Lord Abbett Bond Debenture Portfolio at June 30, 2009, based upon credit quality ratings issued by Standard & Poor’s. For securities not rated by Standard & Poor’s, the equivalent Moody’s rating is used.
| | | |
| Portfolio Composition by Credit Quality (Unaudited) | | Percent of
Portfolio | |
AAA/Government/Government Agency | | 1.24 | % |
AA | | 1.10 | |
A | | 7.25 | |
BBB | | 15.24 | |
BB | | 25.38 | |
B | | 33.22 | |
Below B | | 12.31 | |
Equities/Other | | 4.26 | |
| | | |
Total: | | 100.00 | % |
| | | |
Met Investors Series Trust
Lord Abbett Bond Debenture Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
| Level 1—quoted | | prices in active markets for identical securities |
| Level 2—other | | significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.) |
| Level 3—significant | | unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments) |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Domestic Bonds & Debt Securities | | | | | | | | | | | | |
Aerospace & Defense | | $ | — | | $ | 24,678,092 | | $ | — | | $ | 24,678,092 |
Agriculture | | | — | | | 1,260,365 | | | — | | | 1,260,365 |
Auto Components | | | — | | | 10,928,625 | | | — | | | 10,928,625 |
Automobiles | | | — | | | 2,544,625 | | | — | | | 2,544,625 |
Beverages | | | — | | | 13,234,442 | | | — | | | 13,234,442 |
Building Products | | | — | | | 2,338,989 | | | — | | | 2,338,989 |
Chemicals | | | — | | | 41,563,188 | | | — | | | 41,563,188 |
Commercial & Professional Services | | | — | | | 44,513,174 | | | — | | | 44,513,174 |
Commercial Banks | | | — | | | 7,384,036 | | | — | | | 7,384,036 |
Communications Equipment | | | — | | | 6,288,750 | | | — | | | 6,288,750 |
Computers & Peripherals | | | — | | | 11,711,156 | | | — | | | 11,711,156 |
Consumer Finance | | | — | | | 42,482,595 | | | — | | | 42,482,595 |
Containers & Packaging | | | — | | | 37,467,210 | | | — | | | 37,467,210 |
Diversified Financial Services | | | — | | | 36,516,702 | | | — | | | 36,516,702 |
Diversified Telecommunication Services | | | — | | | 74,321,981 | | | — | | | 74,321,981 |
Electric Utilities | | | — | | | 80,821,707 | | | — | | | 80,821,707 |
Electrical Equipment | | | — | | | 24,307,552 | | | — | | | 24,307,552 |
Energy Equipment & Services | | | — | | | 31,562,941 | | | — | | | 31,562,941 |
Entertainment & Leisure | | | — | | | 7,120,000 | | | — | | | 7,120,000 |
Food & Staples Retailing | | | — | | | 15,916,250 | | | — | | | 15,916,250 |
Food Products | | | — | | | 27,466,650 | | | — | | | 27,466,650 |
Gas Utilities | | | — | | | 17,545,338 | | | — | | | 17,545,338 |
Health Care Equipment & Supplies | | | — | | | 16,127,719 | | | — | | | 16,127,719 |
Health Care Providers & Services | | | — | | | 76,173,834 | | | — | | | 76,173,834 |
Hotels, Restaurants & Leisure | | | — | | | 68,906,623 | | | — | | | 68,906,623 |
Household Durables | | | — | | | 9,875,722 | | | — | | | 9,875,722 |
Independent Power Producers & Energy Traders | | | — | | | 32,297,628 | | | — | | | 32,297,628 |
Insurance | | | — | | | 7,493,921 | | | — | | | 7,493,921 |
Internet & Catalog Retail | | | — | | | 4,615,375 | | | — | | | 4,615,375 |
IT Services | | | — | | | 3,148,500 | | | — | | | 3,148,500 |
Leisure Equipment & Products | | | — | | | 4,055,948 | | | — | | | 4,055,948 |
Life Sciences Tools & Services | | | — | | | 9,030,500 | | | — | | | 9,030,500 |
Machinery | | | — | | | 11,067,875 | | | — | | | 11,067,875 |
Manufacturing | | | — | | | 11,707,341 | | | — | | | 11,707,341 |
Media | | | — | | | 61,634,569 | | | — | | | 61,634,569 |
See accompanying notes to financial statements
16
Met Investors Series Trust
Lord Abbett Bond Debenture Portfolio
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Metals & Mining | | $ | — | | $ | 45,054,308 | | $ | — | | $ | 45,054,308 |
Multi-Utilities | | | — | | | 960,392 | | | — | | | 960,392 |
Multiline Retail | | | — | | | 11,151,420 | | | — | | | 11,151,420 |
Oil, Gas & Consumable Fuels | | | — | | | 144,048,648 | | | — | | | 144,048,648 |
Paper & Forest Products | | | — | | | 13,111,157 | | | — | | | 13,111,157 |
Personal Products | | | — | | | 10,361,450 | | | — | | | 10,361,450 |
Pharmaceuticals | | | — | | | 13,088,668 | | | — | | | 13,088,668 |
Real Estate Investment Trusts (REITs) | | | — | | | 14,328,430 | | | — | | | 14,328,430 |
Semiconductors & Semiconductor Equipment | | | — | | | 5,476,294 | | | — | | | 5,476,294 |
Software | | | — | | | 10,141,500 | | | — | | | 10,141,500 |
Specialty Retail | | | — | | | 11,184,759 | | | — | | | 11,184,759 |
Textiles, Apparel & Luxury Goods | | | — | | | 14,803,250 | | | — | | | 14,803,250 |
Trading Companies & Distributors | | | — | | | 5,445,000 | | | — | | | 5,445,000 |
Transportation | | | — | | | 9,107,500 | | | — | | | 9,107,500 |
Wireless Telecommunication Services | | | — | | | 22,397,500 | | | — | | | 22,397,500 |
Total Domestic Bonds & Debt Securities | | | — | | | 1,208,770,199 | | | — | | | 1,208,770,199 |
U. S. Government & Agency Obligations | | | — | | | 11,892,746 | | | — | | | 11,892,746 |
Convertible Bonds | | | | | | | | | | | | |
Aerospace & Defense | | | — | | | 5,613,850 | | | — | | | 5,613,850 |
Airlines | | | — | | | 175,000 | | | — | | | 175,000 |
Beverages | | | — | | | 5,362,500 | | | — | | | 5,362,500 |
Biotechnology | | | — | | | 16,019,530 | | | — | | | 16,019,530 |
Chemicals | | | — | | | 1,672,800 | | | — | | | 1,672,800 |
Commercial & Professional Services | | | — | | | 6,007,500 | | | — | | | 6,007,500 |
Commercial Banks | | | — | | | 2,468,750 | | | — | | | 2,468,750 |
Communications Equipment | | | — | | | 6,711,058 | | | — | | | 6,711,058 |
Computers & Peripherals | | | — | | | 4,160,000 | | | — | | | 4,160,000 |
Diversified Financial Services | | | — | | | 1,349,790 | | | — | | | 1,349,790 |
Diversified Telecommunication Services | | | — | | | 3,960,000 | | | — | | | 3,960,000 |
Electrical Equipment | | | — | | | 12,530,695 | | | — | | | 12,530,695 |
Electronic Equipment, Instruments & Components | | | — | | | 4,406,031 | | | — | | | 4,406,031 |
Energy Equipment & Services | | | — | | | 2,695,000 | | | — | | | 2,695,000 |
Food Products | | | — | | | 6,862,500 | | | — | | | 6,862,500 |
Health Care Equipment & Supplies | | | — | | | 1,458,750 | | | — | | | 1,458,750 |
Health Care Providers & Services | | | — | | | 931,875 | | | — | | | 931,875 |
Household Durables | | | — | | | 1,440,000 | | | — | | | 1,440,000 |
Industrial Conglomerates | | | — | | | 1,612,000 | | | — | | | 1,612,000 |
Internet Software & Services | | | — | | | 4,950,000 | | | — | | | 4,950,000 |
Life Sciences Tools & Services | | | — | | | 7,613,500 | | | — | | | 7,613,500 |
Machinery | | | — | | | 3,613,250 | | | — | | | 3,613,250 |
Media | | | — | | | 13,121,250 | | | — | | | 13,121,250 |
Metals & Mining | | | — | | | 13,269,250 | | | — | | | 13,269,250 |
Multiline Retail | | | — | | | 1,363,375 | | | — | | | 1,363,375 |
Oil, Gas & Consumable Fuels | | | — | | | 2,748,750 | | | — | | | 2,748,750 |
Pharmaceuticals | | | — | | | 16,323,781 | | | — | | | 16,323,781 |
See accompanying notes to financial statements
17
Met Investors Series Trust
Lord Abbett Bond Debenture Portfolio
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Professional Services | | $ | — | | $ | 8,475,000 | | $ | — | | $ | 8,475,000 |
Real Estate Investment Trusts (REITs) | | | — | | | 3,220,000 | | | — | | | 3,220,000 |
Semiconductors & Semiconductor Equipment | | | — | | | 5,461,153 | | | — | | | 5,461,153 |
Software | | | — | | | 6,715,000 | | | — | | | 6,715,000 |
Wireless Telecommunication Services | | | — | | | 7,330,000 | | | — | | | 7,330,000 |
Total Convertible Bonds | | | — | | | 179,641,938 | | | — | | | 179,641,938 |
Common Stocks | | | | | | | | | | | | |
Independent Power Producers & Energy Traders | | | 3,894,000 | | | — | | | — | | | 3,894,000 |
Media | | | 3,537,544 | | | — | | | — | | | 3,537,544 |
Paper & Forest Products | | | — | | | 317,076 | | | — | | | 317,076 |
Total Common Stocks | | | 7,431,544 | | | 317,076 | | | — | | | 7,748,620 |
Preferred Stock | | | | | | | | | | | | |
Thrifts & Mortgage Finance | | | 182,642 | | | — | | | — | | | 182,642 |
Convertible Preferred Stocks | | | | | | | | | | | | |
Commercial Banks | | | 5,887,275 | | | — | | | — | | | 5,887,275 |
Diversified Financial Services | | | 13,430,914 | | | 1,885,000 | | | — | | | 15,315,914 |
Independent Power Producers & Energy Traders | | | — | | | 1,169,100 | | | — | | | 1,169,100 |
Metals & Mining | | | 1,588,600 | | | — | | | — | | | 1,588,600 |
Oil, Gas & Consumable Fuels | | | — | | | 9,097,127 | | | — | | | 9,097,127 |
Pharmaceuticals | | | 6,029,800 | | | — | | | — | | | 6,029,800 |
Thrifts & Mortgage Finance | | | — | | | 114,475 | | | — | | | 114,475 |
Total Convertible Preferred Stocks | | | 26,936,589 | | | 12,265,702 | | | — | | | 39,202,291 |
Escrowed Shares | | | | | | | | | | | | |
Commercial Banks | | | — | | | — | | | — | | | — |
Short-Term Investments | | | | | | | | | | | | |
Mutual Funds | | | 158,273,147 | | | — | | | — | | | 158,273,147 |
Repurchase Agreement | | | — | | | 28,471,000 | | | — | | | 28,471,000 |
Total Short-Term Investments | | | 158,273,147 | | | 28,471,000 | | | — | | | 186,744,147 |
| TOTAL INVESTMENTS | | $ | 192,823,922 | | $ | 1,441,358,661 | | $ | — | | $ | 1,634,182,583 |
See accompanying notes to financial statements
18
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| Lord Abbett Bond Debenture Portfolio | | | |
| Assets | | | | |
Investments, at value (a)(b) | | $ | 1,605,711,583 | |
Repurchase Agreement | | | 28,471,000 | |
Cash | | | 397 | |
Receivable for investments sold | | | 2,488,785 | |
Receivable for Trust shares sold | | | 705,090 | |
Dividends receivable | | | 204,563 | |
Interest receivable | | | 25,753,679 | |
| | | | |
Total assets | | | 1,663,335,097 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 3,833,992 | |
Trust shares redeemed | | | 477,687 | |
Distribution and services fees—Class B | | | 127,462 | |
Distribution and services fees—Class E | | | 3,396 | |
Collateral for securities on loan | | | 158,273,147 | |
Management fee | | | 621,641 | |
Administration fee | | | 9,341 | |
Custodian and accounting fees | | | 23,646 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 160,322 | |
| | | | |
Total liabilities | | | 163,534,061 | |
| | | | |
| Net Assets | | $ | 1,499,801,036 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 1,750,526,429 | |
Accumulated net realized loss | | | (103,772,899 | ) |
Unrealized depreciation on investments | | | (201,536,057 | ) |
Undistributed net investment income | | | 54,583,563 | |
| | | | |
Total | | $ | 1,499,801,036 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 846,729,438 | |
| | | | |
Class B | | | 625,389,719 | |
| | | | |
Class E | | | 27,681,879 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 81,078,509 | |
| | | | |
Class B | | | 60,287,910 | |
| | | | |
Class E | | | 2,665,009 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 10.44 | |
| | | | |
Class B | | | 10.37 | |
| | | | |
Class E | | | 10.39 | |
| | | | |
| | | | | |
(a) Investments at cost, excluding repurchase agreement | | $ | 1,807,247,640 | |
(b) Includes cash collateral for securities loaned of | | | 158,273,147 | |
See accompanying notes to financial statements
19
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| Lord Abbett Bond Debenture Portfolio | | | |
| Investment Income | | | | |
Dividends (1) | | $ | 1,577,600 | |
Interest (2) | | | 57,771,936 | |
| | | | |
Total investment income | | | 59,349,536 | |
| | | | |
| Expenses | | | | |
Management fee | | | 3,770,123 | |
Administration fees | | | 61,224 | |
Custodian and accounting fees | | | 64,823 | |
Distribution and services fees—Class B | | | 700,777 | |
Distribution and services fees—Class E | | | 18,879 | |
Audit and tax services | | | 17,485 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 81,079 | |
Insurance | | | 18,458 | |
Other | | | 6,582 | |
| | | | |
Total expenses | | | 4,765,863 | |
| | | | |
Net investment income | | | 54,583,673 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments | | | | |
Net realized loss on: | | | | |
Investments | | | (55,718,737 | ) |
| | | | |
Net realized loss on investments | | | (55,718,737 | ) |
| | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 238,289,695 | |
| | | | |
Net change in unrealized appreciation on investments | | | 238,289,695 | |
| | | | |
Net realized and unrealized gain on investments | | | 182,570,958 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 237,154,631 | |
| | | | |
| | | | | |
(1) Dividend income is net of foreign withholding taxes of: | | $ | (7,452 | ) |
(2) Interest income includes securities lending net income of: | | | 752,345 | |
See accompanying notes to financial statements
20
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| Lord Abbett Bond Debenture Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 54,583,673 | | | $ | 127,792,347 | |
Net realized loss on investments | | | (55,718,737 | ) | | | (45,327,371 | ) |
Net change in unrealized increase (depreciation) on investments | | | 238,289,695 | | | | (452,287,553 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 237,154,631 | | | | (369,822,577 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | (81,693,514 | ) | | | (52,521,018 | ) |
Class B | | | (45,231,315 | ) | | | (29,999,174 | ) |
Class E | | | (2,080,126 | ) | | | (1,390,456 | ) |
From net realized gains | | | | | | | | |
Class A | | | — | | | | (18,216,474 | ) |
Class B | | | — | | | | (10,874,653 | ) |
Class E | | | — | | | | (495,656 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (129,004,955 | ) | | | (113,497,431 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 112,932,714 | | | | 204,129,107 | |
Class B | | | 55,032,200 | | | | 53,163,124 | |
Class E | | | 3,421,873 | | | | 3,988,003 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | 81,693,514 | | | | 70,737,492 | |
Class B | | | 45,231,315 | | | | 40,873,827 | |
Class E | | | 2,080,126 | | | | 1,886,112 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (343,651,029 | ) | | | (272,772,724 | ) |
Class B | | | (52,622,369 | ) | | | (183,377,768 | ) |
Class E | | | (3,552,380 | ) | | | (11,759,639 | ) |
| | | | | | | | |
Net decrease in net assets from capital share transactions | | | (99,434,036 | ) | | | (93,132,466 | ) |
| | | | | | | | |
| Net Increase (Decrease) in Net Assets | | | 8,715,640 | | | | (576,452,474 | ) |
Net assets at beginning of period | | | 1,491,085,396 | | | | 2,067,537,870 | |
| | | | | | | | |
Net assets at end of period | | $ | 1,499,801,036 | | | $ | 1,491,085,396 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 54,583,563 | | | $ | 129,004,845 | |
| | | | | | | | |
See accompanying notes to financial statements
21
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Lord Abbett Bond Debenture Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $9.72 | | | $12.63 | | | $ | 12.51 | | | $ | 12.28 | | | $ | 12.63 | | | $ | 12.04 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | 0.37 | | | 0.78 | | | | 0.77 | | | | 0.71 | | | | 0.75 | | | | 0.70 | |
Net Realized/Unrealized Gain (Loss) on Investments | | 1.22 | | | (3.00 | ) | | | 0.07 | | | | 0.39 | | | | (0.52 | ) | | | 0.31 | |
| | | | | | | | | | | | | | | | | | | | | | |
Total From Investment Operations | | 1.59 | | | (2.22 | ) | | | 0.84 | | | | 1.10 | | | | 0.23 | | | | 1.01 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | (0.87 | ) | | (0.51 | ) | | | (0.70 | ) | | | (0.87 | ) | | | (0.58 | ) | | | (0.42 | ) |
Distributions from Net Realized Capital Gains | | — | | | (0.18 | ) | | | (0.02 | ) | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | (0.87 | ) | | (0.69 | ) | | | (0.72 | ) | | | (0.87 | ) | | | (0.58 | ) | | | (0.42 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $10.44 | | | $9.72 | | | $ | 12.63 | | | $ | 12.51 | | | $ | 12.28 | | | $ | 12.63 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | 17.20 | % | | (18.40) | % | | | 6.85 | % | | | 9.35 | % | | | 1.81 | % | | | 8.43 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | 0.55 | %* | | 0.53 | % | | | 0.53 | % | | | 0.56 | % | | | 0.56 | % | | | 0.63 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | 0.55 | %* | | 0.53 | % | | | 0.54 | % | | | N/A | | | | N/A | | | | N/A | |
Ratio of Net investment Income to Average Net Assets | | 7.46 | %* | | 6.84 | % | | | 6.11 | % | | | 5.85 | % | | | 5.92 | % | | | 5.65 | % |
Portfolio Turnover Rate | | 19.6 | % | | 24.8 | % | | | 36.0 | % | | | 36.7 | % | | | 42.1 | % | | | 39.8 | % |
Net Assets, End of Period (in millions) | | $846.7 | | | $933.7 | | | $ | 1,228.9 | | | $ | 1,059.0 | | | $ | 856.4 | | | $ | 520.3 | |
| |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $9.65 | | | $12.54 | | | $ | 12.43 | | | $ | 12.19 | | | $ | 12.54 | | | $ | 11.97 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | 0.36 | | | 0.75 | | | | 0.73 | | | | 0.67 | | | | 0.71 | | | | 0.69 | |
Net Realized/Unrealized Gain (Loss) on Investments | | 1.20 | | | (2.97 | ) | | | 0.07 | | | | 0.40 | | | | (0.52 | ) | | | 0.29 | |
| | | | | | | | | | | | | | | | | | | | | | |
Total From Investment Operations | | 1.56 | | | (2.22 | ) | | | 0.80 | | | | 1.07 | | | | 0.19 | | | | 0.98 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | (0.84 | ) | | (0.49 | ) | | | (0.67 | ) | | | (0.83 | ) | | | (0.54 | ) | | | (0.41 | ) |
Distributions from Net Realized Capital Gains | | — | | | (0.18 | ) | | | (0.02 | ) | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | (0.84 | ) | | (0.67 | ) | | | (0.69 | ) | | | (0.83 | ) | | | (0.54 | ) | | | (0.41 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $10.37 | | | $9.65 | | | $ | 12.54 | | | $ | 12.43 | | | $ | 12.19 | | | $ | 12.54 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | 16.95 | % | | (18.60) | % | | | 6.55 | % | | | 9.15 | % | | | 1.49 | % | | | 8.17 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | 0.80 | %* | | 0.78 | % | | | 0.78 | % | | | 0.81 | % | | | 0.81 | % | | | 0.88 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | 0.80 | %* | | 0.78 | % | | | 0.78 | % | | | N/A | | | | N/A | | | | N/A | |
Ratio of Net Investment Income to Average Net Assets | | 7.21 | %* | | 6.57 | % | | | 5.85 | % | | | 5.59 | % | | | 5.65 | % | | | 5.61 | % |
Portfolio Turnover Rate | | 19.6 | % | | 24.8 | % | | | 36.0 | % | | | 36.7 | % | | | 42.1 | % | | | 39.8 | % |
Net Assets, End of Period (in millions) | | $625.4 | | | $533.6 | | | $ | 800.6 | | | $ | 765.9 | | | $ | 704.5 | | | $ | 776.0 | |
| (a) | | Per share amounts based on average shares outstanding during the period. |
See accompanying notes to financial statements
22
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | |
| Lord Abbett Bond Debenture Portfolio | | Class E | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 9.67 | | | $ | 12.56 | | | $ | 12.44 | | | $ | 12.21 | | | $ | 12.57 | | | $ | 12.00 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.37 | | | | 0.76 | | | | 0.74 | | | | 0.69 | | | | 0.72 | | | | 0.70 | |
Net Realized/Unrealized Gain (Loss) on Investment | | | 1.20 | | | | (2.97 | ) | | | 0.08 | | | | 0.38 | | | | (0.52 | ) | | | 0.29 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total From Investment Operations | | | 1.57 | | | | (2.21 | ) | | | 0.82 | | | | 1.07 | | | | 0.20 | | | | 0.99 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.85 | ) | | | (0.50 | ) | | | (0.68 | ) | | | (0.84 | ) | | | (0.56 | ) | | | (0.42 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (0.18 | ) | | | (0.02 | ) | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.85 | ) | | | (0.68 | ) | | | (0.70 | ) | | | (0.84 | ) | | | (0.56 | ) | | | (0.42 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 10.39 | | | $ | 9.67 | | | $ | 12.56 | | | $ | 12.44 | | | $ | 12.21 | | | $ | 12.57 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 17.07 | % | | | (18.52 | )% | | | 6.73 | % | | | 9.18 | % | | | 1.60 | % | | | 8.24 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.70 | %* | | | 0.68 | % | | | 0.68 | % | | | 0.71 | % | | | 0.71 | % | | | 0.78 | % |
Ratio of Expenses to Average Net Assets Before Reimbursements and Rebates | | | 0.70 | %* | | | 0.68 | % | | | 0.68 | % | | | N/A | | | | N/A | | | | N/A | |
Ratio of Net Investment Income to Average Net Asset | | | 7.31 | %* | | | 6.66 | % | | | 5.95 | % | | | 5.69 | % | | | 5.76 | % | | | 5.67 | % |
Portfolio Turnover Rate | | | 19.6 | % | | | 24.8 | % | | | 36.0 | % | | | 36.7 | % | | | 42.1 | % | | | 39.8 | % |
Net Assets, End of Period (in millions) | | $ | 27.7 | | | $ | 23.8 | | | $ | 37.8 | | | $ | 37.1 | | | | $35.1 | | | | $35.2 | |
| (a) | | Per share amounts based on average shares outstanding during the period. |
See accompanying notes to financial statements
23
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is Lord Abbett Bond Debenture Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A, B and E Shares are currently offered by the Portfolio. Class C is not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
24
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | | |
Expiring
12/31/2016 | | Total |
| |
| $ | 41,997,878 | | $ | 41,997,878 |
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
G. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
H. Forward Commitments, When-Issued and Delayed Delivery Securities - The Portfolio may purchase securities on a when-issued or delayed delivery basis and may purchase or sell securities on a forward commitment basis. Settlement of such transactions normally occurs within a month or more after the purchase or sale commitment is made. The Portfolio may purchase securities under such conditions only with the intention of actually acquiring them, but may enter into a separate agreement to sell the securities before the settlement date. Since the value of securities purchased may fluctuate prior to settlement, the Portfolio may be required to pay more at settlement than the security is worth. In addition, the purchaser is not entitled to any of the interest earned prior to settlement. Upon making a commitment to purchase a security on a when-issued, delayed delivery or forward commitment basis, the Portfolio will hold liquid assets in a segregated account at the Portfolio’s custodian bank worth at least the equivalent of the amount due. The liquid assets will be monitored on a daily basis and adjusted as necessary to maintain the necessary value.
I. Mortgage Related and Other Asset Backed Securities - The Portfolio may invest in mortgage related or other asset-backed securities. These securities may include mortgage pass-through securities, collateralized mortgaged obligations (“CMOs”), commercial mortgage-backed
25
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
securities, mortgage dollar rolls, CMO residuals, stripped mortgage backed securities (“SMBS”) and other securities that directly or indirectly represent a participation in, or are secured by a payable from, mortgage loans on real property or other receivables. The value of some mortgage or asset-backed securities may be particularly sensitive to changes in prevailing interest rates. Early repayment of principal on some mortgage-related securities may expose the Portfolio to a lower rate of return upon reinvestment of principal. The value of these securities may fluctuate in response to the market’s perception of the creditworthiness of the issuers. Additionally, although mortgages and mortgage-related securities are generally supported by some form of government or private guarantee and/or insurance, there is no assurance that private guarantors or insurers will meet their obligations.
One type of SMBS has one class receiving all of the interest from the mortgage assets (the interest-only or “IO” class), while the other class will receive all of the principal (the principal-only or “PO” class). Payments received for the IOs are included in interest income on the Statement of Operations of the Portfolio. Because principal will not be received at the maturity of an IO, adjustments are made to the book value on the security on a daily basis until maturity. These adjustments are included in interest income on the Statement of Operations of the Portfolio. Payments received for POs are treated as reductions to the cost and par value of the securities. Details of mortgage related and other asset-backed securities held at year end are included in the Portfolio’s Portfolio of Investments.
The Portfolio may invest a significant portion of its assets in securities of issuers that hold mortgage and asset backed securities and direct investments in securities backed by commercial and residential mortgage loans and other financial assets. The value and related income of these securities are sensitive to changes in economic conditions, including delinquencies and/or defaults, and may be negatively impacted by increased volatility of market prices and periods of illiquidity.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with Lord, Abbett & Co. LLC (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $3,770,123 | | 0.60 | % | | First $250 Million |
| | |
| | 0.55 | % | | $250 Million to $500 Million |
| | |
| | 0.50 | % | | $500 Million to $1 Billion |
| | |
| | 0.45 | % | | Over $1 Billion |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A, Class B and Class E Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B and Class E distribution plans provide that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%, respectively, of the average net assets of the Portfolio attributable to its Class B and Class E Shares in respect to activities primarily intended to result in the sale of Class B and Class E Shares. However, under the Class B and Class E distribution agreements, payments to the Distributor for activities pursuant to the Class B and Class E distribution plans are currently limited to payments at an annual rate equal to 0.25% and 0.15% of average daily net assets of the Portfolio attributable to its Class B and Class E Shares, respectively.
Under terms of the Class B and Class E distribution plans and distribution agreements, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B and Class E Shares for such entities’ fees or expenses incurred.
26
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
(Decrease)
in Shares
Outstanding | | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 96,011,280 | | 11,257,410 | | 8,518,614 | | (34,708,795 | ) | | (14,932,771 | ) | | 81,078,509 |
12/31/2008 | | 97,337,764 | | 17,556,512 | | 5,934,354 | | (24,817,350 | ) | | (1,326,484 | ) | | 96,011,280 |
| | | | | | |
Class B | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 55,314,081 | | 5,493,678 | | 4,746,203 | | (5,266,052 | ) | | 4,973,829 | | | 60,287,910 |
12/31/2008 | | 63,858,531 | | 4,633,749 | | 3,452,182 | | (16,630,381 | ) | | (8,544,450 | ) | | 55,314,081 |
| | | | | | |
Class E | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 2,461,864 | | 339,606 | | 218,042 | | (354,503 | ) | | 203,145 | | | 2,665,009 |
12/31/2008 | | 3,013,478 | | 346,189 | | 159,031 | | (1,056,834 | ) | | (551,614 | ) | | 2,461,864 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $ | 5,233,250 | | $ | 276,637,093 | | $ | 218,931,569 | | $ | 207,856,125 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $ | 1,835,718,640 | | $ | 23,562,993 | | $ | (225,099,050 | ) | | $ | (201,536,057 | ) |
6. Securities Lending
As of June 30, 2009, the Portfolio had loaned securities which were collateralized by short-term investments. The value of securities on loan and the value of the related collateral were as follows:
| | | | | | | | | | |
Value of
Securities | | Value of
Cash
Collateral | | Value of
Non-Cash
Collateral* | | Total
Collateral |
| | | |
| $ | 154,988,062 | | $ | 158,273,147 | | $ | — | | $ | 158,273,147 |
* The Portfolio cannot repledge or resell this collateral. The non-cash collateral is typically comprised of government securities and/or bank letters of credit.
27
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
7. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $ | 83,910,650 | | $ | 107,087,758 | | $ | 29,586,781 | | $ | 2,514,012 | | $ | 113,497,431 | | $ | 109,601,770 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards | | | Total | |
| | | | |
| $ | 129,004,845 | | $ | — | | $ | (445,882,036 | ) | | $ | (41,997,880 | ) | | $ | (358,875,071 | ) |
8. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
9. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
28
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
29
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
| | |
| Lord Abbett Growth and Income Portfolio | | For the period ended 6/30/09 |
| Managed by Lord, Abbett & Co. LLC | | |
Portfolio Manager Commentary
Performance
During the period ended June 30, 2009, the Portfolio had a return of (0.72)% and (0.87)% for Class A and B Shares, respectively, versus (2.87)% for its benchmark, the Russell 1000® Value Index, and 3.16% for the S&P 500® Index.
Market Environment/Conditions
The economy continued to struggle during the first half of 2009, though some signs of recovery also began to appear. First quarter real output shrank by 5.5% on an annualized basis, resulting in three consecutive quarters in which gross domestic product (GDP) contracted. The stock market (as represented by S&P 500® Index), however, rebounded in March and April, suggesting recovery in the broader economy would follow soon.
In the manufacturing sector, industrial production continued to plummet, and capacity utilization fell below 70%. New orders for durable goods ticked up in February, April, and May, but as of May they were still down more than 23% from a year earlier. After five consecutive months of decline, the Institute for Supply Management’s Manufacturing Index has reversed course, however, showing five straight monthly increases in 2009, hitting 42.8 in May 2009. This is still well below the 50% level that indicates expansion in the manufacturing sector.
In the consumer sector, signs of improvement were mixed as well. The Reuters/University of Michigan index of consumer sentiment rose through much of the first half of 2009, but remains well below its recent peak of 96.9 in January 2007. Retail sales showed some month-over-month increases, but on a yearly basis, sales continued to be down about 9%. Home prices continued to fall during the first quarter of 2009, luring some buyers into the market.
Job losses appear to have turned a corner. May’s nonfarm losses came to 345,000, much lower than economists had expected, and nearly 200,000 fewer than in April, making four straight months of improvement. The unemployment rate, however, rose through the first half of 2009, hitting 9.4% in May.
After enduring a significant decline through most of the first quarter, the total return of the S&P 500® rebounded in the second quarter to finish the first half of 2009 up 3.16%. Technology and materials were among the sectors that outperformed the broader market, while industrials and financials were among those that lagged. While large caps and small caps largely matched the performance of the broader market, value stocks underperformed and growth stocks outperformed.
Portfolio Review/Current Positioning
Overall performance was driven primarily by strong stock selection during the first half of 2009. Stock selection within the consumer discretionary sector contributed significantly to relative performance. Hertz was one of the Portfolio’s strongest performers for the period, as shares of the car and equipment rental provider rose when investors began to detect early signs of a bottoming out process in the overall
economy. Hertz also benefited from reducing its fleet, which resulted in lower-than-expected expenses. Within the retail area, major holdings such Kohl’s and Target reported better-than-expected first-quarter earnings; however, earnings were still down on a year-over-year basis. The overweight within consumer discretionary also benefited the Portfolio, as the sector outperformed the index.
Stock selection within the financial services sector was also a significant contributor to relative performance, led by such high-quality names as Goldman Sachs and JPMorgan Chase. These stock selection gains, however, were offset by an overweight position within a sector that underperformed the benchmark index. The diversified banking industry specifically was one of weakest areas within financials for the year-to-date period despite a strong recovery in the second quarter.
The largest detractor from relative performance was stock selection within the producer durables sector. Delta Air Lines had been one of the Portfolio’s strongest performers in the second half of 2008 due to declining jet fuel prices and a beneficial merger with Northwest Airlines. Despite these positive factors, the company retraced much of its previous relatively good performance due to continuing investor fears of reduced travel from the ongoing recession.
The underweight within materials & processing also detracted from performance, as the sector outperformed the index. Performance within the copper metal industry was particularly strong.
Eli M. Salzmann, Partner and Director
Kenneth G. Fuller, CFA, Partner and Portfolio Manager
Lord, Abbett & Co. LLC
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
1
| | |
| Lord Abbett Growth and Income Portfolio | | For the period ended 6/30/09 |
| Managed by Lord, Abbett & Co. LLC | | |
Portfolio Manager Commentary (continued)
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
JPMorgan Chase & Co. | | 5.18% |
Wells Fargo & Co. | | 4.44% |
Bank of New York Mellon Corp. | | 4.07% |
Goldman Sachs Group, Inc. (The) | | 2.94% |
Schlumberger, Ltd. | | 2.62% |
Target Corp. | | 2.59% |
Boston Scientific Corp. | | 2.50% |
Coca-Cola Enterprises, Inc. | | 2.13% |
Hertz Global Holdings, Inc. | | 2.05% |
Franklin Resources, Inc. | | 1.99% |
Portfolio Composition (% of portfolio market value)
As of 6/30/09
2
| | |
| Lord Abbett Growth and Income Portfolio | | For the period ended 6/30/09 |
| Managed by Lord, Abbett & Co. LLC | | |
Portfolio Manager Commentary (continued)
Lord Abbett Growth and Income Portfolio managed by
Lord, Abbett & Co. LLC vs. Russell 1000® Value Index1 and S&P 500® Index2
Growth Based on $10,000+
| | | | | | | | | | | | | | |
| | | | | Average Annual Return3 (for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | 3 Year | | 5 Year | | 10 Year | | Since
Inception4 |
| — | | Lord Abbett Growth and Income
Portfolio—Class A | | -0.72% | | -25.71% | | -9.68% | | -2.58% | | 0.73% | | — |
| | Class B | | -0.87% | | -25.88% | | -9.92% | | -2.82% | | — | | 0.34% |
| — | | Russell 1000® Value Index1 | | -2.87% | | -29.03% | | -11.11% | | -2.13% | | -0.15% | | — |
| - - | | S&P 500® Index2 | | 3.16% | | -26.21% | | -8.22% | | -2.24% | | -2.22% | | — |
+The chart reflects the performance of Class A shares of the Portfolio. The performance of Class A shares will differ from that of the other class of shares because of the difference in expenses paid by policyholders investing in the different share classes.
1The Russell 1000® Value Index is an unmanaged measure of the largest capitalized U.S. domiciled companies with less than average growth orientation. Companies in this Index generally have a low price-to-book and price-to-earnings ratio, higher dividend yields and lower forecasted growth values.
2The S&P 500® Index is an unmanaged index consisting of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value weighted index (stock price times number of shares outstanding), with each stock’s weight in the Index proportionate to its market value.
3“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
4Inception of the Class A shares is 12/11/89. Inception of the Class B shares is 3/22/01.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Indexes do not include fees or expenses and are not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| Lord Abbett Growth and Income Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.56% | | $ | 1,000.00 | | $ | 992.80 | | $ | 2.77 |
Hypothetical | | 0.56% | | | 1,000.00 | | | 1,022.02 | | | 2.81 |
| | | | | | | | | | | |
| | | | |
Class B | | | | | | | | | | | |
Actual | | 0.81% | | $ | 1,000.00 | | $ | 991.30 | | $ | 4.00 |
Hypothetical | | 0.81% | | | 1,000.00 | | | 1,020.78 | | | 4.06 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
4
Met Investors Series Trust
Lord Abbett Growth and Income Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Common Stocks - 95.3% |
| Aerospace & Defense - 0.7% |
Honeywell International, Inc. | | 223,200 | | $ | 7,008,480 |
Raytheon Co.(a) | | 142,600 | | | 6,335,718 |
| | | | | |
| | | | | 13,344,198 |
| | | | | |
| Air Freight & Logistics - 0.1% |
FedEx Corp. | | 33,000 | | | 1,835,460 |
| | | | | |
| Airlines - 1.9% |
Delta Air Lines, Inc.*(a) | | 6,002,865 | | | 34,756,588 |
| | | | | |
| Automobiles - 1.0% |
Ford Motor Co.* | | 2,832,400 | | | 17,192,668 |
| | | | | |
| Beverages - 2.1% |
Coca-Cola Enterprises, Inc. | | 2,297,422 | | | 38,252,076 |
| | | | | |
| Biotechnology - 1.6% |
Amgen, Inc.* | | 531,300 | | | 28,127,022 |
| | | | | |
| Building Products - 0.3% |
Masco Corp.(a) | | 568,890 | | | 5,449,966 |
| | | | | |
| Capital Markets - 13.9% |
Bank of New York Mellon Corp. | | 2,491,266 | | | 73,019,006 |
Franklin Resources, Inc. | | 496,199 | | | 35,731,290 |
Goldman Sachs Group, Inc. (The) | | 357,900 | | | 52,768,776 |
Legg Mason, Inc. | | 307,524 | | | 7,497,435 |
Morgan Stanley | | 1,194,700 | | | 34,060,897 |
State Street Corp. | | 332,939 | | | 15,714,721 |
T. Rowe Price Group, Inc. | | 561,139 | | | 23,382,662 |
TD Ameritrade Holding Corp.* | | 401,900 | | | 7,049,326 |
| | | | | |
| | | | | 249,224,113 |
| | | | | |
| Chemicals - 1.5% |
Dow Chemical Co. (The)(a) | | 912,497 | | | 14,727,702 |
Praxair, Inc. | | 178,543 | | | 12,689,051 |
| | | | | |
| | | | | 27,416,753 |
| | | | | |
| Commercial Banks - 7.8% |
BB&T Corp. | | 567,174 | | | 12,466,485 |
Comerica, Inc. | | 135,300 | | | 2,861,595 |
M&T Bank Corp.(a) | | 370,189 | | | 18,853,726 |
PNC Financial Services Group, Inc. | | 628,429 | | | 24,389,329 |
SunTrust Banks, Inc. | | 134,600 | | | 2,214,170 |
Wells Fargo & Co. | | 3,279,849 | | | 79,569,137 |
| | | | | |
| | | | | 140,354,442 |
| | | | | |
| Communications Equipment - 0.2% |
Cisco Systems, Inc.* | | 233,880 | | | 4,359,523 |
| | | | | |
| Computers & Peripherals - 0.8% |
EMC Corp.* | | 27,900 | | | 365,490 |
Hewlett-Packard Co. | | 377,830 | | | 14,603,130 |
| | | | | |
| | | | | 14,968,620 |
| | | | | |
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Diversified Financial Services - 7.1% |
Bank of America Corp. | | 1,277,833 | | $ | 16,867,396 |
JPMorgan Chase & Co. | | 2,719,477 | | | 92,761,360 |
Moody’s Corp. | | 632,000 | | | 16,653,200 |
| | | | | |
| | | | | 126,281,956 |
| | | | | |
| Diversified Telecommunication Services - 3.0% |
AT&T, Inc. | | 1,304,343 | | | 32,399,880 |
Verizon Communications, Inc. | | 681,300 | | | 20,936,349 |
| | | | | |
| | | | | 53,336,229 |
| | | | | |
| Electronic Equipment, Instruments & Components - 0.1% |
Corning, Inc. | | 148,400 | | | 2,383,304 |
| | | | | |
| Energy Equipment & Services - 4.4% |
Cameron International Corp.* | | 71,400 | | | 2,020,620 |
Halliburton Co. | | 1,069,299 | | | 22,134,489 |
Schlumberger, Ltd.(a) | | 868,579 | | | 46,998,810 |
Smith International, Inc.(a) | | 296,300 | | | 7,629,725 |
| | | | | |
| | | | | 78,783,644 |
| | | | | |
| Food & Staples Retailing - 2.1% |
Kroger Co. (The)(a) | | 1,385,632 | | | 30,553,186 |
Wal-Mart Stores, Inc. | | 148,468 | | | 7,191,790 |
| | | | | |
| | | | | 37,744,976 |
| | | | | |
| Food Products - 2.7% |
Archer-Daniels-Midland Co. | | 616,323 | | | 16,498,967 |
Kraft Foods, Inc. - Class A | | 1,282,460 | | | 32,497,536 |
| | | | | |
| | | | | 48,996,503 |
| | | | | |
| Health Care Equipment & Supplies - 3.4% |
Boston Scientific Corp.* | | 4,412,325 | | | 44,740,975 |
Covidien Plc | | 450,679 | | | 16,873,422 |
| | | | | |
| | | | | 61,614,397 |
| | | | | |
| Health Care Providers & Services - 1.1% |
UnitedHealth Group, Inc. | | 599,020 | | | 14,963,520 |
WellPoint, Inc.* | | 104,500 | | | 5,318,005 |
| | | | | |
| | | | | 20,281,525 |
| | | | | |
| Hotels, Restaurants & Leisure - 2.1% |
Carnival Corp.(a) | | 833,166 | | | 21,470,688 |
Marriott International, Inc. - Class A(a) | | 686,568 | | | 15,152,561 |
Starbucks Corp.*(a) | | 91,200 | | | 1,266,768 |
| | | | | |
| | | | | 37,890,017 |
| | | | | |
| Household Durables - 0.5% |
Pulte Homes, Inc.(a) | | 1,015,900 | | | 8,970,397 |
| | | | | |
| Household Products - 0.3% |
Colgate-Palmolive Co.(a) | | 67,400 | | | 4,767,876 |
| | | | | |
| Insurance - 1.9% |
Aon Corp. | | 891,500 | | | 33,761,105 |
| | | | | |
See accompanying notes to financial statements
5
Met Investors Series Trust
Lord Abbett Growth and Income Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Internet & Catalog Retail - 0.6% |
HSN, Inc.*(a) | | 931,225 | | $ | 9,843,048 |
| | | | | |
| Internet Software & Services - 0.9% |
IAC/InterActiveCorp*(a) | | 956,102 | | | 15,345,437 |
| | | | | |
| IT Services - 0.2% |
Western Union Co. | | 166,675 | | | 2,733,470 |
| | | | | |
| Machinery - 3.0% |
Caterpillar, Inc.(a) | | 402,191 | | | 13,288,391 |
Eaton Corp.(a) | | 700,566 | | | 31,252,249 |
Joy Global, Inc.(a) | | 31,700 | | | 1,132,324 |
Parker Hannifin Corp. | | 184,100 | | | 7,908,936 |
| | | | | |
| | | | | 53,581,900 |
| | | | | |
| Media - 1.8% | | | | | |
Comcast Corp. - Class A | | 632,054 | | | 9,158,463 |
Omnicom Group, Inc.(a) | | 244,917 | | | 7,734,479 |
Time Warner Cable, Inc.(a) | | 74,820 | | | 2,369,549 |
Time Warner, Inc. | | 298,000 | | | 7,506,620 |
Viacom, Inc. - Class B* | | 230,300 | | | 5,227,810 |
| | | | | |
| | | | | 31,996,921 |
| | | | | |
| Metals & Mining - 0.1% | | | | | |
Nucor Corp.(a) | | 21,619 | | | 960,532 |
| | | | | |
| Multiline Retail - 5.2% | | | | | |
JC Penney Co., Inc.(a) | | 460,100 | | | 13,209,471 |
Kohl’s Corp.*(a) | | 796,997 | | | 34,071,622 |
Target Corp. | | 1,175,264 | | | 46,387,670 |
| | | | | |
| | | | | 93,668,763 |
| | | | | |
| Oil, Gas & Consumable Fuels - 7.8% |
Chevron Corp. | | 261,669 | | | 17,335,571 |
Devon Energy Corp. | | 157,200 | | | 8,567,400 |
El Paso Corp. | | 737,700 | | | 6,808,971 |
EOG Resources, Inc. | | 129,076 | | | 8,766,842 |
Exxon Mobil Corp. | | 452,500 | | | 31,634,275 |
Hess Corp. | | 579,900 | | | 31,169,625 |
Occidental Petroleum Corp. | | 312,945 | | | 20,594,910 |
XTO Energy, Inc. | | 409,475 | | | 15,617,377 |
| | | | | |
| | | | | 140,494,971 |
| | | | | |
| Personal Products - 0.2% | | | | | |
Avon Products, Inc. | | 135,700 | | | 3,498,346 |
| | | | | |
| Pharmaceuticals - 3.5% | | | | | |
Abbott Laboratories | | 464,935 | | | 21,870,542 |
Johnson & Johnson | | 134,700 | | | 7,650,960 |
Teva Pharmaceutical Industries, Ltd. (ADR) | | 663,496 | | | 32,736,893 |
| | | | | |
| | | | | 62,258,395 |
| | | | | |
| | | | | | |
Security
Description | | Shares/Par
Amount | | Value |
| | | | | | |
|
| Road & Rail - 2.8% |
Canadian National Railway Co. | | | 300,900 | | $ | 12,926,664 |
Hertz Global Holdings, Inc.* | | | 4,594,559 | | | 36,710,526 |
| | | | | | |
| | | | | | 49,637,190 |
| | | | | | |
| Semiconductors & Semiconductor Equipment - 0.9% |
Intel Corp. | | | 923,100 | | | 15,277,306 |
| | | | | | |
| Software - 1.9% | | | | | | |
Adobe Systems, Inc.* | | | 353,580 | | | 10,006,314 |
Oracle Corp. | | | 1,151,308 | | | 24,661,017 |
| | | | | | |
| | | | | | 34,667,331 |
| | | | | | |
| Specialty Retail - 5.2% | | | | | | |
Best Buy Co., Inc.(a) | | | 881,035 | | | 29,505,862 |
Gap, Inc. (The) | | | 134,300 | | | 2,202,520 |
Home Depot, Inc. (The)(a) | | | 1,487,305 | | | 35,145,017 |
J. Crew Group, Inc.*(a) | | | 943,316 | | | 25,488,399 |
Lowe’s Cos., Inc. | | | 82,100 | | | 1,593,561 |
| | | | | | |
| | | | | | 93,935,359 |
| | | | | | |
| Tobacco - 0.2% | | | | | | |
Altria Group, Inc.(a) | | | 253,723 | | | 4,158,520 |
| | | | | | |
| Wireless Telecommunication Services - 0.4% |
Sprint Nextel Corp.*(a) | | | 1,349,900 | | | 6,493,019 |
| | | | | | |
Total Common Stocks
(Cost $1,702,174,318) | | | | | | 1,708,643,866 |
| | | | | | |
| |
| Escrowed Shares - 0.0% | | | |
| Computers & Peripherals - 0.0% | | | |
ESC Seagate Technology(b)*
(Cost - $0) | | | 10,300 | | | 10 |
| | | | | | |
|
| Short-Term Investments - 15.5% |
| Mutual Funds - 9.6% | | | | | | |
State Street Navigator Securities Lending Prime Portfolio(c) | | | 172,140,914 | | | 172,140,914 |
| | | | | | |
| Repurchase Agreement - 5.9% | | | |
State Street Bank & Trust Co., Repurchase Agreement,
dated 06/30/09 at 0.010% to be repurchased at $66,864,320
on 07/01/09 collateralized by $67,610,000 FHLMC at 1.625% due 04/26/11 with a value of $68,201,588. | | $ | 66,864,301 | | | 66,864,301 |
See accompanying notes to financial statements
6
Met Investors Series Trust
Lord Abbett Growth and Income Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | | |
Security
Description | | Par
Amount | | Value | |
| | | | | | | |
| | |
| Repurchase Agreement - continued | | | | | | | |
State Street Bank & Trust Co.,
Repurchase Agreement,
dated 06/30/09 at 0.010% to be repurchased at $39,180,709
on 07/01/09 collateralized by $39,770,000 FNMA at 1.722% due 05/10/11 with a value of $39,968,850. | | $ | 39,180,699 | | $ | 39,180,699 | |
| | | | | | | |
Total Short-Term Investments
(Cost $278,185,914) | | | | | | 278,185,914 | |
| | | | | | | |
| | |
TOTAL INVESTMENTS - 110.8%
(Cost $1,980,360,232) | | | | | | 1,986,829,790 | |
| | | | | | | |
| |
| Other Assets and Liabilities (net) - (10.8)% | | | (194,447,158 | ) |
| | | | | | | |
| | |
| NET ASSETS - 100.0% | | | | | $ | 1,792,382,632 | |
| | | | | | | |
Portfolio Footnotes:
| * | | Non-income producing security. |
| (a) | | All or a portion of security is on loan. |
| (b) | | Illiquid securities representing in the aggregate $11 of net assets. |
| (c) | | Represents investment of collateral received from securities lending transactions. |
ADR - American Depositary Receipt
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
See accompanying notes to financial statements
7
Met Investors Series Trust
Lord Abbett Growth and Income Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1—quoted prices in active markets for identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
| Common Stocks | | | | | | | | | | | | |
Aerospace & Defense | | $ | 13,344,198 | | $ | — | | $ | — | | $ | 13,344,198 |
Air Freight & Logistics | | | 1,835,460 | | | — | | | — | | | 1,835,460 |
Airlines | | | 34,756,588 | | | — | | | — | | | 34,756,588 |
Automobiles | | | 17,192,668 | | | — | | | — | | | 17,192,668 |
Beverages | | | 38,252,076 | | | — | | | — | | | 38,252,076 |
Biotechnology | | | 28,127,022 | | | — | | | — | | | 28,127,022 |
Building Products | | | 5,449,966 | | | — | | | — | | | 5,449,966 |
Capital Markets | | | 249,224,113 | | | — | | | — | | | 249,224,113 |
Chemicals | | | 27,416,753 | | | — | | | — | | | 27,416,753 |
Commercial Banks | | | 140,354,442 | | | — | | | — | | | 140,354,442 |
Communications Equipment | | | 4,359,523 | | | — | | | — | | | 4,359,523 |
Computers & Peripherals | | | 14,968,620 | | | — | | | — | | | 14,968,620 |
Diversified Financial Services | | | 126,281,956 | | | — | | | — | | | 126,281,956 |
Diversified Telecommunication Services | | | 53,336,229 | | | — | | | — | | | 53,336,229 |
Electronic Equipment, Instruments & Components | | | 2,383,304 | | | — | | | — | | | 2,383,304 |
Energy Equipment & Services | | | 78,783,644 | | | — | | | — | | | 78,783,644 |
Food & Staples Retailing | | | 37,744,976 | | | — | | | — | | | 37,744,976 |
Food Products | | | 48,996,503 | | | — | | | — | | | 48,996,503 |
Health Care Equipment & Supplies | | | 61,614,397 | | | — | | | — | | | 61,614,397 |
Health Care Providers & Services | | | 20,281,525 | | | — | | | — | | | 20,281,525 |
Hotels, Restaurants & Leisure | | | 37,890,017 | | | — | | | — | | | 37,890,017 |
Household Durables | | | 8,970,397 | | | — | | | — | | | 8,970,397 |
Household Products | | | 4,767,876 | | | — | | | — | | | 4,767,876 |
Insurance | | | 33,761,105 | | | — | | | — | | | 33,761,105 |
Internet & Catalog Retail | | | 9,843,048 | | | — | | | — | | | 9,843,048 |
Internet Software & Services | | | 15,345,437 | | | — | | | — | | | 15,345,437 |
IT Services | | | 2,733,470 | | | — | | | — | | | 2,733,470 |
Machinery | | | 53,581,900 | | | — | | | — | | | 53,581,900 |
Media | | | 31,996,921 | | | — | | | — | | | 31,996,921 |
Metals & Mining | | | 960,532 | | | — | | | — | | | 960,532 |
Multiline Retail | | | 93,668,763 | | | — | | | — | | | 93,668,763 |
Oil, Gas & Consumable Fuels | | | 140,494,971 | | | — | | | — | | | 140,494,971 |
Personal Products | | | 3,498,346 | | | — | | | — | | | 3,498,346 |
Pharmaceuticals | | | 62,258,395 | | | — | | | — | | | 62,258,395 |
Road & Rail | | | 49,637,190 | | | — | | | — | | | 49,637,190 |
See accompanying notes to financial statements
8
Met Investors Series Trust
Lord Abbett Growth and Income Portfolio
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Semiconductors & Semiconductor Equipment | | $ | 15,277,306 | | $ | — | | $ | — | | $ | 15,277,306 |
Software | | | 34,667,331 | | | — | | | — | | | 34,667,331 |
Specialty Retail | | | 93,935,359 | | | — | | | — | | | 93,935,359 |
Tobacco | | | 4,158,520 | | | — | | | — | | | 4,158,520 |
Wireless Telecommunication Services | | | 6,493,019 | | | — | | | — | | | 6,493,019 |
Total Common Stocks | | | 1,708,643,866 | | | — | | | — | | | 1,708,643,866 |
Escrowed Shares | | | | | | | | | | | | |
Computers & Peripherals | | | — | | | — | | | 10 | | | 10 |
Short-Term Investments | | | | | | | | | | | | |
Mutual Funds | | | 172,140,914 | | | — | | | — | | | 172,140,914 |
Repurchase Agreement | | | — | | | 106,045,000 | | | — | | | 106,045,000 |
Total Short-Term Investments | | | 172,140,914 | | | 106,045,000 | | | — | | | 278,185,914 |
| TOTAL INVESTMENTS | | $ | 1,880,784,780 | | $ | 106,045,000 | | $ | 10 | | $ | 1,986,829,790 |
FAS 157 Level 3 Reconciliation Disclosure
Following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value:
Asset Valuation Inputs
| | | | | | |
| Investments in Securities | | Balance as of
December 31,
2008 | | Balance as of
June 30,
2009 |
| Escrowed Shares | | | | | | |
Computers & Peripherals | | $ | 10 | | $ | 10 |
| Total | | $ | 10 | | $ | 10 |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| Lord Abbett Growth and Income Portfolio | | | |
| Assets | | | | |
Investments, at value (a)(b) | | $ | 1,880,784,790 | |
Repurchase Agreement | | | 106,045,000 | |
Cash | | | 46,669 | |
Receivable for investments sold | | | 22,035,137 | |
Receivable for Trust shares sold | | | 109,292 | |
Dividends receivable | | | 1,179,992 | |
Interest receivable | | | 29 | |
| | | | |
Total assets | | | 2,010,200,909 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 43,505,316 | |
Trust shares redeemed | | | 949,425 | |
Distribution and services fees—Class B | | | 170,669 | |
Collateral for securities on loan | | | 172,140,914 | |
Management fee | | | 799,098 | |
Administration fee | | | 10,681 | |
Custodian and accounting fees | | | 32,732 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 206,015 | |
| | | | |
Total liabilities | | | 217,818,277 | |
| | | | |
| Net Assets | | $ | 1,792,382,632 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 2,990,361,353 | |
Accumulated net realized loss | | | (1,220,633,609 | ) |
Unrealized appreciation on investments and foreign currency | | | 6,467,857 | |
Undistributed net investment income | | | 16,187,031 | |
| | | | |
Total | | $ | 1,792,382,632 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 968,592,955 | |
| | | | |
Class B | | | 823,789,677 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 61,044,930 | |
| | | | |
Class B | | | 52,133,776 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 15.87 | |
| | | | |
Class B | | | 15.80 | |
| | | | |
| | | | | |
(a) Investments at cost, excluding repurchase agreements | | $ | 1,874,315,232 | |
(b) Includes cash collateral for securities loaned of | | | 172,140,914 | |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| Lord Abbett Growth and Income Portfolio | | | |
| Investment Income | | | | |
Dividends (1) | | $ | 22,096,983 | |
Interest (2) | | | 571,485 | |
| | | | |
Total investment income | | | 22,668,468 | |
| | | | |
| Expenses | | | | |
Management fee | | | 5,250,231 | |
Administration fees | | | 81,239 | |
Custodian and accounting fees | | | 85,981 | |
Distribution and services fees—Class B | | | 935,233 | |
Audit and tax services | | | 21,337 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 127,079 | |
Insurance | | | 31,483 | |
Other | | | 11,111 | |
| | | | |
Total expenses | | | 6,570,127 | |
Less broker commission recapture | | | (88,740 | ) |
| | | | |
Net expenses | | | 6,481,387 | |
| | | | |
Net investment income | | | 16,187,081 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments, Futures Contracts and Foreign Currency | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | (786,523,874 | ) |
Futures contracts | | | 2,688,227 | |
| | | | |
Net realized loss on investments and futures contracts | | | (783,835,647 | ) |
| | | | |
Net change in unrealized appreciation (depreciation) on: | | | | |
Investments | | | 722,991,056 | |
Foreign currency | | | (1,701 | ) |
| | | | |
Net change in unrealized appreciation on investments and foreign currency | | | 722,989,355 | |
| | | | |
Net realized and unrealized loss on investments, futures contracts and foreign currency | | | (60,846,292 | ) |
| | | | |
| Net Decrease in Net Assets from Operations | | $ | (44,659,211 | ) |
| | | | |
| | | | | |
(1) Dividend income is net of foreign withholding taxes of: | | $ | 61,685 | |
(2) Interest income includes securities lending net income of: | | | 566,604 | |
See accompanying notes to financial statements
11
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| Lord Abbett Growth and Income Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 16,187,081 | | | $ | 59,740,322 | |
Net realized loss on investments, futures contracts and foreign currency | | | (783,835,647 | ) | | | (415,227,030 | ) |
Net change in unrealized appreciation (depreciation) on investments and foreign currency | | | 722,989,355 | | | | (1,063,888,315 | ) |
| | | | | | | | |
Net decrease in net assets resulting from operations | | | (44,659,211 | ) | | | (1,419,375,023 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | (41,222,235 | ) | | | (40,145,410 | ) |
Class B | | | (18,320,336 | ) | | | (18,537,842 | ) |
From net realized gains | | | | | | | | |
Class A | | | — | | | | (227,243,760 | ) |
Class B | | | — | | | | (127,938,585 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (59,542,571 | ) | | | (413,865,597 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 131,381,102 | | | | 270,959,603 | |
Class B | | | 45,538,858 | | | | 82,749,396 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | 41,222,235 | | | | 267,389,170 | |
Class B | | | 18,320,336 | | | | 146,476,427 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (672,655,586 | ) | | | (433,021,085 | ) |
Class B | | | (51,383,888 | ) | | | (272,677,920 | ) |
| | | | | | | | |
Net increase (decrease) in net assets from capital share transactions | | | (487,576,943 | ) | | | 61,875,591 | |
| | | | | | | | |
| Net Decrease in Net Assets | | | (591,778,725 | ) | | | (1,771,365,029 | ) |
Net assets at beginning of period | | | 2,384,161,357 | | | | 4,155,526,386 | |
| | | | | | | | |
Net assets at end of period | | $ | 1,792,382,632 | | | $ | 2,384,161,357 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 16,187,031 | | | $ | 59,542,521 | |
| | | | | | | | |
See accompanying notes to financial statements
12
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Lord Abbett Growth and Income Portfolio | | Class A |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | | |
| Net Asset Value, Beginning of Period | | $ | 16.44 | | | $ | 28.89 | | | $ | 29.36 | | | $ | 27.59 | | | $ | 27.44 | | | $ | 24.41 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.13 | | | | 0.43 | | | | 0.45 | | | | 0.46 | | | | 0.40 | | | | 0.33 | | | |
Net Realized/Unrealized Gain (Loss) on Investments | | | (0.28 | ) | | | (9.93 | ) | | | 0.73 | | | | 4.22 | | | | 0.61 | | | | 2.82 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | (0.15 | ) | | | (9.50 | ) | | | 1.18 | | | | 4.68 | | | | 1.01 | | | | 3.15 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.42 | ) | | | (0.44 | ) | | | (0.31 | ) | | | (0.54 | ) | | | (0.31 | ) | | | (0.12 | ) | | |
Distributions from Net Realized Capital Gains | | | — | | | | (2.51 | ) | | | (1.34 | ) | | | (2.37 | ) | | | (0.55 | ) | | | — | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.42 | ) | | | (2.95 | ) | | | (1.65 | ) | | | (2.91 | ) | | | (0.86 | ) | | | (0.12 | ) | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 15.87 | | | $ | 16.44 | | | $ | 28.89 | | | $ | 29.36 | | | $ | 27.59 | | | $ | 27.44 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | (0.72 | )% | | | (36.19 | )% | | | 4.01 | % | | | 18.03 | % | | | 3.68 | % | | | 12.92 | % | | |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.56 | %* | | | 0.52 | % | | | 0.51 | % | | | 0.54 | % | | | 0.53 | % | | | 0.57 | % | | |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.57 | %* | | | 0.53 | % | | | 0.52 | % | | | 0.54 | % | | | 0.55 | %(b) | | | 0.56 | %(b) | | |
Ratio of Net Investment Income to Average Net Assets | | | 1.78 | %* | | | 1.92 | % | | | 1.55 | % | | | 1.64 | % | | | 1.46 | % | | | 1.30 | % | | |
Portfolio Turnover Rate | | | 44.8 | % | | | 112.2 | % | | | 84.1 | % | | | 50.2 | % | | | 45.9 | % | | | 29.7 | % | | |
Net Assets, End of Period (in millions) | | $ | 968.6 | | | $ | 1,546.8 | | | $ | 2,608.8 | | | $ | 2,172.1 | | | $ | 1,985.7 | | | $ | 1,867.5 | | | |
| |
| | | Class B |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | | |
| Net Asset Value, Beginning of Period | | $ | 16.33 | | | $ | 28.69 | | | $ | 29.20 | | | $ | 27.43 | | | $ | 27.27 | | | $ | 24.29 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.10 | | | | 0.37 | | | | 0.38 | | | | 0.39 | | | | 0.33 | | | | 0.27 | | | |
Net Realized/Unrealized Gain (Loss) on Investments | | | (0.27 | ) | | | (9.86 | ) | | | 0.71 | | | | 4.20 | | | | 0.61 | | | | 2.80 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | (0.17 | ) | | | (9.49 | ) | | | 1.09 | | | | 4.59 | | | | 0.94 | | | | 3.07 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.36 | ) | | | (0.36 | ) | | | (0.26 | ) | | | (0.45 | ) | | | (0.23 | ) | | | (0.09 | ) | | |
Distributions from Net Realized Capital Gains | | | — | | | | (2.51 | ) | | | (1.34 | ) | | | (2.37 | ) | | | (0.55 | ) | | | — | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.36 | ) | | | (2.87 | ) | | | (1.60 | ) | | | (2.82 | ) | | | (0.78 | ) | | | (0.09 | ) | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 15.80 | | | $ | 16.33 | | | $ | 28.69 | | | $ | 29.20 | | | $ | 27.43 | | | $ | 27.27 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | (0.87 | )% | | | (36.33 | )% | | | 3.72 | % | | | 17.78 | % | | | 3.39 | % | | | 12.65 | % | | |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.81 | %* | | | 0.77 | % | | | 0.76 | % | | | 0.79 | % | | | 0.78 | % | | | 0.82 | % | | |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.82 | %* | | | 0.78 | % | | | 0.77 | % | | | 0.79 | % | | | 0.80 | %(b) | | | 0.80 | %(b) | | |
Ratio of Net Investment Income to Average Net Assets | | | 1.40 | %* | | | 1.66 | % | | | 1.31 | % | | | 1.40 | % | | | 1.21 | % | | | 1.08 | % | | |
Portfolio Turnover Rate | | | 44.8 | % | | | 112.2 | % | | | 84.1 | % | | | 50.2 | % | | | 45.9 | % | | | 29.7 | % | | |
Net Assets, End of Period (in millions) | | $ | 823.8 | | | $ | 837.4 | | | $ | 1,546.7 | | | $ | 1,596.5 | | | $ | 1,130.5 | | | $ | 1,282.3 | | | |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Excludes effect of deferred expense reimbursement. |
See accompanying notes to financial statements
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is Lord Abbett Growth and Income Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A and B Shares are currently offered by the Portfolio. Class C and E Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date.
The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | | | | | | | |
Expiring 12/31/2009 | | Expiring
12/31/2010 | | Expiring
12/31/2016 | | Total |
| | | |
| $6,491,841 | | $ | 9,173,099 | | $ | 306,752,150 | | $ | 322,417,090 |
The Portfolio acquired losses of $61,902,713 in the merger with J.P. Morgan Enhanced Index Portfolio on April 28, 2003 which are subject to an annual limitation of $5,221,647.
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
G. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
H. Directed Brokerage Agreement - The Trust has entered into a directed brokerage arrangement with State Street Global Markets (“SSGM”). Under this arrangement, the Portfolio directs certain trades to SSGM in return for a recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to the Portfolio are shown separately as an expense reduction on the Statement of Operations of the Portfolio.
I. Financial Derivative Instruments - Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133, (“FAS 161” or the “Statement”) requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. The disclosure
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
requirements of FAS 161 distinguish between derivatives which are accounted for as “hedges” under FAS 133 and those that do not qualify for such accounting. The Portfolio reflects derivatives at fair value and recognizes changes in fair value through the Statement of Operations, and as such do not qualify for FAS 133 hedge accounting treatment.
J. Futures Contracts - The Portfolio may buy and sell futures contracts (on recognized exchanges) as a hedge, to maintain exposure to the broad equity markets, manage exposure to the securities markets or to movements in interest rates or to enhance return. The Portfolio may be subject to equity price risk, interest rate risk, and foreign currency exchange rate risk in the normal course of pursuing its investment objectives. Futures contracts are agreements to buy or sell a security, or deliver a final cash settlement price in connection with an index, interest rate, currency, or other contracts not calling for physical delivery, for a set price in the future. The Portfolio must post an amount equal to a portion of the total market value of the futures contract as futures variation margin, which is returned when the Portfolio’s obligations under the contract have been satisfied. From time to time thereafter, the Portfolio may have to post variation margin to maintain this amount as the market value of the contract fluctuates. Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities. During the period ended June 30, 2009, the Portfolio entered into Equity Index Futures which were subject to equity price risk. At June 30, 2009, the Portfolio did not have any open futures contracts. For the period ended June 30, 2009, the Portfolio had realized gains in the amount of $2,688,227 which is located in Net realized gain (loss) on Futures Contracts in the Statement of Operations.
K. Foreign Currency Translation - The books and records of the Portfolio are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars on a daily basis using prevailing exchange rates. Purchases and sales of securities are translated at the rates of exchange prevailing when such securities were acquired or sold. Income is translated at rates of exchange prevailing when interest is accrued or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in forward foreign currency contracts; sales of foreign currencies; currency gains or losses realized between the trade and settlement dates on securities transactions; and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Portfolio’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end; from changes in the exchange rates of foreign currency held; and from changes in the contract value of forward foreign currency contracts.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with Lord, Abbett & Co. LLC (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $5,250,231 | | 0.60 | % | | First $600 Million |
| | |
| | 0.55 | % | | $600 Million to $1.1 Billion |
| | |
| | 0.50 | % | | $1.1 Billion to $1.5 Billion |
| | |
| | 0.45 | % | | Over $1.5 Billion |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
16
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A and Class B Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B distribution plan provides that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% of the average net assets of the Portfolio attributable to its Class B Shares in respect to activities primarily intended to result in the sale of Class B Shares. However, under the Class B distribution agreement, payments to the Distributor for activities pursuant to the Class B distribution plan are currently limited to payments at an annual rate equal to 0.25% of average daily net assets of the Portfolio attributable to its Class B Shares.
Under terms of the Class B distribution plan and distribution agreement, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
(Decrease)
in Shares
Outstanding | | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 94,070,600 | | 9,220,217 | | 2,811,885 | | (45,057,772 | ) | | (33,025,670 | ) | | 61,044,930 |
12/31/2008 | | 90,304,055 | | 12,128,658 | | 10,972,063 | | (19,334,176 | ) | | 3,766,545 | | | 94,070,600 |
| | | | | | |
Class B | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 51,276,515 | | 3,183,079 | | 1,253,958 | | (3,579,776 | ) | | 857,261 | | | 52,133,776 |
12/31/2008 | | 53,902,169 | | 3,791,674 | | 6,040,265 | | (12,457,593 | ) | | (2,625,654 | ) | | 51,276,515 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchase | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 834,587,891 | | $ | — | | $ | 1,161,852,322 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Appreciation |
| | | |
| $1,980,360,232 | | $ | 136,518,525 | | $ | (130,048,967 | ) | | $ | 6,469,558 |
17
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
6. Securities Lending
As of June 30, 2009, the Portfolio had loaned securities which were collateralized by short term investments. The value of securities on loan and the value of the related collateral were as follows:
| | | | | | | | | |
Value of
Securities | | Value of
Cash
Collateral | | Value of
Non-Cash
Collateral* | | Total
Collateral |
| | | |
| $174,592,397 | | $ | 172,140,914 | | $ | 7,306,624 | | $ | 179,447,538 |
* The Portfolio cannot repledge or resell this collateral. The non-cash collateral is typically comprised of government securities and/or bank letters of credit.
7. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $ | 64,315,525 | | $ | 39,072,034 | | $ | 349,550,072 | | $ | 168,929,982 | | $ | 413,865,597 | | $ | 208,002,016 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards | | | Total | |
| | | | |
| $59,542,521 | | $ | — | | $ | (830,902,370 | ) | | $ | (322,417,090 | ) | | $ | (1,093,776,939 | ) |
8. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
9. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods.
18
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
11. Recent Accounting Pronouncement - continued
FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
19
| | |
| Lord Abbett Mid Cap Value Portfolio | | For the period ended 6/30/09 |
| Managed by Lord, Abbett & Co. LLC | | |
Portfolio Manager Commentary
Performance
During the period ended June 30, 2009, the Portfolio had a return of 0.88% and 0.71% for Class A and B Shares, respectively, versus 3.19% for its benchmark, the Russell Midcap Value® Index, 4.40% for the S&P MidCap 400®/Citigroup Value Index and 9.96% for the Russell Midcap® Index.
Market Environment/Conditions
The economy continued to struggle during the first half of 2009, though some signs of recovery also began to appear. First quarter real output shrank by 5.5% on an annualized basis, resulting in three consecutive quarters in which gross domestic product (GDP) contracted. The stock market (as represented by S&P 500® Index), however, rebounded in March and April, suggesting recovery in the broader economy would follow soon.
In the manufacturing sector, industrial production continued to plummet, and capacity utilization fell below 70%. New orders for durable goods ticked up in February, April, and May, but as of May they were still down more than 23% from a year earlier. After five consecutive months of decline, the Institute for Supply Management’s Manufacturing Index has reversed course, however, showing five straight monthly increases in 2009, hitting 42.8 in May 2009. This is still well below the 50% level that indicates expansion in the manufacturing sector.
In the consumer sector, signs of improvement were mixed as well. The Reuters/University of Michigan index of consumer sentiment rose through much of the first half of 2009, but remains well below its recent peak of 96.9 in January 2007. Retail sales showed some month-over-month increases, but on a yearly basis, sales continued to be down about 9%. Home prices continued to fall during the first quarter of 2009, luring some buyers into the market.
Job losses appear to have turned a corner. May’s nonfarm losses came to 345,000, much lower than economists had expected, and nearly 200,000 fewer than in April, making four straight months of improvement. The unemployment rate, however, rose through the first half of 2009, hitting 9.4% in May.
After enduring a significant decline through most of the first quarter, the total return of the S&P 500® rebounded in the second quarter to finish the first half of 2009 up 3.16%. Technology and materials were among the sectors that outperformed the broader market, while industrials and financials were among those that lagged. While large caps and small caps largely matched the performance of the broader market, value stocks underperformed and growth stocks outperformed.
Portfolio Review/Current Positioning
Stock selection within the financial services sector was the largest detractor. Fifth Third Bancorp, a regional bank, dropped sharply in the beginning of the year after posting a significant loss for the fourth quarter. The sizable loss was mainly a result of higher than anticipated
credit costs. Negative stock selection also hampered performance within the healthcare and consumer staples sectors. Shares of King Pharmaceuticals slid with the general market in the beginning of the year, and we exited the position on concerns about competitive pressures from generic drugs and lack of clarity with their drug pipeline. Within the consumer staples sector, Snap-On, a tool manufacturer disappointed after reporting weaker than expected sales growth.
The largest contributor to performance was the Portfolio’s relative underweight within financials. Despite the recent rally within financial stocks, the recent returns were unable to compensate for the losses these companies experienced in the beginning of the year. The utilities sector was also a contributor as a result of a relative underweight as well as positive stock selection. The sector failed to keep pace with the general market rally during the second quarter. However, CMS Energy, a Michigan-based regulated utility, saw shares rise following a favorable ruling on its most recent rate case filing.
During the quarter we took profits and moved away from stable earning sectors, such as utilities and consumer staples, and toward more early cycle companies within the consumer discretionary and producer durables sectors. We also added to our technology holdings and continued to decrease the underweight within the financial services sector by selectively adding attractive companies.
We continue to focus on finding high quality companies that have strong, long-term prospects and attractive valuation characteristics. These companies tend to be market leaders with healthy balance sheets and, we believe, the ability to emerge from the current downturn in a stronger competitive position. While this may mean that we do not always participate as fully during the short term, like the current market rally, which was driven largely by lower quality companies, we are confident that the companies chosen for inclusion in the Portfolio will drive strong investment performance over the long term.
Robert P. Fetch, CFA,
Partner and Director
Jeff Diamond, CFA
Portfolio Manager
Lord, Abbett & Co. LLC
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may
1
| | |
| Lord Abbett Mid Cap Value Portfolio | | For the period ended 6/30/09 |
| Managed by Lord, Abbett & Co. LLC | | |
Portfolio Manager Commentary (continued)
not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
State Street Corp. | | 2.32% |
Mylan, Inc. | | 2.30% |
Adobe Systems, Inc. | | 2.11% |
Reliance Steel & Aluminum Co. | | 2.04% |
Aon Corp. | | 2.00% |
ACE, Ltd. | | 1.82% |
Lazard, Ltd.—Class A | | 1.71% |
DaVita, Inc. | | 1.64% |
EQT Corp. | | 1.63% |
Embarq Corp. | | 1.59% |
Portfolio Composition (% of portfolio market value)
As of 6/30/09
2
| | |
| Lord Abbett Mid Cap Value Portfolio | | For the period ended 6/30/09 |
| Managed by Lord, Abbett & Co. LLC | | |
Portfolio Manager Commentary (continued)
Lord Abbett Mid Cap Value Portfolio managed by
Lord, Abbett & Co. LLC vs. Russell Midcap Value® Index1
S&P MidCap® 400/Citigroup Value Index2 and Russell Midcap® Index3
Growth Based on $10,000+
| | | | | | | | | | | | | | |
| | | | | Average Annual Return4 (for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | 3 Year | | 5 Year | | 10 Year | | Since
Inception5 |
| — | | Lord Abbett Mid Cap Value Portfolio—
Class A | | 0.88% | | -28.92% | | -11.34% | | -2.84% | | 5.46% | | — |
| | Class B | | 0.71% | | -29.11% | | -11.57% | | -3.09% | | — | | 2.09% |
| - - | | Russell Midcap Value® Index1 | | 3.19% | | -30.52% | | -11.07% | | -0.43% | | 4.00% | | — |
| - - | | S&P MidCap® 400/Citigroup Value Index2 | | 4.40% | | -27.26% | | -9.20% | | -0.46% | | 3.80% | | — |
| — | | Russell Midcap® Index3 | | 9.96% | | -30.36% | | -9.25% | | -0.11% | | 3.15% | | — |
+The chart reflects the performance of Class A shares of the Portfolio. The performance of Class A shares will differ from that of the other class of shares because of the difference in expenses paid by policyholders investing in the different share classes.
1The Russell Midcap® Value Index is an unmanaged measure of performance of those Russell Midcap® companies (the 800 smallest companies in the Russell 1000® Index) with lower price-to-book ratios and lower forecasted growth values. The stocks are also members of the Russell 1000® Value Index.
2The S&P MidCap® 400/Citigroup Value Index uses a multi-factor methodology to calculate value in separate dimensions. Style scores are calculated taking standardized measures of 4 value factors for each constituent. Combined, the
growth and value indices are exhaustive, containing the full market capitalization of the S&P MidCap 400.
3The Russell Midcap® Index is an unmanaged index which measures the performances of the 800 smallest companies in the Russell 1000® Index.
4“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
5Inception of the Class A shares is 8/20/97. Inception of the Class B shares is 4/3/01.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Indexes do not include fees or expenses and are not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| Lord Abbett Mid Cap Value Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.74% | | $ | 1,000.00 | | $ | 1,008.80 | | $ | 3.69 |
Hypothetical | | 0.74% | | | 1,000.00 | | | 1,021.12 | | | 3.71 |
| | | | | | | | | | | |
| | | | |
Class B | | | | | | | | | | | |
Actual | | 0.99% | | $ | 1,000.00 | | $ | 1,007.10 | | $ | 4.93 |
Hypothetical | | 0.99% | | | 1,000.00 | | | 1,019.89 | | | 4.96 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
4
Met Investors Series Trust
Lord Abbett Mid Cap Value Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | | | | |
| | |
| Common Stocks - 96.4% | | | | | |
| Aerospace & Defense - 2.6% | | | | | |
Alliant Techsystems, Inc.*(a) | | 20,300 | | $ | 1,671,908 |
Curtiss-Wright Corp. | | 40,100 | | | 1,192,173 |
ITT Corp. | | 69,000 | | | 3,070,500 |
Precision Castparts Corp. | | 15,600 | | | 1,139,268 |
| | | | | |
| | | | | 7,073,849 |
| | | | | |
| Airlines - 0.9% | | | | | |
Continental Airlines, Inc. - Class B*(a) | | 188,200 | | | 1,667,452 |
Southwest Airlines Co. | | 123,900 | | | 833,847 |
| | | | | |
| | | | | 2,501,299 |
| | | | | |
| Auto Components - 1.7% | | | | | |
Autoliv, Inc.(a) | | 60,300 | | | 1,734,831 |
BorgWarner, Inc.(a) | | 60,900 | | | 2,079,735 |
WABCO Holdings, Inc. | | 48,800 | | | 863,760 |
| | | | | |
| | | | | 4,678,326 |
| | | | | |
| Capital Markets - 5.1% | | | | | |
Jefferies Group, Inc.* | | 31,300 | | | 667,629 |
Lazard, Ltd. - Class A | | 175,600 | | | 4,727,152 |
Raymond James Financial, Inc. | | 133,500 | | | 2,297,535 |
State Street Corp. | | 135,600 | | | 6,400,320 |
| | | | | |
| | | | | 14,092,636 |
| | | | | |
| Chemicals - 2.6% | | | | | |
Celanese Corp., Series A | | 164,600 | | | 3,909,250 |
Valspar Corp. (The) | | 141,415 | | | 3,186,080 |
| | | | | |
| | | | | 7,095,330 |
| | | | | |
| Commercial & Professional Services - 1.0% | | | |
Republic Services, Inc. | | 109,786 | | | 2,679,876 |
| | | | | |
| Commercial Banks - 3.3% | | | | | |
City National Corp. | | 84,100 | | | 3,097,403 |
Comerica, Inc. | | 114,700 | | | 2,425,905 |
Commerce Bancshares, Inc. | | 19,500 | | | 620,685 |
M&T Bank Corp.(a) | | 58,543 | | | 2,981,595 |
| | | | | |
| | | | | 9,125,588 |
| | | | | |
| Communications Equipment - 1.3% | | | |
Tellabs, Inc.* | | 642,098 | | | 3,679,222 |
| | | | | |
| Computers & Peripherals - 0.3% | | | | | |
Diebold, Inc. | | 32,300 | | | 851,428 |
| | | | | |
| Construction & Engineering - 3.5% | | | |
Jacobs Engineering Group, Inc.* | | 99,900 | | | 4,204,791 |
KBR, Inc.(a) | | 234,711 | | | 4,328,071 |
URS Corp.* | | 20,600 | | | 1,020,112 |
| | | | | |
| | | | | 9,552,974 |
| | | | | |
| Containers & Packaging - 1.1% | | | | | |
Ball Corp. | | 65,222 | | | 2,945,426 |
| | | | | |
| Distributors - 1.0% | | | | | |
Genuine Parts Co. | | 79,261 | | | 2,659,999 |
| | | | | |
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Diversified Telecommunication Services - 2.5% |
CenturyTel, Inc.(a) | | 86,072 | | $ | 2,642,410 |
Embarq Corp. | | 104,150 | | | 4,380,549 |
| | | | | |
| | | | | 7,022,959 |
| | | | | |
| Electric Utilities - 0.6% | | | | | |
Northeast Utilities | | 76,558 | | | 1,708,009 |
| | | | | |
| Electrical Equipment - 0.7% | | | | | |
Roper Industries, Inc. | | 40,600 | | | 1,839,586 |
| | | | | |
| Electronic Equipment, Instruments & Components - 1.2% |
Anixter International, Inc.*(a) | | 50,400 | | | 1,894,536 |
Itron, Inc.*(a) | | 12,200 | | | 671,854 |
Trimble Navigation, Ltd.* | | 33,900 | | | 665,457 |
| | | | | |
| | | | | 3,231,847 |
| | | | | |
| Energy Equipment & Services - 5.3% | | | | | |
Cameron International Corp.* | | 69,600 | | | 1,969,680 |
Halliburton Co. | | 198,529 | | | 4,109,550 |
Oceaneering International, Inc.*(a) | | 26,400 | | | 1,193,280 |
Smith International, Inc.(a) | | 102,800 | | | 2,647,100 |
Superior Energy Services, Inc.* | | 81,800 | | | 1,412,686 |
Transocean, Ltd.* | | 44,784 | | | 3,327,004 |
| | | | | |
| | | | | 14,659,300 |
| | | | | |
| Food & Staples Retailing - 1.2% | | | | | |
Kroger Co. (The) | | 154,711 | | | 3,411,378 |
| | | | | |
| Food Products - 1.1% | | | | | |
J.M. Smucker Co. (The) | | 60,600 | | | 2,948,796 |
| | | | | |
| Gas Utilities - 2.2% | | | | | |
EQT Corp. | | 129,100 | | | 4,506,881 |
Piedmont Natural Gas Co., Inc.(a) | | 60,100 | | | 1,449,011 |
| | | | | |
| | | | | 5,955,892 |
| | | | | |
| Health Care Equipment & Supplies - 1.4% | | | |
Covidien Plc | | 81,000 | | | 3,032,640 |
Varian Medical Systems, Inc.* | | 26,000 | | | 913,640 |
| | | | | |
| | | | | 3,946,280 |
| | | | | |
| Health Care Providers & Services - 6.4% | | | |
AmerisourceBergen Corp. | | 233,600 | | | 4,144,064 |
DaVita, Inc.* | | 91,700 | | | 4,535,482 |
HEALTHSOUTH Corp.*(a) | | 225,282 | | | 3,253,072 |
McKesson Corp. | | 49,300 | | | 2,169,200 |
Patterson Cos., Inc.*(a) | | 162,100 | | | 3,517,570 |
| | | | | |
| | | | | 17,619,388 |
| | | | | |
| Hotels, Restaurants & Leisure - 4.7% | | | |
International Game Technology | | 194,500 | | | 3,092,550 |
Marriott International, Inc. - Class A(a) | | 136,401 | | | 3,010,380 |
Starwood Hotels & Resorts Worldwide, Inc.(a) | | 141,800 | | | 3,147,960 |
Wynn Resorts, Ltd.*(a) | | 104,000 | | | 3,671,200 |
| | | | | |
| | | | | 12,922,090 |
| | | | | |
See accompanying notes to financial statements
5
Met Investors Series Trust
Lord Abbett Mid Cap Value Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | |
| Household Durables - 0.4% | | | | | |
Snap-On, Inc. | | 40,802 | | $ | 1,172,649 |
| | | | | |
| Industrial Conglomerates - 1.2% | | | | | |
Tyco International, Ltd. | | 123,100 | | | 3,198,138 |
| | | | | |
| Insurance - 5.6% | | | | | |
ACE, Ltd. | | 113,388 | | | 5,015,151 |
Aon Corp. | | 145,600 | | | 5,513,872 |
Markel Corp.* | | 2,500 | | | 704,250 |
PartnerRe, Ltd. | | 63,170 | | | 4,102,892 |
| | | | | |
| | | | | 15,336,165 |
| | | | | |
| Machinery - 7.2% | | | | | |
Cummins, Inc. | | 52,910 | | | 1,862,961 |
Donaldson Co., Inc.(a) | | 55,700 | | | 1,929,448 |
Eaton Corp. | | 93,900 | | | 4,188,879 |
Kaydon Corp.(a) | | 31,700 | | | 1,032,152 |
Kennametal, Inc. | | 84,500 | | | 1,620,710 |
PACCAR, Inc.(a) | | 30,200 | | | 981,802 |
Parker Hannifin Corp. | | 96,400 | | | 4,141,344 |
Pentair, Inc. | | 52,300 | | | 1,339,926 |
SPX Corp. | | 58,700 | | | 2,874,539 |
| | | | | |
| | | | | 19,971,761 |
| | | | | |
| Marine - 1.1% | | | | | |
Kirby Corp.* | | 96,418 | | | 3,065,128 |
| | | | | |
| Media - 2.0% | | | | | |
Interpublic Group Cos., Inc.* | | 525,980 | | | 2,656,199 |
Omnicom Group, Inc. | | 87,500 | | | 2,763,250 |
| | | | | |
| | | | | 5,419,449 |
| | | | | |
| Metals & Mining - 2.0% | | | | | |
Reliance Steel & Aluminum Co. | | 146,853 | | | 5,637,687 |
| | | | | |
| Multi-Utilities - 1.2% | | | | | |
CMS Energy Corp.(a) | | 275,976 | | | 3,333,790 |
| | | | | |
| Multiline Retail - 1.6% | | | | | |
Big Lots, Inc.* | | 32,500 | | | 683,475 |
Macy’s, Inc. | | 164,789 | | | 1,937,919 |
Nordstrom, Inc.(a) | | 94,200 | | | 1,873,638 |
| | | | | |
| | | | | 4,495,032 |
| | | | | |
| Oil, Gas & Consumable Fuels - 4.9% | | | |
Cabot Oil & Gas Corp. | | 85,700 | | | 2,625,848 |
EOG Resources, Inc. | | 38,138 | | | 2,590,333 |
Forest Oil Corp.*(a) | | 112,400 | | | 1,677,008 |
Noble Energy, Inc. | | 45,700 | | | 2,694,929 |
Range Resources Corp. | | 21,500 | | | 890,315 |
Williams Cos., Inc. (The) | | 198,400 | | | 3,097,024 |
| | | | | |
| | | | | 13,575,457 |
| | | | | |
| Pharmaceuticals - 3.1% | | | | | |
Mylan, Inc.*(a) | | 485,344 | | | 6,333,739 |
Watson Pharmaceuticals, Inc.*(a) | | 68,100 | | | 2,294,289 |
| | | | | |
| | | | | 8,628,028 |
| | | | | |
| | | | | | | |
Security
Description | | Shares/Par
Amount | | Value | |
| | | | | | | |
| | |
| Road & Rail - 1.2% | | | | | | | |
Kansas City Southern*(a) | | | 203,100 | | $ | 3,271,941 | |
| | | | | | | |
| Semiconductors & Semiconductor Equipment - 0.2% | |
Marvell Technology Group, Ltd.* | | | 50,200 | | | 584,328 | |
| | | | | | | |
| Software - 6.0% | | | | | | | |
Adobe Systems, Inc.* | | | 206,089 | | | 5,832,319 | |
CA, Inc. | | | 77,600 | | | 1,352,568 | |
Intuit, Inc.* | | | 92,000 | | | 2,590,720 | |
Jack Henry & Associates, Inc. | | | 49,900 | | | 1,035,425 | |
McAfee, Inc.*(a) | | | 89,151 | | | 3,761,280 | |
Sybase, Inc.* | | | 63,768 | | | 1,998,489 | |
| | | | | | | |
| | | | | | 16,570,801 | |
| | | | | | | |
| Specialty Retail - 5.2% | | | | | | | |
American Eagle Outfitters, Inc. | | | 293,900 | | | 4,164,563 | |
Foot Locker, Inc. | | | 194,573 | | | 2,037,179 | |
Guess?, Inc. | | | 66,500 | | | 1,714,370 | |
PetSmart, Inc. | | | 113,000 | | | 2,424,980 | |
TJX Cos., Inc. (The) | | | 127,800 | | | 4,020,588 | |
| | | | | | | |
| | | | | | 14,361,680 | |
| | | | | | | |
| Textiles, Apparel & Luxury Goods - 0.3% | |
Fossil, Inc.* | | | 33,600 | | | 809,088 | |
| | | | | | | |
| Trading Companies & Distributors - 1.5% | |
GATX Corp.(a) | | | 78,800 | | | 2,026,736 | |
W.W. Grainger, Inc.(a) | | | 26,703 | | | 2,186,442 | |
| | | | | | | |
| | | | | | 4,213,178 | |
| | | | | | | |
Total Common Stocks
(Cost $269,931,218) | | | | | | 265,845,778 | |
| | | | | | | |
|
| Short-Term Investments - 16.0% | |
| Mutual Funds - 12.7% | |
State Street Navigator Securities Lending Trust Prime Portfolio(b) | | | 35,094,545 | | | 35,094,545 | |
| | | | | | | |
| Repurchase Agreement - 3.3% | |
State Street Bank & Trust Co.,
Repurchase Agreement,
dated 06/30/09 at 0.010% to be repurchased at $9,174,003 on 07/01/09 collateralized by $9,315,000 FNMA at
1.722% due 05/10/11 with a value of $9,361,575. | | $ | 9,174,000 | | | 9,174,000 | |
| | | | | | | |
Total Short-Term Investments
(Cost $44,268,545) | | | | | | 44,268,545 | |
| | | | | | | |
| | |
TOTAL INVESTMENTS - 112.4%
(Cost $314,199,763) | | | | | | 310,114,323 | |
| | | | | | | |
| |
| Other Assets and Liabilities (net) - (12.4)% | | | (34,290,735 | ) |
| | | | | | | |
| | |
| NET ASSETS - 100.0% | | | | | $ | 275,823,588 | |
| | | | | | | |
See accompanying notes to financial statements
6
Met Investors Series Trust
Lord Abbett Mid Cap Value Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
Portfolio Footnotes:
| * | | Non-Income Producing Security. |
| (a) | | All or a portion of security is on loan. |
| (b) | | Represents investment of collateral received from securities lending transactions. |
FNMA - Federal National Mortgage Association
See accompanying notes to financial statements
7
Met Investors Series Trust
Lord Abbett Mid Cap Value Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1—quoted prices in active markets for identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Common Stocks | | | | | | | | | | | | |
Aerospace & Defense | | $ | 7,073,849 | | $ | — | | $ | — | | $ | 7,073,849 |
Airlines | | | 2,501,299 | | | — | | | — | | | 2,501,299 |
Auto Components | | | 4,678,326 | | | — | | | — | | | 4,678,326 |
Capital Markets | | | 14,092,636 | | | — | | | — | | | 14,092,636 |
Chemicals | | | 7,095,330 | | | — | | | — | | | 7,095,330 |
Commercial & Professional Services | | | 2,679,876 | | | — | | | — | | | 2,679,876 |
Commercial Banks | | | 9,125,588 | | | — | | | — | | | 9,125,588 |
Communications Equipment | | | 3,679,222 | | | — | | | — | | | 3,679,222 |
Computers & Peripherals | | | 851,428 | | | — | | | — | | | 851,428 |
Construction & Engineering | | | 9,552,974 | | | — | | | — | | | 9,552,974 |
Containers & Packaging | | | 2,945,426 | | | — | | | — | | | 2,945,426 |
Distributors | | | 2,659,999 | | | — | | | — | | | 2,659,999 |
Diversified Telecommunication Services | | | 7,022,959 | | | — | | | — | | | 7,022,959 |
Electric Utilities | | | 1,708,009 | | | — | | | — | | | 1,708,009 |
Electrical Equipment | | | 1,839,586 | | | — | | | — | | | 1,839,586 |
Electronic Equipment, Instruments & Components | | | 3,231,847 | | | — | | | — | | | 3,231,847 |
Energy Equipment & Services | | | 14,659,300 | | | — | | | — | | | 14,659,300 |
Food & Staples Retailing | | | 3,411,378 | | | — | | | — | | | 3,411,378 |
Food Products | | | 2,948,796 | | | — | | | — | | | 2,948,796 |
Gas Utilities | | | 5,955,892 | | | — | | | — | | | 5,955,892 |
Health Care Equipment & Supplies | | | 3,946,280 | | | — | | | — | | | 3,946,280 |
Health Care Providers & Services | | | 17,619,388 | | | — | | | — | | | 17,619,388 |
Hotels, Restaurants & Leisure | | | 12,922,090 | | | — | | | — | | | 12,922,090 |
Household Durables | | | 1,172,649 | | | — | | | — | | | 1,172,649 |
Industrial Conglomerates | | | 3,198,138 | | | — | | | — | | | 3,198,138 |
Insurance | | | 15,336,165 | | | — | | | — | | | 15,336,165 |
Machinery | | | 19,971,761 | | | — | | | — | | | 19,971,761 |
Marine | | | 3,065,128 | | | — | | | — | | | 3,065,128 |
Media | | | 5,419,449 | | | — | | | — | | | 5,419,449 |
Metals & Mining | | | 5,637,687 | | | — | | | — | | | 5,637,687 |
Multi-Utilities | | | 3,333,790 | | | — | | | — | | | 3,333,790 |
Multiline Retail | | | 4,495,032 | | | — | | | — | | | 4,495,032 |
Oil, Gas & Consumable Fuels | | | 13,575,457 | | | — | | | — | | | 13,575,457 |
Pharmaceuticals | | | 8,628,028 | | | — | | | — | | | 8,628,028 |
Road & Rail | | | 3,271,941 | | | — | | | — | | | 3,271,941 |
See accompanying notes to financial statements
8
Met Investors Series Trust
Lord Abbett Mid Cap Value Portfolio
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Semiconductors & Semiconductor Equipment | | $ | 584,328 | | $ | — | | $ | — | | $ | 584,328 |
Software | | | 16,570,801 | | | — | | | — | | | 16,570,801 |
Specialty Retail | | | 14,361,680 | | | — | | | — | | | 14,361,680 |
Textiles, Apparel & Luxury Goods | | | 809,088 | | | — | | | — | | | 809,088 |
Trading Companies & Distributors | | | 4,213,178 | | | — | | | — | | | 4,213,178 |
Total Common Stocks | | | 265,845,778 | | | — | | | — | | | 265,845,778 |
Short-Term Investments | | | | | | | | | | | | |
Mutual Funds | | | 35,094,545 | | | — | | | — | | | 35,094,545 |
Repurchase Agreement | | | — | | | 9,174,000 | | | — | | | 9,174,000 |
Total Short-Term Investments | | | 35,094,545 | | | 9,174,000 | | | — | | | 44,268,545 |
TOTAL INVESTMENTS | | $ | 300,940,323 | | $ | 9,174,000 | | $ | — | | $ | 310,114,323 |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| Lord Abbett Mid Cap Value Portfolio | | | |
| Assets | | | | |
Investments, at value (a)(b) | | $ | 300,940,323 | |
Repurchase Agreement | | | 9,174,000 | |
Cash | | | 903 | |
Receivable for investments sold | | | 2,460,782 | |
Receivable for Trust shares sold | | | 71,819 | |
Dividends receivable | | | 219,594 | |
Interest receivable | | | 3 | |
| | | | |
Total assets | | | 312,867,424 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 1,349,483 | |
Trust shares redeemed | | | 299,439 | |
Distribution and services fees—Class B | | | 50,603 | |
Collateral for securities on loan | | | 35,094,545 | |
Management fee | | | 157,986 | |
Administration fee | | | 1,706 | |
Custodian and accounting fees | | | 13,979 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 72,668 | |
| | | | |
Total liabilities | | | 37,043,836 | |
| | | | |
| Net Assets | | $ | 275,823,588 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 484,715,772 | |
Accumulated net realized loss | | | (206,292,695 | ) |
Unrealized depreciation on investments | | | (4,085,440 | ) |
Undistributed net investment income | | | 1,485,951 | |
| | | | |
Total | | $ | 275,823,588 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 33,310,333 | |
| | | | |
Class B | | | 242,513,255 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 3,262,025 | |
| | | | |
Class B | | | 24,003,793 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 10.21 | |
| | | | |
Class B | | | 10.10 | |
| | | | |
| | | | | |
(a) Investments at cost, excluding repurchase agreement | | $ | 305,025,763 | |
(b) Includes cash collateral for securities loaned of | | | 35,094,545 | |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| Lord Abbett Mid Cap Value Portfolio | | | |
| Investment Income | | | | |
Dividends | | $ | 2,521,239 | |
Interest (1) | | | 167,267 | |
| | | | |
Total investment income | | | 2,688,506 | |
| | | | |
| Expenses | | | | |
Management fee | | | 863,641 | |
Administration fees | | | 11,732 | |
Custodian and accounting fees | | | 15,090 | |
Distribution and services fees—Class B | | | 272,324 | |
Audit and tax services | | | 17,469 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 14,533 | |
Insurance | | | 3,874 | |
Other | | | 3,238 | |
| | | | |
Total expenses | | | 1,228,334 | |
Less broker commission recapture | | | (25,786 | ) |
| | | | |
Net expenses | | | 1,202,548 | |
| | | | |
Net investment income | | | 1,485,958 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments | | | | |
Net realized loss on: | | | | |
Investments | | | (153,546,672 | ) |
| | | | |
Net realized loss on investments | | | (153,546,672 | ) |
| | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 153,957,361 | |
| | | | |
Net change in unrealized appreciation on investments | | | 153,957,361 | |
| | | | |
Net realized and unrealized gain on investments | | | 410,689 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 1,896,647 | |
| | | | |
| | | | | |
(1) Interest income includes securities lending net income of: | | $ | 166,633 | |
See accompanying notes to financial statements
11
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| Lord Abbett Mid Cap Value Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 1,485,958 | | | $ | 6,098,028 | |
Net realized loss on investments | | | (153,546,672 | ) | | | (52,077,612 | ) |
Net change in unrealized appreciation (depreciation) on investments | | | 153,957,361 | | | | (135,746,347 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 1,896,647 | | | | (181,725,931 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | (876,126 | ) | | | (463,642 | ) |
Class B | | | (5,213,906 | ) | | | (1,876,177 | ) |
From net realized gains | | | | | | | | |
Class A | | | — | | | | (8,667,429 | ) |
Class B | | | — | | | | (49,697,782 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (6,090,032 | ) | | | (60,705,030 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 438,277 | | | | 1,004,304 | |
Class B | | | 30,874,688 | | | | 50,978,334 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | 876,126 | | | | 9,131,071 | |
Class B | | | 5,213,906 | | | | 51,573,959 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (3,966,706 | ) | | | (14,887,895 | ) |
Class B | | | (18,636,596 | ) | | | (90,066,641 | ) |
| | | | | | | | |
Net increase in net assets from capital share transactions | | | 14,799,695 | | | | 7,733,132 | |
| | | | | | | | |
| Net Increase (Decrease) in Net Assets | | | 10,606,310 | | | | (234,697,829 | ) |
Net assets at beginning of period | | | 265,217,278 | | | | 499,915,107 | |
| | | | | | | | |
Net assets at end of period | | $ | 275,823,588 | | | $ | 265,217,278 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 1,485,951 | | | $ | 6,090,025 | |
| | | | | | | | |
See accompanying notes to financial statements
12
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Lord Abbett Mid Cap Value Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 10.40 | | | $ | 19.70 | | | $ | 22.79 | | | $ | 22.47 | | | $ | 21.64 | | | $ | 17.80 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.07 | | | | 0.26 | | | | 0.16 | | | | 0.17 | | | | 0.19 | | | | 0.17 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.01 | | | | (7.04 | ) | | | 0.33 | | | | 2.44 | | | | 1.60 | | | | 4.25 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.08 | | | | (6.78 | ) | | | 0.49 | | | | 2.61 | | | | 1.79 | | | | 4.42 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.27 | ) | | | (0.13 | ) | | | (0.24 | ) | | | (0.17 | ) | | | (0.13 | ) | | | (0.10 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (2.39 | ) | | | (3.34 | ) | | | (2.12 | ) | | | (0.83 | ) | | | (0.48 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.27 | ) | | | (2.52 | ) | | | (3.58 | ) | | | (2.29 | ) | | | (0.96 | ) | | | (0.58 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 10.21 | | | $ | 10.40 | | | $ | 19.70 | | | $ | 22.79 | | | $ | 22.47 | | | $ | 21.64 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 0.88 | % | | | (38.66 | )% | | | 0.90 | % | | | 12.49 | % | | | 8.28 | % | | | 24.82 | % |
Ratio of Expenses to Average Net Assets After Reimbursements | | | 0.74 | %* | | | 0.75 | % | | | 0.73 | % | | | 0.77 | % | | | 0.76 | % | | | 0.78 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.76 | %* | | | 0.75 | % | | | 0.75 | % | | | 0.78 | % | | | 0.76 | % | | | N/A | |
Ratio of Net Investment Income to Average Net Assets | | | 1.41 | %* | | | 1.78 | % | | | 0.74 | % | | | 0.80 | % | | | 0.86 | % | | | 0.86 | % |
Portfolio Turnover Rate | | | 72.1 | % | | | 30.2 | % | | | 38.4 | % | | | 27.8 | % | | | 26.2 | % | | | 19.7 | % |
Net Assets, End of Period (in millions) | | $ | 33.3 | | | $ | 36.9 | | | $ | 77.1 | | | $ | 96.8 | | | $ | 113.3 | | | $ | 125.1 | |
| |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 10.27 | | | $ | 19.48 | | | $ | 22.56 | | | $ | 22.28 | | | $ | 21.48 | | | $ | 17.70 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.05 | | | | 0.22 | | | | 0.11 | | | | 0.12 | | | | 0.14 | | | | 0.12 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.01 | | | | (6.95 | ) | | | 0.31 | | | | 2.40 | | | | 1.59 | | | | 4.22 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.06 | | | | (6.73 | ) | | | 0.42 | | | | 2.52 | | | | 1.73 | | | | 4.34 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.23 | ) | | | (0.09 | ) | | | (0.16 | ) | | | (0.12 | ) | | | (0.10 | ) | | | (0.08 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (2.39 | ) | | | (3.34 | ) | | | (2.12 | ) | | | (0.83 | ) | | | (0.48 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.23 | ) | | | (2.48 | ) | | | (3.50 | ) | | | (2.24 | ) | | | (0.93 | ) | | | (0.56 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 10.10 | | | $ | 10.27 | | | $ | 19.48 | | | $ | 22.56 | | | $ | 22.28 | | | $ | 21.48 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 0.71 | % | | | (38.77 | )% | | | 0.60 | % | | | 12.18 | % | | | 8.05 | % | | | 24.50 | % |
Ratio of Expenses to Average Net Assets After Reimbursements | | | 0.99 | %* | | | 1.00 | % | | | 0.98 | % | | | 1.02 | % | | | 1.01 | % | | | 1.03 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 1.01 | %* | | | 1.00 | % | | | 1.01 | % | | | 1.03 | % | | | 1.02 | % | | | N/A | |
Ratio of Net Investment Income to Average Net Assets | | | 1.15 | %* | | | 1.56 | % | | | 0.53 | % | | | 0.56 | % | | | 0.62 | % | | | 0.60 | % |
Portfolio Turnover Rate | | | 72.1 | % | | | 30.2 | % | | | 38.4 | % | | | 27.8 | % | | | 26.2 | % | | | 19.7 | % |
Net Assets, End of Period (in millions) | | $ | 242.5 | | | $ | 228.3 | | | $ | 422.8 | | | $ | 266.4 | | | $ | 229.0 | | | $ | 179.1 | |
| (a) | | Per share amounts based on average shares outstanding during the period. |
See accompanying notes to financial statements
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is Lord Abbett Mid Cap Value Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A and B Shares are currently offered by the Portfolio. Class C and E Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | | |
Expiring
12/31/2016 | | Total |
| |
| $ | 50,589,228 | | $ | 50,589,228 |
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
G. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
H. Directed Brokerage Agreement - The Trust has entered into a directed brokerage arrangement with State Street Global Markets (“SSGM”). Under this arrangement, the Portfolio directs certain trades to SSGM in return for a recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to the Portfolio are shown separately as an expense reduction on the Statement of Operations of the Portfolio.
I. Foreign Currency Translation - The books and records of the Portfolio are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars on a daily basis using prevailing exchange rates. Purchases and sales of securities are translated at the rates of exchange prevailing when such securities were acquired or sold. Income is translated at rates of exchange prevailing when interest is accrued or dividends are recorded.
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
The Portfolio does not isolate that portion of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in forward foreign currency contracts; sales of foreign currencies; currency gains or losses realized between the trade and settlement dates on securities transactions; and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Portfolio’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end; from changes in the exchange rates of foreign currency held; and from changes in the contract value of forward foreign currency contracts.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with Lord, Abbett & Co. LLC (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $863,641 | | 0.70 | % | | First $200 Million |
| | |
| | 0.65 | % | | $200 Million to $500 Million |
| | |
| | 0.625 | % | | Over $500 Million |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
On April 27, 2007, the Lord Abbett America’s Value Portfolio was acquired by the Portfolio and Lord Abbett Bond Debenture Portfolio as described in Note 8. As a result of the acquisition, the Manager was entitled to a subsidy amount of $193,409. The Manager received $90,000 of such subsidy amount during the year ended December 31, 2007, and $103,409 of such subsidy amount during the year ended December 31, 2008.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A and Class B Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B distribution plan provides that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% of the average net assets of the Portfolio attributable to its Class B Shares in respect to activities primarily intended to result in the sale of Class B Shares. However, under the Class B distribution agreement, payments to the Distributor for activities pursuant to the Class B distribution plan are currently limited to payments at an annual rate equal to 0.25% of average daily net assets of the Portfolio attributable to its Class B Shares.
Under terms of the Class B distribution plan and distribution agreement, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
16
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions
| | | Net Increase
(Decrease)
in Shares
Outstanding | | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 3,550,468 | | 45,685 | | 90,415 | | (424,543 | ) | | (288,443 | ) | | 3,262,025 |
12/31/2008 | | 3,914,840 | | 79,328 | | 586,830 | | (1,030,530 | ) | | (364,372 | ) | | 3,550,468 |
| | | | | | |
Class B | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 22,239,675 | | 3,209,064 | | 543,682 | | (1,988,628 | ) | | 1,764,118 | | | 24,003,793 |
12/31/2008 | | 21,700,789 | | 3,792,062 | | 3,351,134 | | (6,604,310 | ) | | 538,886 | | | 22,239,675 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 183,220,095 | | $ | — | | $ | 173,786,434 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $314,199,763 | | $ | 20,787,627 | | $ | (24,873,067 | ) | | $ | (4,085,440 | ) |
6. Securities Lending
As of June 30, 2009, the Portfolio had loaned securities which were collateralized by short-term investments. The value of securities on loan and the value of the related collateral were as follows:
| | | | | | | | | |
Value of
Securities | | Value of
Cash
Collateral | | Value of
Non-Cash
Collateral* | | Total
Collateral |
| | | |
| $34,164,546 | | $ | 35,094,545 | | $ | — | | $ | 35,094,545 |
* The Portfolio cannot repledge or resell this collateral. The non-cash collateral is typically comprised of government securities and/or bank letters of credit.
7. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $ | 13,402,339 | | $ | 4,525,861 | | $ | 47,302,691 | | $ | 46,931,683 | | $ | 60,705,030 | | $ | 51,457,544 |
17
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
7. Distributions to Shareholders - continued
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards | | | Total | |
| | | | |
| $6,090,025 | | $ | — | | $ | (160,199,596 | ) | | $ | (50,589,230 | ) | | $ | (204,698,801 | ) |
8. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
9. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
18
| | |
| Met/AIM Small Cap Growth Portfolio | | For the period ended 6/30/09 |
| Managed by Invesco Aim Capital Management, Inc. | | |
Portfolio Manager Commentary
Performance
During the six-month period ended June 30, 2009, the Portfolio had a return of 12.08%, 11.92% and 12.03% for Class A, B and E Shares, respectively, versus 11.36% for its benchmark, the Russell 2000® Growth Index, and 2.64% for the Russell 2000® Index.
Market Environment/Conditions
On the heels of a severe global economic slowdown that persisted through much of 2008 and the first two months of 2009, a significant stock market rally began on March 9th, 2009, on optimism that the economy is close to stabilizing. Large, mid and small caps, as represented by the Russell Top 200® Index, the Russell Midcap® Index and the Russell 2000® Index, all had positive returns during the period. In terms of investment style, growth stocks outperformed value stocks, as represented by the Russell 3000® Growth Index and the Russell 3000® Value Index, respectively.
Portfolio Review/Current Positioning
The Portfolio outperformed by the widest margin in the industrials sector, driven primarily by stock selection. The Portfolio also outperformed in the energy, health care and telecommunication services sectors, largely due to stock selection. An underweight position in the health care sector also contributed to outperformance.
Underperformance versus the Russell 2000® Growth Index was concentrated in the information technology, consumer discretionary and consumer staples sector. The Portfolio’s holdings generally underperformed those of the benchmark index in each of these three sectors.
At the end of the reporting period, the Portfolio’s largest overweight positions were in semiconductors, diversified financials, energy and media industry groups. The largest underweight positions were in the consumer durables/apparel, software/services, pharmaceuticals/life sciences/biotechnology, and technology hardware/equipment industry groups.
Juliet Ellis, Senior Portfolio Manager
Juan Hartsfield, Portfolio Manager
Clay Manley, Portfolio Manager
Assisted by the Small Cap Growth/Core Team
Invesco Aim Capital Management, Inc.
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the
subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
| | |
Quality Systems, Inc. | | 1.77% |
Greenhill & Co., Inc. | | 1.51% |
Starent Networks Corp. | | 1.46% |
Marvel Entertainment, Inc. | | 1.40% |
Ralcorp Holdings, Inc. | | 1.36% |
Varian, Inc. | | 1.29% |
CoStar Group, Inc. | | 1.27% |
Arena Resources, Inc. | | 1.24% |
TransDigm Group, Inc. | | 1.22% |
TETRA Technology, Inc. | | 1.22% |
Portfolio Composition (% of portfolio market value)
As of 6/30/09
1
| | |
| Met/AIM Small Cap Growth Portfolio | | For the period ended 6/30/09 |
| Managed by Invesco Aim Capital Management, Inc. | | |
Portfolio Manager Commentary (continued)
Met/AIM Small Cap Growth Portfolio managed by
Invesco Aim Capital Management, Inc. vs. Russell 2000® Growth Index1 and Russell 2000® Index2
Growth Based on $10,000+
| | | | | | | | | | | | |
| | | | | Average Annual Return3 (for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | 3 Year | | 5 Year | | Since
Inception4 |
| | Met/AIM Small Cap Growth Portfolio—Class A | | 12.08% | | -23.01% | | -6.37% | | -0.46% | | 0.36% |
| — | | Class B | | 11.92% | | -23.21% | | -6.59% | | -0.63% | | 2.38% |
| | Class E | | 12.03% | | -23.12% | | -6.48% | | -0.51% | | 0.67% |
| — | | Russell 2000® Growth Index1 | | 11.36% | | -24.85% | | -7.83% | | -1.32% | | 2.91% |
| - - | | Russell 2000® Index2 | | 2.64% | | -25.01% | | -9.89% | | -1.71% | | 4.10% |
+The chart reflects the performance of Class B shares of the Portfolio. The performance of Class B shares will differ from that of the other classes because of the difference in expenses paid by policyholders investing in the different share classes.
1The Russell 2000® Growth Index is an unmanaged measure of performance of those Russell 2000® companies (small capitalization companies) that have higher price-to-book ratios and higher forecasted growth values.
2The Russell 2000® Index is an unmanaged index which measures the performances of the 2,000 smallest companies in the Russell 3000® Index.
3“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
4Inception of the Class A shares is 1/2/02. Inception of the Class B shares is 10/9/01. Inception of the Class E shares is 4/1/02. Index returns are based on an inception date of 10/9/01.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Indexes do not include fees or expenses and are not available for direct investment.
2
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| Met/AIM Small Cap Growth Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.92% | | $ | 1,000.00 | | $ | 1,120.80 | | $ | 4.84 |
Hypothetical | | 0.92% | | | 1,000.00 | | | 1,020.23 | | | 4.61 |
| | | | | | | | | | | |
| | | | |
Class B | | | | | | | | | | | |
Actual | | 1.17% | | $ | 1,000.00 | | $ | 1,119.20 | | $ | 6.15 |
Hypothetical | | 1.17% | | | 1,000.00 | | | 1,018.99 | | | 5.86 |
| | | | | | | | | | | |
| | | | |
Class E | | | | | | | | | | | |
Actual | | 1.07% | | $ | 1,000.00 | | $ | 1,120.30 | | $ | 5.63 |
Hypothetical | | 1.07% | | | 1,000.00 | | | 1,019.49 | | | 5.36 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
3
Met Investors Series Trust
Met/AIM Small Cap Growth Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | |
| Common Stocks - 96.7% | | | | | |
| Aerospace & Defense - 1.7% | | | | | |
Hexcel Corp.* | | 388,747 | | $ | 3,704,759 |
TransDigm Group, Inc.* | | 258,880 | | | 9,371,456 |
| | | | | |
| | | | | 13,076,215 |
| | | | | |
| Air Freight & Logistics - 1.6% | | | | | |
Forward Air Corp.(a) | | 271,276 | | | 5,783,604 |
Hub Group, Inc.* | | 306,087 | | | 6,317,636 |
| | | | | |
| | | | | 12,101,240 |
| | | | | |
| Biotechnology - 4.9% | | | | | |
Acorda Therapeutics, Inc.* | | 244,437 | | | 6,890,679 |
BioMarin Pharmaceutical, Inc.*(a) | | 376,826 | | | 5,882,254 |
Isis Pharmaceuticals, Inc.*(a) | | 220,683 | | | 3,641,269 |
Martek Biosciences Corp.* | | 226,872 | | | 4,798,343 |
Myriad Genetics, Inc.* | | 152,016 | | | 5,419,370 |
Myriad Pharmaceuticals, Inc.* | | 38,004 | | | 176,719 |
OSI Pharmaceuticals, Inc.*(a) | | 126,986 | | | 3,584,815 |
United Therapeutics Corp.*(a) | | 89,621 | | | 7,468,118 |
| | | | | |
| | | | | 37,861,567 |
| | | | | |
| Capital Markets - 4.8% | | | | | |
Affiliated Managers Group, Inc.* | | 113,065 | | | 6,579,252 |
Federated Investors, Inc. - Class B | | 261,112 | | | 6,290,188 |
Greenhill & Co., Inc. | | 160,584 | | | 11,595,771 |
optionsXpress Holdings, Inc. | | 290,773 | | | 4,515,705 |
Stifel Financial Corp.* | | 166,477 | | | 8,005,879 |
| | | | | |
| | | | | 36,986,795 |
| | | | | |
| Chemicals - 0.6% | | | | | |
Calgon Carbon Corp.*(a) | | 341,230 | | | 4,739,685 |
| | | | | |
| Commercial & Professional Services - 3.4% | | | |
Corrections Corp. of America* | | 358,330 | | | 6,088,027 |
EnergySolutions | | 407,144 | | | 3,745,725 |
Fuel Tech, Inc.*(a) | | 369,113 | | | 3,580,396 |
Interface, Inc. - Class A | | 594,713 | | | 3,687,220 |
TETRA Technology, Inc.* | | 326,198 | | | 9,345,573 |
| | | | | |
| | | | | 26,446,941 |
| | | | | |
| Commercial Banks - 1.9% | | | | | |
City National Corp. | | 123,456 | | | 4,546,885 |
Cullen/Frost Bankers, Inc. | | 99,699 | | | 4,598,118 |
SVB Financial Group* | | 209,855 | | | 5,712,253 |
| | | | | |
| | | | | 14,857,256 |
| | | | | |
| Communications Equipment - 4.0% |
F5 Networks, Inc.*(a) | | 181,507 | | | 6,278,327 |
Harmonic, Inc.* | | 902,229 | | | 5,314,129 |
Polycom, Inc.* | | 385,316 | | | 7,810,355 |
Starent Networks Corp.*(a) | | 457,671 | | | 11,171,749 |
| | | | | |
| | | | | 30,574,560 |
| | | | | |
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| |
| Construction & Engineering - 1.4% | | | |
Pike Electric Corp.*(a) | | 559,713 | | $ | 6,744,542 |
Quanta Services, Inc.*(a) | | 189,075 | | | 4,373,305 |
| | | | | |
| | | | | 11,117,847 |
| | | | | |
| Containers & Packaging - 1.1% | | | | | |
Greif, Inc. | | 188,132 | | | 8,319,197 |
| | | | | |
| Diversified Consumer Services - 0.6% |
DeVry, Inc. | | 98,948 | | | 4,951,358 |
| | | | | |
| Electric Utilities - 1.0% | | | | | |
ITC Holdings Corp. | | 161,782 | | | 7,338,432 |
| | | | | |
| Electrical Equipment - 2.1% | | | | | |
General Cable Corp.*(a) | | 225,374 | | | 8,469,555 |
Regal-Beloit Corp.(a) | | 186,315 | | | 7,400,432 |
| | | | | |
| | | | | 15,869,987 |
| | | | | |
| Electronic Equipment, Instruments & Components - 2.7% |
Cogent, Inc.*(a) | | 695,493 | | | 7,462,640 |
Coherent, Inc.*(a) | | 192,684 | | | 3,984,705 |
Tech Data Corp.* | | 273,236 | | | 8,937,550 |
| | | | | |
| | | | | 20,384,895 |
| | | | | |
| Energy Equipment & Services - 1.9% | | | |
Dril-Quip, Inc.* | | 231,619 | | | 8,824,684 |
FMC Technologies, Inc.* | | 161,464 | | | 6,067,817 |
| | | | | |
| | | | | 14,892,501 |
| | | | | |
| Food Products - 1.4% | | | | | |
Ralcorp Holdings, Inc.* | | 171,152 | | | 10,426,580 |
| | | | | |
| Health Care Equipment & Supplies - 3.6% | | | |
Gen-Probe, Inc.*(a) | | 139,238 | | | 5,984,449 |
Insulet Corp.*(a) | | 328,118 | | | 2,526,509 |
Meridian Bioscience, Inc.(a) | | 284,996 | | | 6,435,210 |
NuVasive, Inc.*(a) | | 176,336 | | | 7,864,585 |
Zoll Medical Corp.* | | 235,862 | | | 4,561,571 |
| | | | | |
| | | | | 27,372,324 |
| | | | | |
| Health Care Providers & Services - 5.0% | | | |
Chemed Corp.(a) | | 195,872 | | | 7,733,027 |
inVentiv Health, Inc.* | | 286,008 | | | 3,869,688 |
LifePoint Hospitals, Inc.*(a) | | 284,325 | | | 7,463,531 |
MEDNAX, Inc.*(a) | | 155,180 | | | 6,537,733 |
PSS World Medical, Inc.*(a) | | 270,439 | | | 5,005,826 |
VCA Antech, Inc.*(a) | | 288,408 | | | 7,700,494 |
| | | | | |
| | | | | 38,310,299 |
| | | | | |
| Health Care Technology - 2.9% | | | | | |
Eclipsys Corp.* | | 499,014 | | | 8,872,469 |
Quality Systems, Inc.(a) | | 237,840 | | | 13,547,366 |
| | | | | |
| | | | | 22,419,835 |
| | | | | |
| Hotels, Restaurants & Leisure - 5.8% | | | |
Brinker International, Inc. | | 415,931 | | | 7,083,305 |
Buffalo Wild Wings, Inc.*(a) | | 136,860 | | | 4,450,687 |
See accompanying notes to financial statements
4
Met Investors Series Trust
Met/AIM Small Cap Growth Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Hotels, Restaurants & Leisure - continued |
Choice Hotels International, Inc.(a) | | 206,322 | | $ | 5,490,229 |
Darden Restaurants, Inc. | | 177,852 | | | 5,865,559 |
Jack in the Box, Inc.* | | 369,514 | | | 8,295,589 |
P.F. Chang’s China Bistro, Inc.*(a) | | 230,804 | | | 7,399,576 |
Penn National Gaming, Inc.* | | 194,644 | | | 5,666,087 |
| | | | | |
| | | | | 44,251,032 |
| | | | | |
| Household Products - 1.1% | | | | | |
Church & Dwight Co., Inc. | | 149,555 | | | 8,122,332 |
| | | | | |
| Insurance - 1.5% | | | | | |
Brown & Brown, Inc. | | 241,444 | | | 4,811,979 |
ProAssurance Corp.* | | 149,259 | | | 6,897,258 |
| | | | | |
| | | | | 11,709,237 |
| | | | | |
| Internet Software & Services - 1.4% | | | |
Bankrate, Inc.*(a) | | 191,146 | | | 4,824,525 |
Omniture, Inc.*(a) | | 480,023 | | | 6,029,089 |
| | | | | |
| | | | | 10,853,614 |
| | | | | |
| IT Services - 3.4% | | | | | |
Global Payments, Inc. | | 156,762 | | | 5,872,304 |
NeuStar, Inc. - Class A*(a) | | 319,113 | | | 7,071,544 |
SRA International, Inc.* | | 313,761 | | | 5,509,643 |
Syntel, Inc.(a) | | 239,915 | | | 7,542,928 |
| | | | | |
| | | | | 25,996,419 |
| | | | | |
| Life Sciences Tools & Services - 3.8% | | | |
AMAG Pharmaceuticals, Inc.*(a) | | 149,749 | | | 8,186,778 |
PAREXEL International Corp.* | | 320,801 | | | 4,613,118 |
Techne Corp. | | 95,990 | | | 6,125,122 |
Varian, Inc.* | | 250,727 | | | 9,886,166 |
| | | | | |
| | | | | 28,811,184 |
| | | | | |
| Machinery - 2.8% | | | | | |
Barnes Group, Inc.(a) | | 177,118 | | | 2,105,933 |
Bucyrus International, Inc.(a) | | 165,281 | | | 4,720,425 |
Dynamic Materials Corp.(a) | | 216,197 | | | 4,168,278 |
Lindsay Co.(a) | | 112,354 | | | 3,718,918 |
Wabtec Corp.(a) | | 198,267 | | | 6,378,249 |
| | | | | |
| | | | | 21,091,803 |
| | | | | |
| Media - 2.1% | | | | | |
Live Nation, Inc.*(a) | | 376,380 | | | 1,829,207 |
Marvel Entertainment, Inc.* | | 301,145 | | | 10,717,750 |
National CineMedia, Inc. | | 263,185 | | | 3,621,426 |
| | | | | |
| | | | | 16,168,383 |
| | | | | |
| Metals & Mining - 0.5% | | | | | |
Carpenter Technology Corp. | | 171,298 | | | 3,564,711 |
| | | | | |
| Multiline Retail - 0.7% | | | | | |
Big Lots, Inc.*(a) | | 266,238 | | | 5,598,985 |
| | | | | |
| Oil, Gas & Consumable Fuels - 3.6% | | | | | |
Arena Resources, Inc.*(a) | | 297,287 | | | 9,468,591 |
Bill Barrett Corp.*(a) | | 204,308 | | | 5,610,297 |
Carrizo Oil & Gas, Inc.*(a) | | 248,093 | | | 4,254,795 |
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Oil, Gas & Consumable Fuels - continued |
Goodrich Petroleum Corp.*(a) | | 182,971 | | $ | 4,499,257 |
Whiting Petroleum Corp.*(a) | | 100,768 | | | 3,543,003 |
| | | | | |
| | | | | 27,375,943 |
| | | | | |
| Pharmaceuticals - 0.7% | | | | | |
Perrigo Co.(a) | | 203,353 | | | 5,649,146 |
| | | | | |
| Professional Services - 1.3% | | | | | |
CoStar Group, Inc.*(a) | | 244,492 | | | 9,747,896 |
| | | | | |
| Real Estate Investment Trusts (REITs) - 0.5% |
BioMed Realty Trust, Inc. | | 408,731 | | | 4,181,318 |
| | | | | |
| Road & Rail - 1.2% | | | | | |
Knight Transportation, Inc.(a) | | 560,086 | | | 9,269,423 |
| | | | | |
| Semiconductors & Semiconductor Equipment - 7.7% |
Advanced Energy Industries, Inc.* | | 538,604 | | | 4,842,050 |
Cabot Microelectronics Corp.* | | 178,870 | | | 5,060,232 |
Hittite Microwave Corp.* | | 220,245 | | | 7,653,514 |
Microsemi Corp.*(a) | | 426,077 | | | 5,879,863 |
Monolithic Power Systems, Inc.* | | 357,873 | | | 8,019,934 |
ON Semiconductor Corp.* | | 854,663 | | | 5,862,988 |
Power Integrations, Inc.(a) | | 271,005 | | | 6,447,209 |
Silicon Laboratories, Inc.*(a) | | 201,708 | | | 7,652,802 |
Varian Semiconductor Equipment Associates, Inc.*(a) | | 320,653 | | | 7,692,465 |
| | | | | |
| | | | | 59,111,057 |
| | | | | |
| Software - 7.0% | | | | | |
Aspen Technology, Inc.*(a) | | 615,741 | | | 5,252,271 |
Blackboard, Inc.* | | 177,112 | | | 5,111,452 |
Informatica Corp.* | | 483,882 | | | 8,317,932 |
Lawson Software, Inc.* | | 1,051,474 | | | 5,867,225 |
Manhattan Associates, Inc.*(a) | | 332,816 | | | 6,063,908 |
MICROS Systems, Inc.* | | 221,620 | | | 5,611,418 |
Nice Systems, Ltd. (ADR)* | | 261,119 | | | 6,024,015 |
Sybase, Inc.* | | 161,875 | | | 5,073,162 |
Websense, Inc.* | | 350,726 | | | 6,256,952 |
| | | | | |
| | | | | 53,578,335 |
| | | | | |
| Specialty Retail - 2.2% | | | | | |
AnnTaylor Stores Corp.* | | 326,038 | | | 2,601,783 |
HOT Topic, Inc.*(a) | | 814,896 | | | 5,956,890 |
Tractor Supply Co.*(a) | | 120,146 | | | 4,964,433 |
Zumiez, Inc.*(a) | | 416,049 | | | 3,332,552 |
| | | | | |
| | | | | 16,855,658 |
| | | | | |
| Textiles, Apparel & Luxury Goods - 1.1% | | | |
Warnaco Group, Inc. (The)* | | 264,727 | | | 8,577,155 |
| | | | | |
| Trading Companies & Distributors - 0.7% | | | |
Watsco, Inc.(a) | | 109,656 | | | 5,365,468 |
| | | | | |
|
| Wireless Telecommunication Services - 1.0% |
SBA Communications Corp.*(a) | | 299,306 | | | 7,344,968 |
| | | | | |
Total Common Stocks
(Cost $835,474,604) | | | | | 741,271,581 |
| | | | | |
See accompanying notes to financial statements
5
Met Investors Series Trust
Met/AIM Small Cap Growth Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | | |
Security
Description | | Shares/Par
Amount | | Value | |
| | | | | | | |
| | | | | | | |
| |
| Short-Term Investments - 13.8% | | | | |
| Mutual Funds - 10.5% | | | | | | | |
State Street Navigator Securities Lending Trust Prime Portfolio(b) | | | 80,367,628 | | $ | 80,367,628 | |
| | | | | | | |
| Repurchase Agreement - 3.3% | |
State Street Bank & Trust Co., Repurchase Agreement, dated 06/30/09 at 0.010% to be repurchased at $25,558,007 on 07/01/09 collateralized by $25,940,000 FNMA at 1.722% due 05/10/11 with a value of $26,069,700. | | $ | 25,558,000 | | | 25,558,000 | |
| | | | | | | |
Total Short-Term Investments
(Cost $105,925,628) | | | | | | 105,925,628 | |
| | | | | | | |
| |
TOTAL INVESTMENTS - 110.5%
(Cost $941,400,232) | | | 847,197,209 | |
| | | | | | | |
| |
| Other Assets and Liabilities (net) - (10.5)% | | | (80,795,785 | ) |
| | | | | | | |
| | |
| NET ASSETS - 100.0% | | | | | $ | 766,401,424 | |
| | | | | | | |
Portfolio Footnotes:
| * | | Non-income producing security. |
| (a) | | All or a portion of security is on loan. |
| (b) | | Represents investment of collateral received from securities lending transactions. |
ADR - American Depositary Receipt
FNMA - Federal National Mortgage Association
See accompanying notes to financial statements
6
Met Investors Series Trust
Met/AIM Small Cap Growth Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
| Level 1—quoted | | prices in active markets for identical securities |
| Level 2—other | | significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.) |
| Level 3—significant | | unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments) |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Common Stocks | | | | | | | | | | | | |
Aerospace & Defense | | $ | 13,076,215 | | $ | — | | $ | — | | $ | 13,076,215 |
Air Freight & Logistics | | | 12,101,240 | | | — | | | — | | | 12,101,240 |
Biotechnology | | | 37,861,567 | | | — | | | — | | | 37,861,567 |
Capital Markets | | | 36,986,795 | | | — | | | — | | | 36,986,795 |
Chemicals | | | 4,739,685 | | | — | | | — | | | 4,739,685 |
Commercial & Professional Services | | | 26,446,941 | | | — | | | — | | | 26,446,941 |
Commercial Banks | | | 14,857,256 | | | — | | | — | | | 14,857,256 |
Communications Equipment | | | 30,574,560 | | | — | | | — | | | 30,574,560 |
Construction & Engineering | | | 11,117,847 | | | — | | | — | | | 11,117,847 |
Containers & Packaging | | | 8,319,197 | | | — | | | — | | | 8,319,197 |
Diversified Consumer Services | | | 4,951,358 | | | — | | | — | | | 4,951,358 |
Electric Utilities | | | 7,338,432 | | | — | | | — | | | 7,338,432 |
Electrical Equipment | | | 15,869,987 | | | — | | | — | | | 15,869,987 |
Electronic Equipment, Instruments & Components | | | 20,384,895 | | | — | | | — | | | 20,384,895 |
Energy Equipment & Services | | | 14,892,501 | | | — | | | — | | | 14,892,501 |
Food Products | | | 10,426,580 | | | — | | | — | | | 10,426,580 |
Health Care Equipment & Supplies | | | 27,372,324 | | | — | | | — | | | 27,372,324 |
Health Care Providers & Services | | | 38,310,299 | | | — | | | — | | | 38,310,299 |
Health Care Technology | | | 22,419,835 | | | — | | | — | | | 22,419,835 |
Hotels, Restaurants & Leisure | | | 44,251,032 | | | — | | | — | | | 44,251,032 |
Household Products | | | 8,122,332 | | | — | | | — | | | 8,122,332 |
Insurance | | | 11,709,237 | | | — | | | — | | | 11,709,237 |
Internet Software & Services | | | 10,853,614 | | | — | | | — | | | 10,853,614 |
IT Services | | | 25,996,419 | | | — | | | — | | | 25,996,419 |
Life Sciences Tools & Services | | | 28,811,184 | | | — | | | — | | | 28,811,184 |
Machinery | | | 21,091,803 | | | — | | | — | | | 21,091,803 |
Media | | | 16,168,383 | | | — | | | — | | | 16,168,383 |
Metals & Mining | | | 3,564,711 | | | — | | | — | | | 3,564,711 |
Multiline Retail | | | 5,598,985 | | | — | | | — | | | 5,598,985 |
Oil, Gas & Consumable Fuels | | | 27,375,943 | | | — | | | — | | | 27,375,943 |
Pharmaceuticals | | | 5,649,146 | | | — | | | — | | | 5,649,146 |
Professional Services | | | 9,747,896 | | | — | | | — | | | 9,747,896 |
Real Estate Investment Trusts (REITs) | | | 4,181,318 | | | — | | | — | | | 4,181,318 |
Road & Rail | | | 9,269,423 | | | — | | | — | | | 9,269,423 |
Semiconductors & Semiconductor Equipment | | | 59,111,057 | | | — | | | — | | | 59,111,057 |
See accompanying notes to financial statements
7
Met Investors Series Trust
Met/AIM Small Cap Growth Portfolio
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Software | | $ | 53,578,335 | | $ | — | | $ | — | | $ | 53,578,335 |
Specialty Retail | | | 16,855,658 | | | — | | | — | | | 16,855,658 |
Textiles, Apparel & Luxury Goods | | | 8,577,155 | | | — | | | — | | | 8,577,155 |
Trading Companies & Distributors | | | 5,365,468 | | | — | | | — | | | 5,365,468 |
Wireless Telecommunication Services | | | 7,344,968 | | | — | | | — | | | 7,344,968 |
Total Common Stocks | | | 741,271,581 | | | — | | | — | | | 741,271,581 |
Short-Term Investments | | | | | | | | | | | | |
Mutual Funds | | | 80,367,628 | | | — | | | — | | | 80,367,628 |
Repurchase Agreement | | | — | | | 25,558,000 | | | — | | | 25,558,000 |
Total Short-Term Investments | | | 80,367,629 | | | 25,558,000 | | | — | | | 105,925,628 |
TOTAL INVESTMENTS | | $ | 821,639,209 | | $ | 25,558,000 | | $ | — | | $ | 847,197,209 |
See accompanying notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| Met/AIM Small Cap Growth Portfolio | | | |
| Assets | | | | |
Investments, at value (a)(b) | | $ | 821,639,209 | |
Repurchase Agreement | | | 25,558,000 | |
Cash | | | 329 | |
Receivable for investments sold | | | 47,510 | |
Receivable for Trust shares sold | | | 159,646 | |
Dividends receivable | | | 286,104 | |
Interest receivable | | | 7 | |
| | | | |
Total assets | | | 847,690,805 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Trust shares redeemed | | | 165,530 | |
Distribution and services fees—Class B | | | 37,398 | |
Distribution and services fees—Class E | | | 1,216 | |
Collateral for securities on loan | | | 80,367,628 | |
Management fee | | | 544,468 | |
Administration fee | | | 4,572 | |
Custodian and accounting fees | | | 90,498 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 74,644 | |
| | | | |
Total liabilities | | | 81,289,381 | |
| | | | |
| Net Assets | | $ | 766,401,424 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 926,080,979 | |
Accumulated net realized loss | | | (64,984,803 | ) |
Unrealized depreciation on investments | | | (94,203,023 | ) |
Distributions in excess of net investment income | | | (491,729 | ) |
| | | | |
Total | | $ | 766,401,424 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 575,381,313 | |
| | | | |
Class B | | | 181,158,110 | |
| | | | |
Class E | | | 9,862,001 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 61,407,736 | |
| | | | |
Class B | | | 19,693,165 | |
| | | | |
Class E | | | 1,059,793 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 9.37 | |
| | | | |
Class B | | | 9.20 | |
| | | | |
Class E | | | 9.31 | |
| | | | |
| | | | | |
(a) Investments at cost, excluding repurchase agreement | | $ | 915,842,232 | |
(b) Includes cash collateral for securities loaned of | | | 80,367,628 | |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| Met/AIM Small Cap Growth Portfolio | | | |
| Investment Income | | | | |
Dividends | | $ | 1,750,812 | |
Interest (1) | | | 655,043 | |
| | | | |
Total investment income | | | 2,405,855 | |
| | | | |
| Expenses | | | | |
Management fee | | | 2,561,131 | |
Administration fees | | | 25,021 | |
Custodian and accounting fees | | | 17,435 | |
Distribution and services fees—Class B | | | 197,700 | |
Distribution and services fees—Class E | | | 6,618 | |
Audit and tax services | | | 21,256 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 30,890 | |
Insurance | | | 7,249 | |
Other | | | 3,851 | |
| | | | |
Total expenses | | | 2,897,584 | |
| | | | |
Net investment loss | | | (491,729 | ) |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments and Futures Contracts | | | | |
Net realized loss on: | | | | |
Investments | | | (13,292,596 | ) |
Futures contracts | | | (18,549 | ) |
| | | | |
Net realized loss on investments and futures contracts | | | (13,311,145 | ) |
| | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 85,629,911 | |
| | | | |
Net change in unrealized appreciation on investments | | | 85,629,911 | |
| | | | |
Net realized and unrealized gain on investments and futures contracts | | | 72,318,766 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 71,827,037 | |
| | | | |
| | | | | |
(1) Interest income includes securities lending net income of: | | $ | 654,031 | |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| Met/AIM Small Cap Growth Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment loss | | $ | (491,729 | ) | | $ | (1,141,085 | ) |
Net realized loss on investments and futures contracts | | | (13,311,145 | ) | | | (51,533,280 | ) |
Net change in unrealized appreciation (depreciation) on investments | | | 85,629,911 | | | | (275,119,865 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 71,827,037 | | | | (327,794,230 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | — | | | | — | |
Class B | | | — | | | | — | |
Class E | | | — | | | | — | |
From net realized gains | | | | | | | | |
Class A | | | — | | | | (48,072,537 | ) |
Class B | | | — | | | | (21,605,656 | ) |
Class E | | | — | | | | (1,315,463 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | — | | | | (70,993,656 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 181,402,317 | | | | 132,349,625 | |
Class B | | | 15,282,296 | | | | 31,541,045 | |
Class E | | | 986,243 | | | | 2,847,817 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | — | | | | 48,072,537 | |
Class B | | | — | | | | 21,605,656 | |
Class E | | | — | | | | 1,315,463 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (29,681,352 | ) | | | (130,947,052 | ) |
Class B | | | (12,569,648 | ) | | | (59,435,084 | ) |
Class E | | | (1,407,222 | ) | | | (5,077,364 | ) |
| | | | | | | | |
Net increase in net assets from capital share transactions | | | 154,012,634 | | | | 42,272,643 | |
| | | | | | | | |
| Net Increase (Decrease) in Net Assets | | | 225,839,671 | | | | (356,515,243 | ) |
Net assets at beginning of period | | | 540,561,753 | | | | 897,076,996 | |
| | | | | | | | |
Net assets at end of period | | $ | 766,401,424 | | | $ | 540,561,753 | |
| | | | | | | | |
Net assets at end of period includes distributions in excess of net investment income | | $ | (491,729 | ) | | $ | — | |
| | | | | | | | |
See accompanying notes to financial statements
11
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Met/AIM Small Cap Growth Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 8.36 | | | $ | 14.86 | | | $ | 13.53 | | | $ | 13.66 | | | $ | 12.84 | | | $ | 12.03 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Loss(a) | | | (0.00 | )+ | | | (0.01 | ) | | | (0.06 | ) | | | (0.08 | ) | | | (0.07 | ) | | | (0.09 | ) |
Net Realized/Unrealized Gain (Loss) on Investments | | | 1.01 | | | | (5.35 | ) | | | 1.60 | | | | 1.97 | | | | 1.18 | | | | 0.90 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 1.01 | | | | (5.36 | ) | | | 1.54 | | | | 1.89 | | | | 1.11 | | | | 0.81 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Distributions from Net Realized Capital Gains | | | — | | | | (1.14 | ) | | | (0.21 | ) | | | (2.02 | ) | | | (0.29 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | — | | | | (1.14 | ) | | | (0.21 | ) | | | (2.02 | ) | | | (0.29 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 9.37 | | | $ | 8.36 | | | $ | 14.86 | | | $ | 13.53 | | | $ | 13.66 | | | $ | 12.84 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 12.08 | % | | | (38.60 | )% | | | 11.40 | % | | | 13.91 | % | | | 8.59 | % | | | 6.73 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.92 | %* | | | 0.89 | % | | | 0.92 | % | | | 0.97 | % | | | 0.99 | % | | | 1.03 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.92 | %* | | | 0.89 | % | | | 0.92 | % | | | 0.98 | % | | | 0.96 | %(b) | | | 1.02 | %(b) |
Ratio of Net Investment Loss to Average Net Assets | | | (0.10 | )%* | | | (0.07 | )% | | | (0.42 | )% | | | (0.58 | )% | | | (0.53 | )% | | | (0.74 | )% |
Portfolio Turnover Rate | | | 11.4 | % | | | 43.0 | % | | | 33.6 | % | | | 56.4 | % | | | 74.8 | % | | | 94.9 | % |
Net Assets, End of Period (in millions) | | $ | 575.4 | | | $ | 371.6 | | | $ | 587.1 | | | $ | 329.3 | | | $ | 215.4 | | | $ | 92.5 | |
| |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 8.22 | | | $ | 14.66 | | | $ | 13.39 | | | $ | 13.51 | | | $ | 12.74 | | | $ | 11.97 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Loss(a) | | | (0.01 | ) | | | (0.04 | ) | | | (0.10 | ) | | | (0.11 | ) | | | (0.10 | ) | | | (0.12 | ) |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.99 | | | | (5.26 | ) | | | 1.58 | | | | 2.01 | | | | 1.16 | | | | 0.89 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.98 | | | | (5.30 | ) | | | 1.48 | | | | 1.90 | | | | 1.06 | | | | 0.77 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Distributions from Net Realized Capital Gains | | | — | | | | (1.14 | ) | | | (0.21 | ) | | | (2.02 | ) | | | (0.29 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | — | | | | (1.14 | ) | | | (0.21 | ) | | | (2.02 | ) | | | (0.29 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 9.20 | | | $ | 8.22 | | | $ | 14.66 | | | $ | 13.39 | | | $ | 13.51 | | | $ | 12.74 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 11.92 | % | | | (38.73 | )% | | | 11.07 | % | | | 14.18 | % | | | 8.27 | % | | | 6.43 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 1.17 | %* | | | 1.14 | % | | | 1.16 | % | | | 1.21 | % | | | 1.25 | % | | | 1.29 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 1.17 | %* | | | 1.14 | % | | | 1.17 | % | | | 1.23 | % | | | 1.20 | %(b) | | | 1.23 | %(b) |
Ratio of Net Investment Loss to Average Net Assets | | | (0.35 | )%* | | | (0.33 | )% | | | (0.69 | )% | | | (0.83 | )% | | | (0.80 | )% | | | (1.03 | )% |
Portfolio Turnover Rate | | | 11.4 | % | | | 43.0 | % | | | 33.6 | % | | | 56.4 | % | | | 74.8 | % | | | 94.9 | % |
Net Assets, End of Period (in millions) | | $ | 181.2 | | | $ | 159.7 | | | $ | 292.0 | | | $ | 299.7 | | | $ | 297.1 | | | $ | 309.7 | |
| + | | Rounds to less than $0.005 per share. |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Excludes effect of deferred expense reimbursement. |
See accompanying notes to financial statements
12
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Met/AIM Small Cap Growth Portfolio | | Class E | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 8.31 | | | $ | 14.80 | | | $ | 13.50 | | | $ | 13.60 | | | $ | 12.80 | | | $ | 12.01 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Loss(a) | | | (0.01 | ) | | | (0.03 | ) | | | (0.09 | ) | | | (0.10 | ) | | | (0.09 | ) | | | (0.11 | ) |
Net Realized/Unrealized Gain (Loss) on Investments | | | 1.01 | | | | (5.32 | ) | | | 1.60 | | | | 2.02 | | | | 1.18 | | | | 0.90 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 1.00 | | | | (5.35 | ) | | | 1.51 | | | | 1.92 | | | | 1.09 | | | | 0.79 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Distributions from Net Realized Capital Gains | | | — | | | | (1.14 | ) | | | (0.21 | ) | | | (2.02 | ) | | | (0.29 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | — | | | | (1.14 | ) | | | (0.21 | ) | | | (2.02 | ) | | | (0.29 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 9.31 | | | $ | 8.31 | | | $ | 14.80 | | | $ | 13.50 | | | $ | 13.60 | | | $ | 12.80 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 12.03 | % | | | (38.70 | )% | | | 11.20 | % | | | 14.25 | % | | | 8.46 | % | | | 6.58 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 1.07 | %* | | | 1.04 | % | | | 1.07 | % | | | 1.11 | % | | | 1.15 | % | | | 1.18 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 1.07 | %* | | | 1.04 | % | | | 1.07 | % | | | 1.13 | % | | | 1.11 | %(b) | | | 1.13 | %(b) |
Ratio of Net Investment Loss to Average Net Assets | | | (0.25 | )%* | | | (0.23 | )% | | | (0.58 | )% | | | (0.73 | )% | | | (0.70 | )% | | | (0.93 | )% |
Portfolio Turnover Rate | | | 11.4 | % | | | 43.0 | % | | | 33.6 | % | | | 56.4 | % | | | 74.8 | % | | | 94.9 | % |
Net Assets, End of Period (in millions) | | $ | 9.9 | | | $ | 9.3 | | | $ | 17.9 | | | $ | 15.4 | | | $ | 13.4 | | | $ | 12.4 | |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Excludes effect of deferred expense reimbursement. |
See accompanying notes to financial statements
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is Met/AIM Small Cap Growth Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A, B and E Shares are currently offered by the Portfolio. Class C Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | | |
Expiring
12/31/2016 | | Total |
| |
| $ | 50,435,230 | | $ | 50,435,230 |
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
G. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
H. Foreign Currency Translation - The books and records of the Portfolio are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars on a daily basis using prevailing exchange rates. Purchases and sales of securities are translated at the rates of exchange prevailing when such securities were acquired or sold. Income is translated at rates of exchange prevailing when interest is accrued or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in forward foreign currency contracts; sales of foreign currencies; currency gains or losses realized between the trade and settlement dates on securities transactions; and the difference between the amounts of
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
dividends, interest, and foreign withholding taxes recorded on the Portfolio’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end; from changes in the exchange rates of foreign currency held; and from changes in the contract value of forward foreign currency contracts.
I. Financial Derivative Instruments - Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133, (“FAS 161” or the “Statement”) requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. The disclosure requirements of FAS 161 distinguish between derivatives which are accounted for as “hedges” under FAS 133 and those that do not qualify for such accounting. The Portfolio reflects derivatives at fair value and recognizes changes in fair value through the Statement of Operations, and as such do not qualify for FAS 133 hedge accounting treatment.
J. Futures Contracts - The Portfolio may buy and sell futures contracts (on recognized exchanges) as a hedge, to maintain exposure to the broad equity markets, manage exposure to the securities markets or to movements in interest rates or to enhance return. The Portfolio may be subject to equity price risk, interest rate risk, and foreign currency exchange rate risk in the normal course of pursuing its investment objectives. Futures contracts are agreements to buy or sell a security, or deliver a final cash settlement price in connection with an index, interest rate, currency, or other contracts not calling for physical delivery, for a set price in the future. The Portfolio must post an amount equal to a portion of the total market value of the futures contract as futures variation margin, which is returned when the Portfolio’s obligations under the contract have been satisfied. From time to time thereafter, the Portfolio may have to post variation margin to maintain this amount as the market value of the contract fluctuates. Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities. During the period ended June 30, 2009, the Portfolio entered into Equity Index Futures which were subject to equity price risk. At June 30, 2009, the Portfolio did not have any open futures contracts. For the period ended June 30, 2009, the Portfolio had realized gains in the amount of $18,549 which is located in Net realized gain (loss) on Futures Contracts in the Statement of Operations.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with Invesco Aim Capital Management, Inc. (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio. The Adviser and certain advisory affiliates are expected to be consolidated into Invesco Institutional (N.A.), Inc. on or about August 1, 2009. Also on or about August 1, 2009, Invesco Institutional (N.A.), Inc. is expected to be renamed Invesco Advisers, Inc.
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | Average Daily Net Assets |
| | |
$2,561,131 | | 0.88% | | First $500 Million |
| | |
| | 0.83% | | Over $500 Million |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A, Class B and Class E Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B and Class E distribution plans provide that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%, respectively, of the average net assets of the Portfolio attributable to its Class B and Class E Shares in respect to activities primarily intended to result in the sale of Class B and Class E Shares. However, under the Class B and Class E distribution agreements, payments to the Distributor for activities pursuant to the Class B and Class E distribution plans are currently limited to payments at an annual rate equal to 0.25% and 0.15% of average daily net assets of the Portfolio attributable to its Class B and Class E Shares, respectively.
16
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
Under terms of the Class B and Class E distribution plans and distribution agreements, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B and Class E Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
(Decrease)
in Shares
Outstanding | | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 44,423,992 | | 20,439,477 | | — | | (3,455,733 | ) | | 16,983,744 | | | 61,407,736 |
| | | | | | |
12/31/2008 | | 39,507,107 | | 11,660,845 | | 3,861,248 | | (10,605,208 | ) | | 4,916,885 | | | 44,423,992 |
| | | | | | |
Class B | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 19,416,543 | | 1,831,891 | | — | | (1,555,269 | ) | | 276,622 | | | 19,693,165 |
| | | | | | |
12/31/2008 | | 19,915,686 | | 2,772,585 | | 1,762,288 | | (5,034,016 | ) | | (499,143 | ) | | 19,416,543 |
| | | | | | |
Class E | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 1,119,989 | | 118,286 | | — | | (178,482 | ) | | (60,196 | ) | | 1,059,793 |
| | | | | | |
12/31/2008 | | 1,211,856 | | 242,012 | | 106,171 | | (440,050 | ) | | (91,867 | ) | | 1,119,989 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 191,981,607 | | $ | — | | $ | 66,997,856 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $941,400,232 | | $ | 46,341,575 | | $ | (140,544,598 | ) | | $ | (94,203,023 | ) |
17
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
6. Securities Lending
As of June 30, 2009, the Portfolio had loaned securities which were collateralized by short term investments. The value of securities on loan and the value of the related collateral were as follows:
| | | | | | | | | |
Value of
Securities | | Value of
Cash
Collateral | | Value of
Non-Cash
Collateral* | | Total
Collateral |
| | | |
| $78,401,196 | | $ | 80,367,628 | | $ | — | | $ | 80,367,628 |
* The Portfolio cannot repledge or resell this collateral. The non-cash collateral is typically comprised of government securities and/or bank letters of credit.
7. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $ | 5,757,072 | | $ | 1,377,824 | | $ | 65,236,513 | | $ | 8,429,660 | | $ | 70,993,585 | | $ | 9,807,484 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net Unrealized
Depreciation | | | Loss Carryforwards | | | Total | |
| | | | |
| $— | | $ | — | | $ | (181,071,364 | ) | | $ | (50,435,230 | ) | | $ | (231,506,594 | ) |
8. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
9. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS
18
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
19
| | |
| Met/Franklin Income Portfolio | | For the period ended 6/30/09 |
| Managed by Franklin Advisers, Inc. | | |
Portfolio Manager Commentary
Performance
During the six-month period ended June 30, 2009, the Portfolio had a return of 9.40% and 9.29% for its Class A and B Shares, respectively, versus 1.90% for its fixed income benchmark, the Barclays Capital U.S. Aggregate Bond Index, and 3.16% for its equity benchmark, the Standard & Poor’s 500® Index (S&P 500).
Market Environment/Conditions
During the six-month period ended June 30, 2009, the U.S. economy and stock markets seemed to stabilize after signs appeared that the recession’s severity had eased. Strains on the banking system and credit markets that surfaced in 2008 improved in 2009’s first half with the help of federal aid and tighter regulations. Although home sales fell for most of the period, they edged higher toward period-end. The pace of contraction in manufacturing activity decelerated. However, jobless claims mounted and the unemployment rate rose from 7.2% at the beginning of the year to 9.5% in June 2009, its highest rate since August 1983.1 Retail sales shrank from year-ago levels, and in February the Conference Board’s Consumer Confidence Index dropped to the lowest level since it began in 1967 before rebounding in the second quarter on improved expectations. Economic growth slowed, reflecting a broad-based contraction in consumer spending, falling corporate profits, slowing exports and reduced government spending.
Although the price of oil rose from $44 per barrel at the beginning of the period to $70 by period-end on speculation that the downturn was abating, it was still off more than 50% from its July 2008 record high.2 Prices for most other commodities followed similar trends. Partially as a result of reduced consumer spending and the late-2008 downward trajectory for energy prices, deflationary pressures surfaced. June’s inflation rate, as measured by the Consumer Price Index, was an annualized -1.4%, representing the steepest yearly decline in the cost of living in nearly six decades.1 Core inflation, which excludes food and energy costs, rose at a 1.7% annualized rate, which was within the Federal Reserve Board’s (Fed’s) informal target range of 1.5% - 2.0%.1
A deepening recession and decelerating inflation prompted Washington policymakers to keep interest rates low and enact stimulus plans—including income tax cuts, aid to ailing state governments and funding for transportation infrastructure, school construction and high-tech projects. During the period under review, the Fed kept the federal funds target rate in a range of 0.00% - 0.25% and said the “pace of economic contraction is slowing” but the financial system had not yet returned to normal. The government also introduced various new measures to shore up financial markets and enhance market liquidity, proposed a sweeping financial regulatory system overhaul, and outlined details of its Public-Private Investment Program, with an objective of removing devalued real estate-related assets from banks’ balance sheets.
Most stocks suffered major losses through early March as investors worried about an uncertain future. Stocks then recovered somewhat
from 12-year lows as investors perceived many bargains among the bear market fallout and data indicated the economy’s pace of contraction was moderating. By June, however, fresh investor concerns about the economy and stock valuations reemerged and dampened the rally’s momentum.
Portfolio Review/Current Positioning
The Portfolio outperformed its benchmark indexes during the reporting period due to our preference for fixed income securities, particularly corporate bonds. At period-end, our asset allocation was 56.4% fixed income, 30.0% equity and 13.7% cash. During the period, the Portfolio experienced rapid growth in total net assets, which partly led to the higher-than-expected cash weighting. We continued to look for attractive opportunities across a wide range of markets to invest the cash.
Investment-grade and high yield bonds led performance on the fixed income side as credit spreads contracted during the period. This offset the overall increase in long-term interest rates as evidenced by the 10-year U.S. Treasury rate rising from 2.25% on December 31, 2008, to 3.53% on June 30, 2009. According to Barclays Capital, corporate investment-grade bond spreads fell from 555 basis points (bps; one hundred basis points equal one percentage point) to 306 bps, while high yield corporate bond spreads fell from 1,662 bps to 955 bps.
The Portfolio had several fixed income holdings that boosted returns during the period. Charter Communications, a major cable system operator we think has stable fundamentals in its core businesses, worked toward a successful debt reorganization. Ford Motor Credit bonds appreciated as credit markets improved and funding markets for auto loans began to reappear. Tenet Healthcare bonds performed favorably as the company accessed capital markets and extended debt maturities, which enabled the company to continue to focus on improving operations. Discount retailer Dollar General benefited from strong demand as consumers sought lower-priced offerings given difficult economic conditions.
Despite the strong overall backdrop for corporate bonds, several Portfolio positions weighed on results including Freescale Semiconductor, which was hurt by declining demand for semiconductor chips, particularly those targeting the wireless phone and automotive end-markets. Additionally, publishing company R.H. Donnelley sought bankruptcy protection as the weak economy and declining advertising sales pressured revenues.
During the period under review, equity markets were volatile, reflecting the uncertainty surrounding the overall economy and prospects for corporate fundamentals. However, several convertible security positions generated strong gains for the Portfolio, including diversified real estate investment trust Duke Realty, pharmaceutical companies Schering-Plough and Mylan, and utility provider CMS Energy.
Conversely, detractors among equity holdings included pharmaceutical company Pfizer, which cut its dividend by 50% amid the continued challenges of patent expirations and drug development. Utility stocks
1 Source: Bureau of Labor Statistics.
2 Source: New York Mercantile Exchange.
1
| | |
| Met/Franklin Income Portfolio | | For the period ended 6/30/09 |
| Managed by Franklin Advisers, Inc. | | |
Portfolio Manager Commentary (continued)
also underperformed the overall market given concerns about weak power markets and uncertainty regarding climate change initiatives.
Edward D. Perks CFA
Portfolio Manager
Franklin Advisers, Inc.
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
Texas Competitive Electric Holdings Co. LLC
(10.250%, due 11/01/15) | | 2.04% |
Federal National Mortgage Assoc. (5.000%, due 04/01/38) | | 1.97% |
Bank of America Corp. | | 1.79% |
Merck & Co., Inc. | | 1.67% |
Ford Motor Credit Co. LLC (7.875%, due 06/15/10) | | 1.39% |
Wells Fargo & Co. | | 1.32% |
JPMorgan Chase & Co. (7.900%, due 04/30/18) | | 1.31% |
Canadian Oil Sands Trust | | 1.30% |
PG&E Corp. | | 1.25% |
Tenet Healthcare Corp. (9.250%, due 02/01/15) | | 1.20% |
Portfolio Composition (% of portfolio market value)
As of 6/30/09
2
| | |
| Met/Franklin Income Portfolio | | For the period ended 6/30/09 |
| Managed by Franklin Advisers, Inc. | | |
Portfolio Manager Commentary (continued)
Met/Franklin Income Portfolio managed by
Franklin Advisers, Inc. vs. Barclays Capital U.S. Aggregate Bond Index1 and S&P 500® Index2
Growth Based on $10,000+
| | | | | | | | |
| | | | | Average Annual Return3 (for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | Since
Inception4 |
| — | | Met/Franklin Income
Portfolio—Class A Class B | | 9.40%
9.29% | | -8.41% -8.70% | | -10.05%
-10.29% |
| - - | | Barclays Capital U.S. Aggregate Bond Index1 | | 1.90% | | 6.05% | | 5.09% |
—
| | S&P 500® Index2 | | 3.16% | | -26.21% | | -28.13% |
+The chart reflects the performance of Class A shares of the Portfolio. The performance of Class A shares will differ from that of the other class of shares because of the difference in expenses paid by policyholders investing in the different share classes.
1The Barclays Capital U.S. Aggregate Bond Index includes most obligations of the U.S. Treasury, agencies and quasi-federal corporations, most publicly issued investment grade corporate bonds and most bonds backed by mortgage pools of GNMA, FNMA and FHLMC.
2The S&P 500® Index is an unmanaged index consisting of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-weighted index (stock price times number of shares outstanding) with each stock’s weight in the Index proportionate to its market value.
3“Average Annual Return” is calculated including reinvestment of all income dividends and capital gains distributions.
4Inception of Class A and Class B shares is 4/28/08. Index returns are based on an inception date of 4/28/08.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Indexes do not include fees or expenses and are not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| Met/Franklin Income Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.83% | | $ | 1,000.00 | | $ | 1,092.60 | | $ | 4.31 |
Hypothetical | | 0.83% | | | 1,000.00 | | | 1,020.68 | | | 4.16 |
| | | | | | | | | | | |
| | | | |
Class B | | | | | | | | | | | |
Actual | | 1.08% | | $ | 1,000.00 | | $ | 1,091.50 | | $ | 5.60 |
Hypothetical | | 1.08% | | | 1,000.00 | | | 1,019.44 | | | 5.41 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
4
Met Investors Series Trust
Met/Franklin Income Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Domestic Bonds & Debt Securities - 51.7% |
| Beverages - 0.6% |
Anheuser-Busch InBev Worldwide, Inc.
7.200%, due 01/15/14 (144A)(a) | | $ | 1,000,000 | | $ | 1,076,161 |
| | | | | | |
| Capital Markets - 0.9% |
Goldman Sachs Group, Inc. (The)
7.500%, due 02/15/19 | | | 700,000 | | | 750,833 |
Merrill Lynch & Co., Inc.
6.875%, due 04/25/18 | | | 500,000 | | | 463,369 |
Morgan Stanley
5.300%, due 03/01/13 | | | 500,000 | | | 506,851 |
| | | | | | |
| | | | | | 1,721,053 |
| | | | | | |
| Chemicals - 0.1% |
Ineos Group Holdings Plc
7.875%, due 02/15/16 (144A)(a) | | | 158,000 | | | 69,778 |
Nalco Co.
8.250%, due 05/15/17 (144A)(a) | | | 100,000 | | | 101,000 |
| | | | | | |
| | | | | | 170,778 |
| | | | | | |
| Commercial & Professional Services - 1.7% |
Allied Waste North America, Inc.
6.125%, due 02/15/14 | | | 1,250,000 | | | 1,263,755 |
Hertz Corp.
8.875%, due 01/01/14(b) | | | 1,000,000 | | | 925,000 |
Class A | | | | | | |
10.500%, due 01/01/16 | | | 1,000,000 | | | 895,000 |
| | | | | | |
| | | | | | 3,083,755 |
| | | | | | |
| Commercial Banks - 1.1% |
Wells Fargo Capital XIII
7.700%, due 12/29/49 | | | 300,000 | | | 249,190 |
Wells Fargo Capital XV
9.750%, due 09/26/44(b) | | | 1,835,000 | | | 1,776,862 |
| | | | | | |
| | | | | | 2,026,052 |
| | | | | | |
| Consumer Finance - 3.0% |
American Express Credit Corp.
7.300%, due 08/20/13 | | | 500,000 | | | 520,315 |
Ford Motor Credit Co. LLC | | | | | | |
7.875%, due 06/15/10(b) | | | 2,700,000 | | | 2,565,192 |
9.750%, due 09/15/10(b) | | | 1,000,000 | | | 958,155 |
12.000%, due 05/15/15 | | | 1,500,000 | | | 1,404,154 |
| | | | | | |
| | | | | | 5,447,816 |
| | | | | | |
| Diversified Financial Services - 3.3% |
Bank of America Corp.
8.125%, due 12/29/49(b) | | | 1,500,000 | | | 1,254,660 |
General Motors Acceptance Corp. LLC | | | | | | |
7.750%, due 01/19/10 (144A)(a) | | | 652,000 | | | 642,220 |
6.875%, due 09/15/11 (144A)(a) | | | 1,126,000 | | | 996,510 |
JPMorgan Chase & Co.
7.900%, due 12/31/49 | | | 2,750,000 | | | 2,413,207 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Diversified Financial Services - continued |
Petroplus Finance, Ltd. | | | | | | |
6.750%, due 05/01/14 (144A)(a) | | $ | 500,000 | | $ | 432,500 |
7.000%, due 05/01/17 (144A)(a) | | | 455,000 | | | 379,925 |
Washington Mutual Preferred Funding LLC
9.750%, due 10/29/49 (144A)(a)(c) | | | 100,000 | | | 1,750 |
| | | | | | |
| | | | | | 6,120,772 |
| | | | | | |
| Diversified Telecommunication Services - 0.1% |
Nortel Networks, Ltd.
10.750%, due 07/15/16(c) | | | 300,000 | | | 105,000 |
| | | | | | |
| Electric Utilities - 4.5% |
Aquila, Inc.
11.875%, due 07/01/12 | | | 930,000 | | | 1,028,305 |
Arizona Public Service Co.
8.750%, due 03/01/19 | | | 500,000 | | | 546,043 |
Calpine Construction Finance Co. LP/CCFC Finance Corp.
8.000%, due 06/01/16(144A)(a) | | | 1,000,000 | | | 962,500 |
CMS Energy Corp.
8.750%, due 06/15/19(b) | | | 500,000 | | | 508,362 |
Illinois Power Co.
9.750%, due 11/15/18 | | | 500,000 | | | 576,568 |
Public Service Co. of New Mexico
7.950%, due 05/15/18 | | | 400,000 | | | 388,940 |
Texas Competitive Electric Holdings Co. LLC | | | | | | |
10.250%, due 11/01/15 (b) | | | 6,000,000 | | | 3,765,000 |
Series B 10.250%, 11/01/15 | | | 825,000 | | | 517,687 |
| | | | | | |
| | | | | | 8,293,405 |
| | | | | | |
| Electronic Equipment, Instruments & Components - 0.2% |
Sanmina-SCI Corp.
6.750%, due 03/01/13(b) | | | 500,000 | | | 390,000 |
| | | | | | |
| Energy Equipment & Services - 1.0% |
Pride International Inc.
8.500%, due 06/15/19 | | | 1,000,000 | | | 992,500 |
Weatherford International, Ltd. | | | | | | |
9.625%, due 03/01/19(b) | | | 200,000 | | | 235,666 |
9.875%, due 03/01/39(b) | | | 500,000 | | | 613,350 |
| | | | | | |
| | | | | | 1,841,516 |
| | | | | | |
| Food & Staples Retailing - 0.4% |
SUPERVALU, Inc.
8.000%, due 05/01/16 | | | 700,000 | | | 682,500 |
| | | | | | |
| Food Products - 0.4% |
JBS USA LLC/JBS USA Finance, Inc.
11.625%, due 05/01/14 (144A)(a) | | | 560,000 | | | 532,000 |
Tyson Foods, Inc. - Class A
10.500%, due 03/01/14 (144A)(a) | | | 200,000 | | | 218,000 |
| | | | | | |
| | | | | | 750,000 |
| | | | | | |
See accompanying notes to financial statements
5
Met Investors Series Trust
Met/Franklin Income Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Health Care Providers & Services - 5.5% |
Community Health Systems, Inc.
8.875%, due 07/15/15(b) | | $ | 700,000 | | $ | 689,500 |
DaVita, Inc. | | | | | | |
7.250%, due 03/15/15 | | | 200,000 | | | 189,000 |
6.625%, due 03/15/13 | | | 1,000,000 | | | 947,500 |
HCA, Inc. | | | | | | |
6.375%, due 01/15/15 | | | 750,000 | | | 613,125 |
9.250%, due 11/15/16(b) | | | 2,000,000 | | | 1,975,000 |
8.500%, due 04/15/19 (144A)(a) | | | 1,000,000 | | | 985,000 |
Tenet Healthcare Corp. | | | | | | |
9.250%, due 02/01/15(b) | | | 2,400,000 | | | 2,208,000 |
7.375%, due 02/01/13 | | | 1,225,000 | | | 1,108,625 |
US Oncology Holdings, Inc.
6.904%, due 03/15/12(e)(d) | | | 782,000 | | | 662,745 |
9.125%, due 08/15/17 (144A)(a) | | | 800,000 | | | 798,000 |
| | | | | | |
| | | | | | 10,176,495 |
| | | | | | |
| Hotels, Restaurants & Leisure - 2.2% |
Harrah’s Operating Escrow LLC/Harrah’s Escrow Corp.
11.250%, due 06/01/17 (144A)(a) | | | 1,000,000 | | | 950,000 |
Host Hotels & Resorts LP | | | | | | |
7.125%, due 11/01/13 | | | 750,000 | | | 708,750 |
6.875%, due 11/01/14 | | | 575,000 | | | 520,375 |
9.000%, due 05/15/17 (144A)(a) | | | 300,000 | | | 285,000 |
MGM MIRAGE, Inc. | | | | | | |
6.750%, due 04/01/13 | | | 200,000 | | | 134,500 |
13.000%, due 11/15/13 (144A)(a) | | | 500,000 | | | 550,000 |
Wendy’s/Arby’s Restaurants LLC
10.000%, due 07/15/16 (144A)(a)(b) | | | 500,000 | | | 483,125 |
Wyndham Worldwide Corp.
9.875%, due 05/01/14 | | | 500,000 | | | 498,806 |
| | | | | | |
| | | | | | 4,130,556 |
| | | | | | |
| Household Durables - 0.2% |
Jarden Corp.
8.000%, due 05/01/16 | | | 200,000 | | | 193,000 |
KB HOME
6.375%, due 08/15/11 | | | 100,000 | | | 97,000 |
| | | | | | |
| | | | | | 290,000 |
| | | | | | |
| Insurance - 1.4% |
Aflac, Inc.
8.500%, due 05/15/19 | | | 2,000,000 | | | 2,140,664 |
Liberty Mutual Group, Inc.
10.750%, due 06/15/38 (144A)(a) | | | 500,000 | | | 360,602 |
| | | | | | |
| | | | | | 2,501,266 |
| | | | | | |
| Machinery - 0.4% |
Terex Corp.
8.000%, due 11/15/17 | | | 1,000,000 | | | 773,750 |
| | | | | | |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Manufacturing - 0.9% |
Ingersoll-Rand Global Holding Co., Ltd.
9.500%, due 04/15/14 | | $ | 300,000 | | $ | 328,843 |
RBS Global, Inc./Rexnord LLC | | | | | | |
9.500%, due 08/01/14 | | | 625,000 | | | 537,500 |
11.750%, due 08/01/16 | | | 500,000 | | | 371,250 |
9.500%, due 08/01/14 (144A)(a) | | | 423,000 | | | 363,780 |
| | | | | | |
| | | | | | 1,601,373 |
| | | | | | |
| Media - 4.3% |
Cablevision Systems Corp., Series B
8.000%, due 04/15/12 | | | 475,000 | | | 472,625 |
CBS Corp.
8.875%, due 05/15/19(b) | | | 1,000,000 | | | 976,179 |
CCH I Holdings LLC
0.001%/11.750% , due 05/15/14(c) | | | 500,000 | | | 5,625 |
CCH I LLC/CCH I Capital Corp.
11.000%, due 10/01/15(c) | | | 700,000 | | | 87,500 |
CCH II LLC/CCH II Capital Corp.
10.250%, due 09/15/10(c) | | | 2,000,000 | | | 2,120,000 |
Cinemark USA, Inc.
8.625%, due 06/15/19 (144A)(a) | | | 1,000,000 | | | 992,500 |
Dex Media West, Series B | | | | | | |
8.500%, due 08/15/10(c) | | | 606,000 | | | 439,350 |
9.875%, due 08/15/13(c) | | | 500,000 | | | 77,500 |
Dex Media, Inc. | | | | | | |
8.000%, due 11/15/13(c) | | | 950,000 | | | 147,250 |
9.000%, due 11/15/13(c) | | | 745,000 | | | 115,475 |
DirecTV Holdings LLC/DirecTV Financing Co.
7.625%, due 05/15/16 | | | 200,000 | | | 195,500 |
EchoStar DBS Corp. | | | | | | |
6.375%, due 10/01/11(b) | | | 750,000 | | | 729,375 |
7.750%, due 05/31/15 | | | 500,000 | | | 478,750 |
Lamar Media Corp.
9.750%, due 04/01/14 (144A)(a) | | | 300,000 | | | 311,625 |
R.H. Donnelley Corp. | | | | | | |
8.875%, due 01/15/16-10/15/17(c) | | | 2,430,000 | | | 136,687 |
6.875%, due 01/15/13(c) | | | 1,365,000 | | | 76,782 |
Univision Communications, Inc.
12.000%, due 07/01/14 (144A)(a) | | | 500,000 | | | 496,250 |
| | | | | | |
| | | | | | 7,858,973 |
| | | | | | |
| Metals & Mining - 2.4% |
Anglo American Capital Plc
9.375%, due 04/08/14 (144A)(a) | | | 900,000 | | | 978,565 |
ArcelorMittal
9.850%, due 06/01/19(b) | | | 500,000 | | | 540,471 |
Freeport-McMoRan Copper & Gold, Inc. | | | | | | |
8.375%, due 04/01/17 | | | 500,000 | | | 504,459 |
6.875%, due 02/01/14(b) | | | 500,000 | | | 512,998 |
See accompanying notes to financial statements
6
Met Investors Series Trust
Met/Franklin Income Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Metals & Mining - continued |
Rio Tinto Finance USA, Ltd. | | | | | | |
8.950%, due 05/01/14 | | $ | 500,000 | | $ | 556,171 |
9.000%, due 05/01/19 | | | 500,000 | | | 556,678 |
Teck Resources, Ltd. | | | | | | |
9.750%, due 05/15/14 (144A)(a) | | | 400,000 | | | 422,000 |
10.750%, due 05/15/19 (144A)(a) | | | 400,000 | | | 436,000 |
| | | | | | |
| | | | | | 4,507,342 |
| | | | | | |
| Multi-Utilities - 0.3% |
Sempra Energy
8.900%, due 11/15/13 | | | 500,000 | | | 559,227 |
| | | | | | |
| Multiline Retail - 0.9% |
Dollar General Corp. | | | | | | |
10.625%, due 07/15/15 | | | 50,000 | | | 54,250 |
11.875%, due 07/15/17(d) | | | 1,500,000 | | | 1,627,500 |
| | | | | | |
| | | | | | 1,681,750 |
| | | | | | |
| Oil & Gas Exploration & Production - 0.1% |
Sabine Pass LNG LP
7.250%, due 11/30/13 | | | 150,000 | | | 127,875 |
| | | | | | |
| Oil, Gas & Consumable Fuels - 11.1% |
Bill Barrett Corp.
9.875%, due 07/15/16 | | | 200,000 | | | 190,344 |
Callon Petroleum Co.
9.750%, due 12/08/10(b) | | | 546,000 | | | 210,210 |
Chesapeake Energy Corp. | | | | | | |
9.500%, due 02/15/15 | | | 1,000,000 | | | 1,012,500 |
6.500%, due 08/15/17 | | | 600,000 | | | 507,000 |
7.250%, due 12/15/18 | | | 1,000,000 | | | 875,000 |
6.875%, due 11/15/20 | | | 485,000 | | | 392,850 |
Dynegy Holdings, Inc. | | | | | | |
6.875%, due 04/01/11(b) | | | 1,500,000 | | | 1,451,250 |
8.375%, due 05/01/16 | | | 1,100,000 | | | 937,750 |
7.500%, due 06/01/15(b) | | | 600,000 | | | 503,250 |
7.750%, due 06/01/19(b) | | | 616,000 | | | 482,790 |
El Paso Corp. | | | | | | |
12.000%, due 12/12/13(b) | | | 400,000 | | | 442,000 |
7.250%, due 06/01/18 | | | 500,000 | | | 464,143 |
Forest Oil Corp. | | | | | | |
8.500%, due 02/15/14 (144A)(a) | | | 1,000,000 | | | 987,500 |
7.250%, due 06/15/19 | | | 732,000 | | | 658,800 |
Holly Corp.
9.875%, due 06/15/17 (144A)(a) | | | 1,000,000 | | | 975,000 |
Mariner Energy, Inc. | | | | | | |
7.500%, due 04/15/13 | | | 200,000 | | | 183,000 |
11.750%, due 06/30/16 | | | 500,000 | | | 500,000 |
Newfield Exploration Co.
6.625%, due 04/15/16 | | | 1,057,000 | | | 959,227 |
Petrohawk Energy Corp. | | | | | | |
10.500%, due 08/01/14 (144A)(a) | | | 400,000 | | | 411,000 |
7.875%, due 06/01/15 | | | 1,430,000 | | | 1,329,900 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Oil, Gas & Consumable Fuels - continued |
Pioneer Natural Resources Co. | | | | | | |
6.650%, due 03/15/17 | | $ | 250,000 | | $ | 220,089 |
6.875%, due 05/01/18 | | | 530,000 | | | 464,378 |
Plains Exploration & Production Co. | | | | | | |
7.750%, due 06/15/15 | | | 500,000 | | | 470,000 |
10.000%, due 03/01/16 | | | 500,000 | | | 516,250 |
Quicksilver Resources, Inc.
11.750%, due 01/01/16(b) | | | 300,000 | | | 312,000 |
SandRidge Energy, Inc. | | | | | | |
9.875%, due 05/15/16 (144A)(a) | | | 400,000 | | | 388,000 |
8.000%, due 06/01/18 (144A)(a) | | | 150,000 | | | 129,000 |
Valero Energy Corp.
9.375%, due 03/15/19(b) | | | 500,000 | | | 570,440 |
W&T Offshore, Inc.
8.250%, due 06/15/14 (144A)(a) | | | 1,230,000 | | | 953,250 |
Western Refining, Inc.
11.250%, due 06/15/17 (144A)(a) | | | 1,000,000 | | | 892,500 |
Williams Cos., Inc. (The)
8.750%, due 01/15/20 (144A)(a) | | | 500,000 | | | 522,149 |
Woodside Finance, Ltd. | | | | | | |
8.125%, due 03/01/14 (144A)(a) | | | 500,000 | | | 538,680 |
8.750%, due 03/01/19 (144A)(a) | | | 1,000,000 | | | 1,099,335 |
| | | | | | |
| | | | | | 20,549,585 |
| | | | | | |
| Paper & Forest Products - 0.2% |
NewPage Corp.
10.000%, due 05/01/12 | | | 800,000 | | | 388,000 |
| | | | | | |
| Real Estate - 0.6% |
Duke Realty LP | | | | | | |
6.250%, due 05/15/13(b) | | | 500,000 | | | 442,058 |
5.950%, due 02/15/17 | | | 900,000 | | | 698,648 |
| | | | | | |
| | | | | | 1,140,706 |
| | | | | | |
| Real Estate Investment Trusts (REITs) - 1.2% |
HCP, Inc.
6.700%, due 01/30/18(b) | | | 696,000 | | | 605,553 |
Host Marriott LP
6.375%, due 03/15/15 | | | 700,000 | | | 609,000 |
iStar Financial, Inc.
5.150%, due 03/01/12 | | | 500,000 | | | 252,633 |
8.625%, due 06/01/13 | | | 350,000 | | | 182,125 |
Simon Property Group, LP
10.350%, due 04/01/19 | | | 500,000 | | | 569,016 |
| | | | | | |
| | | | | | 2,218,327 |
| | | | | | |
| Semiconductors & Semiconductor Equipment - 0.3% |
Freescale Semiconductor, Inc.
8.875%, due 12/15/14(b) | | | 1,000,000 | | | 510,000 |
10.125%, due 12/15/16(b) | | | 111,000 | | | 38,295 |
| | | | | | |
| | | | | | 548,295 |
| | | | | | |
See accompanying notes to financial statements
7
Met Investors Series Trust
Met/Franklin Income Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| | |
| Software - 0.6% | | | | | | |
First Data Corp.
9.875%, due 09/24/15(b) | | $ | 1,550,000 | | $ | 1,108,250 |
| | | | | | |
| Specialty Retail - 0.5% | | | | | | |
Limited Brands, Inc.
8.500%, due 06/15/19 (144A)(a) | | | 1,000,000 | | | 959,655 |
| | | | | | |
| Tobacco - 0.6% | | | | | | |
Altria Group, Inc.
8.500%, due 11/10/13 | | | 500,000 | | | 568,886 |
9.700%, due 11/10/18(b) | | | 500,000 | | | 574,132 |
| | | | | | |
| | | | | | 1,143,018 |
| | | | | | |
| Utilities - 0.2% | | | | | | |
Energy Future Holdings Corp.
10.875%, due 11/01/17(b) | | | 100,000 | | | 73,500 |
Series P 5.550%, 11/15/14 | | | 595,000 | | | 378,670 |
| | | | | | |
| | | | | | 452,170 |
| | | | | | |
| Wireless Telecommunication Services - 0.5% |
CC Holdings GS V LLC/Crown Castle GS III Corp.
7.750%, due 05/01/17 (144A)(a) | | | 400,000 | | | 392,000 |
Crown Castle International Corp.
9.000%, due 01/15/15 | | | 250,000 | | | 255,625 |
Qwest Corp.
8.375%, due 05/01/16 (144A)(a) | | | 200,000 | | | 194,000 |
| | | | | | |
| | | | | | 841,625 |
| | | | | | |
Total Domestic Bonds & Debt Securities
(Cost $93,017,471) | | | | | | 95,267,046 |
| | | | | | |
| | |
| Convertible Bonds - 2.5% | | | | | | |
| Capital Markets - 0.0% | | | | | | |
Goldman Sachs Group, Inc. (The)
12.500%, due 04/01/10 (144A)(a) | | | 10,000 | | | 3,790 |
| | | | | | |
| Hotels, Restaurants & Leisure - 0.5% |
Host Hotels & Resorts LP
3.250%, due 04/15/24 (144A)(a) | | | 1,000,000 | | | 971,250 |
| | | | | | |
| Pharmaceuticals - 0.3% | | | | | | |
Mylan, Inc.
3.750%, due 09/15/15 (144A)(a) | | | 500,000 | | | 559,085 |
| | | | | | |
| Real Estate - 0.5% | | | | | | |
Duke Realty LP
3.750%, due 12/01/11 (144A)(a) | | | 1,000,000 | | | 873,750 |
| | | | | | |
| Real Estate Investment Trusts (REITs) - 0.5% |
Vornado Realty Trust
2.850%, due 04/01/27 | | | 1,000,000 | | | 875,000 |
| | | | | | |
| Semiconductors & Semiconductor Equipment - 0.7% |
Advanced Micro Devices, Inc.
5.750%, due 08/15/12 | | | 2,000,000 | | | 1,251,800 |
| | | | | | |
Total Convertible Bonds
(Cost $4,320,851) | | | | | | 4,534,675 |
| | | | | | |
| | | | | | |
Security
Description | | Shares/Par
Amount | | Value |
| | | | | | |
|
| U.S. Government & Agency Obligation - 2.0% |
Federal National Mortgage Assoc.
5.000%, due 04/01/38
(Cost - $3,327,049) | | $ | 3,559,234 | | $ | 3,630,079 |
| | | | | | |
| | |
| Loan Participation - 1.2% | | | | | | |
Freescale Semiconductor, Inc.
1.000%, due 12/15/14 | | | 890,315 | | | 776,800 |
Allison Transmission, Inc.
4.967%, due 08/07/14 | | | 495,171 | | | 397,221 |
Clear Channel Communications
5.086%, due 11/13/15 | | | 881,000 | | | 526,838 |
Idearc, Inc.
2.940%, due 11/17/13 | | | 292,882 | | | 123,620 |
Texas Competitive Electric Holdings Co. LLC
4.752%, due 10/10/14 | | | 497,475 | | | 356,871 |
| | | | | | |
Total Loan Participation
(Cost $2,700,145) | | | | | | 2,181,350 |
| | | | | | |
| | |
| Common Stocks - 24.8% | | | | | | |
| Beverages - 0.5% | | | | | | |
Diageo Plc | | | 60,000 | | | 861,498 |
| | | | | | |
| Capital Markets - 0.1% | | | | | | |
Goldman Sachs Group, Inc. (The)(a) | | | 5,000 | | | 190,908 |
| | | | | | |
| Commercial Banks - 1.6% | | | | | | |
Barclays Plc | | | 50,000 | | | 232,844 |
HSBC Holdings Plc | | | 37,000 | | | 307,104 |
Wells Fargo & Co.(b) | | | 100,000 | | | 2,426,000 |
| | | | | | |
| | | | | | 2,965,948 |
| | | | | | |
| Consumer Finance - 0.7% | | | | | | |
Capital One Financial Corp.(b) | | | 54,000 | | | 1,181,520 |
| | | | | | |
| Diversified Financial Services - 2.7% | | | |
Bank of America Corp.(b) | | | 250,000 | | | 3,300,000 |
JPMorgan Chase & Co.(b) | | | 50,000 | | | 1,705,500 |
| | | | | | |
| | | | | | 5,005,500 |
| | | | | | |
| Diversified Telecommunication Services - 0.8% |
AT&T, Inc. | | | 60,000 | | | 1,490,400 |
| | | | | | |
| Electric Utilities - 5.7% | | | | | | |
American Electric Power Co., Inc.(b) | | | 47,700 | | | 1,378,053 |
Duke Energy Corp.(b) | | | 150,000 | | | 2,188,500 |
FirstEnergy Corp.(b) | | | 25,000 | | | 968,750 |
FPL Group, Inc. | | | 17,500 | | | 995,050 |
Pinnacle West Capital Corp.(b) | | | 15,000 | | | 452,250 |
Portland General Electric Co.(b) | | | 50,000 | | | 974,000 |
Progress Energy, Inc.(b) | | | 40,000 | | | 1,513,200 |
Southern Co.(b) | | | 65,000 | | | 2,025,400 |
| | | | | | |
| | | | | | 10,495,203 |
| | | | | | |
| Gas Utilities - 0.4% |
AGL Resources, Inc.(b) | | | 20,000 | | | 636,000 |
| | | | | | |
| Media - 0.0% | | | | | | |
Comcast Corp. - Class A(b) | | | 5,055 | | | 73,247 |
| | | | | | |
See accompanying notes to financial statements
8
Met Investors Series Trust
Met/Franklin Income Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Metals & Mining - 0.9% |
Newmont Mining Corp. | | 40,900 | | $ | 1,671,583 |
| | | | | |
| Multi-Utilities - 5.6% |
Ameren Corp.(b) | | 25,000 | | | 622,250 |
Consolidated Edison, Inc.(b) | | 20,000 | | | 748,400 |
Dominion Resources, Inc.(b) | | 50,000 | | | 1,671,000 |
PG&E Corp.(b) | | 60,000 | | | 2,306,400 |
Public Service Enterprise Group, Inc. | | 30,000 | | | 978,900 |
Sempra Energy(b) | | 30,000 | | | 1,488,900 |
TECO Energy, Inc.(b) | | 80,000 | | | 954,400 |
Xcel Energy, Inc.(b) | | 81,927 | | | 1,508,276 |
| | | | | |
| | | | | 10,278,526 |
| | | | | |
| Oil, Gas & Consumable Fuels - 2.8% |
Canadian Oil Sands Trust | | 100,000 | | | 2,390,332 |
ConocoPhillips | | 40,000 | | | 1,682,400 |
Spectra Energy Corp.(b) | | 60,000 | | | 1,015,200 |
| | | | | |
| | | | | 5,087,932 |
| | | | | |
| Pharmaceuticals - 2.1% |
Johnson & Johnson | | 15,000 | | | 852,000 |
Merck & Co., Inc.(b) | | 110,000 | | | 3,075,600 |
| | | | | |
| | | | | 3,927,600 |
| | | | | |
| Real Estate Investment Trusts (REITs) - 0.4% |
Duke Realty Corp. (REIT)(b) | | 83,800 | | | 734,926 |
iStar Financial, Inc.(b) | | 21,300 | | | 60,492 |
| | | | | |
| | | | | 795,418 |
| | | | | |
| Semiconductors & Semiconductor Equipment - 0.5% |
Intel Corp. | | 60,000 | | | 993,000 |
| | | | | |
Total Common Stocks
(Cost $49,665,413) | | | | | 45,654,283 |
| | | | | |
| Preferred Stocks - 0.0% |
| Diversified Financial Services - 0.0% |
Preferred Blocker, Inc.
7.000%, due 12/31/11 (144A)(a) | | 141 | | | 60,639 |
| | | | | |
| Thrifts & Mortgage Finance - 0.0% |
Federal Home Loan Mortgage Corp.
8.375%, due 12/31/12 * | | 10,300 | | | 11,974 |
Federal National Mortgage Assoc.
8.250%, due 12/31/10 | | 6,900 | | | 9,246 |
| | | | | |
| | | | | 21,220 |
| | | | | |
Total Preferred Stocks
(Cost $453,376) | | | | | 81,859 |
| | | | | |
| Convertible Preferred Stocks - 3.0% |
| Automobiles - 0.0% |
General Motors Corp.
6.250%, due 07/15/33 | | 15,000 | | | 43,125 |
| | | | | |
| Capital Markets - 0.1% |
Legg Mason, Inc.
7.000%, due 06/30/11(b) | | 5,000 | | | 126,000 |
| | | | | |
| | | | | | | |
Security
Description | | Shares/Par
Amount | | Value | |
| | | | | | | |
|
| Commercial Banks - 0.8% | |
Wells Fargo & Co.,
Series L 7.500%, due 12/31/49 | | | 1,900 | | $ | 1,491,443 | |
| | | | | | | |
| Diversified Financial Services - 1.4% | |
Bank of America Corp.
7.250%, due 12/31/49(b) | | | 1,800 | | | 1,504,854 | |
Citigroup, Inc.
6.500%, due 12/31/49 | | | 34,400 | | | 1,154,464 | |
| | | | | | | |
| | | | | | 2,659,318 | |
| | | | | | | |
| Oil, Gas & Consumable Fuels - 0.6% | |
McMoRan Exploration Co.
8.000%, due 12/31/49* | | | 400 | | | 419,000 | |
SandRidge Energy, Inc.
8.500%, due 12/31/49 (144A)(a)* | | | 5,000 | | | 603,700 | |
| | | | | | | |
| | | | | | 1,022,700 | |
| | | | | | | |
| Real Estate Investment Trusts (REITs) - 0.1% | |
FelCor Lodging Trust, Inc.
1.950%, due 12/31/49 | | | 34,000 | | | 193,375 | |
| | | | | | | |
| Thrifts & Mortgage Finance - 0.0% | |
Federal National Mortgage Assoc.
8.750%, due 05/13/11 | | | 3,800 | | | 3,480 | |
| | | | | | | |
Total Convertible Preferred Stocks
(Cost $4,978,615) | | | | | | 5,539,441 | |
| | | | | | | |
|
| Short-Term Investments - 40.3% | |
| Discount Notes - 4.4% | |
Federal Home Loan Bank
0.000%, due 07/01/09(f) | | $ | 8,125,000 | | | 8,125,000 | |
| | | | | | | |
| Mutual Funds - 24.8% | |
State Street Navigator Securities Lending Trust Prime Portfolio(g) | | | 45,757,381 | | | 45,757,381 | |
| | | | | | | |
| Repurchase Agreement - 11.1% | |
State Street Bank & Trust Co., Repurchase Agreement, dated 06/30/09 at 0.010% to be repurchased at $20,485,006 on 07/01/09 collateralized by $19,415,000 FNMA at 6.250% due 02/01/11 with a value of $20,895,394. | | $ | 20,485,000 | | | 20,485,000 | |
| | | | | | | |
Total Short-Term Investments (Cost $74,367,381) | | | | | | 74,367,381 | |
| | | | | | | |
| |
TOTAL INVESTMENTS - 125.5%
(Cost $232,830,301) | | | 231,256,114 | |
| | | | | | | |
| |
| Other Assets and Liabilities (net) - (25.5)% | | | (46,952,202 | ) |
| | | | | | | |
| |
| NET ASSETS - 100.0% | | $ | 184,303,912 | |
| | | | | | | |
See accompanying notes to financial statements
9
Met Investors Series Trust
Met/Franklin Income Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
Portfolio Footnotes:
| * | | Non-income producing security. |
| (a) | | Securities that may be resold to “qualified institutional buyers” under Rule 144A or securities offered pursuant to Section 4(2) of the Securities Act of 1933, as amended. These securities have been determined to be liquid under the guidelines established by the Board of Trustees. These securities represent in the aggregate $25,529,982 of net assets. |
| (b) | | All or a portion of security is on loan. |
| (c) | | Security is in default and/or issuer is in bankruptcy. |
| (d) | | Payment-in-kind security for which part of the income earned may be paid as additional principal. |
| (e) | | Variable or floating rate security. The stated rate represents the rate at June 30, 2009. |
| (f) | | Zero coupon bond - Interest rate represents current yield to maturity. |
| (g) | | Represents investment of collateral received from securities lending transactions. |
ADR - American Depositary Receipt
FNMA - Federal National Mortgage Association
REIT - Real Estate Investment Trust
See accompanying notes to financial statements
10
Met Investors Series Trust
Met/Franklin Income Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1—quoted prices in active markets for identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Domestic Bonds & Debt Securities | | | | | | | | | | | | |
Beverages | | $ | — | | $ | 1,076,161 | | $ | — | | $ | 1,076,161 |
Capital Markets | | | — | | | 1,721,053 | | | — | | | 1,721,053 |
Chemicals | | | — | | | 170,778 | | | — | | | 170,778 |
Commercial & Professional Services | | | — | | | 3,083,755 | | | — | | | 3,083,755 |
Commercial Banks | | | — | | | 2,026,052 | | | — | | | 2,026,052 |
Consumer Finance | | | — | | | 5,447,816 | | | — | | | 5,447,816 |
Diversified Financial Services | | | — | | | 6,120,772 | | | — | | | 6,120,772 |
Diversified Telecommunication Services | | | — | | | 105,000 | | | — | | | 105,000 |
Electric Utilities | | | — | | | 8,293,405 | | | — | | | 8,293,405 |
Electronic Equipment, Instruments & Components | | | — | | | 390,000 | | | — | | | 390,000 |
Energy Equipment & Services | | | — | | | 1,841,516 | | | — | | | 1,841,516 |
Food & Staples Retailing | | | — | | | 682,500 | | | — | | | 682,500 |
Food Products | | | — | | | 750,000 | | | — | | | 750,000 |
Health Care Providers & Services | | | — | | | 10,176,495 | | | — | | | 10,176,495 |
Hotels, Restaurants & Leisure | | | — | | | 4,130,556 | | | — | | | 4,130,556 |
Household Durables | | | — | | | 290,000 | | | — | | | 290,000 |
Insurance | | | — | | | 2,501,266 | | | — | | | 2,501,266 |
Machinery | | | — | | | 773,750 | | | — | | | 773,750 |
Manufacturing | | | — | | | 1,601,373 | | | — | | | 1,601,373 |
Media | | | — | | | 7,858,973 | | | — | | | 7,858,973 |
Metals & Mining | | | — | | | 4,507,342 | | | — | | | 4,507,342 |
Multi-Utilities | | | — | | | 559,227 | | | — | | | 559,227 |
Multiline Retail | | | — | | | 1,681,750 | | | — | | | 1,681,750 |
Oil & Gas Exploration & Production | | | — | | | 127,875 | | | — | | | 127,875 |
Oil, Gas & Consumable Fuels | | | — | | | 20,549,585 | | | — | | | 20,549,585 |
Paper & Forest Products | | | — | | | 388,000 | | | — | | | 388,000 |
Real Estate | | | — | | | 1,140,706 | | | — | | | 1,140,706 |
Real Estate Investment Trusts (REITs) | | | — | | | 2,218,327 | | | — | | | 2,218,327 |
Semiconductors & Semiconductor Equipment | | | — | | | 548,295 | | | — | | | 548,295 |
Software | | | — | | | 1,108,250 | | | — | | | 1,108,250 |
Specialty Retail | | | — | | | 959,655 | | | — | | | 959,655 |
Tobacco | | | — | | | 1,143,018 | | | — | | | 1,143,018 |
Utilities | | | — | | | 452,170 | | | — | | | 452,170 |
Wireless Telecommunication Services | | | — | | | 841,625 | | | — | | | 841,625 |
Total Domestic Bonds & Debt Securities | | | — | | | 95,267,046 | | | — | | | 95,267,046 |
See accompanying notes to financial statements
11
Met Investors Series Trust
Met/Franklin Income Portfolio
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Convertible Bonds | | | | | | | | | | | | |
Capital Markets | | $ | — | | $ | 3,790 | | $ | — | | $ | 3,790 |
Hotels, Restaurants & Leisure | | | — | | | 971,250 | | | — | | | 971,250 |
Pharmaceuticals | | | — | | | 559,085 | | | — | | | 559,085 |
Real Estate | | | — | | | 873,750 | | | — | | | 873,750 |
Real Estate Investment Trusts (REITs) | | | — | | | 875,000 | | | — | | | 875,000 |
Semiconductors & Semiconductor Equipment | | | — | | | 1,251,800 | | | — | | | 1,251,800 |
Total Convertible Bonds | | | — | | | 4,534,675 | | | — | | | 4,534,675 |
U.S. Government & Agency Obligation | | | — | | | 3,630,079 | | | — | | | 3,630,079 |
Loan Participation | | | — | | | 2,181,350 | | | — | | | 2,181,350 |
Total Loan Participation | | | — | | | 2,181,350 | | | — | | | 2,181,350 |
Common Stocks | | | | | | | | | | | | |
Beverages | | | — | | | 861,498 | | | — | | | 861,498 |
Capital Markets | | | — | | | 190,908 | | | — | | | 190,908 |
Commercial Banks | | | 2,426,000 | | | 539,948 | | | — | | | 2,965,948 |
Consumer Finance | | | 1,181,520 | | | — | | | — | | | 1,181,520 |
Diversified Financial Services | | | 5,005,500 | | | — | | | — | | | 5,005,500 |
Diversified Telecommunication Services | | | 1,490,400 | | | — | | | — | | | 1,490,400 |
Electric Utilities | | | 10,495,203 | | | — | | | — | | | 10,495,203 |
Gas Utilities | | | 636,000 | | | — | | | — | | | 636,000 |
Media | | | 73,247 | | | — | | | — | | | 73,247 |
Metals & Mining | | | 1,671,583 | | | — | | | — | | | 1,671,583 |
Multi-Utilities | | | 10,278,526 | | | — | | | — | | | 10,278,526 |
Oil, Gas & Consumable Fuels | | | 5,087,932 | | | — | | | — | | | 5,087,932 |
Pharmaceuticals | | | 3,927,600 | | | — | | | — | | | 3,927,600 |
Real Estate Investment Trusts (REITs) | | | 795,418 | | | — | | | — | | | 795,418 |
Semiconductors & Semiconductor Equipment | | | 993,000 | | | — | | | — | | | 993,000 |
Total Common Stocks | | | 44,061,929 | | | 1,592,354 | | | — | | | 45,654,283 |
Preferred Stocks | | | | | | | | | | | | |
Diversified Financial Services | | | — | | | 60,639 | | | — | | | 60,639 |
Thrifts & Mortgage Finance | | | 9,246 | | | 11,974 | | | — | | | 21,220 |
Total Preferred Stocks | | | 9,246 | | | 72,613 | | | — | | | 81,859 |
Convertible Preferred Stocks | | | | | | | | | | | | |
Automobiles | | | 43,125 | | | — | | | — | | | 43,125 |
Capital Markets | | | 126,000 | | | — | | | — | | | 126,000 |
Commercial Banks | | | 1,491,443 | | | — | | | — | | | 1,491,443 |
Diversified Financial Services | | | 2,659,318 | | | — | | | — | | | 2,659,318 |
Oil, Gas & Consumable Fuels | | | 419,000 | | | 603,700 | | | — | | | 1,022,700 |
Real Estate Investment Trusts (REITs) | | | 193,375 | | | — | | | — | | | 193,375 |
Thrifts & Mortgage Finance | | | — | | | 3,480 | | | — | | | 3,480 |
Total Convertible Preferred Stocks | | | 4,932,261 | | | 607,180 | | | — | | | 5,539,441 |
See accompanying notes to financial statements
12
Met Investors Series Trust
Met/Franklin Income Portfolio
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Short-Term Investments | | | | | | | | | | | | |
Discount Notes | | $ | — | | $ | 8,125,000 | | $ | — | | $ | 8,125,000 |
Mutual Funds | | | 45,757,381 | | | — | | | — | | | 45,757,381 |
Repurchase Agreement | | | — | | | 20,485,000 | | | — | | | 20,485,000 |
Total Short-Term Investments | | | 45,757,381 | | | 28,610,000 | | | — | | | 74,367,381 |
TOTAL INVESTMENTS | | $ | 94,760,817 | | $ | 136,495,297 | | $ | — | | $ | 231,256,114 |
See accompanying notes to financial statements
13
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| Met/Franklin Income Portfolio | | | |
| Assets | | | | |
Investments, at value (a)(b) | | $ | 210,771,114 | |
Repurchase Agreement | | | 20,485,000 | |
Cash | | | 252 | |
Receivable for investments sold | | | 40,860 | |
Receivable for Trust shares sold | | | 127,998 | |
Dividends receivable | | | 126,126 | |
Interest receivable | | | 2,259,979 | |
| | | | |
Total assets | | | 233,811,329 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 3,613,302 | |
Trust shares redeemed | | | 732 | |
Distribution and services fees—Class B | | | 3,606 | |
Collateral for securities on loan | | | 45,757,381 | |
Management fee | | | 99,908 | |
Administration fee | | | 1,171 | |
Custodian and accounting fees | | | 2,343 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 25,547 | |
| | | | |
Total liabilities | | | 49,507,417 | |
| | | | |
| Net Assets | | $ | 184,303,912 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 184,711,121 | |
Accumulated net realized loss | | | (3,659,264 | ) |
Unrealized depreciation on investments and foreign currency | | | (1,573,884 | ) |
Undistributed net investment income | | | 4,825,939 | |
| | | | |
Total | | $ | 184,303,912 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 165,686,113 | |
| | | | |
Class B | | | 18,617,799 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 19,244,074 | |
| | | | |
Class B | | | 2,166,618 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 8.61 | |
| | | | |
Class B | | | 8.59 | |
| | | | |
| | | | | |
(a) Investments at cost, excluding repurchase agreement | | $ | 212,345,301 | |
(b) Includes cash collateral for securities loaned of | | | 45,757,381 | |
See accompanying notes to financial statements
14
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| Met/Franklin Income Portfolio | | | |
| Investment Income | | | | |
Dividends (1) | | $ | 959,910 | |
Interest | | | 4,448,811 | |
| | | | |
Total investment income | | | 5,408,721 | |
| | | | |
| Expenses | | | | |
Management fee | | | 536,858 | |
Administration fees | | | 7,077 | |
Deferred Expense Reimbursement | | | 11,820 | |
Custodian and accounting fees | | | 13,204 | |
Distribution and services fees - Class B | | | 16,537 | |
Audit and tax services | | | 25,001 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 2,619 | |
Insurance | | | 233 | |
Other | | | 2,529 | |
| | | | |
Total expenses | | | 642,311 | |
Less management fee waiver | | | (67,675 | ) |
| | | | |
Net expenses | | | 574,636 | |
| | | | |
Net investment income | | | 4,834,085 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | (1,217,148 | ) |
Foreign currency | | | 10,138 | |
| | | | |
Net realized loss on investments and foreign currency | | | (1,207,010 | ) |
| | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 11,608,812 | |
Foreign currency | | | 176 | |
| | | | |
Net change in unrealized appreciation on investments and foreign currency | | | 11,608,988 | |
| | | | |
Net realized and unrealized gain on investments and foreign currency | | | 10,401,978 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 15,236,063 | |
| | | | |
| | | | | |
(1) Dividend income is net of foreign withholding taxes of: | | $ | 2,420 | |
See accompanying notes to financial statements
15
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| Met/Franklin Income Portfolio | | | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Period Ended
December 31,
2008* | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 4,834,085 | | | $ | 2,431,933 | |
Net realized loss on investments and foreign currency | | | (1,207,010 | ) | | | (2,486,037 | ) |
Net change in unrealized appreciation (depreciation) on investments and foreign currency | | | 11,608,988 | | | | (13,182,872 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 15,236,063 | | | | (13,236,976 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | — | | | | (2,178,346 | ) |
Class B | | | — | | | | (227,949 | ) |
From net realized gains | | | | | | | | |
Class A | | | — | | | | — | |
Class B | | | — | | | | — | |
From return of capital | | | | | | | | |
Class A | | | — | | | | (31,472 | ) |
Class B | | | — | | | | (3,420 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | — | | | | (2,441,187 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 62,713,186 | | | | 115,345,105 | |
Class B | | | 8,348,965 | | | | 12,589,333 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | — | | | | 2,209,818 | |
Class B | | | — | | | | 231,369 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (2,762,080 | ) | | | (11,330,742 | ) |
Class B | | | (1,191,142 | ) | | | (1,407,800 | ) |
| | | | | | | | |
Net increase in net assets from capital share transactions | | | 67,108,929 | | | | 117,637,083 | |
| | | | | | | | |
| Net Increase in Net Assets | | | 82,344,992 | | | | 101,958,920 | |
Net assets at beginning of period | | | 101,958,920 | | | | — | |
| | | | | | | | |
Net assets at end of period | | $ | 184,303,912 | | | $ | 101,958,920 | |
| | | | | | | | |
Net assets at end of period includes undistributed (distributions in excess of) net investment income | | $ | 4,825,939 | | | $ | (8,146 | ) |
| | | | | | | | |
| * | | For the period 4/28/2008 (Commencement of operations) through 12/31/2008. |
See accompanying notes to financial statements
16
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | |
| | |
| Selected Per Share Data for the Period Ended: | | | | | | |
| | |
| | | | | | | |
| Met/Franklin Income Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Period
Ended
December 31,
2008(b) | |
| Net Asset Value, Beginning of Period | | $ | 7.87 | | | $ | 10.00 | |
| | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | |
Net Investment Income(a) | | | 0.29 | | | | 0.36 | |
Net Realized/Unrealized Loss on Investments | | | 0.45 | | | | (2.29 | ) |
| | | | | | | | |
Total from Investment Operations | | | 0.74 | | | | (1.93 | ) |
| | | | | | | | |
| Less Distributions | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | (0.20 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | — | |
Distributions from Return of Capital | | | — | | | | (0.00 | )+ |
| | | | | | | | |
Total Distributions | | | — | | | | (0.20 | ) |
| | | | | | | | |
| Net Asset Value, End of Period | | $ | 8.61 | | | $ | 7.87 | |
| | | | | | | | |
| Total Return | | | 9.40 | % | | | (19.19 | )% |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.83 | %* | | | 0.88 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.93 | %* | | | 1.03 | %* |
Ratio of Net Investment Income to Average Net Assets | | | 7.23 | %* | | | 6.13 | %* |
Portfolio Turnover Rate | | | 4.1 | % | | | 12.7 | % |
Net Assets, End of Period (in millions) | | $ | 165.7 | | | $ | 92.0 | |
| |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Period
Ended
December 31,
2008(b) | |
| | | |
| Net Asset Value, Beginning of Period | | $ | 7.86 | | | $ | 10.00 | |
| | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | |
Net Investment Income(a) | | | 0.28 | | | | 0.35 | |
Net Realized/Unrealized Loss on Investments | | | 0.45 | | | | (2.30 | ) |
| | | | | | | | |
Total from Investment Operations | | | 0.73 | | | | (1.95 | ) |
| | | | | | | | |
| Less Distributions | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | (0.19 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | — | |
Distributions from Return of Capital | | | — | | | | (0.00 | )+ |
| | | | | | | | |
Total Distributions | | | — | | | | (0.19 | ) |
| | | | | | | | |
| Net Asset Value, End of Period | | $ | 8.59 | | | $ | 7.86 | |
| | | | | | | | |
| Total Return | | | 9.29 | % | | | (19.36 | )% |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 1.08 | %* | | | 1.14 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 1.18 | %* | | | 1.28 | %* |
Ratio of Net Investment Income to Average Net Assets | | | 6.99 | %* | | | 6.06 | %* |
Portfolio Turnover Rate | | | 4.1 | % | | | 12.7 | % |
Net Assets, End of Period (in millions) | | $ | 18.6 | | | $ | 10.0 | |
| + | | Rounds to less than $0.005 per share. |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—4/28/2008. |
See accompanying notes to financial statements
17
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is Met/Franklin Income Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A and B Shares are currently offered by the Portfolio. Class C and E Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
18
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2008 tax year remains subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | | |
Expiring
12/31/2016 | | Total |
| |
| $ | 1,630,235 | | $ | 1,630,235 |
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
G. Foreign Currency Translation - The books and records of the Portfolio are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars on a daily basis using prevailing exchange rates. Purchases and sales of securities are translated at the rates of exchange prevailing when such securities were acquired or sold. Income is translated at rates of exchange prevailing when interest is accrued or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in forward foreign currency contracts; sales of foreign currencies; currency gains or losses realized between the trade and settlement dates on securities transactions; and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Portfolio’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end; from changes in the exchange rates of foreign currency held; and from changes in the contract value of forward foreign currency contracts.
H. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust
19
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with Franklin Advisers, Inc. (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $536,858 | | 0.800 | % | | First $200 Million |
| | |
| | 0.675 | % | | $200 Million to $500 Million |
| | |
| | 0.650 | % | | Over $500 Million |
The advisory fee the Manager pays to the Adviser in connection with the investment management of the Portfolio is calculated based on the aggregate average daily net assets of the Portfolio and certain other portfolios of the Trust that are managed by the Adviser and/or its affiliates.
The Manager has agreed to voluntarily waive a portion of its management fee reflecting the difference between the actual contractual management fee of the Portfolio, which is calculated based on the average daily net assets of the Portfolio, and the management fee for the Portfolio if the level of aggregated average daily net assets used for calculating the advisory fee were also applied for purposes of calculating the management fee. During the period ended June 30, 2009, the Manager voluntarily waived 0.3% in management fees otherwise chargeable to the Portfolio.
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Manager has entered into an expense limitation agreement with the Trust (“Expense Limitation Agreement”) in the interest of limiting expenses of the Portfolio of the Trust. The Expense Limitation Agreement shall continue in effect with respect to the Portfolio until April 30, 2010. Pursuant to that Expense Limitation Agreement, the Manager has agreed to waive or limit its fees and to assume other expenses so that the total annual operating expenses of the Portfolio other than interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with accounting principles generally accepted in the United States of America, and other extraordinary expenses not incurred in the ordinary course of the Portfolio’s business, but including amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act, are limited to the following expense ratios as a percentage of the Portfolio’s average daily net assets:
| | | | | | | | | | |
Maximum Expense Ratio
under current Expense
Limitation Agreement | | | Expenses Deferred in |
| | 2008 | | 2009 |
| | Subject to repayment until
December 31, |
Class A | | | Class B | | | 2013 | | 2014 |
| | | |
| 0.90 | % | | 1.15 | % | | $ | 11,820 | | $ | — |
The amount waived for the period ended June 30, 2009 is shown as management fee waiver in the Statement of Operations of the Portfolio.
20
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
If in any year in which the Management Agreement is still in effect, the estimated aggregate portfolio operating expenses of the Portfolio for the fiscal year are less than the Maximum Expense Ratios for that year, subject to approval by the Trust’s Board, the Manager shall be entitled to reimbursement by the Portfolio to the extent that the charge does not cause the expenses in such subsequent year to exceed the Maximum Expense Ratios as stated above. The Portfolio is not obligated to repay any expense paid by the Manager more than five years after the end of the fiscal year in which such expense was incurred.
The following amount was repaid to the Manager in accordance with the Expense Limitation Agreement during the period ended June 30, 2009: $11,820
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A and Class B Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B distribution plan provides that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% of the average net assets of the Portfolio attributable to its Class B Shares in respect to activities primarily intended to result in the sale of Class B Shares. However, under the Class B distribution agreement, payments to the Distributor for activities pursuant to the Class B distribution plan are currently limited to payments at an annual rate equal to 0.25% of average daily net assets of the Portfolio attributable to its Class B Shares.
Under terms of the Class B distribution plan and distribution agreement, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
in Shares
Outstanding | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 11,687,885 | | 7,909,508 | | — | | (353,319 | ) | | 7,556,189 | | 19,244,074 |
| | | | | | |
4/28/2008-12/31/2008 | | — | | 12,732,205 | | 286,990 | | (1,331,310 | ) | | 11,687,885 | | 11,687,885 |
| | | | | | |
Class B | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 1,267,885 | | 1,050,346 | | — | | (151,613 | ) | | 898,733 | | 2,166,618 |
| | | | | | |
4/28/2008-12/31/2008 | | — | | 1,402,985 | | 30,087 | | (165,187 | ) | | 1,267,885 | | 1,267,885 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 26,780,248 | | $ | — | | $ | 4,316,399 |
21
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
5. Investment Transactions - continued
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $232,830,301 | | $ | 10,082,736 | | $ | (11,656,923 | ) | | $ | (1,574,187 | ) |
6. Distributions to Shareholders
The tax character of distributions paid for the year ended December 31, 2008 was as follows:
| | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gains | | Return of
Capital | | Total |
2008 | | 2008 | | 2008 | | 2008 |
| $2,406,295 | | $ | — | | $ | 34,892 | | $ | 2,441,187 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net Unrealized
Depreciation | | | Loss Carryforwards
and Deferrals | | | Total | |
| | | | |
| $— | | $ | — | | $ | (13,163,671 | ) | | $ | (2,479,601 | ) | | $ | (15,643,272 | ) |
7. Securities Lending
As of June 30, 2009, the Portfolio had loaned securities which were collateralized by short term investments. The value of securities on loan and the value of the related collateral were as follows:
| | | | | | | | | |
Value of
Securities | | Value of
Cash
Collateral | | Value of
Non-Cash
Collateral* | | Total
Collateral |
| | | |
| $44,741,023 | | $ | 45,757,381 | | $ | — | | $ | 45,757,381 |
* The Portfolio cannot repledge or resell this collateral. The non-cash collateral is typically comprised of government securities and/or bank letters of credit.
8. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
9. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
22
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
23
| | |
| Met/Franklin Mutual Shares Portfolio | | For the period ended 6/30/09 |
| Managed by Franklin Mutual Advisers, LLC | | |
Portfolio Manager Commentary
Performance
During the period ended June 30, 2009, the Portfolio had returns of 2.93% and 2.94% for Class A and B shares, respectively, compared with 3.16% for its benchmark, the Standard & Poor’s (S&P) 500® Index.
Market Environment/Conditions
During the six-month period ended June 30, 2009, the U.S. economy and stock markets seemed to stabilize after signs appeared that the recession’s severity had eased. Strains on the banking system and credit markets that surfaced in 2008 improved in 2009’s first half with the help of federal aid and tighter regulations. Despite rising unemployment, near period-end home sales edged higher, the decline in manufacturing activity slowed and consumer confidence started to pick up. Economic growth as measured by gross domestic product (GDP) contracted.
Although the price of oil rose from $44 per barrel at the beginning of the period to $70 by period-end on speculation that the downturn was abating, it was still off more than 50% from its July 2008 record high.1 June’s inflation rate, as measured by the Consumer Price Index, was an annualized -1.4%, representing the steepest yearly decline in the cost of living in nearly six decades.2 Core inflation, which excludes food and energy costs, rose at a 1.7% annualized rate, which was within the Federal Reserve Board’s (Fed’s) informal target range of 1.5% - 2.0%.2
A deepening recession and decelerating inflation prompted Washington policymakers to keep interest rates low and enact stimulus plans—including income tax cuts, aid to ailing state governments and funding for transportation infrastructure, school construction and high-tech projects. During the period under review, the Fed kept the federal funds target rate in a range of 0 - 0.25% and said the “pace of economic contraction is slowing” but the financial system had not yet returned to normal.
Most U.S. stocks suffered major losses through early March as investors worried about an uncertain future. Stocks then recovered somewhat from 12-year lows as investors perceived many bargains among the bear market fallout and data indicated the economy’s pace of contraction was moderating. By June, however, fresh investor concerns about the economy and stock valuations reemerged and dampened the rally’s momentum.
Global equities followed the same trend. At the beginning of the period, with investor sentiment depressed and risk aversion elevated, defensive, non-cyclical sectors like utilities, consumer staples and health care were market leaders. As data emerged suggesting a fledgling recovery in the financials sector and a moderating pace of global economic contraction, investors regained some risk appetite, rotating capital back into cyclical sectors such as financials, materials
and consumer discretionary. Resurgent risk appetite also buoyed emerging markets stocks, which delivered their best three-month returns on record from March through May 2009. Emerging market optimism in turn supported higher commodity prices, which gained the most since the bubble in hard assets burst in the summer of 2008. Also supporting commodity prices was a weaker U.S. dollar. Although systemic risk aversion and the consensus belief that the U.S. could lead the global economy out of recession helped strengthen the dollar at the beginning of the period, investors soon began to worry about the currency’s ongoing stability in the face of aggressive and unconventional monetary policy, and the greenback lost value relative to most currencies for the six-month period.
In the reporting period’s final weeks, global equity markets moderated as investors appeared to contemplate the rally’s merits and reassess their new positions. Although sentiment had improved and most seemed to believe the global economy had exited the worst stage of this recessionary cycle, indicators remained mixed and lacked the sustainable upward trajectory investors had hoped for. In Europe, policymakers committed to an easier monetary regime, but the eurozone’s industrial production declined, capacity utilization continued to shrink, and price deflation was recorded for the first time since data began in 1997.3 In China, a stimulative monetary campaign spurred lending and fueled an annualized money growth rate of 26%, a powerful measure against near-term economic headwinds but a potentially dangerous catalyst for longer-term inflation and asset bubble formation.4
Portfolio Review/Current Positioning
Although the Portfolio provided positive results during the first half of 2009, it had some disappointments. Three investments that declined in value were U.S. Bancorp, a diversified financial services company; Comcast, a cable services provider; and U.S.-based property and casualty insurance and reinsurance company White Mountains Insurance Group.
U.S. Bancorp’s fourth quarter 2008 results included securities losses that in part led to a subsequent 25% decrease in tangible book value that was reported in 2009’s first quarter. Investor fears about continued deterioration in the value of the company’s assets led to further pressure on the shares, as well as those of its peers. We exited the position during the period under review.
Comcast shares fell after the company reported a decline in subscriber growth across all products—video, data and telephony—when it reported 2008 fourth quarter results. In addition, given the improvement in corporate debt markets during the second quarter and Comcast’s relatively underleveraged balance sheet, investors began to anticipate a more significant increase in the dividend and/or an increase in share repurchase activity. The fact that the company undertook neither appeared to create uncertainty and spark speculation about potential merger and acquisition activity.
White Mountains suffered early in the year from an investment portfolio leveraged to equities, a mismanaged life reinsurance portfolio in Japan, and the subsequent erosion of its capital position that was exacerbated
1 Source: New York Mercantile Exchange.
2 Source: Bureau of Labor Statistics.
3 Source: European Communities Eurostat.
4 Source: People’s Bank of China.
1
| | |
| Met/Franklin Mutual Shares Portfolio | | For the period ended 6/30/09 |
| Managed by Franklin Mutual Advisers, LLC | | |
Portfolio Manager Commentary (continued)
by the buy-back of Berkshire Hathaway’s holding. The company took corrective actions by reducing its equity exposure and neutralizing its life reinsurance book, reportedly with a view to exiting that business. The company’s core underwriting businesses were apparently performing well however, and at period-end we expected the stock to recover from these oversold levels if the market recognizes what we see as the intrinsic value of these businesses.
The Portfolio’s equity investments represented the strongest contributor to performance during the six months under review. Three of the Portfolio’s best performing investments were U.S.-based personal computer manufacturer Dell, software provider Microsoft, and oil and gas drilling company Transocean.
Dell shares appreciated during the first half of 2009 as investors anticipated the company’s $4 billion cost-cutting program, combined with an improving demand environment, could lead to a strong earnings recovery next year. The company believes that, on average, the currently installed base of computers has aged to the point where unit sales could rise significantly, driving improving sales and cash flow into 2010. In addition, we believe Dell should be a beneficiary of Microsoft’s next operating system, Windows 7, due to be launched in October.
Based in Seattle, Microsoft is the world’s largest software company. It manufactures, licenses and supports a wide range of proprietary software products and services. Companywide cost controls implemented in late 2008 gained traction and began to benefit operating results in 2009. Microsoft also announced several new products, including a rebranded search engine, Bing, and the next version of the ubiquitous Windows operating system. The combination of cost discipline and new revenue opportunities appeared to revitalize the company, as well as Microsoft’s image with investors.
Transocean is a leading global provider of offshore drilling contract services for oil and gas companies. New drilling and seismic technologies have led to significant oil and gas discoveries in very deep water accessible only to modern, highly specialized rigs. The offshore drilling industry has benefited from these discoveries as customers entered into multi-year contracts at rates exceeding $500,000 per day. Transocean’s shares appreciated dramatically as investors began to anticipate strong demand from Brazilian national oil company Petrobras for deepwater drilling rigs, to develop the vast and recently discovered Tupi underwater oil field; an improving supply-demand picture for new deepwater projects; and better cost controls by the company. We continued to believe that the supply-and-demand outlook for deepwater drilling rigs was favorable.
Team Managed Approach
Peter A. Langerman, Co-Portfolio Manager
F. David Segal CFA, Co-Portfolio Manager
Deborah A. Turner CFA, Assistant Portfolio Manager
Franklin Mutual Advisers, LLC
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and
information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
Microsoft Corp. | | 3.02% |
Berkshire Hathaway, Inc. - Class B | | 2.92% |
CVS Caremark Corp. | | 2.92% |
British American Tobacco Plc | | 2.72% |
Comcast Corp. - Class A | | 2.69% |
Imperial Tobacco Group Plc | | 2.18% |
Nestle S.A. | | 1.99% |
News Corp. - Class A | | 1.97% |
Mattel, Inc. | | 1.87% |
Dell, Inc. | | 1.81% |
Portfolio Composition (% of portfolio market value)
As of 6/30/09
2
| | |
| Met/Franklin Mutual Shares Portfolio | | For the period ended 6/30/09 |
| Managed by Franklin Mutual Advisers, LLC | | |
Portfolio Manager Commentary (continued)
Met/Franklin Mutual Shares Portfolio managed by
Franklin Mutual Advisers, LLC vs. S&P 500® Index1
Growth Based on $10,000+
| | | | | | | | |
| | | | | Average Annual Return2 (for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | Since
Inception3 |
| — | | Met/Franklin Mutual Shares
Portfolio—Class A | | 2.93% | | -24.28% | | -27.29% |
| | Class B | | 2.94% | | -24.37% | | -27.43% |
| - - | | S&P 500® Index1 | | 3.16% | | -26.21% | | -28.13% |
+The chart reflects the performance of Class A shares of the Portfolio. The performance of Class A shares will differ from that of the other class of shares because of the difference in expenses paid by policyholders investing in the different share classes.
1The S&P 500® Index is an unmanaged index consisting of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-weighted index (stock price times number of shares outstanding) with each stock’s weight in the Index proportionate to its market value.
2“Average Annual Return” is calculated including reinvestment of all income dividends and capital gains distributions.
3Inception of Class A and Class B shares is 4/28/08. Index returns are based on an inception date of 4/28/08.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include
any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Index does not include fees or expenses and is not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| Met/Franklin Mutual Shares Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.86% | | $ | 1,000.00 | | $ | 1,029.30 | | $ | 4.33 |
Hypothetical | | 0.86% | | | 1,000.00 | | | 1,020.53 | | | 4.31 |
| | | | | | | | | | | |
| | | | |
Class B | | | | | | | | | | | |
Actual | | 1.12% | | $ | 1,000.00 | | $ | 1,029.40 | | $ | 5.64 |
Hypothetical | | 1.12% | | | 1,000.00 | | | 1,019.24 | | | 5.61 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
4
Met Investors Series Trust
Met/Franklin Mutual Shares Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security Description | | Shares/Par
Amount | | Value |
| | | | | | |
|
| Domestic Bonds & Debt Securities - 1.1% |
| Diversified Consumer Services - 0.0% |
Spectrum Brands, Inc.
1.000%, due 04/01/13 | | $ | 51,503 | | $ | 46,063 |
| | | | | | |
| Electrical Equipment - 0.3% |
Texas Competitive Electric Holding LLC
3.810%, due 10/10/14 | | | 2,563,533 | | | 1,839,181 |
| | | | | | |
| Insurance - 0.3% |
American General Finance Corp. | | | | | | |
5.850%, due 06/01/13 | | | 203,000 | | | 116,537 |
6.900%, due 12/15/17 | | | 2,850,000 | | | 1,545,256 |
| | | | | | |
| | | | | | 1,661,793 |
| | | | | | |
| IT Services - 0.0% |
First Data Corp.
3.065%, due 09/24/14 | | | 372,556 | | | 281,228 |
| | | | | | |
| Media - 0.5% |
Charter Communications, Inc.
6.250%, due 03/06/14 | | | 3,022,386 | | | 2,731,482 |
| | | | | | |
Total Domestic Bonds & Debt Securities
(Cost $6,142,901) | | | | | | 6,559,747 |
| | | | | | |
| Loan Participation - 1.4% |
Boston Generating LLC | | | | | | |
0.473%, due 12/21/13 | | | 31,775 | | | 22,997 |
2.560%, due 12/21/13 | | | 109,290 | | | 79,099 |
Calpine
3.475%, due 03/29/14 | | | 6,774,905 | | | 6,020,520 |
Charter Communications, Inc.
7.250%, due 03/06/14 | | | 171,894 | | | 169,488 |
First Data Corp.
3.065%, due 09/24/14 | | | 46,644 | | | 34,957 |
Quebecor World, Inc.
8.250%, due 07/21/09 | | | 434,970 | | | 408,139 |
Realogy Corp. | | | | | | |
0.301%, due 10/10/13 | | | 144,531 | | | 105,056 |
4.177%, due 10/10/13 | | | 536,828 | | | 390,209 |
Spectrum Brands, Inc.
1.000%, due 03/29/13 | | | 154,121 | | | 159,897 |
Texas Competitive Electric Holdings LLC
3.810%, due 10/10/14 | | | 463,961 | | | 332,237 |
| | | | | | |
Total Loan Participation
(Cost $7,323,645) | | | | | | 7,722,599 |
| | | | | | |
|
| Common Stocks - 87.9% |
| Aerospace & Defense - 1.1% |
GenCorp, Inc.*(a) | | | 143,356 | | | 273,810 |
United Technologies Corp.(a) | | | 119,342 | | | 6,201,010 |
| | | | | | |
| | | | | | 6,474,820 |
| | | | | | |
| Air Freight & Logistics - 0.3% |
TNT N.V. | | | 99,310 | | | 1,933,138 |
| | | | | | |
| | | | | |
Security Description | | Shares | | Value |
| | | | | |
|
| Airlines - 0.0% |
ACE Aviation Holdings, Inc. - Class A* | | 1,978 | | $ | 9,017 |
| | | | | |
| Auto Components - 0.5% |
Goodyear Tire & Rubber Co. (The)*(a) | | 236,865 | | | 2,667,100 |
| | | | | |
| Automobiles - 0.4% |
Daimler AG | | 65,448 | | | 2,366,602 |
| | | | | |
| Beverages - 5.1% |
Brown-Forman Corp. - Class B(a) | | 51,141 | | | 2,198,040 |
Carlsberg A.S. - Class B | | 44,366 | | | 2,850,066 |
Dr Pepper Snapple Group, Inc.* | | 439,454 | | | 9,312,030 |
Lion Nathan Ltd. | | 115,028 | | | 1,075,648 |
Pepsi Bottling Group, Inc. (The) | | 166,320 | | | 5,628,269 |
PepsiAmericas, Inc.(a) | | 48,896 | | | 1,310,902 |
Pernod Ricard S.A.(a) | | 111,333 | | | 7,024,443 |
| | | | | |
| | | | | 29,399,398 |
| | | | | |
| Building Products - 0.4% | | | | | |
Owens Corning, Inc.*(a) | | 182,288 | | | 2,329,641 |
| | | | | |
| Capital Markets - 0.3% | | | | | |
Ameriprise Financial, Inc.(a) | | 59,597 | | | 1,446,419 |
| | | | | |
| Chemicals - 1.7% | | | | | |
Koninklijke DSM N.V. | | 108,072 | | | 3,384,063 |
Linde AG | | 79,493 | | | 6,531,542 |
| | | | | |
| | | | | 9,915,605 |
| | | | | |
| Commercial Banks - 1.0% | | | | | |
Barclays Plc | | 713,799 | | | 3,324,075 |
Intesa Sanpaolo* | | 706,360 | | | 2,288,753 |
| | | | | |
| | | | | 5,612,828 |
| | | | | |
| Communications Equipment - 1.2% | | | |
Motorola, Inc.(a) | | 1,008,346 | | | 6,685,334 |
| | | | | |
| Computers & Peripherals - 2.4% | | | |
Dell, Inc.*(a) | | 759,948 | | | 10,434,086 |
Sun Microsystems, Inc.*(a) | | 391,745 | | | 3,611,889 |
| | | | | |
| | | | | 14,045,975 |
| | | | | |
| Containers & Packaging - 0.5% | | | |
Temple-Inland, Inc.(a) | | 218,877 | | | 2,871,666 |
| | | | | |
| Diversified Consumer Services - 0.6% | | | |
H&R Block, Inc.(a) | | 110,632 | | | 1,906,190 |
Hillenbrand, Inc.(a) | | 79,641 | | | 1,325,226 |
| | | | | |
| | | | | 3,231,416 |
| | | | | |
| Diversified Financial Services - 0.8% | | | |
Bank of America Corp. | | 146,486 | | | 1,933,615 |
Deutsche Boerse AG | | 38,050 | | | 2,955,598 |
| | | | | |
| | | | | 4,889,213 |
| | | | | |
| Diversified Telecommunication Services - 3.3% |
Koninklijke (Royal) KPN N.V. | | 576,546 | | | 7,937,571 |
Qwest Communications International, Inc.(a) | | 1,322,289 | | | 5,487,499 |
See accompanying notes to financial statements
5
Met Investors Series Trust
Met/Franklin Mutual Shares Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security Description | | Shares | | Value |
| | | | | |
|
| Diversified Telecommunication Services - continued |
Telefonica S.A. | | 238,606 | | $ | 5,407,111 |
| | | | | |
| | | | | 18,832,181 |
| | | | | |
| Electric Utilities - 2.9% | | | | | |
E. On AG | | 241,756 | | | 8,575,773 |
Entergy Corp.(a) | | 44,035 | | | 3,413,593 |
Exelon Corp.(a) | | 90,113 | | | 4,614,687 |
| | | | | |
| | | | | 16,604,053 |
| | | | | |
| Electronic Equipment, Instruments & Components - 0.9% |
Tyco Electronics, Ltd.(a) | | 274,178 | | | 5,096,969 |
| | | | | |
| Energy Equipment & Services - 2.4% |
Baker Hughes, Inc.(a) | | 56,630 | | | 2,063,597 |
Exterran Holdings, Inc.*(a) | | 18,513 | | | 296,949 |
Pride International, Inc.*(a) | | 102,371 | | | 2,565,417 |
Transocean, Ltd.*(a) | | 118,516 | | | 8,804,554 |
| | | | | |
| | | | | 13,730,517 |
| | | | | |
| Food & Staples Retailing - 6.5% |
Carrefour S.A. | | 145,228 | | | 6,208,712 |
CVS Caremark Corp.(a) | | 528,743 | | | 16,851,040 |
Kroger Co. (The)(a) | | 345,023 | | | 7,607,757 |
SUPERVALU, Inc.(a) | | 209,077 | | | 2,707,547 |
Wal-Mart Stores, Inc.(a) | | 84,066 | | | 4,072,157 |
| | | | | |
| | | | | 37,447,213 |
| | | | | |
| Food Products - 6.1% | | | | | |
Cadbury Plc | | 597,466 | | | 5,102,846 |
General Mills, Inc. | | 83,765 | | | 4,692,515 |
Groupe Danone | | 79,989 | | | 3,953,372 |
Kraft Foods, Inc. - Class A(a) | | 394,714 | | | 10,002,053 |
Nestle S.A. | | 304,079 | | | 11,473,124 |
| | | | | |
| | | | | 35,223,910 |
| | | | | |
| Gas Utilities - 0.5% | | | | | |
GDF Suez | | 84,951 | | | 3,171,653 |
| | | | | |
| Health Care Providers & Services - 0.7% | | | |
Tenet Healthcare Corp.*(a) | | 1,396,936 | | | 3,939,359 |
| | | | | |
| Independent Power Producers & Energy Traders - 1.3% |
Constellation Energy Group, Inc.(a) | | 225,649 | | | 5,997,751 |
NRG Energy, Inc.*(a) | | 54,020 | | | 1,402,359 |
| | | | | |
| | | | | 7,400,110 |
| | | | | |
| Industrial Conglomerates - 4.7% |
Keppel Corp., Ltd. | | 738,848 | | | 3,508,523 |
Koninklijke (Royal) Philips Electronics N.V. | | 205,725 | | | 3,801,821 |
Orkla A.S.A. | | 1,114,820 | | | 8,110,058 |
Siemens AG | | 95,721 | | | 6,622,790 |
Tyco International, Ltd. | | 202,919 | | | 5,271,835 |
| | | | | |
| | | | | 27,315,027 |
| | | | | |
| Insurance - 5.8% | | | | | |
ACE, Ltd.(a) | | 127,934 | | | 5,658,521 |
Berkshire Hathaway, Inc. - Class B*(a) | | 5,826 | | | 16,870,523 |
| | | | | |
Security Description | | Shares | | Value |
| | | | | |
| | |
| Insurance - continued | | | | | |
Conseco, Inc.*(a) | | 246,370 | | $ | 583,897 |
Old Republic International Corp.(a) | | 333,536 | | | 3,285,330 |
Travelers Cos., Inc. (The)(a) | | 75,889 | | | 3,114,484 |
White Mountains Insurance Group, Ltd.(a) | | 5,449 | | | 1,247,331 |
Zurich Financial Services AG | | 16,536 | | | 2,926,226 |
| | | | | |
| | | | | 33,686,312 |
| | | | | |
| Leisure Equipment & Products - 2.0% |
Eastman Kodak Co.(a) | | 225,113 | | | 666,334 |
Mattel, Inc.(a) | | 674,571 | | | 10,826,865 |
| | | | | |
| | | | | 11,493,199 |
| | | | | |
| Life Sciences Tools & Services - 0.8% |
MDS, Inc.* | | 153,786 | | | 808,216 |
Thermo Fisher Scientific, Inc.*(a) | | 95,331 | | | 3,886,645 |
| | | | | |
| | | | | 4,694,861 |
| | | | | |
| Machinery - 0.7% | | | | | |
Parker Hannifin Corp.(a) | | 41,689 | | | 1,790,959 |
SKF AB - Class B | | 200,433 | | | 2,471,979 |
| | | | | |
| | | | | 4,262,938 |
| | | | | |
| Marine - 0.7% | | | | | |
A.P. Moller - Maersk A.S. - Class B(a) | | 693 | | | 4,158,819 |
| | | | | |
| Media - 5.1% | | | | | |
Comcast Corp. - Class A(a) | | 1,102,057 | | | 15,539,004 |
News Corp. - Class A | | 1,251,221 | | | 11,398,623 |
Time Warner Cable, Inc.(a) | | 65,961 | | | 2,088,985 |
Virgin Media, Inc.(a) | | 32,466 | | | 303,557 |
| | | | | |
| | | | | 29,330,169 |
| | | | | |
| Metals & Mining - 0.7% |
Anglo American Plc | | 131,883 | | | 3,847,740 |
| | | | | |
| Oil, Gas & Consumable Fuels - 4.2% |
BP Plc | | 402,665 | | | 3,185,769 |
Marathon Oil Corp.(a) | | 296,618 | | | 8,937,100 |
Noble Energy, Inc.(a) | | 30,949 | | | 1,825,063 |
Royal Dutch Shell Plc-Class A | | 273,724 | | | 6,830,944 |
Total S.A. | | 69,181 | | | 3,744,722 |
| | | | | |
| | | | | 24,523,598 |
| | | | | |
| Paper & Forest Products - 3.4% |
Domtar Corp.*(a) | | 71,818 | | | 1,190,742 |
International Paper Co.(a) | | 525,559 | | | 7,951,708 |
Weyerhaeuser Co.(a) | | 340,692 | | | 10,367,258 |
| | | | | |
| | | | | 19,509,708 |
| | | | | |
| Pharmaceuticals - 1.7% |
Novartis AG | | 110,165 | | | 4,474,599 |
Valeant Pharmaceuticals International*(a) | | 73,391 | | | 1,887,617 |
Wyeth(a) | | 72,660 | | | 3,298,037 |
| | | | | |
| | | | | 9,660,253 |
| | | | | |
See accompanying notes to financial statements
6
Met Investors Series Trust
Met/Franklin Mutual Shares Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security Description | | Shares/Par
Amount | | Value |
| | | | | | |
|
| Real Estate Investment Trusts (REITs) - 1.9% |
Alexander’s, Inc.(a) | | | 18,738 | | $ | 5,051,765 |
Link (The) | | | 1,235,918 | | | 2,634,931 |
Ventas, Inc.(a) | | | 58,533 | | | 1,747,795 |
Vornado Realty Trust(a) | | | 29,500 | | | 1,328,385 |
| | | | | | |
| | | | | | 10,762,876 |
| | | | | | |
| Real Estate Management & Development - 0.4% |
Forestar Real Estate Group, Inc.*(a) | | | 77,208 | | | 917,231 |
St. Joe Co. (The)*(a) | | | 59,509 | | | 1,576,393 |
| | | | | | |
| | | | | | 2,493,624 |
| | | | | | |
| Semiconductors & Semiconductor Equipment - 1.9% |
LSI Corp.*(a) | | | 1,351,270 | | | 6,161,791 |
Maxim Integrated Products, Inc.(a) | | | 319,440 | | | 5,012,014 |
| | | | | | |
| | | | | | 11,173,805 |
| | | | | | |
| Software - 3.0% |
Microsoft Corp. | | | 733,226 | | | 17,428,782 |
| | | | | | |
| Tobacco - 10.0% |
Altria Group, Inc.(a) | | | 612,015 | | | 10,030,926 |
British American Tobacco Plc | | | 568,487 | | | 15,701,810 |
Imperial Tobacco Group Plc | | | 483,550 | | | 12,574,477 |
Japan Tobacco, Inc. | | | 1,427 | | | 4,443,514 |
KT&G Corp. | | | 62,976 | | | 3,556,988 |
Lorillard, Inc.(a) | | | 30,473 | | | 2,065,155 |
Philip Morris International, Inc.(a) | | | 87,095 | | | 3,799,084 |
Reynolds American, Inc.(a) | | | 143,548 | | | 5,543,824 |
| | | | | | |
| | | | | | 57,715,778 |
| | | | | | |
Total Common Stocks
(Cost $502,474,967) | | | | | | 507,381,626 |
| | | | | | |
| Purchased Option - 0.1% |
S&P 500 Index,
Expire 12/19/09, Strike Price $775
(Cost - $1,801,006) | | | 30,200 | | | 773,120 |
| | | | | | |
|
| Short-Term Investments - 35.6% |
| Discount Notes - 2.3% | | | | | | |
Federal Home Loan Bank
0.000%, due 07/01/09(b) | | $ | 13,400,000 | | | 13,400,000 |
| | | | | | |
| Mutual Funds - 24.6% | | | | | | |
State Street Navigator Securities Lending Trust Prime Portfolio(c) | | | 142,256,229 | | | 142,256,229 |
| | | | | | |
| | | | | | | |
Security Description | | Par Amount | | Value | |
| | | | | | | |
| | |
| U.S. Treasuries - 8.7% | | | | | | | |
U.S. Treasury Bills
0.285%, due 07/02/09(a)(b) | | $ | 3,000,000 | | $ | 2,999,976 | |
0.170%, due 07/30/09(a)(b) | | | 3,000,000 | | | 2,999,589 | |
0.447%, due 08/06/09(a)(b) | | | 3,000,000 | | | 2,998,658 | |
0.495%, due 08/20/09(a)(b) | | | 1,500,000 | | | 1,498,969 | |
0.195%, due 09/17/09(b) | | | 3,000,000 | | | 2,998,732 | |
0.378%, due 09/24/09(b) | | | 2,000,000 | | | 1,998,215 | |
0.370%, due 10/08/09(a)(b) | | | 1,500,000 | | | 1,498,474 | |
0.320%, due 10/15/09(b) | | | 3,000,000 | | | 2,997,173 | |
0.205%, due 10/22/09(a)(b) | | | 5,000,000 | | | 4,996,783 | |
0.293%, due 10/29/09(a)(b) | | | 3,000,000 | | | 2,997,066 | |
0.275%, due 11/27/09(b) | | | 5,000,000 | | | 4,994,309 | |
0.273%, due 12/03/09(b) | | | 5,000,000 | | | 4,994,134 | |
0.300%, due 12/10/09(a)(b) | | | 5,000,000 | | | 4,993,250 | |
0.295%, due 12/17/09(a)(b) | | | 2,000,000 | | | 1,997,230 | |
0.340%, due 12/24/09(b) | | | 5,000,000 | | | 4,991,689 | |
| | | | | | | |
| | | | | | 49,954,247 | |
| | | | | | | |
Total Short-Term Investments
(Cost $205,610,476) | | | 205,610,476 | |
| | | | | | | |
| |
TOTAL INVESTMENTS - 126.1%
(Cost $723,352,995) | | | 728,047,568 | |
| | | | | | | |
| |
| Other Assets and Liabilities (net) - (26.1)% | | | (150,513,623 | ) |
| | | | | | | |
| |
| NET ASSETS - 100.0% | | $ | 577,533,945 | |
| | | | | | | |
Portfolio Footnotes:
| * | | Non-income producing security. |
| (a) | | All or a portion of security is on loan. |
| (b) | | Zero coupon bond - Interest rate represents current yield to maturity. |
| (c) | | Represents investment of collateral received from securities lending transactions. |
| | | | | | | | | | | | | | | | | | |
| Written Call Options | | Counterparty | | Expi
ration | | Strike
Price | | Number
of
Contracts | | | Premium | | | Value | |
Microsoft Corp. | | Morgan Stanley & Co., Inc. | | 07/18/2009 | | $ | 22.00 | | (221 | ) | | $ | (16,830 | ) | | $ | (42,874 | ) |
| | | | | | | | | | | | | | | | | | |
See accompanying notes to financial statements
7
Met Investors Series Trust
Met/Franklin Mutual Shares Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1—quoted prices in active markets for identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Domestic Bonds & Debt Securities | | | | | | | | | | | | |
Diversified Consumer Services | | $ | — | | $ | 46,063 | | $ | — | | $ | 46,063 |
Electrical Equipment | | | — | | | 1,839,181 | | | — | | | 1,839,181 |
Insurance | | | — | | | 1,661,793 | | | — | | | 1,661,793 |
IT Services | | | — | | | 281,228 | | | — | | | 281,228 |
Media | | | — | | | 2,731,482 | | | — | | | 2,731,482 |
Total Domestic Bonds & Debt Securities | | | — | | | 6,559,747 | | | — | | | 6,559,747 |
Loan Participation | | | — | | | 7,722,599 | | | — | | | 7,722,599 |
Common Stocks | | | | | | | | | | | | |
Aerospace & Defense | | | 6,474,820 | | | — | | | — | | | 6,474,820 |
Air Freight & Logistics | | | — | | | 1,933,138 | | | — | | | 1,933,138 |
Airlines | | | 9,017 | | | — | | | — | | | 9,017 |
Auto Components | | | 2,667,100 | | | — | | | — | | | 2,667,100 |
Automobiles | | | — | | | 2,366,602 | | | — | | | 2,366,602 |
Beverages | | | 18,449,241 | | | 10,950,157 | | | — | | | 29,399,398 |
Building Products | | | 2,329,641 | | | — | | | — | | | 2,329,641 |
Capital Markets | | | 1,446,419 | | | — | | | — | | | 1,446,419 |
Chemicals | | | — | | | 9,915,605 | | | — | | | 9,915,605 |
Commercial Banks | | | — | | | 5,612,828 | | | — | | | 5,612,828 |
Communications Equipment | | | 6,685,334 | | | — | | | — | | | 6,685,334 |
Computers & Peripherals | | | 14,045,975 | | | — | | | — | | | 14,045,975 |
Containers & Packaging | | | 2,871,666 | | | — | | | — | | | 2,871,666 |
Diversified Consumer Services | | | 3,231,416 | | | — | | | — | | | 3,231,416 |
Diversified Financial Services | | | 1,933,615 | | | 2,955,598 | | | — | | | 4,889,213 |
Diversified Telecommunication Services | | | 5,487,499 | | | 13,344,682 | | | — | | | 18,832,181 |
Electric Utilities | | | 8,028,280 | | | 8,575,773 | | | — | | | 16,604,053 |
Electronic Equipment, Instruments & Components | | | 5,096,969 | | | — | | | — | | | 5,096,969 |
Energy Equipment & Services | | | 13,730,517 | | | — | | | — | | | 13,730,517 |
Food & Staples Retailing | | | 31,238,501 | | | 6,208,712 | | | — | | | 37,447,213 |
Food Products | | | 14,694,568 | | | 20,529,342 | | | — | | | 35,223,910 |
Gas Utilities | | | — | | | 3,171,653 | | | — | | | 3,171,653 |
Health Care Providers & Services | | | 3,939,359 | | | — | | | — | | | 3,939,359 |
Independent Power Producers & Energy Traders | | | 7,400,110 | | | — | | | — | | | 7,400,110 |
Industrial Conglomerates | | | 5,271,835 | | | 22,043,192 | | | — | | | 27,315,027 |
Insurance | | | 30,760,086 | | | 2,926,226 | | | — | | | 33,686,312 |
See accompanying notes to financial statements
8
Met Investors Series Trust
Met/Franklin Mutual Shares Portfolio
| | | | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | | Significant
Unobservable
Inputs
(Level 3) | | Total | |
Leisure Equipment & Products | | $ | 11,493,199 | | $ | — | | | $ | — | | $ | 11,493,199 | |
Life Sciences Tools & Services | | | 4,694,861 | | | — | | | | — | | | 4,694,861 | |
Machinery | | | 1,790,959 | | | 2,471,979 | | | | — | | | 4,262,938 | |
Marine | | | — | | | 4,158,819 | | | | — | | | 4,158,819 | |
Media | | | 29,330,169 | | | — | | | | — | | | 29,330,169 | |
Metals & Mining | | | — | | | 3,847,740 | | | | — | | | 3,847,740 | |
Oil, Gas & Consumable Fuels | | | 17,593,107 | | | 6,930,491 | | | | — | | | 24,523,598 | |
Paper & Forest Products | | | 19,509,708 | | | — | | | | — | | | 19,509,708 | |
Pharmaceuticals | | | 5,185,654 | | | 4,474,599 | | | | — | | | 9,660,253 | |
Real Estate Investment Trusts (REITs) | | | 8,127,945 | | | 2,634,931 | | | | — | | | 10,762,876 | |
Real Estate Management & Development | | | 2,493,624 | | | — | | | | — | | | 2,493,624 | |
Semiconductors & Semiconductor Equipment | | | 11,173,805 | | | — | | | | — | | | 11,173,805 | |
Software | | | 17,428,782 | | | — | | | | — | | | 17,428,782 | |
Tobacco | | | 21,438,989 | | | 36,276,789 | | | | — | | | 57,715,778 | |
Total Common Stocks | | | 336,052,770 | | | 171,328,856 | | | | — | | | 507,381,626 | |
Purchased Option | | | 773,120 | | | — | | | | — | | | 773,120 | |
Short-Term Investments | | | | | | | | | | | | | | |
Discount Notes | | | — | | | 13,400,000 | | | | — | | | 13,400,000 | |
Mutual Funds | | | 142,256,229 | | | — | | | | — | | | 142,256,229 | |
U.S. Treasuries | | | — | | | 49,954,247 | | | | — | | | 49,954,247 | |
Total Short-Term Investments | | | 142,256,229 | | | 63,354,247 | | | | — | | | 205,610,476 | |
| TOTAL INVESTMENTS | | $ | 479,082,119 | | $ | 248,965,449 | | | $ | — | | $ | 728,047,568 | |
Forward Contracts | | | | | | | | | | | | | | |
Forward Currency Contracts | | $ | — | | $ | (5,647,887 | ) | | $ | — | | $ | (5,647,887 | ) |
Options Written | | | | | | | | | | | | | | |
Options Written Calls | | | 26,044 | | | — | | | | — | | | 26,044 | |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| Met/Franklin Mutual Shares Portfolio | | | |
| Assets | | | | |
Investments, at value (a)(b) | | $ | 728,047,568 | |
Cash | | | 98,481 | |
Cash denominated in foreign currencies (c) | | | 33,175 | |
Receivable for investments sold | | | 1,148,278 | |
Receivable for Trust shares sold | | | 394,727 | |
Dividends receivable | | | 921,165 | |
Interest receivable | | | 111,115 | |
Unrealized appreciation on forward currency contracts | | | 163,096 | |
| | | | |
Total assets | | | 730,917,605 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 4,795,638 | |
Trust shares redeemed | | | 21,609 | |
Unrealized depreciation on forward currency contracts | | | 5,810,983 | |
Outstanding written options (d) | | | 42,874 | |
Distribution and services fees—Class B | | | 15,813 | |
Collateral for securities on loan | | | 142,256,229 | |
Management fee | | | 373,193 | |
Administration fee | | | 3,490 | |
Custodian and accounting fees | | | 32,530 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 27,874 | |
| | | | |
Total liabilities | | | 153,383,660 | |
| | | | |
| Net Assets | | $ | 577,533,945 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 586,345,921 | |
Accumulated net realized loss | | | (10,601,071 | ) |
Unrealized depreciation on investments, options contracts and foreign currency | | | (974,504 | ) |
Undistributed net investment income | | | 2,763,599 | |
| | | | |
Total | | $ | 577,533,945 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 495,731,748 | |
| | | | |
Class B | | | 81,802,197 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 74,286,513 | |
| | | | |
Class B | | | 12,289,505 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 6.67 | |
| | | | |
Class B | | | 6.66 | |
| | | | |
| | | | | |
(a) Investments at cost | | $ | 723,352,995 | |
(b) Includes cash collateral for securities loaned of | | | 142,256,229 | |
(c) Cost of cash denominated in foreign currencies | | | 33,253 | |
(d) Cost of written options | | | 16,830 | |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| Met/Franklin Mutual Shares Portfolio | | | |
| Investment Income | | | | |
Dividends (1) | | $ | 4,127,573 | |
Interest | | | 272,142 | |
| | | | |
Total investment income | | | 4,399,715 | |
| | | | |
| Expenses | | | | |
Management fee | | | 1,100,415 | |
Administration fees | | | 12,361 | |
Custodian and accounting fees | | | 71,809 | |
Distribution and services fees—Class B | | | 62,533 | |
Audit and tax services | | | 25,155 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,298 | |
Shareholder reporting | | | 2,619 | |
Insurance | | | 469 | |
Other | | | 2,929 | |
| | | | |
Total expenses | | | 1,304,322 | |
Less expenses reimbursed by the Manager | | | (60,687 | ) |
| | | | |
Net expenses | | | 1,243,635 | |
| | | | |
Net investment income | | | 3,156,080 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments, Options Contracts and Foreign Currency | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | (4,310,290 | ) |
Options contracts | | | 9,354 | |
Foreign currency | | | (1,177,083 | ) |
| | | | |
Net realized loss on investments, options contracts and foreign currency | | | (5,478,019 | ) |
| | | | |
Net change in unrealized appreciation (depreciation) on: | | | | |
Investments | | | 31,864,295 | |
Options contracts | | | (32,985 | ) |
Foreign currency | | | (5,346,740 | ) |
| | | | |
Net change in unrealized appreciation on investments, options contracts and foreign currency | | | 26,484,570 | |
| | | | |
Net realized and unrealized gain on investments, options contracts and foreign currency | | | 21,006,551 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 24,162,631 | |
| | | | |
| | | | | |
(1) Dividend income is net of foreign withholding taxes of: | | $ | 306,546 | |
See accompanying notes to financial statements
11
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| Met/Franklin Mutual Shares Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Period Ended
December 31,
2008* | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 3,156,080 | | | $ | 565,553 | |
Net realized loss on investments, option contracts and foreign currency | | | (5,478,019 | ) | | | (2,616,187 | ) |
Net change in unrealized appreciation (depreciation) on investments, option contracts and foreign currency | | | 26,484,570 | | | | (27,459,074 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 24,162,631 | | | | (29,509,708 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | — | | | | (2,584,867 | ) |
Class B | | | — | | | | (882,980 | ) |
From net realized gains | | | | | | | | |
Class A | | | — | | | | — | |
Class B | | | — | | | | — | |
From return of capital | | | | | | | | |
Class A | | | — | | | | (19,582 | ) |
Class B | | | — | | | | (6,878 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | — | | | | (3,494,307 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 385,351,009 | | | | 118,406,995 | |
Class B | | | 49,123,732 | | | | 40,935,999 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | — | | | | 2,604,449 | |
Class B | | | — | | | | 889,858 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (450,079 | ) | | | (4,385,272 | ) |
Class B | | | (3,456,371 | ) | | | (2,644,991 | ) |
| | | | | | | | |
Net increase in net assets from capital share transactions | | | 430,568,291 | | | | 155,807,038 | |
| | | | | | | | |
| Net Increase in Net Assets | | | 454,730,922 | | | | 122,803,023 | |
Net assets at beginning of period | | | 122,803,023 | | | | — | |
| | | | | | | | |
Net assets at end of period | | $ | 577,533,945 | | | $ | 122,803,023 | |
| | | | | | | | |
Net assets at end of period includes undistributed (distributions in excess of) net investment income | | $ | 2,763,599 | | | $ | (392,481 | ) |
| | | | | | | | |
| * | | For the period 4/28/2008 (Commencement of operations) through 12/31/2008. |
See accompanying notes to financial statements
12
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | |
| | |
| Selected Per Share Data for the Period Ended: | | | | | | |
| | |
| | | | | | | |
| Met/Franklin Mutual Shares Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Period
Ended
December 31,
2008(b) | |
| Net Asset Value, Beginning of Period | | $ | 6.48 | | | $ | 10.00 | |
| | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | |
Net Investment Income(a) | | | 0.07 | | | | 0.07 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.12 | | | | (3.40 | ) |
| | | | | | | | |
Total from Investment Operations | | | 0.19 | | | | (3.33 | ) |
| | | | | | | | |
| Less Distributions | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | (0.19 | ) |
Distributions from Return of Capital | | | — | | | | (0.00 | )+ |
| | | | | | | | |
Total Distributions | | | — | | | | (0.19 | ) |
| | | | | | | | |
| Net Asset Value, End of Period | | $ | 6.67 | | | $ | 6.48 | |
| | | | | | | | |
| Total Return | | | 2.93 | % | | | (33.20 | )% |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.86 | %* | | | 0.90 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.90 | %* | | | 1.32 | %* |
Ratio of Net Investment Income to Average Net Assets | | | 2.33 | %* | | | 1.29 | %* |
Portfolio Turnover Rate | | | 32.7 | % | | | 23.6 | % |
Net Assets, End of Period (in millions) | | $ | 495.7 | | | $ | 90.9 | |
| |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Period
Ended
December 31,
2008(b) | |
| | | |
| Net Asset Value, Beginning of Period | | $ | 6.47 | | | $ | 10.00 | |
| | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | |
Net Investment Income(a) | | | 0.07 | | | | 0.05 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.12 | | | | (3.39 | ) |
| | | | | | | | |
Total from Investment Operations | | | 0.19 | | | | (3.34 | ) |
| | | | | | | | |
| Less Distributions | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | (0.19 | ) |
Distributions from Return of Capital | | | — | | | | (0.00 | )+ |
| | | | | | | | |
Total Distributions | | | — | | | | (0.19 | ) |
| | | | | | | | |
| Net Asset Value, End of Period | | $ | 6.66 | | | $ | 6.47 | |
| | | | | | | | |
| Total Return | | | 2.94 | % | | | (33.36 | )% |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 1.12 | %* | | | 1.15 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 1.19 | %* | | | 1.60 | %* |
Ratio of Net Investment Income to Average Net Assets | | | 2.12 | %* | | | 1.05 | %* |
Portfolio Turnover Rate | | | 32.7 | % | | | 23.6 | % |
Net Assets, End of Period (in millions) | | $ | 81.8 | | | $ | 31.9 | |
| + | | Rounds to less than $0.005 per share. |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—4/28/2008. |
See accompanying notes to financial statements
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is Met/Franklin Mutual Shares Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A and B Shares are currently offered by the Portfolio. Class C and E Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2008 tax year remains subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | |
Expiring
12/31/2016 | | Total |
| |
| $ | 2,898,380 | | $2,898,380 |
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
G. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
H. Foreign Currency Translation - The books and records of the Portfolio are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars on a daily basis using prevailing exchange rates. Purchases and sales of securities are translated at the rates of exchange prevailing when such securities were acquired or sold. Income is translated at rates of exchange prevailing when interest is accrued or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in forward foreign currency contracts; sales of foreign currencies; currency gains or losses realized between the trade and settlement dates on securities transactions; and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Portfolio’s books and the U.S. dollar equivalent of the amounts actually received
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end; from changes in the exchange rates of foreign currency held; and from changes in the contract value of forward foreign currency contracts.
I. Financial Derivative Instruments - Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133, (“FAS 161” or the “Statement”) requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. The disclosure requirements of FAS 161 distinguish between derivatives which are accounted for as “hedges” under FAS 133 and those that do not qualify for such accounting. The Portfolio reflects derivatives at fair value and recognizes changes in fair value through the Statement of Operations, and as such do not qualify for FAS 133 hedge accounting treatment.
J. Futures Contracts - The Portfolio may buy and sell futures contracts (on recognized exchanges) as a hedge, to maintain exposure to the broad equity markets or to enhance return. The Portfolio may be subject to equity price risk, interest rate risk, and foreign currency exchange rate risk in the normal course of pursuing its investment objectives. Futures contracts are agreements to buy or sell a security, or deliver a final cash settlement price in connection with an index, interest rate, currency, or other contracts not calling for physical delivery, for a set price in the future. The Portfolio must post an amount equal to a portion of the total market value of the futures contract as futures variation margin, which is returned when the Portfolio’s obligations under the contract have been satisfied. From time to time thereafter, the Portfolio may have to post variation margin to maintain this amount as the market value of the contract fluctuates. Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities.
K. Forward Foreign Currency Contracts - The Portfolio may enter into forward foreign currency contracts to hedge its portfolio holdings against future movements in certain foreign currency exchange rates. A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a set price. Forward currency contracts are valued at the forward rate and are marked-to-market daily. The change in market value is recorded by the Portfolio as an unrealized gain or loss. When the contract is closed, the Portfolio recognizes a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.
The use of forward foreign currency contracts does not eliminate fluctuations in the underlying prices of the securities of the Portfolio, but it does establish a rate of exchange that can be achieved in the future. Although forward foreign currency contracts to sell limit the risk of loss due to a decline in the value of the currency holdings, they also limit any potential gain that might result should the value of the currency increase. In addition, the Portfolio could be exposed to risks if the counterparties to the contracts are unable to meet the terms of the contracts.
L. Options Contracts - A purchased option contract gives the buyer the right, but not the obligation, to buy (call) or sell (put) an underlying item at a fixed exercise price during a specified period. These contracts are generally used by the Portfolio to provide the return of an index without purchasing all of the securities underlying the index or as a substitute for purchasing or selling specific securities.
Purchases of put and call options are recorded as investments, the value of which are marked-to-market daily. When a purchased option expires, the Portfolio will realize a loss equal to the premium paid. When the Portfolio enters into a closing sale transaction, the Portfolio will realize a gain or loss depending on whether the sales proceeds from the closing sale transaction are greater or less than the cost of the option. When the Portfolio exercises a put option, it will realize a gain or loss from the sale of the underlying security and the proceeds from such sale will be decreased by the premium originally paid. When the Portfolio exercises a call option, the cost of the security which the Portfolio purchases upon exercise will be increased by the premium originally paid.
The premium received for a written option is recorded as an asset and an equivalent liability. The liability is marked-to-market daily based on the option’s quoted market price. When an option expires or the Portfolio enters into a closing purchase transaction, the Portfolio realizes a gain (or loss if the cost of the closing purchase transaction exceeds the premium received when the option was sold) without regard to any unrealized gain or loss on the underlying security and the liability related to such option is eliminated. When a written call option is exercised, the Portfolio realizes a gain or loss from the sale of the underlying security and the proceeds from such sale are increased by the premium originally received. If a written put option is exercised, the amount of the premium originally received will reduce the cost of the underlying security purchased.
The risk associated with purchasing options is limited to the premium originally paid. The risk in writing a covered call option is that the Portfolio may forego the opportunity for profit if the market price of the underlying security increases and the option is exercised. The risk in writing a put option is that the Portfolio may incur a loss if the market price of the underlying security decreases and the option is exercised. The Portfolio as a writer of an option has no control over whether the underlying instrument may be sold (call) or purchased (put) and as a result bears the market risk of an unfavorable change in the price of the instrument underlying the written option. There is a risk the Portfolio may not be able to enter into a closing transaction because of an illiquid market. This loss can be greater than premium received. In addition, the Portfolio could be exposed to risks if the counterparties to the transactions are unable to meet the terms of the contracts.
16
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
At June 30, 2009, the Portfolio had following derivatives (not designated as hedging instruments under SFAS No.133), grouped into appropriate risk categories that illustrate how and why the Portfolio uses derivative instruments:
| | | | | | | | | | | |
| | | Asset Derivatives | | Liability Derivatives | |
Derivatives not accounted for as
hedging instruments under Statement 133 | | Balance Sheet Location | | Fair Value | | Balance Sheet Location | | Fair Value | |
| | | | |
Interest Rate Contracts | | | | | | | | | | | |
| | | | |
Foreign Exchange Contracts | | Unrealized appreciation on Forward Currency Contracts | | $ | 163,095 | | Unrealized depreciation on Forward Currency Contracts | | $ | (5,810,983 | ) |
| | | | |
Equity Contracts | | Receivables | | | — | | Outstanding written options | | | (42,874 | ) |
| | | | | | | | | | | |
| | | | |
Total | | | | $ | 163,095 | | | | $ | (5,853,857 | ) |
| | | | | | | | | | | |
Transactions in derivative instruments during the six months ended June 30, 2009, were as follows:
| | | | | | |
Derivatives not accounted for as hedging instruments under Statement 133 |
Location | | Equity
Contracts | | Total |
| | |
Statement of Operations—Realized Gain (Loss) | | | | | | |
| | |
Option contracts | | $ | 3,662 | | $ | 9,354 |
| | | | | | |
| | |
Total | | $ | 3,662 | | $ | 9,354 |
| | | | | | | | | | | | |
Location | | Foreign Exchange
Contracts | | | Equity
Contracts | | | Total | |
| |
Statement of Operations—Change in Unrealized Gain (Loss) | | | | | |
| | | |
Foreign Currency | | $ | (5,345,235 | ) | | $ | — | | | $ | (5,345,235 | ) |
| | | |
Options | | | — | | | | (28,564 | ) | | | (28,564 | ) |
| | | | | | | | | | | | |
| | | |
Total | | $ | (5,345,235 | ) | | $ | (28,564 | ) | | $ | (5,373,799 | ) |
| | | |
Number of Contracts, Notional Amounts or Shares/Units* | | Other Contracts Risk | |
| |
Options Written(1) | | (22,100 | ) |
(1) Amount(s) represent(s) number of contracts or number of Shares/Units.
* Calculated based on number of contracts or notional amounts as of the prior fiscal year-end and each subsequent fiscal quarter-end.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with Franklin Mutual Advisers, LLC (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
17
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $1,100,415 | | 0.800 | % | | ALL |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Manager has entered into an expense limitation agreement with the Trust (“Expense Limitation Agreement”) in the interest of limiting expenses of the Portfolio of the Trust. The Expense Limitation Agreement shall continue in effect with respect to the Portfolio until April 30, 2010. Pursuant to that Expense Limitation Agreement, the Manager has agreed to waive or limit its fees and to assume other expenses so that the total annual operating expenses of the Portfolio other than interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with accounting principles generally accepted in the United States of America, and other extraordinary expenses not incurred in the ordinary course of the Portfolio’s business, but including amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act, are limited to the following expense ratios as a percentage of the Portfolio’s average daily net assets:
| | | | | | | | | |
Maximum Expense Ratio
under current Expense
Limitation Agreement | | | Expenses Deferred in |
| | 2008 | | 2009 |
| | Subject to repayment
until December 31, |
Class A | | Class B | | | 2013 | | 2014 |
| | | |
| 0.90% | | 1.15 | % | | $ | 193,042 | | $ | 60,687 |
If in any year in which the Management Agreement is still in effect, the estimated aggregate portfolio operating expenses of the Portfolio for the fiscal year are less than the Maximum Expense Ratios for that year, subject to approval by the Trust’s Board, the Manager shall be entitled to reimbursement by the Portfolio to the extent that the charge does not cause the expenses in such subsequent year to exceed the Maximum Expense Ratios as stated above. The Portfolio is not obligated to repay any expense paid by the Manager more than five years after the end of the fiscal year in which such expense was incurred.
The expenses reimbursed for the period ended June 30, 2009 are shown as expenses reimbursed in the Statement of Operations of the Portfolio.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A and Class B Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B distribution plan provides that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% of the average net assets of the Portfolio attributable to its Class B Shares in respect to activities primarily intended to result in the sale of Class B Shares. However, under the Class B distribution agreement, payments to the Distributor for activities pursuant to the Class B distribution plan are currently limited to payments at an annual rate equal to 0.25% of average daily net assets of the Portfolio attributable to its Class B Shares.
Under terms of the Class B distribution plan and distribution agreement, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
18
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
in Shares
Outstanding | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 14,019,950 | | 60,335,027 | | — | | (68,464 | ) | | 60,266,563 | | 74,286,513 |
4/28/2008-12/31/2008 | | — | | 14,110,601 | | 413,405 | | (504,056 | ) | | 14,019,950 | | 14,019,950 |
| | | | | | |
Class B | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 4,931,331 | | 7,925,719 | | — | | (567,545 | ) | | 7,358,174 | | 12,289,505 |
4/28/2008-12/31/2008 | | — | | 5,138,226 | | 141,472 | | (348,367 | ) | | 4,931,331 | | 4,931,331 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 475,598,421 | | $ | — | | $ | 81,027,782 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Appreciation |
| | | |
| $723,352,995 | | $ | 20,930,478 | | $ | (16,235,905 | ) | | $ | 4,694,573 |
6. Forward Foreign Currency Contracts
Forward Foreign Currency Contracts to Buy:
| | | | | | | | | | | | | | |
Settlement Date | | Counterparty | | Contracts to Buy | | Value at
June 30, 2009 | | In Exchange for U.S.$ | | Net Unrealized
Appreciation/
(Depreciation) | |
| | | | | |
9/17/2009 | | State Street Bank and Trust Co. | | 4,300 AUD | | $ | 3,444 | | $ | 3,422 | | $ | 22 | |
| | | | | |
8/31/2009 | | State Street Bank and Trust Co. | | 5,100 CAD | | | 4,388 | | | 3,947 | | | 441 | |
| | | | | |
8/31/2009 | | Bank of America Securities LLC | | 5,500 CAD | | | 4,732 | | | 4,498 | | | 234 | |
| | | | | |
8/31/2009 | | State Street Bank and Trust Co. | | 7,800 CAD | | | 6,711 | | | 6,376 | | | 335 | |
| | | | | |
8/31/2009 | | State Street Bank and Trust Co. | | 6,600 CAD | | | 5,679 | | | 5,934 | | | (255 | ) |
| | | | | |
8/31/2009 | | State Street Bank and Trust Co. | | 3,500 CAD | | | 3,012 | | | 3,187 | | | (175 | ) |
| | | | | |
8/31/2009 | | State Street Bank and Trust Co. | | 5,400 CAD | | | 4,646 | | | 4,818 | | | (172 | ) |
| | | | | |
8/31/2009 | | State Street Bank and Trust Co. | | 5,487 CAD | | | 4,721 | | | 4,859 | | | (138 | ) |
| | | | | |
8/10/2009 | | State Street Bank and Trust Co. | | 97,000 CHF | | | 89,293 | | | 82,998 | | | 6,295 | |
| | | | | |
10/23/2009 | | State Street Bank and Trust Co. | | 338,300 DKK | | | 63,589 | | | 58,548 | | | 5,041 | |
| | | | | |
10/23/2009 | | State Street Bank and Trust Co. | | 1,300,000 DKK | | | 244,355 | | | 243,585 | | | 770 | |
| | | | | |
7/13/2009 | | State Street Bank and Trust Co. | | 100,000 GBP | | | 164,488 | | | 141,918 | | | 22,570 | |
19
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
6. Forward Foreign Currency Contracts - continued
| | | | | | | | | | | | | | |
Settlement Date | | Counterparty | | Contracts to Buy | | Value at
June 30, 2009 | | In Exchange for U.S.$ | | Net Unrealized
Appreciation/
(Depreciation) | |
| | | | | |
7/13/2009 | | State Street Bank and Trust Co. | | 200,000 GBP | | $ | 328,976 | | $ | 281,258 | | $ | 47,718 | |
| | | | | |
7/13/2009 | | State Street Bank and Trust Co. | | 117,822 GBP | | | 193,804 | | | 194,069 | | | (265 | ) |
| | | | | |
10/20/2009 | | State Street Bank and Trust Co. | | 7,000,000 JPY | | | 72,693 | | | 71,259 | | | 1,434 | |
| | | | | |
7/8/2009 | | Bank of America Securities LLC | | 19,200,000 KRW | | | 15,077 | | | 15,035 | | | 42 | |
| | | | | |
8/19/2009 | | State Street Bank and Trust Co. | | 2,100,000 NOK | | | 325,727 | | | 329,469 | | | (3,742 | ) |
| | | | | |
8/19/2009 | | State Street Bank and Trust Co. | | 3,500,000 NOK | | | 542,879 | | | 541,896 | | | 983 | |
| | | | | |
9/16/2009 | | State Street Bank and Trust Co. | | 1,500,000 SEK | | | 193,975 | | | 190,145 | | | 3,830 | |
| | | | | |
9/16/2009 | | State Street Bank and Trust Co. | | 1,080,000 SEK | | | 139,662 | | | 137,457 | | | 2,205 | |
| | | | | |
9/24/2009 | | State Street Bank and Trust Co. | | 158,770 SGD | | | 109,599 | | | 109,640 | | | (41 | ) |
| | | | | | | | | | | | | | |
| | | | | |
| | | | | | | | | | | | $ | 87,132 | |
| | | | | | | | | | | | | | |
Forward Foreign Currency Contracts to Sell:
| | | | | | | | | | | | | | |
Settlement Date | | Counterparty | | Contracts to Deliver | | Value at
June 30, 2009 | | In Exchange for U.S.$ | | Net Unrealized
Appreciation/
(Depreciation) | |
| | | | | |
9/17/2009 | | State Street Bank and Trust Co. | | 34,700 AUD | | $ | 27,789 | | $ | 27,694 | | $ | (95 | ) |
| | | | | |
9/17/2009 | | State Street Bank and Trust Co. | | 37,600 AUD | | | 30,111 | | | 30,563 | | | 452 | |
| | | | | |
9/17/2009 | | State Street Bank and Trust Co. | | 39,900 AUD | | | 31,953 | | | 32,204 | | | 251 | |
| | | | | |
9/17/2009 | | State Street Bank and Trust Co. | | 155,246 AUD | | | 124,326 | | | 123,989 | | | (337 | ) |
| | | | | |
9/17/2009 | | State Street Bank and Trust Co. | | 228,000 AUD | | | 182,589 | | | 178,695 | | | (3,894 | ) |
| | | | | |
9/17/2009 | | State Street Bank and Trust Co. | | 107,800 AUD | | | 86,330 | | | 85,792 | | | (538 | ) |
| | | | | |
9/17/2009 | | State Street Bank and Trust Co. | | 93,500 AUD | | | 74,878 | | | 74,895 | | | 17 | |
| | | | | |
9/17/2009 | | HSBC Bank Plc | | 130,268 AUD | | | 104,322 | | | 100,104 | | | (4,218 | ) |
| | | | | |
9/17/2009 | | HSBC Bank Plc | | 132,623 AUD | | | 106,209 | | | 102,228 | | | (3,981 | ) |
| | | | | |
9/17/2009 | | Bank of America Securities LLC | | 234,698 AUD | | | 187,953 | | | 184,895 | | | (3,058 | ) |
| | | | | |
8/31/2009 | | State Street Bank and Trust Co. | | 44,017 CAD | | | 37,874 | | | 35,503 | | | (2,371 | ) |
| | | | | |
8/31/2009 | | State Street Bank and Trust Co. | | 5,800 CAD | | | 4,990 | | | 4,641 | | | (349 | ) |
| | | | | |
8/10/2009 | | State Street Bank and Trust Co. | | 115,170 CHF | | | 106,020 | | | 97,722 | | | (8,298 | ) |
| | | | | |
8/10/2009 | | State Street Bank and Trust Co. | | 100,000 CHF | | | 92,055 | | | 84,633 | | | (7,422 | ) |
| | | | | |
8/10/2009 | | State Street Bank and Trust Co. | | 200,000 CHF | | | 184,110 | | | 177,691 | | | (6,419 | ) |
| | | | | |
8/10/2009 | | State Street Bank and Trust Co. | | 350,000 CHF | | | 322,192 | | | 309,844 | | | (12,348 | ) |
| | | | | |
8/10/2009 | | State Street Bank and Trust Co. | | 180,000 CHF | | | 165,699 | | | 154,512 | | | (11,187 | ) |
| | | | | |
8/10/2009 | | State Street Bank and Trust Co. | | 128,287 CHF | | | 118,094 | | | 112,001 | | | (6,093 | ) |
| | | | | |
8/10/2009 | | State Street Bank and Trust Co. | | 28,140 CHF | | | 25,905 | | | 24,928 | | | (977 | ) |
| | | | | |
8/10/2009 | | State Street Bank and Trust Co. | | 127,753 CHF | | | 117,603 | | | 112,405 | | | (5,198 | ) |
| | | | | |
8/10/2009 | | State Street Bank and Trust Co. | | 54,866 CHF | | | 50,507 | | | 48,368 | | | (2,139 | ) |
| | | | | |
8/10/2009 | | State Street Bank and Trust Co. | | 6,700,000 CHF | | | 6,167,671 | | | 5,924,066 | | | (243,605 | ) |
| | | | | |
8/10/2009 | | State Street Bank and Trust Co. | | 176,132 CHF | | | 162,138 | | | 159,482 | | | (2,656 | ) |
20
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
6. Forward Foreign Currency Contracts - continued
| | | | | | | | | | | | | | |
Settlement Date | | Counterparty | | Contracts to Deliver | | Value at
June 30, 2009 | | In Exchange for U.S.$ | | Net Unrealized
Appreciation/
(Depreciation) | |
| | | | | |
8/10/2009 | | Bank of America Securities LLC | | 2,772,143 CHF | | $ | 2,551,890 | | $ | 2,389,778 | | $ | (162,112 | ) |
| | | | | |
8/10/2009 | | Bank of America Securities LLC | | 95,300 CHF | | | 87,728 | | | 82,819 | | | (4,909 | ) |
| | | | | |
8/10/2009 | | Bank of America Securities LLC | | 372,648 CHF | | | 343,040 | | | 342,822 | | | (218 | ) |
| | | | | |
10/23/2009 | | State Street Bank and Trust Co. | | 157,000 DKK | | | 29,511 | | | 27,521 | | | (1,990 | ) |
| | | | | |
10/23/2009 | | State Street Bank and Trust Co. | �� | 358,000 DKK | | | 67,292 | | | 61,039 | | | (6,253 | ) |
| | | | | |
10/23/2009 | | State Street Bank and Trust Co. | | 300,000 DKK | | | 56,390 | | | 51,291 | | | (5,099 | ) |
| | | | | |
10/23/2009 | | State Street Bank and Trust Co. | | 320,000 DKK | | | 60,149 | | | 55,555 | | | (4,594 | ) |
| | | | | |
10/23/2009 | | State Street Bank and Trust Co. | | 99,600 DKK | | | 18,722 | | | 18,070 | | | (652 | ) |
| | | | | |
10/23/2009 | | State Street Bank and Trust Co. | | 360,000 DKK | | | 67,668 | | | 64,760 | | | (2,908 | ) |
| | | | | |
10/23/2009 | | State Street Bank and Trust Co. | | 142,300 DKK | | | 26,747 | | | 25,014 | | | (1,733 | ) |
| | | | | |
10/23/2009 | | State Street Bank and Trust Co. | | 585,800 DKK | | | 110,111 | | | 102,026 | | | (8,085 | ) |
| | | | | |
10/23/2009 | | State Street Bank and Trust Co. | | 546,500 DKK | | | 102,723 | | | 96,995 | | | (5,728 | ) |
| | | | | |
10/23/2009 | | State Street Bank and Trust Co. | | 373,000 DKK | | | 70,111 | | | 66,567 | | | (3,544 | ) |
| | | | | |
10/23/2009 | | State Street Bank and Trust Co. | | 8,100,000 DKK | | | 1,522,519 | | | 1,462,149 | | | (60,370 | ) |
| | | | | |
10/23/2009 | | State Street Bank and Trust Co. | | 1,100,000 DKK | | | 206,762 | | | 204,218 | | | (2,544 | ) |
| | | | | |
10/23/2009 | | Bank of America Securities LLC | | 1,488,717 DKK | | | 279,827 | | | 255,530 | | | (24,297 | ) |
| | | | | |
10/23/2009 | | Bank of America Securities LLC | | 55,200 DKK | | | 10,376 | | | 9,832 | | | (544 | ) |
| | | | | |
10/23/2009 | | Bank of America Securities LLC | | 760,000 DKK | | | 142,854 | | | 142,322 | | | (532 | ) |
| | | | | |
8/13/2009 | | State Street Bank and Trust Co. | | 749,628 EUR | | | 1,050,955 | | | 1,012,005 | | | (38,950 | ) |
| | | | | |
8/13/2009 | | State Street Bank and Trust Co. | | 39,729,261 EUR | | | 55,699,214 | | | 54,150,983 | | | (1,548,231 | ) |
| | | | | |
8/13/2009 | | State Street Bank and Trust Co. | | 113,827 EUR | | | 159,582 | | | 153,456 | | | (6,126 | ) |
| | | | | |
8/13/2009 | | State Street Bank and Trust Co. | | 115,054 EUR | | | 161,302 | | | 156,617 | | | (4,685 | ) |
| | | | | |
8/13/2009 | | State Street Bank and Trust Co. | | 234,991 EUR | | | 329,451 | | | 326,779 | | | (2,672 | ) |
| | | | | |
8/13/2009 | | State Street Bank and Trust Co. | | 131,049 EUR | | | 183,727 | | | 185,774 | | | 2,047 | |
| | | | | |
8/13/2009 | | State Street Bank and Trust Co. | | 119,868 EUR | | | 168,051 | | | 170,996 | | | 2,945 | |
| | | | | |
8/13/2009 | | State Street Bank and Trust Co. | | 1,200,000 EUR | | | 1,682,363 | | | 1,714,608 | | | 32,245 | |
| | | | | |
8/13/2009 | | State Street Bank and Trust Co. | | 353,014 EUR | | | 494,915 | | | 504,086 | | | 9,171 | |
| | | | | |
8/13/2009 | | State Street Bank and Trust Co. | | 568,025 EUR | | | 796,354 | | | 793,940 | | | (2,414 | ) |
| | | | | |
8/13/2009 | | State Street Bank and Trust Co. | | 209,165 EUR | | | 293,243 | | | 295,303 | | | 2,060 | |
| | | | | |
8/13/2009 | | State Street Bank and Trust Co. | | 82,250 EUR | | | 115,312 | | | 115,103 | | | (209 | ) |
| | | | | |
8/13/2009 | | HSBC Bank Plc | | 525,733 EUR | | | 737,062 | | | 714,945 | | | (22,117 | ) |
| | | | | |
8/13/2009 | | Barclays Capital, Inc. | | 2,000,000 EUR | | | 2,803,939 | | | 2,755,400 | | | (48,539 | ) |
| | | | | |
8/13/2009 | | HSBC Bank Plc | | 207,157 EUR | | | 290,429 | | | 289,078 | | | (1,351 | ) |
| | | | | |
8/13/2009 | | Bank of America Securities LLC | | 364,521 EUR | | | 511,048 | | | 511,037 | | | (11 | ) |
| | | | | |
7/13/2009 | | State Street Bank and Trust Co. | | 4,718,060 GBP | | | 7,760,652 | | | 7,166,733 | | | (593,919 | ) |
| | | | | |
7/13/2009 | | State Street Bank and Trust Co. | | 140,078 GBP | | | 230,412 | | | 194,657 | | | (35,755 | ) |
| | | | | |
7/13/2009 | | State Street Bank and Trust Co. | | 196,628 GBP | | | 323,430 | | | 281,955 | | | (41,475 | ) |
| | | | | |
7/13/2009 | | State Street Bank and Trust Co. | | 101,341 GBP | | | 166,694 | | | 144,022 | | | (22,672 | ) |
21
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
6. Forward Foreign Currency Contracts - continued
| | | | | | | | | | | | | | |
Settlement Date | | Counterparty | | Contracts to Deliver | | Value at
June 30, 2009 | | In Exchange for U.S.$ | | Net Unrealized
Appreciation/
(Depreciation) | |
| | | | | |
7/13/2009 | | State Street Bank and Trust Co. | | 330,000 GBP | | $ | 542,811 | | $ | 473,096 | | $ | (69,715 | ) |
| | | | | |
7/13/2009 | | State Street Bank and Trust Co. | | 93,316 GBP | | | 153,495 | | | 129,657 | | | (23,838 | ) |
| | | | | |
7/13/2009 | | State Street Bank and Trust Co. | | 300,000 GBP | | | 493,465 | | | 416,736 | | | (76,729 | ) |
| | | | | |
7/13/2009 | | State Street Bank and Trust Co. | | 76,978 GBP | | | 126,620 | | | 108,712 | | | (17,908 | ) |
| | | | | |
7/13/2009 | | State Street Bank and Trust Co. | | 275,000 GBP | | | 452,343 | | | 400,076 | | | (52,267 | ) |
| | | | | |
7/13/2009 | | State Street Bank and Trust Co. | | 320,000 GBP | | | 526,362 | | | 470,896 | | | (55,466 | ) |
| | | | | |
7/13/2009 | | State Street Bank and Trust Co. | | 122,875 GBP | | | 202,115 | | | 184,003 | | | (18,112 | ) |
| | | | | |
7/13/2009 | | State Street Bank and Trust Co. | | 68,035 GBP | | | 111,909 | | | 101,422 | | | (10,487 | ) |
| | | | | |
7/13/2009 | | State Street Bank and Trust Co. | | 94,972 GBP | | | 156,217 | | | 140,667 | | | (15,550 | ) |
| | | | | |
7/13/2009 | | State Street Bank and Trust Co. | | 370,000 GBP | | | 608,607 | | | 544,470 | | | (64,137 | ) |
| | | | | |
7/13/2009 | | State Street Bank and Trust Co. | | 130,510 GBP | | | 214,673 | | | 192,579 | | | (22,094 | ) |
| | | | | |
7/13/2009 | | State Street Bank and Trust Co. | | 132,581 GBP | | | 218,080 | | | 197,503 | | | (20,577 | ) |
| | | | | |
7/13/2009 | | State Street Bank and Trust Co. | | 9,300,000 GBP | | | 15,297,402 | | | 14,002,452 | | | (1,294,950 | ) |
| | | | | |
7/13/2009 | | State Street Bank and Trust Co. | | 375,643 GBP | | | 617,888 | | | 564,028 | | | (53,860 | ) |
| | | | | |
7/13/2009 | | State Street Bank and Trust Co. | | 3,692,176 GBP | | | 6,073,194 | | | 5,566,472 | | | (506,722 | ) |
| | | | | |
7/13/2009 | | State Street Bank and Trust Co. | | 204,099 GBP | | | 335,718 | | | 309,597 | | | (26,121 | ) |
| | | | | |
7/13/2009 | | State Street Bank and Trust Co. | | 105,088 GBP | | | 172,857 | | | 160,580 | | | (12,277 | ) |
| | | | | |
7/13/2009 | | State Street Bank and Trust Co. | | 214,676 GBP | | | 353,117 | | | 336,063 | | | (17,054 | ) |
| | | | | |
7/13/2009 | | State Street Bank and Trust Co. | | 420,000 GBP | | | 690,850 | | | 655,376 | | | (35,474 | ) |
| | | | | |
7/13/2009 | | State Street Bank and Trust Co. | | 165,000 GBP | | | 271,406 | | | 273,001 | | | 1,595 | |
| | | | | |
7/13/2009 | | State Street Bank and Trust Co. | | 203,053 GBP | | | 333,998 | | | 326,233 | | | (7,765 | ) |
| | | | | |
7/13/2009 | | State Street Bank and Trust Co. | | 500,000 GBP | | | 822,441 | | | 722,650 | | | (99,791 | ) |
| | | | | |
8/12/2009 | | Bank of America Securities LLC | | 1,730,000 GBP | | | 2,845,542 | | | 2,816,094 | | | (29,448 | ) |
| | | | | |
10/20/2009 | | State Street Bank and Trust Co. | | 88,512,000 JPY | | | 919,168 | | | 895,870 | | | (23,298 | ) |
| | | | | |
10/20/2009 | | State Street Bank and Trust Co. | | 144,122,500 JPY | | | 1,496,665 | | | 1,457,712 | | | (38,953 | ) |
| | | | | |
10/20/2009 | | State Street Bank and Trust Co. | | 16,397,833 JPY | | | 170,286 | | | 168,402 | | | (1,884 | ) |
| | | | | |
10/20/2009 | | State Street Bank and Trust Co. | | 19,600,000 JPY | | | 203,540 | | | 205,874 | | | 2,334 | |
| | | | | |
10/20/2009 | | State Street Bank and Trust Co. | | 29,500,000 JPY | | | 306,347 | | | 300,799 | | | (5,548 | ) |
| | | | | |
10/20/2009 | | State Street Bank and Trust Co. | | 16,912,141 JPY | | | 175,627 | | | 177,425 | | | 1,798 | |
| | | | | |
7/8/2009 | | Bank of America Securities LLC | | 33,737,500 KRW | | | 26,492 | | | 25,000 | | | (1,492 | ) |
| | | | | |
7/8/2009 | | Bank of America Securities LLC | | 71,082,507 KRW | | | 55,817 | | | 53,500 | | | (2,317 | ) |
| | | | | |
7/8/2009 | | Bank of America Securities LLC | | 6,555,000 KRW | | | 5,147 | | | 5,000 | | | (147 | ) |
| | | | | |
7/8/2009 | | Bank of America Securities LLC | | 13,250,000 KRW | | | 10,404 | | | 10,000 | | | (404 | ) |
| | | | | |
7/8/2009 | | Bank of America Securities LLC | | 19,909,200 KRW | | | 15,633 | | | 15,000 | | | (633 | ) |
| | | | | |
7/8/2009 | | Bank of America Securities LLC | | 100,000,000 KRW | | | 78,524 | | | 80,972 | | | 2,448 | |
| | | | | |
7/8/2009 | | Bank of America Securities LLC | | 179,420,000 KRW | | | 140,887 | | | 142,171 | | | 1,284 | |
| | | | | |
7/8/2009 | | Bank of America Securities LLC | | 1,000,000,000 KRW | | | 785,238 | | | 790,514 | | | 5,276 | |
22
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
6. Forward Foreign Currency Contracts - continued
| | | | | | | | | | | | | | |
Settlement Date | | Counterparty | | Contracts to Deliver | | Value at
June 30, 2009 | | In Exchange for U.S.$ | | Net Unrealized
Appreciation/
(Depreciation) | |
| | | | | |
7/8/2009 | | Bank of America Securities LLC | | 1,287,000,000 KRW | | $ | 1,010,601 | | $ | 1,000,000 | | $ | (10,601 | ) |
| | | | | |
7/8/2009 | | Barclays Capital, Inc. | | 33,125,000 KRW | | | 26,011 | | | 25,000 | | | (1,011 | ) |
| | | | | |
7/8/2009 | | Bank of America Securities LLC | | 10,640,000 KRW | | | 8,355 | | | 8,000 | | | (355 | ) |
| | | | | |
8/19/2009 | | State Street Bank and Trust Co. | | 47,785,714 NOK | | | 7,411,961 | | | 7,352,780 | | | (59,181 | ) |
| | | | | |
8/19/2009 | | State Street Bank and Trust Co. | | 1,180,000 NOK | | | 183,028 | | | 182,937 | | | (91 | ) |
| | | | | |
8/19/2009 | | State Street Bank and Trust Co. | | 1,800,000 NOK | | | 279,195 | | | 280,498 | | | 1,303 | |
| | | | | |
8/19/2009 | | State Street Bank and Trust Co. | | 1,422,542 NOK | | | 220,648 | | | 223,703 | | | 3,055 | |
| | | | | |
9/16/2009 | | State Street Bank and Trust Co. | | 3,991,526 SEK | | | 516,171 | | | 460,431 | | | (55,740 | ) |
| | | | | |
9/16/2009 | | State Street Bank and Trust Co. | | 760,000 SEK | | | 98,281 | | | 94,768 | | | (3,513 | ) |
| | | | | |
9/16/2009 | | State Street Bank and Trust Co. | | 158,400 SEK | | | 20,484 | | | 19,066 | | | (1,418 | ) |
| | | | | |
9/16/2009 | | State Street Bank and Trust Co. | | 327,300 SEK | | | 42,325 | | | 40,204 | | | (2,121 | ) |
| | | | | |
9/16/2009 | | State Street Bank and Trust Co. | | 470,000 SEK | | | 60,779 | | | 55,629 | | | (5,150 | ) |
| | | | | |
9/16/2009 | | State Street Bank and Trust Co. | | 224,000 SEK | | | 28,967 | | | 26,702 | | | (2,265 | ) |
| | | | | |
9/16/2009 | | State Street Bank and Trust Co. | | 520,000 SEK | | | 67,244 | | | 65,967 | | | (1,277 | ) |
| | | | | |
9/16/2009 | | State Street Bank and Trust Co. | | 10,300,000 SEK | | | 1,331,963 | | | 1,298,520 | | | (33,443 | ) |
| | | | | |
9/16/2009 | | State Street Bank and Trust Co. | | 1,500,000 SEK | | | 193,974 | | | 195,458 | | | 1,484 | |
| | | | | |
9/16/2009 | | State Street Bank and Trust Co. | | 765,795 SEK | | | 99,030 | | | 99,073 | | | 43 | |
| | | | | |
9/16/2009 | | Bank of America Securities LLC | | 700,000 SEK | | | 90,522 | | | 90,998 | | | 476 | |
| | | | | |
9/24/2009 | | State Street Bank and Trust Co. | | 484,000 SGD | | | 334,105 | | | 319,135 | | | (14,970 | ) |
| | | | | |
9/24/2009 | | State Street Bank and Trust Co. | | 45,550 SGD | | | 31,444 | | | 30,131 | | | (1,313 | ) |
| | | | | |
9/24/2009 | | State Street Bank and Trust Co. | | 103,850 SGD | | | 71,687 | | | 68,790 | | | (2,897 | ) |
| | | | | |
9/24/2009 | | State Street Bank and Trust Co. | | 40,000 SGD | | | 27,612 | | | 26,693 | | | (919 | ) |
| | | | | |
9/24/2009 | | State Street Bank and Trust Co. | | 61,000 SGD | | | 42,108 | | | 40,492 | | | (1,616 | ) |
| | | | | |
9/24/2009 | | State Street Bank and Trust Co. | | 86,000 SGD | | | 59,366 | | | 58,402 | | | (964 | ) |
| | | | | |
9/24/2009 | | State Street Bank and Trust Co. | | 83,500 SGD | | | 57,640 | | | 56,685 | | | (955 | ) |
| | | | | |
9/24/2009 | | State Street Bank and Trust Co. | | 1,140,000 SGD | | | 786,941 | | | 778,449 | | | (8,492 | ) |
| | | | | |
9/24/2009 | | State Street Bank and Trust Co. | | 359,000 SGD | | | 247,817 | | | 245,353 | | | (2,464 | ) |
| | | | | |
9/24/2009 | | State Street Bank and Trust Co. | | 304,900 SGD | | | 210,472 | | | 211,364 | | | 892 | |
| | | | | | | | | | | | | | |
| | | | | |
| | | | | | | | | | | | $ | (5,735,019 | ) |
| | | | | | | | | | | | | | |
AUD - Austrialian Dollar
CAD - Canadian Dollar
CHF - Swiss Franc
DKK - Danish Krone
EUR - Euro Dollar
GBP - Great Britain Pound
JPY - Japanese Yen
KRW - South Korean Won
NOK - Novwegian Krone
SEK - Swedish Krona
SGD - Singapore Dollar
23
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
7. Securities Lending
As of June 30, 2009, the Portfolio had loaned securities which were collateralized by short-term investments. The value of securities on loan and the value of the related collateral were as follows:
| | | | | | | | | |
Value of
Securities | | Value of
Cash
Collateral | | Value of
Non-Cash
Collateral* | | Total
Collateral |
| | | |
| $139,859,154 | | $ | 142,256,229 | | $ | 1,691,908 | | $ | 143,948,137 |
* The Portfolio cannot repledge or resell this collateral. The non-cash collateral is typically comprised of government securities and/or bank letters of credit.
8. Distributions to Shareholders
The tax character of distributions paid for the year ended December 31, 2008 was as follows:
| | | | | | | | | |
Ordinary Income | | Long-Term Capital Gains | | Return of
Capital | | Total |
2008 | | 2008 | | 2008 | | 2008 |
| | | |
| $3,467,847 | | $ | — | | $ | 26,460 | | $ | 3,494,307 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net Unrealized
Depreciation | | | Loss Carryforwards
and Post October
Loss Deferrals | | | Total | |
| | | | |
| $— | | $ | — | | $ | (28,044,769 | ) | | $ | (4,929,838 | ) | | $ | (32,974,607 | ) |
9. Options
During the period ended June 30, 2009 the following options contracts were written:
| | | | | | | |
| | | Number of
Contracts | | | Premium | |
Options outstanding at December 31, 2008 | | 60 | | | $ | 9,656 | |
Options written | | 221 | | | | 16,830 | |
Options closed and expired | | (60 | ) | | | (9,656 | ) |
| | | | | | | |
Options outstanding at June 30, 2009 | | 221 | | | $ | 16,830 | |
| | | | | | | |
10. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
11. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist
24
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
11. Market, Credit and Counterparty Risk - continued
principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
12. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
13. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
25
| | |
| Met/Franklin Templeton Founding Strategy Portfolio | | For the period ended 6/30/09 |
| Managed by MetLife Advisers, LLC | | |
Portfolio Manager Commentary
Performance
For the six-month period ended June 30, 2009, the Class A and Class B Shares of the Portfolio returned 6.74% and 6.60%, respectively, compared to the 3.16% return of the Standard & Poor’s 500® Index.
Market Environment/Conditions
The worst economic downturn since the 1930s—dubbed “The Great Recession” by some pundits—showed few signs of sustained improvement; although at least the rapid rate of descent appeared to have slowed during the first half of 2009. The Unemployment Rate reached 9.5% in June as over six million jobs were lost over the past twelve months. Other economic statistics were more ambiguous: Consumer Confidence, although still well below its level of two years ago, recovered from the level reached in March and Existing Home Sales improved modestly in response to lower house prices and improved availability of credit.
The Barclays Capital U.S. Aggregate Bond Index produced a modest, but positive total return of 1.9% for the first six months of 2009. The increase in Treasury yields that lowered the price of Treasury bonds was offset by a narrowing of yield spreads, which boosted credit based securities as investors became more positive on the prospects for the economy. The Barclays Capital U.S. Treasury Index was down 4.3% for the six months ending June, while the Barclays Capital U.S. Corporate Investment Grade Index was up 8.3%. Although the Barclays U.S. Corporate High Yield Index was up over 30% for the six-month period, it was still down 2.4% over the previous twelve months. The yield on Three Month Treasury Bills stayed close to 0.2% as the Federal Reserve kept their target rate in the 0.00% to 0.25% range.
The Standard & Poor’s 500® Index, buoyed by a robust 15.9% return for the second quarter, returned 3.2% for the six months ending in June. The rout in stocks that began last summer continued into the first quarter of this year as the severity of the recession became apparent. A turnaround began in early March on improving sentiment and stocks surged over 35% from the low in early March to the end of the June. Although Small Cap stocks had better performance in the second quarter, they were up slightly less than large cap stocks for the full six-month period as measured by the 2.6% rise of the Russell 2000® Index. Growth outperformed Value stocks during the first half of 2009 primarily due to the strength of technology companies compared to the relative weakness in traditional value stocks such as those in the Financials sector. Technology and Basic Materials were the best performing sectors over the six-month period. The Financials sector, despite a nearly 100% return from the middle of March to the end of June, was still among the worst performing sectors for the six-month period (-3.4%). The MSCI EAFE Index was up nearly 8% for the six months ending in June, slightly more than the local return due to a weaker dollar that made foreign securities more valuable to the U.S. dollar based investor. Emerging Market equities and international small cap equities were both up more than the large cap stocks from developed countries.
Portfolio Review/Current Positioning
The Portfolio is a “fund of funds” consisting of three portfolios of the Met Investors Series Trust subadvised by the Franklin Templeton organization: the Met/Franklin Mutual Shares Portfolio, the Met/Templeton Growth Portfolio, and the Met/Franklin Income Portfolio. The Portfolio’s strategy is to hold one-third of its assets in each of the underlying portfolios and to rebalance the Portfolio on a quarterly basis. MetLife Advisers expects that the combination of these three underlying portfolios will provide a diversified portfolio with exposure to both bonds and stocks, including foreign stocks. The Portfolio’s holding approximately 30% of its assets in cash and bonds during most of the period provided a cushion to performance in the first quarter, but it detracted from performance during the second quarter.
The Met/Franklin Mutual Shares Portfolio, which invests primarily in large cap value oriented stocks, returned 2.93% for the six-month period compared to the 3.16% return of the S&P 500®; the Met/Templeton Growth Portfolio, which invests in both foreign and domestic stocks, returned 7.76% for the period compared to the 6.35% return of the MSCI World Index, and the Met/Franklin Income Portfolio, which invests in a combination of stocks and bonds, returned 9.26% for the period compared to the 3.16% return of the S&P 500® and the 1.90% return of the Barclays Capital U.S. Aggregate Bond Index. The good relative performance of the Met/Franklin Founding Strategy Portfolio over this period was due primarily to a significant position in foreign stocks and good overall stock selection. In particular, Met/Templeton Growth excelled in the Energy sector (not holding Exxon Mobil, which represents about 5% of the S&P 500®, but was down for the period). Met/Franklin Mutual Shares had strong stock selection in the Materials sector (aluminum giant Alcoa).
MetLife Advisers, LLC
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the advisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect
1
| | |
| Met/Franklin Templeton Founding Strategy Portfolio | | For the period ended 6/30/09 |
| Managed by MetLife Advisers, LLC | | |
Portfolio Manager Commentary (continued)
additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
| | |
Met/Franklin Mutual Shares Portfolio (Class A) | | 33.89% |
Met/Franklin Income Portfolio (Class A) | | 33.16% |
Met/Templeton Growth Portfolio (Class A) | | 32.95% |
2
| | |
| Met/Franklin Templeton Founding Strategy Portfolio | | For the period ended 6/30/09 |
| Managed by MetLife Advisers, LLC | | |
Portfolio Manager Commentary (continued)
Met/Franklin Templeton Founding Strategy Portfolio managed by
MetLife Advisers, LLC vs. S&P® 500 Index1
Growth Based on $10,000+
| | | | | | | | |
| | | | | Average Annual Return (for the period ended 6/30/09)2 |
| | | | | 6 Months | | 1 Year | | Since
Inception3 |
| | Met/Franklin Templeton Founding Strategy Portfolio—Class A | | 6.74% | | -18.76% | | -20.93% |
| — | | Class B | | 6.60% | | -18.86% | | -21.08% |
| — | | S&P® 500 Index1 | | 3.16% | | -26.21% | | -28.13% |
+The chart reflects the performance of Class B shares of the Portfolio. The performance of Class B shares will differ from that of the other class because of the difference in expenses paid by policyholders investing in the different share classes.
1 The S&P 500® Index is an unmanaged index consisting of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-
weighted index (stock price times number of shares outstanding) with each stock’s weight in the Index proportionate to its market value.
2“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
3Inception of the Class A and Class B shares is 4/28/08. Index returns are based on an inception date of 4/28/08.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Index does not include fees or expenses and is not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| Met/Franklin Templeton Founding Strategy Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A(a)(b) | | | | | | | | | | | |
Actual | | 0.90% | | $ | 1,000.00 | | $ | 1,067.40 | | $ | 0.26 |
Hypothetical | | 0.90% | | | 1,000.00 | | | 1,024.55 | | | 0.25 |
| | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class B(a)(b) | | | | | | | | | | | |
Actual | | 1.15% | | $ | 1,000.00 | | $ | 1,066.00 | | $ | 1.54 |
Hypothetical | | 1.15% | | | 1,000.00 | | | 1,023.31 | | | 1.51 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
(a) The annualized expense ratio shown reflects an expense limitation agreement between MetLife Advisers, LLC and the Portfolio as described in Note 3 of the Notes to Financial Statements.
(b) The annualized expense ratio reflects the expenses of both the Portfolio and the Underlying Portfolios in which it invests.
4
Met Investors Series Trust
Met/Franklin Templeton Founding Strategy Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Shares | | Value | |
|
| Investment Company Securities - 100.0% | |
Met/Franklin Income Portfolio (Class A)(a) | | 19,226,256 | | $ | 165,538,063 | |
Met/Franklin Mutual Shares Portfolio (Class A)(a) | | 24,652,244 | | | 164,430,470 | |
Met/Templeton Growth Portfolio (Class A)(a) | | 23,796,656 | | | 169,194,222 | |
| | | | | | |
Total Investment Company Securities (Cost $521,287,548) | | | | | 499,162,755 | |
| | | | | | |
| | |
TOTAL INVESTMENTS - 100.0% (Cost $521,287,548) | | | | | 499,162,755 | |
| | | | | | |
| | |
| Other Assets and Liabilities (net) - 0.0% | | | | | (134,390 | ) |
| | | | | | |
| | |
| NET ASSETS - 100.0% | | | | $ | 499,028,365 | |
| | | | | | |
Portfolio Footnotes:
| (a) | | A Portfolio of Met Investors Series Trust. |
See accompanying notes to financial statements
5
Met Investors Series Trust
Met/Franklin Templeton Founding Strategy Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1—quoted prices in active markets for identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Investment Company Securities | | $ | 499,162,755 | | $ | — | | $ | — | | $ | 499,162,755 |
TOTAL INVESTMENTS | | $ | 499,162,755 | | $ | — | | $ | — | | $ | 499,162,755 |
See accompanying notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009
| | | | |
| Met/Franklin Templeton Founding Strategy Portfolio | | | |
| Assets | | | | |
Investments, at value (a) | | $ | 499,162,755 | |
Receivable for Trust shares sold | | | 285,748 | |
Receivable from Manager | | | 9,323 | |
| | | | |
Total assets | | | 499,457,826 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 230,214 | |
Trust shares redeemed | | | 55,534 | |
Distribution and services fees—Class B | | | 99,982 | |
Management fee | | | 20,014 | |
Administration fee | | | 1,791 | |
Custodian and accounting fees | | | 3,820 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 14,679 | |
| | | | |
Total liabilities | | | 429,461 | |
| | | | |
| Net Assets | | $ | 499,028,365 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 524,922,895 | |
Accumulated net realized loss | | | (3,270,866 | ) |
Unrealized depreciation on investments | | | (22,124,793 | ) |
Distributions in excess of net investment income | | | (498,871 | ) |
| | | | |
Total | | $ | 499,028,365 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 428,430 | |
| | | | |
Class B | | | 498,599,935 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 57,586 | |
| | | | |
Class B | | | 67,117,843 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 7.44 | |
| | | | |
Class B | | | 7.43 | |
| | | | |
| | | | | |
(a) Investments at cost | | $ | 521,287,548 | |
See accompanying notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| Met/Franklin Templeton Founding Strategy Portfolio | | | |
| Investment Income | | | | |
Dividends from Underlying Portfolios | | $ | 43,888 | |
| | | | |
Total investment income | | | 43,888 | |
| | | | |
| Expenses | | | | |
Management fee | | | 90,535 | |
Administration fees | | | 11,725 | |
Custodian and accounting fees | | | 12,105 | |
Distribution and services fees—Class B | | | 452,223 | |
Audit and tax services | | | 13,890 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Other | | | 2,258 | |
| | | | |
Total expenses | | | 609,169 | |
Less expenses reimbursed by the Manager | | | (66,410 | ) |
| | | | |
Net expenses | | | 542,759 | |
| | | | |
Net investment loss | | | (498,871 | ) |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments | | | | |
Net realized loss on: | | | | |
Investments | | | (1,640,072 | ) |
| | | | |
Net realized loss on investments | | | (1,640,072 | ) |
| | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 37,875,709 | |
| | | | |
Net change in unrealized appreciation on investments | | | 37,875,709 | |
| | | | |
Net realized and unrealized gain on investments | | | 36,235,637 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 35,736,766 | |
| | | | |
See accompanying notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| Met/Franklin Templeton Founding Strategy Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Period Ended
December 31,
2008* | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income (loss) | | $ | (498,871 | ) | | $ | 5,031,401 | |
Net realized loss on investments and capital gain distributions from Underlying Portfolios | | | (1,640,072 | ) | | | (1,630,794 | ) |
Net change in unrealized (appreciation) depreciation on investments | | | 37,875,709 | | | | (60,000,502 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 35,736,766 | | | | (56,599,895 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | — | | | | (6,387 | ) |
Class B | | | — | | | | (5,061,759 | ) |
From net realized gains | | | | | | | | |
Class A | | | — | | | | — | |
Class B | | | — | | | | — | |
| | | | | | | | |
Net decrease in net assets resulting from operations | | | — | | | | (5,068,146 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 84,048 | | | | 1,375,975 | |
Class B | | | 202,518,301 | | | | 345,564,477 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | — | | | | 6,387 | |
Class B | | | — | | | | 5,061,759 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (16,291 | ) | | | (875,826 | ) |
Class B | | | (15,972,005 | ) | | | (12,787,185 | ) |
| | | | | | | | |
Net increase in net assets from capital share transactions | | | 186,614,053 | | | | 338,345,587 | |
| | | | | | | | |
| Net Increase in Net Assets | | | 222,350,819 | | | | 276,677,546 | |
Net assets at beginning of period | | | 276,677,546 | | | | — | |
| | | | | | | | |
Net assets at end of period | | $ | 499,028,365 | | | $ | 276,677,546 | |
| | | | | | | | |
Net assets at end of period includes distributions in excess of net investment income | | $ | (498,871 | ) | | $ | — | |
| | | | | | | | |
| * | | For the period 4/28/08 (Commencement of operations) through 12/31/08. |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | |
| | |
| Selected Per Share Data for the Period Ended: | | | | | | |
| | |
| | | | | | | |
| Met/Franklin Templeton Founding Strategy Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Period
Ended
December 31,
2008(b) | |
| | | |
| Net Asset Value, Beginning of Period | | $ | 6.97 | | | $ | 10.00 | |
| | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | |
Net Investment Income(a) | | | (0.00 | )+ | | | 0.08 | |
Net Realized/Unrealized Loss on Investments | | | 0.47 | | | | (2.97 | ) |
| | | | | | | | |
Total from Investment Operations | | | 0.47 | | | | (2.89 | ) |
| | | | | | | | |
| Less Distributions | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | (0.14 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | — | |
| | | | | | | | |
Total Distributions | | | — | | | | (0.14 | ) |
| | | | | | | | |
| Net Asset Value, End of Period | | $ | 7.44 | | | $ | 6.97 | |
| | | | | | | | |
| Total Return | | | 6.74 | % | | | (28.92 | )% |
Ratio of Expenses to Average Net Assets After Reimbursement(c) | | | 0.05 | %* | | | 0.05 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates(d) | | | 0.09 | %* | | | 0.44 | %* |
Ratio of Net Investment Income to Average Net Assets(e) | | | (0.03 | )%* | | | 1.23 | %* |
Portfolio Turnover Rate | | | 1.2 | % | | | 4.4 | % |
Net Assets, End of Period (in millions) | | $ | 0.4 | | | $ | 0.3 | |
| |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Period
Ended
December 31,
2008(b) | |
| | | |
| Net Asset Value, Beginning of Period | | $ | 6.97 | | | $ | 10.00 | |
| | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | |
Net Investment Income(a) | | | (0.01 | ) | | | 0.26 | |
Net Realized/Unrealized Loss on Investments | | | 0.47 | | | | (3.16 | ) |
| | | | | | | | |
Total from Investment Operations | | | 0.46 | | | | (2.90 | ) |
| | | | | | | | |
| Less Distributions | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | (0.13 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | — | |
| | | | | | | | |
Total Distributions | | | — | | | | (0.13 | ) |
| | | | | | | | |
| Net Asset Value, End of Period | | $ | 7.43 | | | $ | 6.97 | |
| | | | | | | | |
| Total Return | | | 6.60 | % | | | (28.98 | )% |
Ratio of Expenses to Average Net Assets After Reimbursement(c) | | | 0.30 | %* | | | 0.30 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates(d) | | | 0.34 | %* | | | 0.38 | %* |
Ratio of Net Investment Income to Average Net Assets(e) | | | (0.28 | )%* | | | 4.97 | %* |
Portfolio Turnover Rate | | | 1.2 | % | | | 4.4 | % |
Net Assets, End of Period (in millions) | | $ | 498.6 | | | $ | 276.3 | |
| + | | Rounds to less than $0.005 per share. |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—04/28/2008. |
| (c) | | The ratio of operating expenses to average net assets does not include expenses of the Underlying Portfolios in which the Portfolio invests. |
| (d) | | See Note 3 of the Notes to Financial Statements. |
| (e) | | Recognition of net investment income by the Portfolio is affected by the timing of the declaration of dividends by the Underlying Portfolios in which it invests. |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is Met/Franklin Templeton Founding Strategy Portfolio (the “Portfolio”), which is non-diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A and B Shares are currently offered by the Portfolio. Class C and E Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
The Portfolio is a “fund of funds” that invests, on a fixed percentage basis, in a combination of the Trust’s portfolios sub-advised by subsidiaries of Franklin Resources, Inc. (collectively, “Franklin Templeton”), which, in turn, invest primarily in U.S. and foreign equity securities and, to a lesser extent, fixed-income and money market securities. The Portfolio’s assets will be allocated on an equal basis (33 1/3%) among the Met/Franklin Income Portfolio, Met/Franklin Mutual Shares Portfolio and Met/Templeton Growth Portfolio (the “Underlying Portfolios”), each of which is a separate portfolio of the Trust.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Investments in the Underlying Portfolios are valued at their closing daily net asset value. The net asset value of the Portfolio is calculated based on the net asset values of the Underlying Portfolios in which the Portfolio invests. For information about the use of fair value pricing by the Underlying Portfolios, please refer to the prospectuses of the Underlying Portfolios.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes.
C. Investment Income and Expenses - Income and capital gain distributions from the Underlying Portfolios are recorded on the ex-dividend date.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2008 tax year remains subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board of Trustees (the “Board”) and has overall responsibility for the general management and administration of the Trust.
11
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $ | 90,535 | | 0.05 | % | | ALL |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Manager has entered into an expense limitation agreement with the Trust (“Expense Limitation Agreement”) in the interest of limiting expenses of the Portfolio of the Trust. The Expense Limitation Agreement shall continue in effect with respect to the Portfolio until April 30, 2010. Pursuant to that Expense Limitation Agreement, the Manager has agreed to waive or limit its fees and to assume other expenses so that the total annual operating expenses of the Portfolio other than interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with accounting principles generally accepted in the United States of America, other extraordinary expenses not incurred in the ordinary course of the Portfolio’s business, and Underlying Portfolios’ fees and expenses, but including amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act, are limited to the following expense ratios as a percentage of the Portfolio’s average daily net assets:
| | | | | | | | | | |
Maximum Expense Ratio under current
Expense Limitation Agreement | | | Expenses Deferred in |
| | 2008 | | 2009 |
| | Subject to repayment
until December 31, |
| Class A | | | Class B | | | 2013 | | 2014 |
| | | |
| 0.05 | % | | 0.30 | % | | $ | 85,140 | | $ | 66,410 |
The expenses reimbursed for the period ended June 30, 2009 are shown as expenses reimbursed in the Statement of Operations of the Portfolio.
If in any year in which the Management Agreement is still in effect, the estimated aggregate portfolio operating expenses of the Portfolio for the fiscal year are less than the Maximum Expense Ratios for that year, subject to approval by the Trust’s Board, the Manager shall be entitled to reimbursement by the Portfolio to the extent that the charge does not cause the expenses in such subsequent year to exceed the Maximum Expense Ratios as stated above. The Portfolio is not obligated to repay any expense paid by the Manager more than five years after the end of the fiscal year in which such expense was incurred.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A and Class B Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B distribution plan provides that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% of the average net assets of the Portfolio attributable to its Class B Shares in respect to activities primarily intended to result in the sale of Class B Shares. However, under the Class B distribution agreement, payments to the Distributor for activities pursuant to the Class B distribution plan are currently limited to payments at an annual rate equal to 0.25% of average daily net assets of the Portfolio, attributable to its Class B Shares.
Under terms of the Class B distribution plan and distribution agreement, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
12
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
in Shares
Outstanding | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 47,451 | | 12,493 | | — | | (2,358 | ) | | 10,135 | | 57,586 |
04/28/2008-12/31/2008 | | — | | 146,028 | | 923 | | (99,500 | ) | | 47,451 | | 47,451 |
| | | | | | |
Class B | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 39,630,768 | | 29,823,024 | | — | | (2,335,949 | ) | | 27,487,075 | | 67,117,843 |
04/28/2008-12/31/2008 | | — | | 40,466,918 | | 731,468 | | (1,567,618 | ) | | 39,630,768 | | 39,630,768 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 190,517,556 | | $ | — | | $ | 4,345,006 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $521,287,548 | | $ | 2,357,896 | | $ | (24,482,689 | ) | | $ | (22,124,793 | ) |
6. Distributions to Shareholders
The tax character of distributions paid for the year ended December 31, 2008 was as follows:
| | | | | | |
Ordinary Income | | Long-Term Capital Gains | | Total |
| $5,068,146 | | $ | — | | $ | 5,068,146 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net Unrealized
Depreciation | | | Loss Carryforwards | | Total | |
| | | | |
| $ | — | | $ | — | | $ | (61,631,296 | ) | | $ | — | | $ | (61,631,296 | ) |
7. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
8. Market, Credit and Counterparty Risk
In the normal course of business, the Underlying Portfolios, in which the Portfolio invests, invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Underlying Portfolios may decline in response to certain events, including those directly involving the companies whose securities are owned by the Underlying Portfolios; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Underlying Portfolios may
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
8. Market, Credit and Counterparty Risk - continued
be exposed to counterparty risk, or the risk that an entity with which the Underlying Portfolios have unsettled or open transactions may default. Financial assets, which potentially expose the Underlying Portfolios to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Underlying Portfolios’ exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Underlying Portfolios’ Statements of Assets and Liabilities.
9. Transactions in Securities of Affiliated Issuers
Transactions in the Underlying Portfolios during the period ended June 30, 2009 in which the Portfolio had ownership are as follows:
| | | | | | | | | |
Security Description | | Number of
shares held at
December 31,
2008 | | Shares
purchased
during the
period | | Shares
sold
during the
period | | | Number of
shares held at
June 30,
2009 |
| | | | |
Met/Franklin Income Portfolio* | | 11,682,057 | | 7,896,936 | | (352,737 | ) | | 19,226,256 |
| | | | |
Met/Franklin Mutual Shares Portfolio* | | 14,009,063 | | 10,667,791 | | (24,610 | ) | | 24,652,244 |
| | | | |
Met/Templeton Growth Portfolio* | | 14,230,490 | | 9,782,253 | | (216,087 | ) | | 23,796,656 |
| | | | |
| | | | | | | | | |
* The Portfolio had ownership of at least 25% of the outstanding voting securities of the Underlying Portfolio as of June 30, 2009. Once filed, the most recent Annual Report of the Underlying Portfolio will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
| | | | | | | | | | | | | | |
Security Description | | Net Realized
Gain (Loss)
on Investments
during the period | | | Capital
Gain Distributions
from Affiliates
during the period | | Income earned
from Affiliates
during the period | | | Ending Value |
| | | | |
Met/Franklin Income Portfolio | | $ | (810,901 | ) | | $ | — | | $ | — | | | $ | 165,538,063 |
| | | | |
Met/Franklin Mutual Shares Portfolio | | | (89,366 | ) | | | — | | | — | | | | 164,430,470 |
| | | | |
Met/Templeton Growth Portfolio | | | (739,805 | ) | | | 46,717 | | | (2,829 | ) | | | 169,194,222 |
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
15
| | |
| Met/Templeton Growth Portfolio | | For the period ended 6/30/09 |
| Managed by Templeton Global Advisors Limited | | |
Portfolio Manager Commentary
Performance
During the six-month period ended June 30, 2009, the Portfolio had returns of 7.76% and 7.61% for Class A and B Shares, respectively, versus 6.35% for its benchmark, the Morgan Stanley Capital International (MSCI) World® Index.
Market Environment/Conditions
During the six months under review, global equities hit new bear market lows in March before delivering their biggest quarterly rally in more than a decade. At the beginning of the period, with investor sentiment depressed and risk aversion elevated, defensive, non-cyclical sectors like utilities, consumer staples and health care were market leaders. As data emerged suggesting a fledgling recovery in the financials sector and a moderating pace of global economic contraction, investors regained some risk appetite, rotating capital back into cyclical sectors such as financials, materials and consumer discretionary. Resurgent risk appetite also buoyed emerging markets stocks, which delivered their best three-month returns on record from March through May 2009. Emerging market optimism in turn supported higher commodity prices, which gained the most since the bubble in hard assets burst in the summer of 2008. Also supporting commodity prices was a weaker U.S. dollar. Although systemic risk aversion and the consensus belief that the U.S. could lead the global economy out of recession helped strengthen the dollar at the beginning of the period, investors soon began to worry about the currency’s ongoing stability in the face of aggressive and unconventional monetary policy, and the greenback lost value relative to most currencies for the six-month period.
In the reporting period’s final weeks, equity markets moderated as investors appeared to contemplate the rally’s merits and reassess their new positions. Although sentiment had improved and most seemed to believe the global economy had exited the worst stage of this recessionary cycle, indicators remained mixed and lacked the sustainable upward trajectory investors had hoped for. For example, initial U.S. jobless claims fell to their lowest levels in six months during May, but unemployment rose again at the end of the period to 9.5%.1 In Europe, policymakers committed to an easier monetary regime, but the eurozone’s industrial production declined, capacity utilization continued to shrink, and price deflation was recorded for the first time since data began in 1997.2 In China, a stimulative monetary campaign spurred lending and fueled an annualized money growth rate of 26%, a powerful measure against near-term economic headwinds but a potentially dangerous catalyst for longer-term inflation and asset bubble formation.3
Portfolio Review/Current Positioning
From a geographic perspective, Asian and emerging markets led Portfolio returns. North American stocks posted strong gains relative to the MSCI World® Index due to stock selection. Developed-market European stocks were relatively out of favor as investors seemed to prefer growth over stability, and stock selection in the region detracted from relative performance.
Strong commodity prices helped the Portfolio’s materials sector investments deliver solid absolute returns during the period; however, we maintained an underweighted position in the sector because our analysis indicated to us that valuations overstated the longer-term, normalized global supply and demand scenario. Our underweighted allocation curtailed the positive impact of sector returns on relative Portfolio performance. Consumer discretionary was another economically sensitive sector that benefited from improving investor confidence in the latter half of the period, and the Portfolio’s overweighted position in the sector boosted relative results. We believed some stocks in the sector offered low valuations, low debt profiles, and high cash balances at a time when the number of competitors continued to decline as the recession took its toll. Although other cyclical sectors like information technology and energy also delivered positive absolute returns during the period, it was the Portfolio’s positioning in the more defensive consumer staples and telecommunication services sectors that delivered the best performance relative to the benchmark. Our underweighted allocation and stock selection in the consumer staples sector was based on what we considered expensive valuations and an uncompelling secular growth profile which contributed to performance in a period of resurgent risk appetite. Lastly, stock selection in the telecommunication services sector, where we favored some companies because we saw them as having a mix of defensive characteristics and growth potential, also benefited relative results.
It is also important to recognize the impact that currency fluctuations had on Portfolio performance. The U.S. dollar strengthened during the first half of the period as investors sought the relative safety of Treasury securities and strategists forecast that the U.S. would lead the global economy out of recession. However, during the second half of the period, emerging market economic prospects improved and investors began to worry about the ongoing stability of the dollar in the face of aggressive and experimental monetary policy. Consequently, the dollar declined, ultimately finishing the six-month period weaker relative to most non-U.S. currencies. The greenback’s fall modestly aided returns for U.S.-dollar investors, whose foreign-currency denominated investments were ultimately worth more dollars once repatriated. Thus, the Portfolio’s performance was positively affected by the Portfolio’s investment in securities with non-U.S. currency exposure. However, one cannot expect the same result in future periods.
Conversely, our overweighted health care sector position hindered performance as investors rotated into more aggressive allocations. However, we continued to hold health care stocks whose multi-decade low valuations, high free cash flow and dividend yields, and favorable earnings growth profiles remained attractive to us. Lastly, financials stocks were one of the period’s biggest relative detractors due to our underweighted position and stock selection.
Team Managed Approach
Lisa F. Myers CFA
Tucker Scott CFA
Cynthia L. Sweeting CFA
Templeton Global Advisors Limited
1. Source: Bureau of Labor Statistics.
2. Source: European Communities Eurostat.
3. Source: People’s Bank of China.
1
| | |
| Met/Templeton Growth Portfolio | | For the period ended 6/30/09 |
| Managed by Templeton Global Advisors Limited | | |
Portfolio Manager Commentary (continued)
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
Oracle Corp. | | 2.59% |
Accenture, Ltd.—Class A | | 2.27% |
Microsoft Corp. | | 2.14% |
Amgen, Inc. | | 2.06% |
Sanofi-Aventis | | 1.86% |
Samsung Electronics Co., Ltd. | | 1.62% |
Vodafone Group Plc | | 1.54% |
Comcast Corp.—Special Class A | | 1.53% |
Total S.A. | | 1.51% |
Singapore Telecommunications, Ltd. | | 1.50% |
Portfolio Composition (% of portfolio market value)
As of 6/30/09
2
| | |
| Met/Templeton Growth Portfolio | | For the period ended 6/30/09 |
| Managed by Templeton Global Advisors Limited | | |
Portfolio Manager Commentary (continued)
Met/Templeton Growth Portfolio managed by
Templeton Global Advisors Limited vs. Morgan Stanley Capital International (MSCI) World® Index (net)1
Growth Based on $10,000+
| | | | | | | | |
| | | | | Average Annual Return2 (for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | Since
Inception3 |
| — | | Met/Templeton Growth Portfolio—Class A Class B | | 7.76%
7.61% | | -22.99%
-23.17% | | -24.80%
-24.94% |
| - - | | Morgan Stanley Capital International (MSCI) World® Index (net)1 | | 6.35% | | -29.50% | | -30.11% |
+The chart reflects the performance of Class A shares of the Portfolio. The performance of Class A shares will differ from that of the other class of shares because of the difference in expenses paid by policyholders investing in the different share classes.
1The Morgan Stanley Capital International (MSCI) World® Index (net) is an unmanaged free-float adjusted market capitalization index that is designed to measure global developed market equity performance.
2“Average Annual Return” is calculated including reinvestment of all income dividends and capital gains distributions.
3Inception of Class A and Class B shares is 4/28/08. Index returns are based on an inception date of 4/28/08.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Index does not include fees or expenses and is not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| Met/Templeton Growth Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.76% | | $ | 1,000.00 | | $ | 1,077.60 | | $ | 3.91 |
Hypothetical | | 0.76% | | | 1,000.00 | | | 1,021.03 | | | 3.81 |
| | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class B | | | | | | | | | | | |
Actual | | 1.00% | | $ | 1,000.00 | | $ | 1,076.10 | | $ | 5.15 |
Hypothetical | | 1.00% | | | 1,000.00 | | | 1,019.84 | | | 5.01 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
4
Met Investors Series Trust
Met/Templeton Growth Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | |
| Common Stocks - 90.4% | | | | | |
| Aerospace & Defense - 0.7% | | | | | |
BAE Systems Plc | | 163,170 | | $ | 910,654 |
Empresa Brasileira de Aeronautica S.A. (ADR)(a) | | 21,250 | | | 351,900 |
| | | | | |
| | | | | 1,262,554 |
| | | | | |
| Air Freight & Logistics - 2.8% | | | | | |
Deutsche Post AG | | 97,440 | | | 1,272,795 |
FedEx Corp.(a) | | 24,230 | | | 1,347,672 |
United Parcel Service,
Inc. - Class B(a) | | 48,410 | | | 2,420,016 |
| | | | | |
| | | | | 5,040,483 |
| | | | | |
| Auto Components - 0.6% | | | | | |
Compagnie Generale des Etablissements Michelin - Class B | | 17,570 | | | 1,003,589 |
| | | | | |
| Automobiles - 2.9% | | | | | |
Bayerische Motoren Werke (BMW) AG | | 37,340 | | | 1,409,369 |
Harley-Davidson, Inc.(a) | | 37,100 | | | 601,391 |
Hyundai Motor Co. | | 30,423 | | | 1,763,310 |
Toyota Motor Corp.(a) | | 39,200 | | | 1,480,468 |
| | | | | |
| | | | | 5,254,538 |
| | | | | |
| Biotechnology - 2.1% | | | | | |
Amgen, Inc.*(a) | | 70,670 | | | 3,741,270 |
| | | | | |
| Capital Markets - 1.2% | | | | | |
Bank of New York Mellon
Corp.(a) | | 40,670 | | | 1,192,038 |
Legg Mason, Inc.(a) | | 17,170 | | | 418,605 |
UBS AG* | | 39,420 | | | 482,160 |
| | | | | |
| | | | | 2,092,803 |
| | | | | |
| Commercial & Professional Services - 0.6% |
Brambles, Ltd. | | 136,608 | | | 653,208 |
Rentokil Initial Plc | | 314,470 | | | 463,989 |
| | | | | |
| | | | | 1,117,197 |
| | | | | |
| Commercial Banks - 3.8% | | | | | |
DBS Group Holdings, Ltd. | | 177,500 | | | 1,440,799 |
HSBC Holdings Plc | | 149,200 | | | 1,250,251 |
ICICI Bank, Ltd. (ADR)(a) | | 45,550 | | | 1,343,725 |
Intesa Sanpaolo* | | 353,958 | | | 1,146,898 |
KB Financial Group, Inc.* | | 19,160 | | | 638,105 |
Mitsubishi UFJ Financial Group, Inc.(a) | | 55,912 | | | 343,363 |
UniCredito Italiano S.p.A.* | | 263,814 | | | 675,473 |
| | | | | |
| | | | | 6,838,614 |
| | | | | |
| Communications Equipment - 1.5% | | | |
Cisco Systems, Inc.* | | 112,740 | | | 2,101,474 |
Telefonaktiebolaget LM Ericsson | | 57,291 | | | 559,135 |
| | | | | |
| | | | | 2,660,609 |
| | | | | |
| Computers & Peripherals - 0.7% | | | |
Lite-On Technology Corp. | | 840,655 | | | 726,703 |
Seagate Technology(a) | | 48,780 | | | 510,239 |
| | | | | |
| | | | | 1,236,942 |
| | | | | |
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | |
| Construction Materials - 0.8% | | | | | |
CRH Plc | | 63,198 | | $ | 1,447,061 |
| | | | | |
| Consumer Finance - 0.5% | | | | | |
American Express Co.(a) | | 40,340 | | | 937,502 |
| | | | | |
| Diversified Financial Services - 1.1% | | | |
ING Groep N.V. | | 99,500 | | | 1,000,870 |
JPMorgan Chase & Co.(a) | | 31,480 | | | 1,073,783 |
| | | | | |
| | | | | 2,074,653 |
| | | | | |
| Diversified Telecommunication Services - 5.8% |
AT&T, Inc. | | 29,610 | | | 735,512 |
China Telecom Corp., Ltd. (ADR) | | 24,190 | | | 1,203,695 |
France Telecom S.A. | | 110,720 | | | 2,514,058 |
Singapore Telecommunications, Ltd. | | 1,321,000 | | | 2,726,493 |
Telefonica S.A. | | 71,147 | | | 1,612,280 |
Telekom Austria AG | | 55,330 | | | 865,190 |
Telenor ASA* | | 101,840 | | | 785,083 |
| | | | | |
| | | | | 10,442,311 |
| | | | | |
| Electrical Equipment - 0.2% | | | | | |
Shanghai Electric Group Co., Ltd. | | 1,002,000 | | | 430,392 |
| | | | | |
| Electronic Equipment, Instruments & Components - 1.2% |
Flextronics International,
Ltd.*(a) | | 196,930 | | | 809,382 |
FUJIFILM Holdings Corp.(a) | | 17,300 | | | 545,249 |
Tyco Electronics, Ltd.(a) | | 42,540 | | | 790,819 |
| | | | | |
| | | | | 2,145,450 |
| | | | | |
| Energy Equipment & Services - 1.4% | | | |
Aker Solutions ASA | | 31,300 | | | 259,686 |
Halliburton Co.(a) | | 69,711 | | | 1,443,018 |
SBM Offshore N.V. | | 46,186 | | | 790,653 |
| | | | | |
| | | | | 2,493,357 |
| | | | | |
| Food & Staples Retailing - 0.9% | | | |
CVS Caremark Corp.(a) | | 11,580 | | | 369,055 |
Tesco Plc | | 208,230 | | | 1,213,471 |
| | | | | |
| | | | | 1,582,526 |
| | | | | |
| Food Products - 0.7% | | | | | |
Nestle S.A. | | 27,630 | | | 1,042,500 |
Premier Foods Plc* | | 363,444 | | | 220,130 |
| | | | | |
| | | | | 1,262,630 |
| | | | | |
| Health Care Equipment & Supplies - 2.1% |
Boston Scientific Corp.* | | 122,760 | | | 1,244,786 |
Covidien Plc | | 69,040 | | | 2,584,858 |
| | | | | |
| | | | | 3,829,644 |
| | | | | |
| Health Care Providers & Services - 0.9% |
Quest Diagnostics, Inc.(a) | | 29,430 | | | 1,660,735 |
| | | | | |
| Hotels, Restaurants & Leisure - 0.5% | | | |
Accor S.A. | | 15,720 | | | 624,734 |
Compass Group Plc | | 60,780 | | | 342,432 |
| | | | | |
| | | | | 967,166 |
| | | | | |
See accompanying notes to financial statements
5
Met Investors Series Trust
Met/Templeton Growth Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | |
| Household Durables - 0.3% | | | | | |
Persimmon Plc | | 96,050 | | $ | 554,421 |
| | | | | |
| Industrial Conglomerates - 2.8% | | | |
General Electric Co.(a) | | 89,590 | | | 1,049,995 |
Koninklijke (Royal) Philips Electronics N.V. | | 39,460 | | | 729,225 |
Siemens AG | | 24,150 | | | 1,670,902 |
Tyco International, Ltd. | | 65,400 | | | 1,699,092 |
| | | | | |
| | | | | 5,149,214 |
| | | | | |
| Insurance - 3.6% | | | | | |
ACE, Ltd.(a) | | 20,280 | | | 896,984 |
Aviva Plc | | 301,290 | | | 1,702,262 |
Muenchener Rueckversicherungs-Gesellschaft AG | | 11,480 | | | 1,551,668 |
Progressive Corp. (The)*(a) | | 109,140 | | | 1,649,105 |
Standard Life Plc | | 83,540 | | | 255,761 |
Swiss Re. | | 10,970 | | | 362,847 |
Torchmark Corp.(a) | | 4,320 | | | 160,013 |
| | | | | |
| | | | | 6,578,640 |
| | | | | |
| Internet & Catalog Retail - 0.5% | | | |
Expedia, Inc.*(a) | | 59,110 | | | 893,152 |
| | | | | |
| IT Services - 2.6% | | | | | |
Accenture, Ltd. - Class A(a) | | 122,770 | | | 4,107,884 |
Cap Gemini S.A. | | 16,440 | | | 606,863 |
| | | | | |
| | | | | 4,714,747 |
| | | | | |
| Life Sciences Tools & Services - 0.5% | | | |
Lonza Group AG | | 9,710 | | | 964,082 |
| | | | | |
| Machinery - 0.2% | | | | | |
GEA Group AG | | 19,890 | | | 301,546 |
| | | | | |
| Media - 7.8% | | | | | |
British Sky Broadcasting
Group Plc | | 66,290 | | | 497,200 |
Comcast Corp. - Special
Class A(a) | | 196,590 | | | 2,771,919 |
News Corp. - Class A(a) | | 280,130 | | | 2,551,984 |
Pearson Plc | | 98,800 | | | 992,223 |
Reed Elsevier N.V. | | 45,550 | | | 502,035 |
Time Warner Cable, Inc.(a) | | 39,596 | | | 1,254,005 |
Time Warner, Inc.(a) | | 28,936 | | | 728,898 |
Viacom, Inc. - Class B*(a) | | 39,250 | | | 890,975 |
Vivendi | | 100,660 | | | 2,409,779 |
Walt Disney Co. (The)(a) | | 69,180 | | | 1,613,969 |
| | | | | |
| | | | | 14,212,987 |
| | | | | |
| Metals & Mining - 1.1% | | | | | |
Alcoa, Inc.(a) | | 81,760 | | | 844,581 |
POSCO | | 1,314 | | | 435,174 |
Vale S.A. (ADR)(a) | | 51,900 | | | 796,665 |
| | | | | |
| | | | | 2,076,420 |
| | | | | |
| Multiline Retail - 0.6% | | | | | |
Target Corp.(a) | | 27,210 | | | 1,073,979 |
| | | | | |
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | |
| Office Electronics - 0.6% | | | | | |
Konica Minolta Holdings, Inc. | | 97,000 | | $ | 1,006,915 |
| | | | | |
| Oil, Gas & Consumable Fuels - 7.6% | | | |
BG Group Plc | | 55,280 | | | 928,642 |
BP Plc | | 218,260 | | | 1,726,810 |
Chevron Corp. | | 8,050 | | | 533,313 |
El Paso Corp.(a) | | 100,140 | | | 924,292 |
Eni S.p.A. | | 88,301 | | | 2,093,482 |
Gazprom (ADR)(a) | | 30,200 | | | 611,550 |
Petroleo Brasileiro S.A. (ADR) | | 36,200 | | | 1,207,632 |
Repsol YPF S.A.(a) | | 20,168 | | | 451,987 |
Royal Dutch Shell Plc | | 64,530 | | | 1,628,850 |
Sasol, Ltd. | | 8,017 | | | 280,588 |
StatoilHydro ASA | | 26,010 | | | 513,077 |
Talisman Energy, Inc. | | 11,500 | | | 165,289 |
Total S.A. | | 50,610 | | | 2,739,486 |
| | | | | |
| | | | | 13,804,998 |
| | | | | |
| Paper & Forest Products - 0.5% | | | | | |
Svenska Cellulosa AB | | 76,020 | | | 798,212 |
UPM-Kymmene Oyj | | 9,920 | | | 86,404 |
| | | | | |
| | | | | 884,616 |
| | | | | |
| Pharmaceuticals - 10.1% | | | | | |
Abbott Laboratories | | 21,220 | | | 998,189 |
Bristol-Myers Squibb Co.(a) | | 55,380 | | | 1,124,768 |
GlaxoSmithKline Plc | | 147,640 | | | 2,599,401 |
Merck & Co., Inc.(a) | | 63,380 | | | 1,772,104 |
Merck KGaA | | 15,280 | | | 1,556,855 |
Novartis AG | | 47,300 | | | 1,921,196 |
Pfizer, Inc.(a) | | 154,040 | | | 2,310,600 |
Roche Holdings AG | | 18,790 | | | 2,555,650 |
Sanofi-Aventis | | 57,470 | | | 3,377,832 |
| | | | | |
| | | | | 18,216,595 |
| | | | | |
| Professional Services - 1.2% | | | | | |
Adecco S.A. | | 24,890 | | | 1,039,133 |
Randstad Holding N.V.* | | 41,400 | | | 1,148,483 |
| | | | | |
| | | | | 2,187,616 |
| | | | | |
| Real Estate Management & Development - 1.3% |
Cheung Kong Holdings, Ltd. | | 94,000 | | | 1,075,217 |
Swire Pacific, Ltd. | | 128,500 | | | 1,279,800 |
| | | | | |
| | | | | 2,355,017 |
| | | | | |
| Semiconductors & Semiconductor Equipment - 2.8% |
Samsung Electronics Co., Ltd. | | 6,328 | | | 2,930,642 |
Taiwan Semiconductor Manufacturing Co., Ltd. (ADR) | | 234,816 | | | 2,209,619 |
| | | | | |
| | | | | 5,140,261 |
| | | | | |
See accompanying notes to financial statements
6
Met Investors Series Trust
Met/Templeton Growth Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | |
| Software - 6.8% | | | | | |
Check Point Software Technologies, Ltd.*(a) | | 28,660 | | $ | 672,650 |
Microsoft Corp. | | 163,050 | | | 3,875,699 |
Nintendo Co., Ltd.(a) | | 3,338 | | | 917,726 |
Oracle Corp. | | 219,200 | | | 4,695,264 |
SAP AG | | 54,690 | | | 2,203,538 |
| | | | | |
| | | | | 12,364,877 |
| | | | | |
| Specialty Retail - 2.8% | | | | | |
Chico’s FAS, Inc.*(a) | | 101,960 | | | 992,071 |
Home Depot, Inc. (The)(a) | | 42,870 | | | 1,013,018 |
Industria de Diseno Textil S.A. | | 21,560 | | | 1,035,490 |
Kingfisher Plc | | 436,950 | | | 1,280,715 |
USS Co., Ltd. | | 15,990 | | | 819,622 |
| | | | | |
| | | | | 5,140,916 |
| | | | | |
| Trading Companies & Distributors - 0.8% |
Wolseley Plc* | | 77,436 | | | 1,480,115 |
| | | | | |
| Wireless Telecommunication Services - 2.9% |
Sprint Nextel Corp.*(a) | | 294,350 | | | 1,415,823 |
Turkcell Iletisim Hizmetleri A.S. (ADR)(a) | | 71,480 | | | 990,713 |
Vodafone Group Plc | | 1,446,650 | | | 2,795,825 |
| | | | | |
| | | | | 5,202,361 |
| | | | | |
Total Common Stocks
(Cost $169,732,752) | | | | | 163,825,501 |
| | | | | |
| | | | | | | |
Security
Description | | Shares/Par
Amount | | Value | |
| | | | | | | |
| |
| Short-Term Investments - 28.6% | | | | |
| Mutual Funds - 18.9% | | | | | | | |
State Street Navigator Securities Lending Trust Prime Portfolio(b) | | | 34,189,810 | | $ | 34,189,810 | |
| | | | | | | |
| Repurchase Agreement - 9.7% | | | | |
State Street Bank & Trust Co., Repurchase Agreement, dated 06/30/09 at 0.010% to be repurchased at $17,609,005 on 07/01/09 collateralized by $17,875,000 FNMA at 1.722% due 05/10/11 with a value of $17,964,375. | | $ | 17,609,000 | | | 17,609,000 | |
| | | | | | | |
Total Short-Term Investments
(Cost $51,798,810) | | | | | | 51,798,810 | |
| | | | | | | |
| |
TOTAL INVESTMENTS - 119.0%
(Cost $221,531,562) | | | 215,624,311 | |
| | | | | | | |
| |
| Other Assets and Liabilities (net) - (19.0)% | | | (34,448,719 | ) |
| | | | | | | |
| | |
| NET ASSETS - 100.0% | | | | | $ | 181,175,592 | |
| | | | | | | |
Portfolio Footnotes:
| * | | Non-income producing security. |
| (a) | | All or a portion of security is on loan. |
| (b) | | Represents investment of collateral received from securities lending transactions. |
ADR - American Depositary Receipt
FNMA - Federal National Mortgage Association
See accompanying notes to financial statements
7
Met Investors Series Trust
Met/Templeton Growth Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1—quoted prices in active markets for identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices in Active Markets for Identical Assets (Level 1) | | Significant Other Observable Inputs (Level 2) | | Significant Unobservable Inputs (Level 3) | | Total |
Common Stocks | | | | | | | | | | | | |
Aerospace & Defense | | $ | 351,900 | | $ | 910,654 | | $ | — | | $ | 1,262,554 |
Air Freight & Logistics | | | 3,767,688 | | | 1,272,795 | | | — | | | 5,040,483 |
Auto Components | | | — | | | 1,003,589 | | | — | | | 1,003,589 |
Automobiles | | | 601,391 | | | 4,653,147 | | | — | | | 5,254,538 |
Biotechnology | | | 3,741,270 | | | — | | | — | | | 3,741,270 |
Capital Markets | | | 1,610,643 | | | 482,160 | | | — | | | 2,092,803 |
Commercial & Professional Services | | | — | | | 1,117,197 | | | — | | | 1,117,197 |
Commercial Banks | | | 1,343,725 | | | 5,494,889 | | | — | | | 6,838,614 |
Communications Equipment | | | 2,101,474 | | | 559,135 | | | — | | | 2,660,609 |
Computers & Peripherals | | | 510,239 | | | 726,703 | | | — | | | 1,236,942 |
Construction Materials | | | — | | | 1,447,061 | | | — | | | 1,447,061 |
Consumer Finance | | | 937,502 | | | — | | | — | | | 937,502 |
Diversified Financial Services | | | 1,073,783 | | | 1,000,870 | | | — | | | 2,074,653 |
Diversified Telecommunication Services | | | 1,939,207 | | | 8,503,104 | | | — | | | 10,442,311 |
Electrical Equipment | | | — | | | 430,392 | | | — | | | 430,392 |
Electronic Equipment, Instruments & Components | | | 1,600,201 | | | 545,249 | | | — | | | 2,145,450 |
Energy Equipment & Services | | | 1,443,018 | | | 1,050,339 | | | — | | | 2,493,357 |
Food & Staples Retailing | | | 369,055 | | | 1,213,471 | | | — | | | 1,582,526 |
Food Products | | | — | | | 1,262,630 | | | — | | | 1,262,630 |
Health Care Equipment & Supplies | | | 3,829,644 | | | — | | | — | | | 3,829,644 |
Health Care Providers & Services | | | 1,660,735 | | | — | | | — | | | 1,660,735 |
Hotels, Restaurants & Leisure | | | — | | | 967,166 | | | — | | | 967,166 |
Household Durables | | | — | | | 554,421 | | | — | | | 554,421 |
Industrial Conglomerates | | | 2,749,087 | | | 2,400,127 | | | — | | | 5,149,214 |
Insurance | | | 2,706,102 | | | 3,872,538 | | | — | | | 6,578,640 |
Internet & Catalog Retail | | | 893,152 | | | — | | | — | | | 893,152 |
IT Services | | | 4,107,884 | | | 606,863 | | | — | | | 4,714,747 |
Life Sciences Tools & Services | | | — | | | 964,082 | | | — | | | 964,082 |
Machinery | | | — | | | 301,546 | | | — | | | 301,546 |
Media | | | 9,811,750 | | | 4,401,237 | | | — | | | 14,212,987 |
Metals & Mining | | | 1,641,246 | | | 435,174 | | | — | | | 2,076,420 |
Multiline Retail | | | 1,073,979 | | | — | | | — | | | 1,073,979 |
See accompanying notes to financial statements
8
Met Investors Series Trust
Met/Templeton Growth Portfolio
| | | | | | | | | | | | |
| Description | | Quoted Prices in Active Markets for Identical Assets (Level 1) | | Significant Other Observable Inputs (Level 2) | | Significant Unobservable Inputs (Level 3) | | Total |
Office Electronics | | $ | — | | $ | 1,006,915 | | $ | — | | $ | 1,006,915 |
Oil, Gas & Consumable Fuels | | | 3,442,076 | | | 10,362,922 | | | — | | | 13,804,998 |
Paper & Forest Products | | | — | | | 884,616 | | | — | | | 884,616 |
Pharmaceuticals | | | 6,205,661 | | | 12,010,934 | | | — | | | 18,216,595 |
Professional Services | | | — | | | 2,187,616 | | | — | | | 2,187,616 |
Real Estate Management & Development | | | — | | | 2,355,017 | | | — | | | 2,355,017 |
Semiconductors & Semiconductor Equipment | | | 2,209,619 | | | 2,930,642 | | | — | | | 5,140,261 |
Software | | | 9,243,613 | | | 3,121,264 | | | — | | | 12,364,877 |
Specialty Retail | | | 2,005,089 | | | 3,135,827 | | | — | | | 5,140,916 |
Trading Companies & Distributors | | | — | | | 1,480,115 | | | — | | | 1,480,115 |
Wireless Telecommunication Services | | | 2,406,536 | | | 2,795,825 | | | — | | | 5,202,361 |
Total Common Stocks | | | 75,377,269 | | | 88,448,232 | | | — | | | 163,825,501 |
Short-Term Investments | | | | | | | | | | | | |
Mutual Funds | | | 34,189,810 | | | — | | | — | | | 34,189,810 |
Repurchase Agreement | | | — | | | 17,609,000 | | | — | | | 17,609,000 |
Total Short-Term Investments | | | 34,189,810 | | | 17,609,000 | | | — | | | 51,798,810 |
TOTAL INVESTMENTS | | $ | 109,567,079 | | $ | 106,057,232 | | $ | — | | $ | 215,624,311 |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| Met/Templeton Growth Portfolio | | | |
| Assets | | | | |
Investments, at value (a)(b) | | $ | 198,015,311 | |
Repurchase Agreement | | | 17,609,000 | |
Cash | | | 501 | |
Cash denominated in foreign currencies (c) | | | 384,818 | |
Receivable for Trust shares sold | | | 92,363 | |
Dividends receivable | | | 362,096 | |
Interest receivable | | | 6 | |
| | | | |
Total assets | | | 216,464,095 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 953,373 | |
Trust shares redeemed | | | 3,746 | |
Distribution and services fees—Class B | | | 2,309 | |
Collateral for securities on loan | | | 34,189,810 | |
Management fee | | | 97,481 | |
Administration fee | | | 1,163 | |
Custodian and accounting fees | | | 8,373 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 28,821 | |
| | | | |
Total liabilities | | | 35,288,503 | |
| | | | |
| Net Assets | | $ | 181,175,592 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 189,765,372 | |
Accumulated net realized loss | | | (4,547,381 | ) |
Unrealized depreciation on investments and foreign currency | | | (5,901,076 | ) |
Undistributed net investment income | | | 1,858,677 | |
| | | | |
Total | | $ | 181,175,592 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 169,468,379 | |
| | | | |
Class B | | | 11,707,213 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 23,828,159 | |
| | | | |
Class B | | | 1,649,251 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 7.11 | |
| | | | |
Class B | | | 7.10 | |
| | | | |
| | | | | |
(a) Investments at cost, excluding repurchase agreement | | $ | 203,922,562 | |
(b) Includes cash collateral for securities loaned of | | | 34,189,810 | |
(c) Cost of cash denominated in foreign currencies | | | 386,588 | |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| Met/Templeton Growth Portfolio | | | |
| Investment Income | | | | |
Dividends (1) | | $ | 2,359,424 | |
Interest | | | 1,143 | |
| | | | |
Total investment income | | | 2,360,567 | |
| | | | |
| Expenses | | | | |
Management fee | | | 452,197 | |
Administration fees | | | 6,903 | |
Custodian and accounting fees | | | 39,901 | |
Distribution and services fees—Class B | | | 9,383 | |
Audit and tax services | | | 25,693 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,299 | |
Shareholder reporting | | | 2,607 | |
Insurance | | | 272 | |
Other | | | 2,506 | |
| | | | |
Total expenses | | | 565,495 | |
| |
Less management fee waiver | | | (12,145 | ) |
Less expenses reimbursed by the Manager | | | (52,489 | ) |
| | | | |
Net expenses | | | 500,861 | |
| | | | |
Net investment income | | | 1,859,706 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency | | | | |
Net realized loss on: | | | | |
Investments | | | (2,528,601 | ) |
Foreign currency | | | (99,487 | ) |
| | | | |
Net realized loss on investments and foreign currency | | | (2,628,088 | ) |
| | | | |
Net change in unrealized appreciation (depreciation) on: | | | | |
Investments | | | 16,379,783 | |
Foreign currency | | | (6,371 | ) |
| | | | |
Net change in unrealized appreciation on investments and foreign currency | | | 16,373,412 | |
| | | | |
Net realized and unrealized gain on investments and foreign currency | | | 13,745,324 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 15,605,030 | |
| | | | |
| | | | | |
(1) Dividend income is net of foreign withholding taxes of: | | $ | 169,336 | |
See accompanying notes to financial statements
11
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| Met/Templeton Growth Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Period Ended
December 31,
2008* | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 1,859,706 | | | $ | 511,379 | |
Net realized loss on investments and foreign currency | | | (2,628,088 | ) | | | (1,837,966 | ) |
Net change in unrealized appreciation (depreciation) on investments and foreign currency | | | 16,373,412 | | | | (22,274,488 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 15,605,030 | | | | (23,601,075 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | (43,955 | ) | | | (524,599 | ) |
Class B | | | (2,762 | ) | | | (22,866 | ) |
From net realized gains | | | | | | | | |
Class A | | | — | | | | — | |
Class B | | | — | | | | — | |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (46,717 | ) | | | (547,465 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 62,291,946 | | | | 119,440,791 | |
Class B | | | 6,299,233 | | | | 6,230,487 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | 43,955 | | | | 524,599 | |
Class B | | | 2,762 | | | | 22,866 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (1,450,687 | ) | | | (2,714,570 | ) |
Class B | | | (458,624 | ) | | | (466,939 | ) |
| | | | | | | | |
Net increase in net assets from capital share transactions | | | 66,728,585 | | | | 123,037,234 | |
| | | | | | | | |
| Net Increase in Net Assets | | | 82,286,898 | | | | 98,888,694 | |
Net assets at beginning of period | | | 98,888,694 | | | | — | |
| | | | | | | | |
Net assets at end of period | | $ | 181,175,592 | | | $ | 98,888,694 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 1,858,677 | | | $ | 45,688 | |
| | | | | | | | |
| * | | For the period 4/28/2008 (Commencement of operations) through 12/31/2008. |
See accompanying notes to financial statements
12
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | |
| | |
| Selected Per Share Data for the Period Ended: | | | | | | |
| | |
| | | | | | | |
| Met/Templeton Growth Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Period
Ended
December 31,
2008(b) | |
| Net Asset Value, Beginning of Period | | $ | 6.60 | | | $ | 10.00 | |
| | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | |
Net Investment Income(a) | | | 0.09 | | | | 0.07 | |
Net Realized/Unrealized Loss on Investments | | | 0.42 | | | | (3.43 | ) |
| | | | | | | | |
Total from Investment Operations | | | 0.51 | | | | (3.36 | ) |
| | | | | | | | |
| Less Distributions | | | | | | | | |
Dividends from Net Investment Income | | | (0.00 | )+ | | | (0.04 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | — | |
| | | | | | | | |
Total Distributions | | | (0.00 | )+ | | | (0.04 | ) |
| | | | | | | | |
| Net Asset Value, End of Period | | $ | 7.11 | | | $ | 6.60 | |
| | | | | | | | |
| Total Return | | | 7.76 | % | | | (33.62 | )% |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.76 | %* | | | 0.80 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.86 | %* | | | 1.27 | %* |
Ratio of Net Investment Income to Average Net Assets | | | 2.87 | %* | | | 1.41 | %* |
Portfolio Turnover Rate | | | 2.1 | % | | | 2.7 | % |
Net Assets, End of Period (in millions) | | $ | 169.5 | | | $ | 94.1 | |
| |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Period
Ended
December 31,
2008(b) | |
| | | |
| Net Asset Value, Beginning of Period | | $ | 6.60 | | | $ | 10.00 | |
| | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | |
Net Investment Income(a) | | | 0.09 | | | | 0.06 | |
Net Realized/Unrealized Loss on Investments | | | 0.41 | | | | (3.43 | ) |
| | | | | | | | |
Total from Investment Operations | | | 0.50 | | | | (3.37 | ) |
| | | | | | | | |
| Less Distributions | | | | | | | | |
Dividends from Net Investment Income | | | (0.00 | )+ | | | (0.03 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | — | |
| | | | | | | | |
Total Distributions | | | (0.00 | )+ | | | (0.03 | ) |
| | | | | | | | |
| Net Asset Value, End of Period | | $ | 7.10 | | | $ | 6.60 | |
| | | | | | | | |
| Total Return | | | 7.61 | % | | | (33.67 | )% |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 1.00 | %* | | | 1.05 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 1.10 | %* | | | 1.54 | %* |
Ratio of Net Investment Income to Average Net Assets | | | 2.65 | %* | | | 1.11 | %* |
Portfolio Turnover Rate | | | 2.1 | % | | | 2.7 | % |
Net Assets, End of Period (in millions) | | $ | 11.7 | | | $ | 4.8 | |
| + | | Rounds to less than 0.005 per share. |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—4/28/08. |
See accompanying notes to financial statements
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is Met/Templeton Growth Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A and B Shares are currently offered by the Portfolio. Class C and E Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2008 tax year remains subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | | |
Expiring
12/31/2016 | | Total |
| |
| $ | 1,077,426 | | $ | 1,077,426 |
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
G. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
H. Foreign Currency Translation - The books and records of the Portfolio are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars on a daily basis using prevailing exchange rates. Purchases and sales of securities are translated at the rates of exchange prevailing when such securities were acquired or sold. Income is translated at rates of exchange prevailing when interest is accrued or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in forward foreign currency contracts; sales of foreign currencies; currency gains or losses realized between the trade and settlement dates on securities transactions; and the difference between the amounts of
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
dividends, interest, and foreign withholding taxes recorded on the Portfolio’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end; from changes in the exchange rates of foreign currency held; and from changes in the contract value of forward foreign currency contracts.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with Templeton Global Advisors Limited (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $452,197 | | 0.700 | % | | First $100 Million |
| | |
| | 0.680 | % | | $100 Million to $250 Million |
| | |
| | 0.670 | % | | $250 Million to $500 Million |
| | |
| | 0.660 | % | | $500 Million to $750 Million |
| | |
| | 0.650 | % | | Over $750 Million |
The advisory fee the Manager pays to the Adviser in connection with the investment management of the Portfolio is calculated based on the aggregate average daily net assets of the Portfolio and certain other portfolios of the Trust that are managed by the Adviser and/or its affiliates.
The Manager has agreed to voluntarily waive a portion of its management fee reflecting the difference between the actual contractual management fee of the Portfolio, which is calculated based on the average daily net assets of the Portfolio, and the management fee for the Portfolio if the level of aggregated average daily net assets used for calculating the advisory fee were also applied for purposes of calculating the management fee. During the period ended June 30, 2009, the Manager voluntarily waived 0.1% in management fees otherwise chargeable to the Portfolio.
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Manager has entered into an expense limitation agreement with the Trust (“Expense Limitation Agreement”) in the interest of limiting expenses of the Portfolio of the Trust. The Expense Limitation Agreement shall continue in effect with respect to the Portfolio until April 30, 2010. Pursuant to that Expense Limitation Agreement, the Manager has agreed to waive or limit its fees and to assume other expenses so that the total annual operating expenses of the Portfolio other than interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with accounting principles generally accepted in the United States of America, and other extraordinary expenses not incurred in the ordinary course of the Portfolio’s business, but including amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act, are limited to the following expense ratios as a percentage of the Portfolio’s average daily net assets:
| | | | | | | | | |
Maximum Expense Ratio
under current Expense
Limitation Agreement | | | Expenses Deferred in |
| | 2008 | | 2009 |
| | Subject to repayment until
December 31, |
Class A | | Class B | | | 2013 | | 2014 |
| | | |
| 0.80% | | 1.05 | % | | $ | 166,824 | | $ | 52,489 |
16
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
The amount waived and expenses reimbursed for the period ended June 30, 2009 are shown as a management fee waiver and expenses reimbursed in the Statement of Operations of the Portfolio.
If in any year in which the Management Agreement is still in effect, the estimated aggregate portfolio operating expenses of the Portfolio for the fiscal year are less than the Maximum Expense Ratios for that year, subject to approval by the Trust’s Board, the Manager shall be entitled to reimbursement by the Portfolio to the extent that the charge does not cause the expenses in such subsequent year to exceed the Maximum Expense Ratios as stated above. The Portfolio is not obligated to repay any expense paid by the Manager more than five years after the end of the fiscal year in which such expense was incurred.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A and Class B Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B distribution plan provides that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% of the average net assets of the Portfolio attributable to its Class B Shares in respect to activities primarily intended to result in the sale of Class B Shares. However, under the Class B distribution agreement, payments to the Distributor for activities pursuant to the Class B distribution plan are currently limited to payments at an annual rate equal to 0.25% of average daily net assets of the Portfolio attributable to its Class B Shares.
Under terms of the Class B distribution plan and distribution agreement, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
in Shares
Outstanding | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 14,243,129 | | 9,797,183 | | 6,932 | | (219,085 | ) | | 9,585,030 | | 23,828,159 |
4/28/2008-12/31/2008 | | — | | 14,476,215 | | 81,333 | | (314,419 | ) | | 14,243,129 | | 14,243,129 |
| | | | | | |
Class B | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 731,289 | | 991,145 | | 436 | | (73,619 | ) | | 917,962 | | 1,649,251 |
4/28/2008-12/31/2008 | | — | | 788,942 | | 3,545 | | (61,198 | ) | | 731,289 | | 731,289 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 66,061,368 | | $ | — | | $ | 2,347,025 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $221,531,562 | | $ | 7,940,881 | | $ | (13,848,132 | ) | | $ | (5,907,251 | ) |
17
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
6. Securities Lending
As of June 30, 2009, the Portfolio had loaned securities which were collateralized by short-term investments. The value of securities on loan and the value of the related collateral were as follows:
| | | | | | | | | |
Value of
Securities | | Value of
Cash
Collateral | | Value of
Non-Cash
Collateral* | | Total
Collateral |
| | | |
| $33,261,021 | | $ | 34,189,810 | | $ | — | | $ | 34,189,810 |
* The Portfolio cannot replace or resell this collateral. The non-cash collateral is typically comprised of government securities and/or bank letters of credit.
7. Distributions to Shareholders
The tax character of distributions paid for the year ended December 31, 2008 was as follows:
| | | | | | |
| Ordinary Income | | Long-Term Capital Gains | | Total |
2008 | | 2008 | | 2008 |
| | |
| $547,465 | | $ | — | | $ | 547,465 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards
and Deferrals | | | Total | |
| | | | |
| $ | 46,706 | | $ | — | | $ | (22,368,695 | ) | | $ | (1,826,103 | ) | | $ | (24,148,092 | ) |
8. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
9. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
18
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
19
Met/Templeton International Bond Portfolio | For the period ended 6/30/09 |
Managed by Franklin Advisers, Inc.
Portfolio Manager Commentary
Performance
During the period since the Portfolio’s inception on May 1, 2009, through June 30, 2009, the Portfolio had a return of 0.60% for each of its Class A and B Shares, versus 4.79% for its benchmark, the Citigroup World Government Bond ex-U.S. Index.
Market Environment/Conditions
Global bond markets generated mixed, though generally positive performance in May and June driven by most currencies’ strengthening against the U.S. dollar. Currencies and credit spreads benefited from the increasingly held belief that the worst of the financial crisis was over. This, however, caused yields to rise in many countries as bond markets priced in a quicker end to the recession and, consequently, earlier interest rate hikes than many previously expected. Furthermore, stabilizing economic activity lessened fears of a deflationary environment developing where interest rates would have to be kept at historical lows for a prolonged period. In addition to improved risk appetite, currencies benefited during the period from concerns regarding the U.S. dollar. These centered around the possibility of a credit rating downgrade for the U.S. federal government or the dollar’s losing its status as the primary international reserve currency. Investors feared that expected large fiscal deficits and monetary expansion in the U.S. may put upward pressure on bond yields. In addition, China discussed denominating bilateral trade in yuan with several key trade partners, and the International Monetary Fund considered issuing bonds.
Portfolio Review/Current Positioning
During the period, the Portfolio benefited from its sovereign credit exposure; however, its interest rate and currency exposure detracted from relative performance. The Portfolio benefited from exposures to the Brazilian real, Mexican peso, Russian ruble, Indonesian rupiah and Chilean peso. Conversely, the Portfolio’s net negative positions in the New Zealand dollar and Singapore dollar hampered results. The Portfolio’s net negative euro position also detracted as the euro appreciated against the U.S. dollar, Japanese yen, and Swedish krona, although the portion against the Polish zloty mitigated this underperformance somewhat. The Portfolio’s sovereign credit exposure generated strong returns led by Argentina, Iraq and Russia. Among interest rate positions, duration exposures to Brazil and Indonesia contributed to performance but were offset by exposures to Mexico and being underweighted in Japan.
Michael Hasenstab, Ph.D.
Portfolio Manager
Franklin Advisers, Inc.
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual
outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
Sweden Government (5.250%, due 03/15/11) | | 6.81% |
Russia-Eurobonds (7.500%, due 03/31/30) | | 4.83% |
Sweden Government (4.000%, due 12/01/09) | | 4.37% |
France Government Bond OAT (4.250%, due 04/25/19) | | 3.51% |
Bundesrepublik Deutschland (3.750%, due 01/04/19) | | 3.45% |
Indonesia Government (10.000%, due 09/15/24) | | 3.19% |
Poland Government Bond (5.750%, due 04/25/14) | | 3.04% |
Province of Ontario (6.250%, due 06/16/15) | | 2.96% |
Mexican Bonos (8.000%, due 12/07/23) | | 2.95% |
Mexican Bonos (7.750%, due 12/14/17) | | 2.93% |
Portfolio Composition (% of portfolio market value)
As of 6/30/09
1
Met/Templeton International Bond Portfolio | For the period ended 6/30/09 |
Managed by Franklin Advisers, Inc.
Portfolio Manager Commentary (continued)
Met/Templeton International Bond Portfolio managed by
Franklin Advisers, Inc. vs. Citigroup World Government Bond Index (“WGBI”) ex U.S.1
Growth Based on $10,000+
| | | | |
| | | | | Cumulative Return2
(for the period ended 6/30/09) |
| | | | | Since
Inception3 |
| — | | Met/Templeton International Bond Portfolio—Class A | | 0.60% |
| | Class B | | 0.60% |
| - - | | Citigroup World Government Bond Index (“WGBI”) ex U.S.1 | | 4.79% |
+The chart reflects the performance of Class A shares of the Portfolio. The performance of Class A shares will differ from that of the other class of shares because of the difference in expenses paid by policyholders investing in the different share classes.
1The Citigroup World Government Bond Index (“WGBI”) ex U.S. is market capitalization weighted and tracks total returns of government bonds in 21 countries globally. Local bond market returns are from country subindexes of the Citigroup WGBI.
2“Cumulative Return” is calculated including reinvestment of all income dividends and capital gains distributions.
3Inception of Class B and Class E shares is 5/1/09. Index returns are based on an inception date of 5/1/09.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Index does not include fees or expenses and is not available for direct investment.
2
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, May 1, 2009 (Commencement of operations) through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
5/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
5/1/09-6/30/09 |
| | | | | | | | | | | |
| Met/Templeton International Bond Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.81% | | $ | 1,000.00 | | $ | 1,000.00 | | $ | 1.35 |
Hypothetical | | 0.81% | | | 1,000.00 | | | 1,007.00 | | | 1.36 |
| | | | | | | | | | | |
Class B | | | | | | | | | | | |
Actual | | 1.19% | | $ | 1,000.00 | | $ | 1,000.00 | | $ | 1.99 |
Hypothetical | | 1.19% | | | 1,000.00 | | | 1,006.37 | | | 2.00 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent two month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal period, divided by 365 (to reflect the two month period.)
3
Met Investors Series Trust
Met/Templeton International Bond Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par Amount | | Value
|
| | | | | | |
| | |
| Municipals - 0.3% | | | | | | |
Tulare, CA Sewer Revenue Bonds Build America, FSA
8.750%, due 11/15/44
(Cost - $1,532,838) | | $ | 1,585,000 | | $ | 1,571,020 |
| | | | | | |
|
| Corporate Bond & Note - 0.5% |
| Commercial Banks - 0.5% |
Export-Import Bank of Korea
8.125%, due 01/21/14
(Cost - $2,345,090) | | | 2,200,000 | | | 2,410,483 |
| | | | | | |
| |
| Foreign Bonds & Debt Securities - 37.4% | | | |
| Argentina - 2.2% | | | | | | |
Argentina Bonos
1.683%, due 08/03/12 | | | 44,400,000 | | | 10,822,500 |
| | | | | | |
| Australia - 5.3% | | | | | | |
New South Wales Treasury Corp.
5.500%, due 03/01/17 | | | 12,800,000 | | | 9,911,704 |
Queensland Treasury Corp.
6.000%, due 06/14/11-09/14/17 | | | 18,400,000 | | | 14,849,713 |
7.125%, due 09/18/17 | | | 2,330,000 | | | 1,559,704 |
| | | | | | |
| | | | | | 26,321,121 |
| | | | | | |
| Canada - 3.0% | | | | | | |
Province of Ontario
6.250%, due 06/16/15 | | | 23,250,000 | | | 14,680,567 |
| | | | | | |
| France - 3.5% | | | | | | |
France Government Bond OAT
4.250%, due 04/25/19 | | | 11,900,000 | | | 17,379,942 |
| | | | | | |
| Germany - 3.4% | | | | | | |
Bundesrepublik Deutschland
3.750%, due 01/04/19 | | | 11,800,000 | | | 17,105,746 |
| | | | | | |
| Multi-National - 2.0% | | | | | | |
Corp. Andina De Fomento
8.125%, due 06/04/19 | | | 3,700,000 | | | 3,933,500 |
Inter-American Development Bank
6.250%, due 06/22/16 | | | 9,300,000 | | | 6,010,185 |
| | | | | | |
| | | | | | 9,943,685 |
| | | | | | |
| Russia - 4.8% | | | | | | |
Russia-Eurobonds
7.500%, due 03/31/30 (144A)(a)(b) | | | 24,192,000 | | | 23,919,840 |
| | | | | | |
| South Africa - 0.5% | | | | | | |
Republic of South Africa
4.500%, due 04/05/16 | | | 2,000,000 | | | 2,547,433 |
| | | | | | |
| South Korea - 0.5% | | | | | | |
Korea Development Bank
8.000%, due 01/23/14 | | | 2,200,000 | | | 2,387,924 |
| | | | | | |
| | | | | | |
Security
Description | | Par
Amount | | Value
|
| | | | | | |
| | |
| Sweden - 11.2% | | | | | | |
Sweden Government
5.250%, due 03/15/11 | | $ | 244,000,000 | | $ | 33,734,851 |
4.000%, due 12/01/09 | | | 165,000,000 | | | 21,655,487 |
| | | | | | |
| | | | | | 55,390,338 |
| | | | | | |
| United Arab Emirates - 1.0% |
Emirate of Abu Dhabi
6.750%, due 04/08/19 (144A)(a) | | | 4,600,000 | | | 4,768,576 |
| | | | | | |
| Total Foreign Bonds & Debt Securities (Cost $177,160,027) | | | | | | 185,267,672 |
| | | | | | |
|
| Foreign Bonds & Debt Securities - Emerging Markets - 38.3% |
| Sovereign - 38.3% | | | | | | |
Brazil Notas do Tesouro Nacional,
Series B
6.000%, due 05/15/15- 05/15/45 | | | 1,989,500 | | | 17,878,061 |
Brazil Notas do Tesouro Nacional,
Series F
10.000%, due 01/01/12 | | | 1,158,500 | | | 6,043,710 |
Hungary Government International Bond
3.875%, due 02/24/20 | | | 6,510,000 | | | 7,024,021 |
Indonesia Government
12.800%, due 06/15/21 | | | 93,010,000,000 | | | 9,979,556 |
10.000%, due 09/15/24-02/15/28 | | | 279,030,000,000 | | | 23,448,454 |
Mexican Bonos
7.750%, due 12/14/17 | | | 195,000,000 | | | 14,507,338 |
8.000%, due 12/07/23 | | | 200,000,000 | | | 14,621,943 |
10.000%, due 12/05/24-11/20/36 | | | 330,000,000 | | | 28,101,099 |
Peru Government Bond
8.600%, due 08/12/17 | | | 5,700,000 | | | 2,266,749 |
Poland Government Bond
5.750%, due 04/25/14 | | | 48,000,000 | | | 15,056,809 |
6.250%, due 10/24/15 | | | 45,000,000 | | | 14,334,557 |
Qatar Government International Bond
6.550%, due 04/09/19 (144A)(a) | | | 4,550,000 | | | 4,680,813 |
Republic of Hungary
5.750%, due 06/11/18 | | | 4,650,000 | | | 6,053,885 |
Republic of Iraq
5.800%, due 01/15/28 | | | 4,200,000 | | | 2,761,500 |
Republic of Korea
7.125%, due 04/16/19 | | | 4,600,000 | | | 4,970,617 |
South Africa Government International Bond
5.250%, due 05/16/13 | | | 1,800,000 | | | 2,557,668 |
6.875%, due 05/27/19 | | | 7,970,000 | | | 8,219,062 |
See accompanying notes to financial statements
4
Met Investors Series Trust
Met/Templeton International Bond Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | | |
Security
Description | | Par
Amount | | Value
| |
| | | | | | | |
| | |
| Sovereign - continued | | | | | | | |
Venezuela Government International Bond
5.375%, due 08/07/10 | | $ | 6,500,000 | | $ | 6,077,500 | |
10.750%, due 09/19/13 | | | 1,710,000 | | | 1,419,300 | |
| | | | | | | |
| | | | | | 190,002,642 | |
| | | | | | | |
Total Foreign Bonds &
Debt Securites - Emerging Markets (Cost $188,555,833) | | | | | | 190,002,642 | |
| | | | | | | |
| |
| Short-Term Investment - 27.9% | | | | |
| Discount Notes - 27.9% | | | | | | | |
Federal Home Loan Bank
0.010%, due 07/01/09 (Cost - $138,325,000) | | | 138,325,000 | | | 138,325,000 | |
| | | | | | | |
| |
TOTAL INVESTMENTS - 104.4%
(Cost $507,918,788) | | | 517,576,817 | |
| | | | | | | |
| |
| Other Assets and Liabilities (net) - (4.4)% | | | (22,041,226 | ) |
| | | | | | | |
| | |
| NET ASSETS - 100.0% | | | | | $ | 495,535,591 | |
| | | | | | | |
Portfolio Footnotes:
| (a) | | Securities that may be resold to “qualified institutional buyers” under Rule 144A or securities offered pursuant to Section 4(2) of the Securities Act of 1933, as amended. These securities have been determined to be liquid under the guidelines established by the Board of Trustees. These securities represent in the aggregate $33,369,229 of net assets. |
FHLB - Federal Home Loan Bank
FSA - Financial Security Assurance, Inc.
The following table summarizes the credit composition of the portfolio holdings of the Met/Templeton International Bond Portfolio at June 30, 2009, based upon credit quality ratings issued by Standard & Poor’s. For securities not rated by Standard & Poor’s, the equivalent Moody’s rating is used.
| | | |
| Portfolio Composition by Credit Quality (Unaudited) | | Percent of
Portfolio | |
AAA/Government/Government Agency | | 28.31 | % |
AA | | 10.69 | |
A | | 26.45 | |
BBB | | 13.87 | |
BB | | 10.92 | |
B | | 2.85 | |
Other | | 6.91 | |
| | | |
Total: | | 100.00 | % |
| | | |
See accompanying notes to financial statements
5
Met Investors Series Trust
Met/Templeton International Bond Portfolio
The following table summarizes the sector diversification of the portfolio holdings of the Met/Templeton International Bond Portfolio at June 30, 2009.
Industries as of June 30, 2009 (Unaudited)
| | |
| Industry | | Percent of
Total
Net Assets |
Global Government Investment Grade | | 58.0% |
Global Government High Yield | | 15.8% |
Foreign Corporate Investment Grade | | 2.7% |
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
| Level 1—quoted | | prices in active markets for identical securities |
| Level 2—other | | significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.) |
| Level 3—significant | | unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments) |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | | Significant
Unobservable
Inputs
(Level 3) | | Total | |
| Municipals | | | | | | | | | | | | | | |
California | | $ | — | | $ | 1,571,020 | | | $ | — | | $ | 1,571,020 | |
| Corporate Bond & Note | | | | | | | | | | | | | | |
Commercial Banks | | | — | | | 2,410,483 | | | | — | | | 2,410,483 | |
| Foreign Bonds & Debt Securities | | | | | | | | | | | | | | |
Argentina | | | — | | | 10,822,500 | | | | — | | | 10,822,500 | |
Australia | | | — | | | 26,321,121 | | | | — | | | 26,321,121 | |
Canada | | | — | | | 14,680,567 | | | | — | | | 14,680,567 | |
France | | | — | | | 17,379,942 | | | | — | | | 17,379,942 | |
Germany | | | — | | | 17,105,746 | | | | — | | | 17,105,746 | |
Multi-National | | | — | | | 9,943,685 | | | | — | | | 9,943,685 | |
Russia | | | — | | | 23,919,840 | | | | — | | | 23,919,840 | |
South Africa | | | — | | | 2,547,433 | | | | — | | | 2,547,433 | |
South Korea | | | — | | | 2,387,924 | | | | — | | | 2,387,924 | |
Sweden | | | — | | | 55,390,338 | | | | — | | | 55,390,338 | |
United Arab Emirates | | | — | | | 4,768,576 | | | | — | | | 4,768,576 | |
Total Foreign Bonds & Debt Securities | | | — | | | 185,267,672 | | | | — | | | 185,267,672 | |
Foreign Bonds & Debt Securities—Emerging Markets Sovereign | | | — | | | 190,002,642 | | | | — | | | 190,002,642 | |
Total Foreign Bonds & Debt Securities—Emerging Markets | | | — | | | 190,002,642 | | | | — | | | 190,002,642 | |
| Short-Term Investments | | | | | | | | | | | | | | |
Discount Notes | | | — | | | 138,325,000 | | | | — | | | 138,325,000 | |
TOTAL INVESTMENTS | | $ | — | | $ | 517,576,817 | | | $ | — | | $ | 517,576,817 | |
| Forward Contracts | | | | | | | | | | | | | | |
Forward Currency Contracts | | $ | — | | $ | (10,776,257 | ) | | $ | — | | $ | (10,776,257 | ) |
See accompanying notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| Met/Templeton International Bond Portfolio | | | |
| Assets | | | | |
Investments, at value (a) | | $ | 517,576,817 | |
Cash | | | 52,765 | |
Cash denominated in foreign currencies (b) | | | 3,846 | |
Receivable for investments sold | | | 8,338,354 | |
Receivable for Trust shares sold | | | 170,138 | |
Dividends receivable | | | 149,496 | |
Interest receivable | | | 5,054,726 | |
Unrealized appreciation on forward currency contracts | | | 4,603,303 | |
| | | | |
Total assets | | | 535,949,445 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 24,683,528 | |
Trust shares redeemed | | | 6,615 | |
Unrealized depreciation on forward currency contracts | | | 15,379,560 | |
Distribution and services fees—Class B | | | 30 | |
Management fee | | | 241,022 | |
Administration fee | | | 3,218 | |
Custodian and accounting fees | | | 79,511 | |
Deferred trustee fees | | | 1,803 | |
Accrued expenses | | | 18,567 | |
| | | | |
Total liabilities | | | 40,413,854 | |
| | | | |
| Net Assets | | $ | 495,535,591 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 492,562,859 | |
Accumulated net realized gain | | | 665,225 | |
Unrealized depreciation on investments and foreign currency | | | (1,076,251 | ) |
Undistributed net investment income | | | 3,383,758 | |
| | | | |
Total | | $ | 495,535,591 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 495,242,261 | |
| | | | |
Class B | | | 293,330 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 49,225,782 | |
| | | | |
Class B | | | 29,165 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 10.06 | |
| | | | |
Class B | | | 10.06 | |
| | | | |
| | | | | |
(a) Investments at cost | | $ | 507,918,788 | |
(b) Cost of cash denominated in foreign currencies | | | 3,775 | |
See accompanying notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Period May 1, 2009* to June 30, 2009
| | | | |
| Met/Templeton International Bond Portfolio | | | |
| Investment Income | | | | |
Interest | | $ | 4,028,038 | |
| | | | |
Total investment income | | | 4,028,038 | |
| | | | |
| Expenses | | | | |
Management fee | | | 478,471 | |
Administration fees | | | 6,523 | |
Custodian and accounting fees | | | 89,511 | |
Distribution and services fees—Class B | | | 33 | |
Audit and tax services | | | 12,449 | |
Legal | | | 44,519 | |
Trustee fees and expenses | | | 3,337 | |
Shareholder reporting | | | 8,092 | |
Insurance | | | 299 | |
Organizational expense | | | 51 | |
Other | | | 995 | |
| | | | |
Total expenses | | | 644,280 | |
| | | | |
Net investment income | | | 3,383,758 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency | | | | |
Net realized gain on: | | | | |
Investments | | | 108,013 | |
Foreign currency | | | 557,212 | |
| | | | |
Net realized gain on investments and foreign currency | | | 665,225 | |
| | | | |
Net change in unrealized appreciation (depreciation) on: | | | | |
Investments | | | 9,658,029 | |
Foreign currency | | | (10,734,280 | ) |
| | | | |
Net change in unrealized depreciation on investments and foreign currency | | | (1,076,251 | ) |
| | | | |
Net realized and unrealized loss on investments and foreign currency | | | (411,026 | ) |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 2,972,732 | |
| | | | |
| * | | Commencement of operations |
See accompanying notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENT OF CHANGES IN NET ASSETS
| | | | |
| Met/Templeton International Bond Portfolio | | | |
| | | Period Ended
June 30, 2009*
(Unaudited) | |
| Increase (Decrease) in Net Assets: | | | | |
| Operations | | | | |
Net investment income | | $ | 3,383,758 | |
Net realized gain on investments and foreign currency | | | 665,225 | |
Net change in unrealized depreciation on investments and foreign currency | | | (1,076,251 | ) |
| | | | |
Net increase in net assets resulting from operations | | | 2,972,732 | |
| | | | |
| Distributions to Shareholders | | | | |
From net investment income | | | | |
Class A | | | — | |
Class B | | | — | |
From net realized gains | | | | |
Class A | | | — | |
Class B | | | — | |
| | | | |
Net decrease in net assets resulting from distributions | | | — | |
| | | | |
| Capital Share Transactions | | | | |
Proceeds from shares sold | | | | |
Class A | | | 493,278,350 | |
Class B | | | 304,551 | |
Net asset value of shares issued through dividend reinvestment | | | | |
Class A | | | — | |
Class B | | | — | |
Cost of shares repurchased | | | | |
Class A | | | (1,006,917 | ) |
Class B | | | (13,125 | ) |
| | | | |
Net increase in net assets from capital share transactions | | | 492,562,859 | |
| | | | |
| Net Increase in Net Assets | | | 495,535,591 | |
Net assets at beginning of Period | | | — | |
| | | | |
Net assets at end of Period | | $ | 495,535,591 | |
| | | | |
Net assets at end of period includes undistributed net investment income | | $ | 3,383,758 | |
| | | | |
| * | | For the period 5/1/2009 (Commencement of operations) through 6/30/2009. |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | |
| |
| Selected Per Share Data for the Period Ended: | | | |
| |
| | | | |
| Met/Templeton International Bond Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009(b)
(Unaudited) | |
| | |
| Net Asset Value, Beginning of Period | | $ | 10.00 | |
| | | | |
| Income (Loss) from Investment Operations: | | | | |
Net Investment Income(a) | | | 0.07 | |
Net Realized/Unrealized Loss on Investments | | | (0.01 | ) |
| | | | |
Total from Investment Operations | | | 0.06 | |
| | | | |
| Less Distributions | | | | |
Dividends from Net Investment Income | | | — | |
Distributions from Net Realized Capital Gains | | | — | |
| | | | |
Total Distributions | | | — | |
| | | | |
| Net Asset Value, End of Period | | $ | 10.06 | |
| | | | |
| Total Return | | | 0.60 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.81 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.81 | %* |
Ratio of Net Investment Income (Loss) to Average Net Assets | | | 4.24 | %* |
Portfolio Turnover Rate | | | 3.7 | % |
Net Assets, End of Period (in millions) | | $ | 495.2 | |
| | | | |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009(b)
(Unaudited) | |
| | |
| Net Asset Value, Beginning of Period | | $ | 10.00 | |
| | | | |
| Income (Loss) from Investment Operations: | | | | |
Net Investment Income(a) | | | 0.08 | |
Net Realized/Unrealized Loss on Investments | | | (0.02 | ) |
| | | | |
Total from Investment Operations | | | 0.06 | |
| | | | |
| Less Distributions | | | | |
Dividends from Net Investment Income | | | — | |
Distributions from Net Realized Capital Gains | | | — | |
| | | | |
Total Distributions | | | — | |
| | | | |
| Net Asset Value, End of Period | | $ | 10.06 | |
| | | | |
| Total Return | | | 0.60 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 1.19 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 1.19 | %* |
Ratio of Net Investment Loss to Average Net Assets | | | 4.62 | %* |
Portfolio Turnover Rate | | | 3.7 | % |
Net Assets, End of Period (in millions) | | $ | 0.3 | |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—5/1/2009. |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is Met/Templeton International Bond Portfolio (the “Portfolio”) (commenced operations on May 1, 2009), which is non-diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A and B Shares are currently offered by the Portfolio. Class C and E Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
11
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination.
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Foreign Currency Translation - The books and records of the Portfolio are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars on a daily basis using prevailing exchange rates. Purchases and sales of securities are translated at the rates of exchange prevailing when such securities were acquired or sold. Income is translated at rates of exchange prevailing when interest is accrued or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in forward foreign currency contracts; sales of foreign currencies; currency gains or losses realized between the trade and settlement dates on securities transactions; and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Portfolio’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end; from changes in the exchange rates of foreign currency held; and from changes in the contract value of forward foreign currency contracts.
G. Financial Derivative Instruments - Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133, (“FAS 161” or the “Statement”) requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. The disclosure requirements of FAS 161 distinguish between derivatives which are accounted for as “hedges” under FAS 133 and those that do not qualify for such accounting. The Portfolio reflects derivatives at fair value and recognizes changes in fair value through the Statement of Operations, and as such do not qualify for FAS 133 hedge accounting treatment.
H. Forward Foreign Currency Contracts - The Portfolio may enter into forward foreign currency contracts to hedge its portfolio holdings against future movements in certain foreign currency exchange rates. A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a set price. Forward currency contracts are valued at the forward rate and are marked-to-market daily. The change in market value is recorded by the Portfolio as an unrealized gain or loss. When the contract is closed, the Portfolio recognizes a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The use of forward foreign currency contracts does not eliminate fluctuations in the underlying prices of the securities of the Portfolio, but it does establish a rate of exchange that can be achieved in the future. Although forward foreign currency contracts to sell limit the risk of loss due to a decline in the value of the currency holdings, they also limit any potential gain that might result should the value of the currency increase. In addition, the Portfolio could be exposed to risks if the counterparties to the contracts are unable to meet the terms of the contracts. At June 30, 2009, the Portfolio had following derivatives (not designated as hedging instruments under SFAS No. 133), grouped into appropriate risk categories that illustrate how and why the Portfolio uses derivative instruments:
| | | | | | | | | | | |
| | | Asset Derivatives | | Liability Derivatives | |
Derivatives not accounted for as hedging instruments under Statement 133 | | Balance Sheet Location | | Fair Value | | Balance Sheet Location | | Fair Value | |
| | | | |
Foreign Exchange Contracts | | Unrealized appreciation on forward currency contracts | | $ | 4,603,303 | | Unrealized depreciation on forward currency contracts | | $ | (15,379,560 | ) |
| | | | | | | | | | | |
| | | | |
Total | | | | $ | 4,603,303 | | | | $ | (15,379,560 | ) |
| | | | | | | | | | | |
12
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
Transactions in derivative instruments during the six months ended June 30, 2009, were as follows:
| | | | |
Derivatives not accounted for as hedging instruments under Statement 133 | |
Location | | Foreign
Exchange
Contracts | |
| |
Statement of Operations—Realized Gain (Loss) | | | | |
| |
Foreign Currency | | | $498,421 | |
| | | | |
| |
Total | | | $498,421 | |
| | | | |
| |
| | | | |
Location | | Foreign
Exchange
Contracts | |
| |
Statement of Operations—Change in Unrealized Gain (Loss) | | | | |
| |
Foreign Currency | | $ | (10,776,257 | ) |
| | | | |
| |
Total | | $ | (10,776,257 | ) |
| | | | |
I. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
J. Forward Commitments, When-Issued and Delayed Delivery Securities - The Portfolio may purchase securities on a when-issued or delayed delivery basis and may purchase or sell securities on a forward commitment basis. Settlement of such transactions normally occurs within a month or more after the purchase or sale commitment is made. The Portfolio may purchase securities under such conditions only with the intention of actually acquiring them, but may enter into a separate agreement to sell the securities before the settlement date. Since the value of securities purchased may fluctuate prior to settlement, the Portfolio may be required to pay more at settlement than the security is worth. In addition, the purchaser is not entitled to any of the interest earned prior to settlement. Upon making a commitment to purchase a security on a when-issued, delayed delivery or forward commitment basis, the Portfolio will hold liquid assets in a segregated account at the Portfolio’s custodian bank worth at least the equivalent of the amount due. The liquid assets will be monitored on a daily basis and adjusted as necessary to maintain the necessary value.
K. Mortgage Related and Other Asset Backed Securities - The Portfolio may invest in mortgage related or other asset-backed securities. These securities may include mortgage pass-through securities, collateralized mortgaged obligations (“CMOs”), commercial mortgage-backed securities, mortgage dollar rolls, CMO residuals, stripped mortgage backed securities (“SMBS”) and other securities that directly or indirectly represent a participation in, or are secured by a payable from, mortgage loans on real property or other receivables. The value of some mortgage or asset-backed securities may be particularly sensitive to change in prevailing interest rates. Early repayment of principal on some mortgage-related securities may expose the Portfolio to a lower rate of return upon reinvestment of principal. The value of these securities may fluctuate in response to the market’s perception of the creditworthiness of the issuers. Additionally, although mortgages and mortgage-related securities are generally supported by some form of government or private guarantee and/or insurance, there is no assurance that private guarantors or insurers will meet their obligations.
One type of SMBS has one class receiving all of the interest from the mortgage assets (the interest-only or “IO” class), while the other class will receive all of the principal (the principal-only or “PO” class). Payments received for the IOs are included in interest income on the Statement of Operations of the Portfolio. Because principal will not be received at the maturity of an IO, adjustments are made to the book value on the security on a daily basis until maturity. These adjustments are included in interest income on the Statement of Operations of the Portfolio. Payments received for POs are treated as reductions to the cost and par value of the securities. Details of mortgage related and other asset-backed securities held at year end are included in the Portfolio’s Portfolio of Investments.
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
The Portfolio may invest a significant portion of its assets in securities of issuers that hold mortgage and asset backed securities and direct investments in securities backed by commercial and residential mortgage loans and other financial assets. The value and related income of these securities are sensitive to changes in economic conditions, including delinquencies and/or defaults, and may be negatively impacted by increased volatility of market prices and periods of illiquidity.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with Franklin Advisers, Inc. (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $478,471 | | 0.60 | % | | All |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Manager has entered into an expense limitation agreement with the Trust (“Expense Limitation Agreement”) in the interest of limiting expenses of the Portfolio of the Trust. The Expense Limitation Agreement shall continue in effect with respect to the Portfolio until April 30, 2010. Pursuant to that Expense Limitation Agreement, the Manager has agreed to waive or limit its fees and to assume other expenses so that the total annual operating expenses of the Portfolio other than interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with accounting principles generally accepted in the United States of America, and other extraordinary expenses not incurred in the ordinary course of the Portfolio’s business, but including amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act, are limited to the following expense ratios as a percentage of the Portfolio’s average daily net assets:
| | | |
Maximum Expense Ratio under current Expense Limitation Agreement | |
|
|
| Class A | | Class B | |
| |
| 1.00% | | 1.25 | % |
If in any year in which the Management Agreement is still in effect, the estimated aggregate portfolio operating expenses of the Portfolio for the fiscal year are less than the Maximum Expense Ratios for that year, subject to approval by the Trust’s Board, the Manager shall be entitled to reimbursement by the Portfolio to the extent that the charge does not cause the expenses in such subsequent year to exceed the Maximum Expense Ratios as stated above. The Portfolio is not obligated to repay any expense paid by the Manager more than five years after the end of the fiscal year in which such expense was incurred.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A and Class B Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B distribution plan provides that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% of the average net assets of the Portfolio attributable to its Class B Shares in respect to activities primarily intended to result in the sale of Class B Shares. However, under the Class B distribution agreement, payments to the Distributor for activities pursuant to the Class B distribution plan are currently limited to payments at an annual rate equal to 0.25% of average daily net assets of the Portfolio attributable to its Class B Shares.
Under terms of the Class B distribution plan and distribution agreement, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B Shares for such entities’ fees or expenses incurred.
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
in Shares
Outstanding | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | |
| | | | | | |
5/1/2009-6/30/2009 | | — | | 49,326,312 | | — | | (100,530 | ) | | 49,225,782 | | 49,225,782 |
| | | | | | |
Class B | | | | | | | | | | | | | |
| | | | | | |
5/1/2009-6/30/2009 | | — | | 30,475 | | — | | (1,310 | ) | | 29,165 | | 29,165 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | | | | | | | | |
| Purchases | | Sales |
| | | Foreign | | | | Foreign |
| U.S. Government | | Government | | Non-Government | | U.S. Government | | Government | | Non-Government |
| | | | | |
| $ | — | | $ | 355,791,085 | | $ | 36,171,385 | | $ | — | | $ | 18,103,625 | | $ | — |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Appreciation |
| | | |
| $ | 507,918,788 | | $ | 13,136,905 | | $ | (3,478,876 | ) | | $ | 9,658,029 |
Forward Foreign Currency Contracts to Buy:
| | | | | | | | | | | | |
Settlement Date | | Contracts to Buy | | Value at
June 30, 2009 | | In Exchange for U.S.$ | | Net Unrealized
Appreciation/
(Depreciation) | |
| | | | |
5/7/2010 | | 8,066,295,000 CLP | | $ | 15,224,256 | | $ | 14,220,000 | | $ | 1,004,256 | |
| | | | |
5/7/2010 | | 8,126,730,000 CLP | | | 15,338,320 | | | 14,220,000 | | | 1,118,320 | |
| | | | |
5/7/2010 | | 158,947,880 CNY | | | 23,459,226 | | | 23,660,000 | | | (200,774 | ) |
| | | | |
5/10/2010 | | 159,770,200 CNY | | | 23,583,054 | | | 23,740,000 | | | (156,946 | ) |
| | | | |
5/7/2010 | | 590,148,000 INR | | | 12,069,925 | | | 11,640,000 | | | 429,925 | |
| | | | |
5/10/2010 | | 609,271,200 INR | | | 12,458,911 | | | 12,060,000 | | | 398,911 | |
| | | | |
8/10/2009 | | 1,168,200,000 JPY | | | 12,120,074 | | | 11,784,525 | | | 335,549 | |
| | | | |
8/10/2009 | | 1,166,297,250 JPY | | | 12,100,334 | | | 11,806,421 | | | 293,913 | |
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
5. Investment Transactions - continued
| | | | | | | | | | | | |
Settlement Date | | Contracts to Buy | | Value at
June 30, 2009 | | In Exchange for U.S.$ | | Net Unrealized
Appreciation/
(Depreciation) | |
| | | | |
5/7/2010 | | 50,068,620 MYR | | $ | 14,151,491 | | $ | 14,220,000 | | $ | (68,509 | ) |
| | | | |
5/10/2010 | | 50,424,120 MYR | | | 14,251,765 | | | 14,220,000 | | | 31,765 | |
| | | | |
6/4/2010 | | 99,141,840 MYR | | | 28,017,862 | | | 28,440,000 | | | (422,138 | ) |
| | | | |
6/2/2010 | | 39,200,000 PLN | | | 12,086,642 | | | 12,277,625 | | | (190,983 | ) |
| | | | |
11/6/2009 | | 404,914,500 RUB | | | 12,542,464 | | | 11,850,000 | | | 692,464 | |
| | | | |
6/28/2010 | | 22,382,000 SEK | | | 2,896,590 | | | 2,819,211 | | | 77,379 | |
| | | | |
6/29/2010 | | 16,252,000 SEK | | | 2,103,277 | | | 2070582 | | | 32,695 | |
| | | | | | | | | | | | |
| | | | |
| | | | | | | | | | $ | 3,375,827 | |
| | | | | | | | | | | | |
Forward Foreign Currency Contracts to Sell:
| | | | | | | | | | | | |
Settlement Date | | Contracts to Deliver | | Value at
June 30, 2009 | | In Exchange for U.S.$ | | Net Unrealized
Appreciation/
(Depreciation) | |
| | | | |
5/7/2010 | | 25,915,245 AUD | | $ | 20,403,977 | | $ | 18,813,172 | | $ | (1,590,805 | ) |
| | | | |
8/10/2009 | | 8,850,000 EUR | | | 12,407,536 | | | 11,784,525 | | | (623,011 | ) |
| | | | |
8/10/2009 | | 8,850,000 EUR | | | 12,407,537 | | | 11,806,421 | | | (601,116 | ) |
| | | | |
1/4/2010 | | 15,484,300 EUR | | | 21,701,394 | | | 21,712,860 | | | 11,466 | |
| | | | |
5/7/2010 | | 44,852,000 EUR | | | 62,874,203 | | | 59,950,529 | | | (2,923,674 | ) |
| | | | |
5/10/2010 | | 8,138,999 EUR | | | 11,409,476 | | | 10,834,635 | | | (574,841 | ) |
| | | | |
6/28/2010 | | 2,012,263 EUR | | | 2,821,277 | | | 2,819,211 | | | (2,066 | ) |
| | | | |
6/29/2010 | | 1,466,655 EUR | | | 2,056,318 | | | 2,070,582 | | | 14,264 | |
| | | | |
7/2/2010 | | 8,641,023 EUR | | | 12,115,228 | | | 12,277,624 | | | 162,396 | |
| | | | |
8/7/2009 | | 55,406,301 NZD | | | 35,626,154 | | | 31,760,000 | | | (3,866,154 | ) |
| | | | |
8/7/2009 | | 980,322 NZD | | | 630,345 | | | 560,715 | | | (69,630 | ) |
| | | | |
8/7/2009 | | 964,786 NZD | | | 620,356 | | | 560,715 | | | (59,641 | ) |
| | | | |
8/7/2009 | | 975,918 NZD | | | 627,514 | | | 560,715 | | | (66,799 | ) |
| | | | |
8/10/2009 | | 483,358 NZD | | | 310,739 | | | 280,357 | | | (30,382 | ) |
| | | | |
8/11/2009 | | 483,121 NZD | | | 310,567 | | | 280,357 | | | (30,210 | ) |
| | | | |
8/12/2009 | | 4,553,540 NZD | | | 2,926,999 | | | 2,683,629 | | | (243,370 | ) |
| | | | |
8/24/2009 | | 4,449,491 NZD | | | 2,857,963 | | | 2,683,755 | | | (174,208 | ) |
| | | | |
8/26/2009 | | 4,428,000 NZD | | | 2,843,802 | | | 2,677,744 | | | (166,058 | ) |
| | | | |
11/30/2009 | | 4,366,392 NZD | | | 2,787,922 | | | 2,683,755 | | | (104,167 | ) |
| | | | |
12/2/2009 | | 3,309,084 NZD | | | 2,112,586 | | | 2,012,817 | | | (99,769 | ) |
| | | | |
12/2/2009 | | 1,092,002 NZD | | | 697,156 | | | 675,370 | | | (21,786 | ) |
| | | | |
5/10/2009 | | 26,225,202 NZD | | | 16,588,949 | | | 14,903,782 | | | (1,685,167 | ) |
| | | | |
5/11/2010 | | 10,205,417 NZD | | | 6,455,135 | | | 5,936,491 | | | (518,644 | ) |
| | | | |
2/8/2010 | | 35,059,410 SGD | | | 24,197,774 | | | 23,700,000 | | | (497,774 | ) |
| | | | |
5/7/2010 | | 34,905,360 SGD | | | 24,090,938 | | | 23,700,000 | | | (390,938 | ) |
| | | | | | | | | | | | |
| | | | |
| | | | | | | | | | $ | (14,152,084.00 | ) |
| | | | | | | | | | | | |
16
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
5. Investment Transactions - continued
AUD - Australian Dollar
CLP - Chilean Peso
CNY - China Yuan Renminbi
EUR - Euro Dollar
INR - Indian Rupee
JPY - Japanese Yen
MYR - Malaysian Ringgit
NZD - New Zealand Dollar
PLN - Polish Zloty
RUB - Russian Ruble
SEK - Swedish Krona
SGD - Singapore Dollar
6. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
7. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
8. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
9. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
17
MET/TEMPLETON INTERNATIONAL BOND PORTFOLIO
BOARD OF TRUSTEES’ CONSIDERATION OF MANAGEMENT AND ADVISORY AGREEMENTS
At an in-person meeting of the Board of Trustees (the “Board”) of the Met Investors Series Trust (the “Trust”) held on February 10-11, 2009, the Board, including a majority of the Trustees who are not considered to be “interested persons” of the Trust (the “Disinterested Trustees”) under the Investment Company Act of 1940, as amended (the “1940 Act”), initially approved the Trust’s management agreement (the “Management Agreement”) with Met Investors Advisory LLC (now known as MetLife Advisers, LLC) (the “Manager”) and the advisory agreement (the “Advisory Agreement”, and collectively with the Management Agreement, the “Agreements”) between the Manager and Franklin Advisers, Inc. (the “Adviser”) for the Met/Templeton International Bond Portfolio (the “Portfolio”).
In considering the Agreements, the Board reviewed a variety of materials provided by the Manager and the Adviser relating to the Portfolio, the Manager and the Adviser, including comparative performance, fee and expense information for an appropriate peer group of similar mutual funds, performance information for relevant benchmark indices and other information regarding the nature, extent and quality of services to be provided by the Manager and the Adviser under their respective Agreements. The Disinterested Trustees also assessed a report provided by an independent consultant, who reviewed and provided analyses regarding fees and expenses as more fully discussed below.
The Disinterested Trustees were separately advised by independent legal counsel throughout the process. Prior to voting, the Disinterested Trustees also received a memorandum from Trust counsel discussing the legal standards for their consideration of the proposed initial approval of the Agreements. The Disinterested Trustees also discussed the proposed initial approval of the Agreements in private sessions with their independent legal counsel at which no representatives of management were present.
In considering whether to approve the Management Agreement with the Manager and the Advisory Agreement with respect to the Portfolio, the Board reviewed and analyzed the factors it deemed relevant, including: (1) the nature, extent and quality of the services to be provided to the Portfolio by the Manager and the Adviser; (2) the performance of a comparable fund managed by the Adviser as compared to a peer group and an appropriate index; (3) the Manager’s and the Adviser’s personnel and operations; (4) the financial condition of the Manager and of the Adviser; (5) the level and method of computing the Portfolio’s management and advisory fees; (6) the anticipated profitability of the Manager, the Adviser and their affiliates from their relationship with the Portfolio; (7) any “fall-out” benefits to the Manager, the Adviser and their affiliates (i.e., ancillary benefits realized by the Manager, the Adviser or their affiliates from the Manager’s or Adviser’s relationship with the Trust); (8) the anticipated effect of growth in size on the Portfolio’s performance and expenses; and (9) possible conflicts of interest. The Board also considered the nature, quality, and extent of the services to be provided to the Portfolio by the Manager’s affiliates, including distribution services.
Nature, extent and quality of services. In considering the nature, extent and quality of the services to be provided by the Manager to the Portfolio, the Board took into account the extensive responsibilities that the Manager would have as investment manager to the Portfolio, including the selection of the Adviser for the Portfolio and oversight of the Adviser’s compliance with portfolio policies and objectives; review of brokerage matters, including with respect to trade allocation and best execution; oversight of general portfolio compliance with federal and state laws; and the implementation of Board directives as they relate to the Portfolio. The Manager’s role in coordinating the activities of the Portfolio’s other service providers was also considered. The Board also evaluated the expertise and performance of the personnel who would oversee the Adviser and compliance with the Portfolio’s investment restrictions, tax and other requirements. The Board considered information received from the Trust’s Chief Compliance Officer (the “CCO”) regarding the Portfolio’s compliance policies and procedures established pursuant to Rule 38a-1 under the 1940 Act, including the policies and procedures in place relating to proxy voting. The Board also took into account its familiarity with management through Board meetings, discussions and reports. The Board also took into consideration the quality of the services the Manager provided to other portfolios of the Trust.
The Board also recognized the Manager’s reputation and long-standing experience in serving as an investment manager to the Trust, and considered the anticipated benefit to shareholders of investing in a portfolio that is part of a family of variable annuity portfolios offering a variety of investments. In addition, the Board reviewed the financial condition of the Manager and whether it had the financial wherewithal to provide a high level and quality of services to the Portfolio.
With respect to the services to be provided by the Adviser, the Board considered information provided to the Board by the Adviser, including the Adviser’s Form ADV. The Board considered the Adviser’s current level of staffing and its overall resources, as well as its compensation program. The Board reviewed the Adviser’s history and investment experience, as well as information regarding the qualifications, background and responsibilities of the Adviser’s investment and compliance personnel who would provide services to the Portfolio. The Board also considered, among other things, the Adviser’s compliance program and any disciplinary history. The Board noted the Adviser’s regulatory history, including whether it was currently involved in any regulatory actions or investigations as well as material litigation, and any settlements and ameliorative actions undertaken, as appropriate. The Board also noted that the Trust’s CCO and his staff would conduct regular, periodic compliance reviews of the Adviser and present reports to the Disinterested Trustees regarding the same, which would include evaluating the regulatory compliance system of the Adviser and procedures reasonably designed by the Adviser to assure compliance with federal securities laws, including issues related to late trading and market timing, best execution, fair value pricing and proxy voting procedures, among others. The Board also took into account the financial condition of the Adviser. The Board also took into consideration the quality of the services the Adviser and its affiliates provided to other portfolios of the Trust.
The Board considered the Adviser’s investment process and philosophy. The Board took into account that the Adviser’s responsibilities would include the development and maintenance of an investment program for the Portfolio which would be consistent with the Portfolio’s investment objectives, the selection of investment securities and the placement of orders for the purchase and sale of such securities, as well as the implementation of compliance controls related to performance of these services. The Board also reviewed the Adviser’s brokerage policies and practices, including with respect to best execution and soft dollars.
18
Based on its consideration and review of the foregoing information, the Board concluded that the nature, extent and quality of services to be provided by the Manager and by the Adviser were satisfactory and that there was a reasonable basis on which to conclude that each would provide a high quality of investment services to the Portfolio.
Performance. The Board considered the performance record of a fund managed by the Adviser that had an investment objective and investment strategy similar to those the Adviser intended to use in managing the Portfolio (the “Comparable Fund”). Among other data relating specifically to the Comparable Fund, the Board considered that the Comparable Fund outperformed the median of its peer group for the one-, three-, five-, and ten-year periods ended December 31, 2008. The Board also considered that the Comparable Fund outperformed its benchmark, the Citigroup World Government Bond Index ex U.S., for the three-, five- and ten-year periods ended December 31, 2008 and underperformed its benchmark for the one-year period. The Board concluded that the Comparable Fund’s performance was satisfactory.
Fees and expenses. The Board gave substantial consideration to the proposed management fee payable under the Management Agreement and the proposed advisory fee payable under the Advisory Agreement with respect to the Portfolio. The Board, with the assistance of Bobroff Consulting, Inc., an independent third party consultant (“Bobroff”), also examined the fees to be paid by the Portfolio in light of fees paid to other investment managers by comparable funds. In addition, the Board considered the Portfolio’s proposed management fee and total expenses as compared to similarly situated investment companies underlying variable insurance products deemed to be comparable to the Portfolio as determined by Bobroff.
The Board considered that the Portfolio’s proposed management fee was below the median of the peer group. The Board further considered that the Portfolio’s estimated total expenses (exclusive of 12b-1 fees) were below the median of the peer group.
The Board noted that the advisory fee for the Portfolio would be paid by the Manager, not the Portfolio, out of the management fee. It was further noted that the Manager negotiated the advisory fee at arms-length. The Board also considered that the Manager had agreed to enter into an expense limitation agreement with the Portfolio, pursuant to which the Manager would agree to waive a portion of its management fee and/or reimburse certain expenses as a means of limiting the Portfolio’s total annual operating expenses.
The Board also compared the proposed advisory fee to be paid by the Manager to the fee charged by the Adviser to manage the Comparable Fund. The Board considered the fee comparison in light of the differences required to manage different types of accounts.
After consideration of all relevant factors, the Board concluded that the proposed management and advisory fees were consistent with industry norms and were fair and reasonable in light of the services to be provided.
Profitability. The Board examined the anticipated profitability of the Manager with respect to the Portfolio. The Board noted that a major component of profitability of the Manager would be the margin between the management fee that the Manager would receive from the Portfolio and the portion of that fee the Manager would pay to the Adviser. The Board considered the profitability of insurance products, the function of which is supported in part by the Manager’s revenues under the Management Agreement. The Board also considered that the Trust’s distributor, MetLife Investors Distribution Company, would receive 12b-1 payments to support the distribution of insurance products. The Board concluded, after discussions with management, that the anticipated profitability of the Manager and its affiliates from their relationship with the Portfolio was reasonable in light of all relevant factors.
In considering the anticipated profitability to the Adviser and its affiliates from their relationships with the Portfolio, the Board noted that the proposed advisory fee under the Advisory Agreement would be paid by the Manager out of the management fee that it received under the Management Agreement. The Board also relied on the ability of the Manager to negotiate the Advisory Agreement and the fee thereunder at arm’s length. The Board placed more reliance on the fact that the Advisory Agreement was negotiated at arm’s length and that the proposed advisory fee would be paid by the Manager than on Adviser profitability.
Economies of scale. The Board also considered the probable effect of the Portfolio’s growth in size on its performance and fees. The Board noted that the proposed management fee and advisory fee did not contain breakpoints and took into account management’s discussion of those fees. The Board also took into account that the proposed advisory fee would be paid by the Manager out of the management fee. The Board also noted that if the Portfolio’s assets increase over time, it may realize other economies of scale if assets increase proportionally more than certain other expenses. The Board concluded that the proposed management fee structure for the Portfolio was reasonable.
Other factors. As part of its evaluation of the Manager’s compensation, the Board considered other benefits that may be realized by the Manager and its affiliates from their relationship with the Trust. Among them, the Board recognized that an affiliate of the Manager, MetLife Investors Distribution Company, serves as the distributor for the Trust, and, as such, would receive payments pursuant to Rule 12b-1 from the Portfolio to compensate it for providing shareholder services and selling activities, which could lead to growth in the Trust’s assets and corresponding benefits from such growth, including economies of scale. The Board also considered that affiliates of the Manager may benefit from certain indirect tax benefits relating to dividend received deductions and foreign tax credits. The Board concluded that anticipated ancillary benefits accruing to the Manager and its affiliates by virtue of the Manager’s relationship with the Portfolio were fair and reasonable in light of the anticipated costs of providing investment management and other services to the Portfolio and the ongoing commitment of the Manager to the Portfolio.
The Board considered other benefits that may be realized by the Adviser and its affiliates from their relationship with the Trust, including the opportunity to provide advisory services to additional portfolios of the Trust and reputational benefits. The Board concluded that any benefits that may accrue to the Adviser and its affiliates by virtue of the Adviser’s relationship to the Portfolio were fair and reasonable in light of the anticipated costs of providing investment advisory services to the Portfolio and the ongoing commitment of the Adviser to the Portfolio.
The Board considered any possible conflicts of interest in the form of material benefits or detriments to the Trust resulting from the nature of the Trust’s and the Manager’s or the Adviser’s affiliations. Here, the Board considered possible conflicts of interest that may arise between the Trust and the Manager or the Adviser in connection with the services to be provided to the Trust and the various relationships that they and their affiliates may have with the Trust. The Board considered the procedures for monitoring and managing such potential conflicts.
19
Conclusion. In considering the initial approval of each of the Agreements, the Board, including the Disinterested Trustees, did not identify any single factor as controlling, and each Trustee may have attributed different weights to various factors. Based on all of the above-mentioned considerations, the Board, including a majority of the Disinterested Trustees, determined that approval of the Management Agreement and the Advisory Agreement was in the best interests of the Portfolio. After full consideration of these and other factors, the Board, including a majority of the Disinterested Trustees, with the assistance of independent counsel, approved the Management Agreement and the Advisory Agreement with respect to the Portfolio.
20
| | |
| MetLife Aggressive Strategy Portfolio | | For the period ended 6/30/09 |
| Managed by MetLife Advisers, LLC | | |
Portfolio Manager Commentary
Performance
For the six-month period ended June 30, 2009, the Class A and B shares of the Portfolio returned 7.77% and 7.61%, respectively, compared to the 10.95% return of its primary index, the Dow Jones Aggressive Index.
Market Environment/Conditions
The worst economic downturn since the 1930s—dubbed “The Great Recession” by some pundits—showed few signs of sustained improvement; although at least the rapid rate of descent appeared to have slowed during the first half of 2009. The Unemployment Rate reached 9.5% in June as over six million jobs were lost over the past twelve months. Other economic statistics were more ambiguous: Consumer Confidence, although still well below its level of two years ago, recovered from the level reached in March and Existing Home Sales improved modestly in response to lower house prices and improved availability of credit.
The Barclays Capital U.S. Aggregate Bond Index produced a modest, but positive total return of 1.9% for the first six months of 2009. The increase in Treasury yields that lowered the price of Treasury bonds was offset by a narrowing of yield spreads, which boosted credit based securities as investors became more positive on the prospects for the economy. The Barclays Capital U.S. Treasury Index was down 4.3% for the six months ending June, while the Barclays Capital U.S. Corporate Investment Grade Index was up 8.3%. Although the Barclays U.S. Corporate High Yield Index was up over 30% for the six-month period, it was still down 2.4% over the previous twelve months. The yield on Three Month Treasury Bills stayed close to 0.2% as the Federal Reserve kept their target rate in the 0.00% to 0.25% range.
The Standard & Poor’s 500 Index, buoyed by a robust 15.9% return for the second quarter, returned 3.2% for the six months ending in June. The rout in stocks that began last summer continued into the first quarter of this year as the severity of the recession became apparent. A turnaround began in early March on improving sentiment and stocks surged over 35% from the low in early March to the end of the June. Although Small Cap stocks had better performance in the second quarter, they were up slightly less than large cap stocks for the full six-month period as measured by the 2.6% rise of the Russell 2000® Index. Growth outperformed Value stocks during the first half of 2009 primarily due to the strength of technology companies compared to the relative weakness in traditional value stocks such as those in the Financials sector. Technology and Basic Materials were the best performing sectors over the six-month period. The Financials sector, despite a nearly 100% return from the middle of March to the end of June, was still among the worst performing sectors for the six-month period (-3.4%). The MSCI EAFE Index was up nearly 8% for the six months ending in June, slightly more than the local return due to a weaker dollar that made foreign securities more valuable to the U.S. dollar based investor. Emerging Market equities and international small cap equities were both up more than the large cap stocks from developed countries.
Portfolio Review/Current Positioning
The Portfolio is a “fund of funds” consisting of other portfolios of the Met Investors Series Trust and the Metropolitan Series Fund, Inc. with a broad allocation goal of 100% in equities and 0% in fixed income. While the broad asset class allocation goals of this Portfolio remained the same, several adjustments to the goals to the sub-asset classes and the underlying portfolio targets were made during the first six months of 2009. This included the elimination of a formal goal for cash, although we still expect the Portfolio will hold some residual cash from the underlying portfolios. In addition there was a slight increase in the goals to non-core asset classes such as small cap stocks and international stocks.
Generally, the underlying equity portfolios with a growth style performed better than those with a value style. This included the Jennison Growth Portfolio, which was helped by an overweight in the strong performing Information Technology sector and good security selection, especially in the Energy and Financials sectors. In Energy, they did not hold Exxon Mobil (-11%), but held Southwestern Energy (+34%); in Financials, they overweighted Goldman Sachs (+76%) and avoided Citigroup (-55%). The Harris Oakmark International Portfolio also performed well, aided by good security selection in the Financials sector of Western Europe. Holding large overweights in strong performing Credit Suisse and BNP Paribas offset holding weak performing Allianz and UBS. Although the Van Eck Global Natural Resources Portfolio made up only 3% of the Portfolio, it had a significant positive impact on performance due to its underweighting of several large, poor performing oil companies (Exxon Mobil, ConocoPhillips, and Chevron) and its overweighting of Metal & Mining stocks, including a position in Freeport-McMoRan Copper & Gold, which doubled during the six-month period. The rising tide of the emerging markets during the six months ending June 2009 lifted the MFS® Emerging Market Portfolio to a nearly 30% return and was a positive contributor to both relative and absolute return.
Detracting the most from the Portfolio’s relative performance were the BlackRock Large Cap Value Portfolio and the Lord Abbett Growth and Income Portfolio. BlackRock’s blend of quantitative and qualitative analysis resulted in a focus on companies with a high-quality bias. During the market rally that began in early March, investors bid up the price of weaker companies that lost the most in the preceding year. Lord Abbett, despite good stock selection in the Financials sector, was adversely impacted by its value style. Despite overall good stock selection in the Financials sector, it was not able to overcome an overweight in that weak sector. The Artio International Stock Portfolio also detracted from the Portfolio’s relative and absolute performance due to a large cash position in a strong market and overall weak stock selection. Most notable was that they did not own several large strong performing companies in the Financials sector: Credit Suisse, BNP Paribas, and Barclays.
MetLife Advisers, LLC
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking
1
| | |
| MetLife Aggressive Strategy Portfolio | | For the period ended 6/30/09 |
| Managed by MetLife Advisers, LLC | | |
Portfolio Manager Commentary (continued)
statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the advisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
Davis Venture Value Portfolio (Class A) | | 9.08% |
Jennison Growth Portfolio (Class A) | | 8.74% |
Rainier Large Cap Equity Portfolio (Class A) | | 7.68% |
Clarion Global Real Estate Portfolio (Class A) | | 5.18% |
Van Kampen Comstock Portfolio (Class A) | | 5.10% |
Third Avenue Small Cap Value Portfolio (Class A) | | 5.07% |
Met/AIM Small Cap Growth Portfolio (Class A) | | 4.97% |
Lord Abbett Growth and Income Portfolio (Class A) | | 4.93% |
MFS® Value Portfolio (Class A) | | 4.89% |
BlackRock Large Cap Value Portfolio (Class A) | | 4.66% |
Harris Oakmark International Portfolio (Class A) | | 4.19% |
MFS® Research International Portfolio (Class A) | | 4.19% |
Legg Mason Partners Aggressive Growth Portfolio (Class A) | | 4.12% |
Artio International Stock Portfolio (Class A) | | 4.07% |
Janus Forty Portfolio (Class A) | | 3.91% |
MFS® Emerging Markets Equity Portfolio (Class A) | | 3.32% |
Met/Dimensional International Small Capital Portfolio (Class A) | | 3.22% |
Van Eck Global Natural Resources Portfolio (Class A) | | 3.10% |
T. Rowe Price Mid Cap Growth Portfolio (Class A) | | 2.89% |
Turner Mid Cap Growth Portfolio (Class A) | | 2.86% |
Goldman Sachs Mid Cap Value Portfolio (Class A) | | 1.97% |
Met/Artisan Mid Cap Value Portfolio (Class A) | | 1.96% |
2
| | |
| MetLife Aggressive Strategy Portfolio | | For the period ended 6/30/09 |
| Managed by MetLife Advisers, LLC | | |
Portfolio Manager Commentary (continued)
MetLife Aggressive Strategy Portfolio managed by MetLife Advisers, LLC vs. Dow Jones Aggressive Index1 and
Aggressive Blended Benchmark2
Growth Based on $10,000+
| | | | | | | | | | |
| | | | | Average Annual Return3 (for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | 3 Year | | Since
Inception4 |
| | MetLife Aggressive Strategy
Portfolio—Class A | | 7.77% | | -27.21% | | -10.03% | | -3.39% |
| — | | Class B | | 7.61% | | -27.37% | | -10.28% | | -2.69% |
| - - | | Dow Jones Aggressive Index1 | | 10.95% | | -26.71% | | -7.11% | | 0.68% |
| — | | Aggressive Blended Benchmark2 | | 6.04% | | -25.67% | | -7.28% | | -0.83% |
+The chart reflects the performance of Class B shares of the Portfolio. The performance of Class B shares will differ from that of the other class because of the difference in expenses paid by policyholders investing in the different share classes.
1The Dow Jones Aggressive Index is a benchmark designed for asset allocation strategists who are willing to take 100% of the risk of an all equity portfolio. It is a total returns index using a combination of various equity indices (both domestic and foreign) from Dow Jones.
2The Aggressive Blended Benchmark is comprised of 73% Dow Jones U.S. Total Full Cap Index and 27% Morgan Stanley Capital International Europe Australasia and Far East Index (“MSCI EAFE® Index”).
The Dow Jones U.S. Total Full Cap Index measures the performance of all U.S. equity securities with readily available price data.
The Morgan Stanley Capital International Europe, Australasia and Far East Index (“MSCI EAFE® Index”) is an unmanaged free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the U.S. and Canada.
3“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
4Inception of the Class B shares is 11/4/04. Inception of the Class A shares is 5/2/05. Index returns are based on an inception date of 11/4/04.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Indexes do not include fees or expenses and are not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| MetLife Aggressive Strategy Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
| | | | |
Class A(a)(b) | | | | | | | | | | | |
Actual | | 0.91% | | $ | 1,000.00 | | $ | 1,077.70 | | $ | 0.46 |
Hypothetical | | 0.91% | | | 1,000.00 | | | 1,024.35 | | | 0.45 |
| | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
| | | | |
Class B(a)(b) | | | | | | | | | | | |
Actual | | 1.16% | | $ | 1,000.00 | | $ | 1,076.10 | | $ | 1.75 |
Hypothetical | | 1.16% | | | 1,000.00 | | | 1,023.11 | | | 1.71 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
(a) The annualized expense ratio shown reflects an expense limitation agreement between MetLife Advisers, LLC and the Portfolio as described in Note 3 of the Notes to Financial Statements.
(b) The annualized expense ratio reflects the expenses of both the Portfolio and the Underlying Portfolios in which it invests.
4
Met Investors Series Trust
MetLife Aggressive Strategy Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Shares | | Value | |
| | | | | | |
|
| Investment Company Securities - 100.1% | |
Artio International Stock Portfolio (Class A)(b) | | 2,754,601 | | $ | 21,403,247 | |
BlackRock Large Cap Value Portfolio (Class A)(b) | | 3,130,410 | | | 24,511,112 | |
Clarion Global Real Estate Portfolio (Class A)(a) | | 3,720,854 | | | 27,236,653 | |
Davis Venture Value Portfolio (Class A)(b) | | 2,096,497 | | | 47,695,295 | |
Goldman Sachs Mid Cap Value Portfolio (Class A)(a) | | 1,259,911 | | | 10,369,068 | |
Harris Oakmark International Portfolio (Class A)(a) | | 2,381,497 | | | 22,028,847 | |
Janus Forty Portfolio
(Class A)(a) | | 379,002 | | | 20,541,882 | |
Jennison Growth Portfolio (Class A)(b) | | 5,222,631 | | | 45,959,151 | |
Legg Mason Partners Aggressive Growth Portfolio (Class A)(a) | | 4,349,459 | | | 21,660,306 | |
Lord Abbett Growth and Income Portfolio (Class A)(a) | | 1,634,825 | | | 25,944,678 | |
Met/AIM Small Cap Growth Portfolio (Class A)(a) | | 2,791,389 | | | 26,155,316 | |
Met/Artisan Mid Cap Value Portfolio (Class A)(b) | | 87,519 | | | 10,314,931 | |
Met/Dimensional International Small Capital Portfolio (Class A)(b) | | 1,417,946 | | | 16,916,095 | |
MFS® Emerging Markets Equity Portfolio (Class A)(a) | | 2,406,235 | | | 17,445,205 | |
MFS® Research International Portfolio (Class A)(a) | | 2,890,419 | | | 22,024,991 | |
MFS® Value Portfolio
(Class A)(b) | | 2,718,960 | | | 25,721,362 | |
Rainier Large Cap Equity Portfolio (Class A)(a) | | 6,835,334 | | | 40,396,826 | |
T. Rowe Price Mid Cap Growth Portfolio (Class A)(a) | | 2,457,009 | | | 15,208,888 | |
Third Avenue Small Cap Value Portfolio (Class A)(a) | | 2,574,286 | | | 26,643,863 | |
Turner Mid Cap Growth Portfolio (Class A)(a) | | 1,819,645 | | | 15,048,462 | |
Van Eck Global Natural Resources Portfolio
(Class A)(b) | | 1,354,241 | | | 16,291,519 | |
Van Kampen Comstock Portfolio (Class A)(a) | | 3,953,798 | | | 26,806,753 | |
| | | | | | |
Total Investment Company Securities
(Cost $670,901,294) | | | | | 526,324,450 | |
| | | | | | |
| |
TOTAL INVESTMENTS - 100.1%
(Cost $670,901,294) | | | 526,324,450 | |
| | | | | | |
| |
| Other Assets and Liabilities (net) - (0.1)% | | | (265,061 | ) |
| | | | | | |
| | |
| NET ASSETS - 100.0% | | | | $ | 526,059,389 | |
| | | | | | |
Portfolio Footnotes:
| (a) | | A Portfolio of Met Investors Series Trust. |
| (b) | | A Portfolio of Metropolitan Series Fund, Inc. |
See accompanying notes to financial statements
5
Met Investors Series Trust
MetLife Aggressive Strategy Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1—quoted prices in active markets for identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Investment Company Securities | | $ | 526,324,450 | | $ | — | | $ | — | | $ | 526,324,450 |
TOTAL INVESTMENTS | | $ | 526,324,450 | | $ | — | | $ | — | | $ | 526,324,450 |
See accompanying notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| MetLife Aggressive Strategy Portfolio | | | |
| Assets | | | | |
Investments, at value (a) | | $ | 526,324,450 | |
Receivable for investments sold | | | 99,944 | |
Receivable for Trust shares sold | | | 111,886 | |
| | | | |
Total assets | | | 526,536,280 | |
| | | | |
| Liabilities | | | | |
Due to Custodian | | | 1 | |
Payables for: | | | | |
Trust shares redeemed | | | 211,830 | |
Distribution and services fees—Class B | | | 108,964 | |
Management fee | | | 42,978 | |
Administration fee | | | 2,010 | |
Custodian and accounting fees | | | 2,924 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 104,757 | |
| | | | |
Total liabilities | | | 476,891 | |
| | | | |
| Net Assets | | $ | 526,059,389 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 840,128,891 | |
Accumulated net realized loss | | | (178,684,200 | ) |
Unrealized depreciation on investments | | | (144,576,844 | ) |
Undistributed net investment income | | | 9,191,542 | |
| | | | |
Total | | $ | 526,059,389 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 237,589 | |
| | | | |
Class B | | | 525,821,800 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 34,951 | |
| | | | |
Class B | | | 77,446,374 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 6.80 | |
| | | | |
Class B | | | 6.79 | |
| | | | |
| | | | | |
(a) Investments at cost | | $ | 670,901,294 | |
See accompanying notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| MetLife Aggressive Strategy Portfolio | | | |
| Investment Income | | | | |
Dividends from Underlying Portfolios | | $ | 9,996,304 | |
| | | | |
Total investment income | | | 9,996,304 | |
| | | | |
| Expenses | | | | |
Management fee | | | 234,889 | |
Administration fees | | | 11,901 | |
Custodian and accounting fees | | | 12,402 | |
Distribution and services fees—Class B | | | 589,210 | |
Audit and tax services | | | 96,074 | |
Legal | | | 14,086 | |
Trustee fees and expenses | | | 9,699 | |
Insurance | | | 1,267 | |
Other | | | 1,644 | |
| | | | |
Total expenses | | | 971,172 | |
Less expenses reimbursed by the Manager | | | (166,410 | ) |
| | | | |
Net expenses | | | 804,762 | |
| | | | |
Net investment income | | | 9,191,542 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments | | | | |
Net realized loss on: | | | | |
Investments | | | (144,177,325 | ) |
Capital gain distributions from Underlying Portfolios | | | (496,043 | ) |
| | | | |
Net realized loss on investments and capital gain from Underlying Portfolios | | | (144,673,368 | ) |
| | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 170,546,001 | |
| | | | |
Net change in unrealized appreciation on investments | | | 170,546,001 | |
| | | | |
Net realized and unrealized gain on investments | | | 25,872,633 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 35,064,175 | |
| | | | |
See accompanying notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| MetLife Aggressive Strategy Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 9,191,542 | | | $ | 5,296,488 | |
Net realized gain (loss) on investments and capital gain distributions from Underlying Portfolios | | | (144,673,368 | ) | | | 9,020 | |
Net change in unrealized appreciation (depreciation) on investments | | | 170,546,001 | | | | (309,605,331 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 35,064,175 | | | | (304,299,823 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | — | | | | (14,174 | ) |
Class B | | | — | | | | (22,482,743 | ) |
From net realized gains | | | | | | | | |
Class A | | | — | | | | (43,098 | ) |
Class B | | | — | | | | (78,906,533 | ) |
From return of capital | | | | | | | | |
Class A | | | — | | | | (85 | ) |
Class B | | | — | | | | (155,370 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | — | | | | (101,602,003 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 13,964 | | | | 33,922 | |
Class B | | | 29,572,004 | | | | 64,897,256 | |
Net asset value of shares issued through acquisition | | | | | | | | |
Class A | | | — | | | | — | |
Class B | | | — | | | | 89,222,615 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | — | | | | 57,357 | |
Class B | | | — | | | | 101,544,646 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (27,393 | ) | | | (42,480 | ) |
Class B | | | (39,700,819 | ) | | | (165,885,064 | ) |
| | | | | | | | |
Net increase (decrease) in net assets from capital share transactions | | | (10,142,244 | ) | | | 89,828,252 | |
| | | | | | | | |
| Net Increase (Decrease) in Net Assets | | | 24,921,931 | | | | (316,073,574 | ) |
Net assets at beginning of period | | | 501,137,458 | | | | 817,211,032 | |
| | | | | | | | |
Net assets at end of period | | $ | 526,059,389 | | | $ | 501,137,458 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 9,191,542 | | | $ | — | |
| | | | | | | | |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| MetLife Aggressive Strategy Portfolio | | Class A | | | | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended
December 31, | | | | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005(b) | | | | |
| Net Asset Value, Beginning of Period | | $ | 6.31 | | | $ | 12.61 | | | $ | 13.21 | | | $ | 11.68 | | | $ | 10.27 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.13 | | | | 0.11 | | | | 0.09 | | | | 0.22 | | | | 0.77 | | | | | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.36 | | | | (4.71 | ) | | | 0.34 | | | | 1.42 | | | | 0.79 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.49 | | | | (4.60 | ) | | | 0.43 | | | | 1.64 | | | | 1.56 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | (0.41 | ) | | | (0.20 | ) | | | (0.02 | ) | | | (0.11 | ) | | | | |
Distributions from Net Realized Capital Gains | | | — | | | | (1.29 | ) | | | (0.83 | ) | | | (0.09 | ) | | | (0.04 | ) | | | | |
Distributions from Return of Capital | | | — | | | | (0.00 | )+ | | | — | | | | — | | | | — | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | — | | | | (1.70 | ) | | | (1.03 | ) | | | (0.11 | ) | | | (0.15 | ) | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 6.80 | | | $ | 6.31 | | | $ | 12.61 | | | $ | 13.21 | | | $ | 11.68 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 7.77 | % | | | (40.67 | )% | | | 3.12 | % | | | 14.10 | % | | | 15.12 | % | | | | |
Ratio of Expenses to Average Net Assets After Reimbursement(e) | | | 0.09 | %* | | | 0.10 | % | | | 0.10 | % | | | 0.10 | % | | | 0.12 | %* | | | | |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates(f) | | | 0.16 | %* | | | 0.11 | % | | | 0.10 | % | | | 0.11 | % | | | 0.12 | %* | | | | |
Ratio of Net Investment Income to Average Net Assets(g) | | | 4.15 | %* | | | 1.11 | % | | | 0.69 | % | | | 1.75 | % | | | 1.08 | %* | | | | |
Portfolio Turnover Rate | | | 38.4 | % | | | 29.6 | % | | | 27.2 | % | | | 26.0 | % | | | 18.3 | % | | | | |
Net Assets, End of Period (in millions) | | $ | 0.2 | | | $ | 0.2 | | | $ | 0.4 | | | $ | 0.3 | | | $ | 0.1 | | | | | |
| |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004(c) | |
| Net Asset Value, Beginning of Period | | $ | 6.31 | | | $ | 12.58 | | | $ | 13.18 | | | $ | 11.68 | | | $ | 10.69 | | | $ | 10.00 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.12 | | | | 0.08 | | | | 0.05 | | | | 0.18 | | | | 0.20 | | | | 0.08 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.36 | | | | (4.70 | ) | | | 0.35 | | | | 1.41 | | | | 0.91 | | | | 0.64 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.48 | | | | (4.62 | ) | | | 0.40 | | | | 1.59 | | | | 1.11 | | | | 0.72 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | (0.36 | ) | | | (0.17 | ) | | | (0.00 | )+ | | | (0.08 | ) | | | (0.03 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (1.29 | ) | | | (0.83 | ) | | | (0.09 | ) | | | (0.04 | ) | | | — | |
Distributions from Return of Capital | | | — | | | | (0.00 | )+ | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | — | | | | (1.65 | ) | | | (1.00 | ) | | | (0.09 | ) | | | (0.12 | ) | | | (0.03 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 6.79 | | | $ | 6.31 | | | $ | 12.58 | | | $ | 13.18 | | | $ | 11.68 | | | $ | 10.69 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 7.61 | % | | | (40.81 | )% | | | 2.89 | % | | | 13.64 | % | | | 10.38 | % | | | 7.15 | % |
Ratio of Expenses to Average Net Assets After Reimbursement(e) | | | 0.34 | %* | | | 0.35 | % | | | 0.35 | % | | | 0.35 | % | | | 0.35 | % | | | 0.35 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates(f) | | | 0.41 | %* | | | 0.36 | % | | | 0.35 | % | | | 0.36 | % | | | 0.37 | % | | | 0.52 | %* |
Ratio of Net Investment Income to Average Net Assets(g) | | | 3.90 | %* | | | 0.84 | % | | | 0.36 | % | | | 1.45 | % | | | 1.80 | % | | | 4.77 | %* |
Portfolio Turnover Rate | | | 38.4 | % | | | 29.6 | % | | | 27.2 | % | | | 26.0 | % | | | 18.3 | % | | | 0.0 | %(d) |
Net Assets, End of Period (in millions) | | $ | 525.8 | | | $ | 500.9 | | | $ | 816.8 | | | $ | 855.9 | | | $ | 661.7 | | | $ | 304.5 | |
| + | | Rounds to less than $0.005 per share |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—05/02/2005. |
| (c) | | Commencement of operations—11/04/2004. |
| (d) | | For the period ended 12/31/2004, the portfolio turnover calculation is zero, due to no sales activity. |
| (e) | | The ratio of operating expenses to average net assets does not include expenses of the Underlying Portfolios in which the Portfolio invests. |
| (f) | | See Note 3 of the Notes to Financial Statements. |
| (g) | | Recognition of net investment income by the Portfolio is affected by the timing of the declaration of dividends by the Underlying Portfolios in which it invests. |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is MetLife Aggressive Strategy Portfolio (the “Portfolio”), which is non-diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A and B Shares are currently offered by the Portfolio. Class C and E Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
The Portfolio is designed on established principles of asset allocation and risk tolerance. The Portfolio will invest substantially all of its assets in other Portfolios of the Trust or of Metropolitan Series Fund, Inc. which invest either in equity securities or fixed income securities, as applicable (“Underlying Portfolios”).
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Investments in the Underlying Portfolios are valued at their closing daily net asset value. The net asset value of the Portfolio is calculated based on the net asset values of the Underlying Portfolios in which the Portfolio invests. For information about the use of fair value pricing by the Underlying Portfolios, please refer to the prospectuses of the Underlying Portfolios.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes.
C. Investment Income and Expenses - Income and capital gain distributions from the Underlying Portfolios are recorded on the ex-dividend date.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | |
Expiring
12/31/2016 | | Total |
| |
| $17,248,289 | | $17,248,289 |
The Portfolio acquired capital losses of $18,355,669 in the merger with Strategic Growth Portfolio on November 7, 2008, which are subject to a first year limitation of $1,107,380.
11
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board of Trustees (the “Board”) and has overall responsibility for the general management and administration of the Trust.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $ | 234,889 | | 0.10 | % | | First $500 Million |
| | |
| | | 0.075 | % | | $500 Million to $1 Billion |
| | |
| | | 0.05 | % | | Over $1 Billion |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Manager has entered into an expense limitation agreement with the Trust (“Expense Limitation Agreement”) in the interest of limiting expenses of the Portfolio of the Trust. The Expense Limitation Agreement shall continue in effect with respect to the Portfolio until April 30, 2010. Pursuant to that Expense Limitation Agreement, the Manager has agreed to waive or limit its fees and to assume other expenses so that the total annual operating expenses of the Portfolio other than interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with accounting principles generally accepted in the United States of America, other extraordinary expenses not incurred in the ordinary course of the Portfolio’s business, and Underlying Portfolios’ fees and expenses, but including amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act, are limited to the following expense ratios as a percentage of the Portfolio’s average daily net assets:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Maximum Expense Ratio
under current Expense
Limitation Agreement | | | Expenses Deferred in |
| | | | 2004 | | 2005 | | 2006 | | 2007 | | 2008 | | 2009 |
| | | | Subject to repayment until December 31, |
| | | Class A | | | Class B | | | 2009 | | 2010 | | 2011 | | 2012 | | 2013 | | 2014 |
| | | | | | | | |
| MetLife Aggressive Strategy Portfolio | | 0.10 | % | | 0.35 | % | | $ | 32,989 | | $ | 122,410 | | $ | 98,966 | | $ | 11,142 | | $ | 75,771 | | $ | 166,410 |
| Strategic Growth Portfolio* | | N/A | | | N/A | | | $— | | $— | | $36,665 | | $131,207 | | $65,845 | | $— |
* On November 7, 2008, the Strategic Growth Portfolio merged with and into MetLife Aggressive Strategy Portfolio. The repayment of the subsidy amount for the Strategic Growth Portfolio will occur from the MetLife Aggressive Strategy Portfolio.
As a result of the Strategic Growth Portfolio acquisition, the Manager was entitled to a subsidy amount of $233,717, which $0 was repaid by the Portfolio during the period ended June 30, 2009.
The expenses reimbursed for the period ended June 30, 2009 are shown as expenses reimbursed in the Statement of Operations of the Portfolio.
If in any year in which the Management Agreement is still in effect, the estimated aggregate portfolio operating expenses of the Portfolio for the fiscal year are less than the Maximum Expense Ratios for that year, subject to approval by the Trust’s Board, the Manager shall be entitled to reimbursement by the Portfolio to the extent that the charge does not cause the expenses in such subsequent year to exceed the Maximum Expense Ratios as stated above. The Portfolio is not obligated to repay any expense paid by the Manager more than five years after the end of the fiscal year in which such expense was incurred.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A and Class B Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B distribution plan provides that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% of the average net assets of the Portfolio attributable to its Class B Shares in respect to activities primarily intended to result in the sale of Class B Shares. However, under the Class B distribution agreement, payments to the Distributor for activities pursuant to the Class B distribution plan are currently limited to payments at an annual rate equal to 0.25% of average daily net assets of the Portfolio attributable to its Class B Shares.
12
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
Under terms of the Class B distribution plan and distribution agreement, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Shares Issued
in Connection
with Acquisition | | Reinvestments | | Redemptions | | | Net Increase
(Decrease)
in Shares
Outstanding | | | Ending
Shares |
| | | | | | | |
Class A | | | | | | | | | | | | | | | | |
| | | | | | | |
6/30/2009 | | 37,356 | | 2,414 | | — | | — | | (4,819 | ) | | (2,405 | ) | | 34,951 |
| | | | | | | |
12/31/2008 | | 32,319 | | 3,601 | | — | | 6,074 | | (4,638 | ) | | 5,037 | | | 37,356 |
| | | | | | | |
Class B | | | | | | | | | | | | | | | | |
| | | | | | | |
6/30/2009 | | 79,381,701 | | 4,823,758 | | — | | — | | (6,759,085 | ) | | (1,935,327 | ) | | 77,446,374 |
| | | | | | | |
12/31/2008 | | 64,928,499 | | 6,945,289 | | 13,747,706 | | 10,701,777 | | (16,941,570 | ) | | 14,453,202 | | | 79,381,701 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 183,142,987 | | $ | — | | $ | 183,502,699 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $670,901,294 | | $ | 9,180,216 | | $ | (153,757,060 | ) | | (144,576,844 | ) |
6. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Return of
Capital | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | | | |
| $24,550,055 | | $ | 11,375,570 | | $ | 76,896,493 | | $ | 52,594,346 | | $ | 155,455 | | $ | — | | $ | 101,602,003 | | $ | 63,969,916 |
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
6. Distributions to Shareholders - continued
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards | | | Total | |
| | | | |
| $— | | $ | — | | $ | (331,885,389 | ) | | $ | (17,248,289 | ) | | $ | (349,133,678 | ) |
7. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
8. Market, Credit and Counterparty Risk
In the normal course of business, the Underlying Portfolios, in which the Portfolio invests, invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Underlying Portfolios may decline in response to certain events, including those directly involving the companies whose securities are owned by the Underlying Portfolios; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Underlying Portfolios may be exposed to counterparty risk, or the risk that an entity with which the Underlying Portfolios have unsettled or open transactions may default. Financial assets, which potentially expose the Underlying Portfolios to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Underlying Portfolios’ exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Underlying Portfolios’ Statements of Assets and Liabilities.
9. Transactions in Securities of Affiliated Issuers
Transactions in the Underlying Portfolios during the period ended June 30, 2009 in which the Portfolio had ownership are as follows:
| | | | | | | | | |
Security Description | | Number of
shares held at
December 31, 2008 | | Shares purchased
during the period | | Shares sold
during the period | | | Number of
shares held at
June 30, 2009 |
| | | | |
Artio International Stock Portfolio (Class A) | | 2,007,197 | | 868,784 | | (121,380 | ) | | 2,754,601 |
| | | | |
BlackRock Large Cap Value Portfolio (Class A) | | — | | 3,140,816 | | (10,406 | ) | | 3,130,410 |
| | | | |
Clarion Global Real Estate Portfolio (Class A) | | 2,697,795 | | 1,155,826 | | (132,767 | ) | | 3,720,854 |
| | | | |
Davis Venture Value Portfolio (Class A) | | 2,270,574 | | 145,891 | | (319,968 | ) | | 2,096,497 |
| | | | |
Goldman Sachs Mid Cap Value Portfolio (Class A) | | 1,268,191 | | 97,250 | | (105,530 | ) | | 1,259,911 |
| | | | |
Harris Oakmark International Portfolio (Class A) | | 2,420,666 | | 304,302 | | (343,471 | ) | | 2,381,497 |
| | | | |
Janus Forty Portfolio (Class A) | | — | | 380,214 | | (1,212 | ) | | 379,002 |
| | | | |
Jennison Growth Portfolio (Class A) | | 1,911,116 | | 3,498,186 | | (186,671 | ) | | 5,222,631 |
| | | | |
Lazard Mid Cap Portfolio (Class A) | | 2,166,894 | | 50,458 | | (2,217,352 | ) | | — |
| | | | |
Legg Mason Partners Aggressive Growth Portfolio (Class A) | | 7,757,390 | | 128,741 | | (3,536,672 | ) | | 4,349,459 |
| | | | |
Legg Mason Value Equity Portfolio (Class A) | | 6,179,435 | | 507,927 | | (6,687,362 | ) | | — |
| | | | |
Lord Abbett Growth and Income Portfolio (Class A) | | 3,095,342 | | 302,267 | | (1,762,784 | ) | | 1,634,825 |
| | | | |
Met/AIM Small Cap Growth Portfolio (Class A) | | 2,407,623 | | 533,514 | | (149,748 | ) | | 2,791,389 |
| | | | |
Met/Artisan Mid Cap Value Portfolio (Class A) | | 185,217 | | 5,716 | | (103,414 | ) | | 87,519 |
| | | | |
Met/Dimensional International Small Capital Portfolio (Class A) | | 972,867 | | 489,182 | | (44,103 | ) | | 1,417,946 |
| | | | |
MFS® Emerging Markets Equity Portfolio (Class A) | | 4,637,221 | | 165,430 | | (2,396,416 | ) | | 2,406,235 |
| | | | |
MFS® Research International Portfolio (Class A) | | 2,245,670 | | 899,362 | | (254,613 | ) | | 2,890,419 |
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
9. Transactions in Securities of Affiliated Issuers - continued
| | | | | | | | | |
Security Description | | Number of
shares held at
December 31, 2008 | | Shares purchased
during the period | | Shares sold
during the period | | | Number of
shares held at
June 30, 2009 |
| | | | |
MFS® Value Portfolio (Class A) | | — | | 2,727,629 | | (8,669 | ) | | 2,718,960 |
| | | | |
Rainier Large Cap Equity Portfolio (Class A) | | 5,172,823 | | 1,991,253 | | (328,742 | ) | | 6,835,334 |
| | | | |
T. Rowe Price Mid Cap Growth Portfolio (Class A) | | — | | 2,464,901 | | (7,892 | ) | | 2,457,009 |
| | | | |
Third Avenue Small Cap Value Portfolio (Class A) | | 4,325,398 | | 214,070 | | (1,965,182 | ) | | 2,574,286 |
| | | | |
Turner Mid Cap Growth Portfolio (Class A) | | 1,339,489 | | 553,123 | | (72,967 | ) | | 1,819,645 |
| | | | |
Van Eck Global Natural Resources Portfolio (Class A) | | 979,999 | | 448,763 | | (74,521 | ) | | 1,354,241 |
| | | | |
Van Kampen Comstock Portfolio (Class A) | | 7,914,242 | | 663,058 | | (4,623,502 | ) | | 3,953,798 |
| | | | | | | | | | | | | |
Security Description | | Net Realized Loss
on Investments
during the period | | | Capital
Gain Distributions
from Affiliates
during the period | | Income earned
from Affiliates
during the period | | Ending Value |
| | | | |
Artio International Stock Portfolio (Class A) | | $ | (761,240 | ) | | $ | — | | $ | 109,523 | | $ | 21,403,247 |
| | | | |
BlackRock Large Cap Value Portfolio (Class A) | | | 2,434 | | | | — | | | — | | | 24,511,112 |
| | | | |
Clarion Global Real Estate Portfolio (Class A) | | | (1,449,194 | ) | | | — | | | 835,611.00 | | | 27,236,653 |
| | | | |
Davis Venture Value Portfolio (Class A) | | | (2,437,558 | ) | | | — | | | 163,442.00 | | | 47,695,295 |
| | | | |
Goldman Sachs Mid Cap Value Portfolio (Class A) | | | (592,290 | ) | | | — | | | 1,972,424.00 | | | 10,369,068 |
| | | | |
Harris Oakmark International Portfolio (Class A) | | | (2,984,739 | ) | | | — | | | — | | | 22,028,847 |
| | | | |
Janus Forty Portfolio (Class A) | | | 4,356 | | | | — | | | 214,965.00 | | | 20,541,882 |
| | | | |
Jennison Growth Portfolio (Class A) | | | (913,420 | ) | | | — | | | 45,136.00 | | | 45,959,151 |
| | | | |
Lazard Mid Cap Portfolio (Class A) | | | (8,047,339 | ) | | | — | | | 1,322,452.00 | | | — |
| | | | |
Legg Mason Partners Aggressive Growth Portfolio (Class A) | | | (13,189,467 | ) | | | — | | | 247,967.00 | | | 21,660,306 |
| | | | |
Legg Mason Value Equity Portfolio (Class A) | | | (31,637,128 | ) | | | — | | | 613,980.00 | | | — |
| | | | |
Lord Abbett Growth and Income Portfolio (Class A) | | | (23,073,605 | ) | | | — | | | 1,183,923.00 | | | 25,944,678 |
| | | | |
Met/AIM Small Cap Growth Portfolio (Class A) | | | (672,308 | ) | | | — | | | 554,144.00 | | | 26,155,316 |
| | | | |
Met/Artisan Mid Cap Value Portfolio (Class A) | | | (12,407,635 | ) | | | — | | | 11,977.00 | | | 10,314,931 |
| | | | |
Met/Dimensional International Small Capital Portfolio (Class A) | | | (28,207 | ) | | | — | | | 596,338.00 | | | 16,916,095 |
| | | | |
MFS® Emerging Markets Equity Portfolio (Class A) | | | (10,043,170 | ) | | | — | | | 293,973.00 | | | 17,445,205 |
| | | | |
MFS® Research International Portfolio (Class A) | | | (1,810,204 | ) | | | — | | | — | | | 22,024,991 |
| | | | |
MFS® Value Portfolio (Class A) | | | 5,720 | | | | — | | | — | | | 25,721,362 |
| | | | |
Rainier Large Cap Equity Portfolio (Class A) | | | (1,369,725 | ) | | | — | | | — | | | 40,396,826 |
| | | | |
T. Rowe Price Mid Cap Growth Portfolio (Class A) | | | 3,087 | | | | — | | | — | | | 15,208,888 |
| | | | |
Third Avenue Small Cap Value Portfolio (Class A) | | | (12,936,606 | ) | | | 159,054 | | | — | | | 26,643,863 |
| | | | |
Turner Mid Cap Growth Portfolio (Class A) | | | (403,570 | ) | | | — | | | — | | | 15,048,462 |
| | | | |
Van Eck Global Natural Resources Portfolio (Class A) | | | (8,153 | ) | | | — | | | — | | | 16,291,519 |
| | | | |
Van Kampen Comstock Portfolio (Class A) | | | (20,419,450 | ) | | | — | | | — | | | 26,806,753 |
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
10. Acquisitions
As of the close of business on November 7, 2008, MetLife Aggressive Strategy Portfolio (“Aggressive”) acquired all the net assets of Strategic Growth Portfolio (“Growth”), a series of the Trust, pursuant to a plan of reorganization approved by Growth shareholders on November 5, 2008. The acquisition was accomplished by a tax-free exchange of 13,747,706 Class B shares of Aggressive (valued at $89,222,615) in exchange for 14,328,164 Class B shares of Growth outstanding on November 7, 2008. Growth Class B net assets at that date ($89,222,615), including $41,304,836 of unrealized depreciation and $19,407,113 of accumulated net realized losses, were combined with those of Aggressive Class B. The aggregate Class B net assets of Aggressive immediately before the acquisition were $432,543,589. The aggregate Class B net assets of Growth immediately before the acquisition were $89,222,615. The aggregate Class B net assets of Aggressive immediately after the acquisition were $521,766,204.
11. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
12. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
16
| | |
| MetLife Balanced Strategy Portfolio | | For the period ended 6/30/09 |
| Managed by MetLife Advisers, LLC | | |
Portfolio Manager Commentary
Performance
For the six-month period ended June 30, 2009, the Class A and B shares of the Portfolio returned 8.65% and 8.53%, respectively, compared to the 7.11% return of its primary index, the Dow Jones Moderate Index.
Market Environment/Conditions
The worst economic downturn since the 1930s—dubbed “The Great Recession” by some pundits—showed few signs of sustained improvement; although at least the rapid rate of descent appeared to have slowed during the first half of 2009. The Unemployment Rate reached 9.5% in June as over six million jobs were lost over the past twelve months. Other economic statistics were more ambiguous: Consumer Confidence, although still well below its level of two years ago, recovered from the level reached in March and Existing Home Sales improved modestly in response to lower house prices and improved availability of credit.
The Barclays Capital U.S. Aggregate Bond Index produced a modest, but positive total return of 1.9% for the first six months of 2009. The increase in Treasury yields that lowered the price of Treasury bonds was offset by a narrowing of yield spreads, which boosted credit based securities as investors became more positive on the prospects for the economy. The Barclays Capital U.S. Treasury Index was down 4.3% for the six months ending June, while the Barclays Capital U.S. Corporate Investment Grade Index was up 8.3%. Although the Barclays U.S. Corporate High Yield Index was up over 30% for the six-month period, it was still down 2.4% over the previous twelve months. The yield on Three Month Treasury Bills stayed close to 0.2% as the Federal Reserve kept their target rate in the 0.00% to 0.25% range.
The Standard & Poor’s 500 Index, buoyed by a robust 15.9% return for the second quarter, returned 3.2% for the six months ending in June. The rout in stocks that began last summer continued into the first quarter of this year as the severity of the recession became apparent. A turnaround began in early March on improving sentiment and stocks surged over 35% from the low in early March to the end of the June. Although Small Cap stocks had better performance in the second quarter, they were up slightly less than large cap stocks for the full six-month period as measured by the 2.6% rise of the Russell 2000® Index. Growth outperformed Value stocks during the first half of 2009 primarily due to the strength of technology companies compared to the relative weakness in traditional value stocks such as those in the Financials sector. Technology and Basic Materials were the best performing sectors over the six-month period. The Financials sector, despite a nearly 100% return from the middle of March to the end of June, was still among the worst performing sectors for the six-month period (-3.4%). The MSCI EAFE Index was up nearly 8% for the six months ending in June, slightly more than the local return due to a weaker dollar that made foreign securities more valuable to the U.S. dollar based investor. Emerging Market equities and international small cap equities were both up more than the large cap stocks from developed countries.
Portfolio Review/Current Positioning
The Portfolio is a “fund of funds” consisting of other portfolios of the Met Investors Series Trust and the Metropolitan Series Fund, Inc, with a broad allocation goal of 65% in equities and 35% in fixed income. While the broad asset class allocation goals of this Portfolio remained the same, several adjustments to the goals to the sub-asset classes and the underlying portfolio targets were made during the first six months of 2009. This included the elimination of a formal goal for cash, although we still expect the Portfolio will hold some residual cash from the underlying portfolios.
The Portfolio continues to be diversified across a wide variety of asset classes and underlying portfolios to add value over the long term. During 2008, investors shunned risk and rewarded only what they perceived to be the safest investments. This was especially true in the fixed income area where Treasuries outperformed high yield securities and investment grade corporate bonds by a wide margin. In contrast, exposure to credit based bonds helped actively managed fixed income portfolios during the first six months of 2009. This was less at a factor for this Portfolio because of its relatively small (35%) bond exposure.
Generally, the underlying equity portfolios with a growth style performed better than those with a value style. This included the Jennison Growth Portfolio, which was helped by an overweight in the strong performing Information Technology sector and good security selection, especially in the Energy and Financials sectors. In Energy, they did not hold Exxon Mobil (-11%), but held Southwestern Energy (+34%); in Financials, they overweighted Goldman Sachs (+76%) and avoided Citigroup (-55%). The Harris Oakmark International Portfolio also performed well, aided by good security selection in the Financials sector of Western Europe. Holding large overweights in strong performing Credit Suisse and BNP Paribas offset holding weak performing Allianz and UBS. Although the Van Eck Global Natural Resources Portfolio made up only 1% of the Portfolio, it had a positive impact on performance due to its underweighting of several large, poor performing oil companies (Exxon Mobil, ConocoPhillips, and Chevron) and its overweighting of Metal & Mining stocks, including a position in Freeport-McMoRan Copper & Gold, which doubled during the six-month period. The rising tide of the emerging markets during the six months ending June 2009 lifted the MFS® Emerging Market Portfolio to a nearly 30% return and was a positive contributor to both relative and absolute return.
Detracting the most from the Portfolio’s relative performance were the BlackRock Large Cap Value Portfolio and the Lord Abbett Growth and Income Portfolio. BlackRock’s blend of quantitative and qualitative analysis resulted in a focus on companies with a high-quality bias. During the market rally that began in early March, investors bid up the price of weaker companies that lost the most in the preceding year. Lord Abbett, despite good stock selection in the Financials sector, was adversely impacted by its value style. Despite overall good stock selection in the Financials sector, it was not able to overcome an overweight in that weak sector. The Artio International Stock Portfolio also detracted from the Portfolio’s relative and absolute performance due to a large cash position in a strong market and overall weak stock
1
| | |
| MetLife Balanced Strategy Portfolio | | For the period ended 6/30/09 |
| Managed by MetLife Advisers, LLC | | |
Portfolio Manager Commentary (continued)
selection. Most notable was that they did not own several large strong performing companies in the Financials sector: Credit Suisse, BNP Paribas, and Barclays.
Within the fixed income segment, the underlying portfolios with large exposures to high yield bonds, such as the Lord Abbett Bond Debenture Portfolio and the BlackRock High Yield Portfolio, were all up sharply relative to the broad bond indices for the period. Overall high yield exposure was about 4% of the Portfolio, which was in line with its target. The PIMCO Total Return Portfolio—the single largest holding in the Portfolio—was the largest contributor to relative return: it was helped by prescient yield curve positioning that anticipated the steepening of the yield curve and by having larger exposure to credit securities than the broad index. A position in Treasury Inflation Protected Securities (TIPS) also helped the PIMCO Total Return Portfolio. The Western Asset Management U.S. Government Portfolio had a negative impact on relative performance due to its exposure to Treasury securities, which were negative for the period due to the rise in yields, as well as exposure to non-agency mortgage securities, which continue to be hurt by the sub-prime mortgage crisis.
MetLife Advisers, LLC
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the advisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance
contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
PIMCO Total Return Portfolio (Class A) | | 14.65% |
Davis Venture Value Portfolio (Class A) | | 7.12% |
MFS® Value Portfolio (Class A) | | 4.96% |
BlackRock Large Cap Value Portfolio (Class A) | | 4.73% |
Western Asset Management U.S. Government Portfolio (Class A) | | 4.64% |
Van Kampen Comstock Portfolio (Class A) | | 4.11% |
Jennison Growth Portfolio (Class A) | | 3.96% |
Rainier Large Cap Equity Portfolio (Class A) | | 3.90% |
PIMCO Inflation Protected Bond Portfolio (Class A) | | 3.84% |
MFS® Research International Portfolio (Class A) | | 3.21% |
Harris Oakmark International Portfolio (Class A) | | 3.15% |
Artio International Stock Portfolio (Class A) | | 3.08% |
Lord Abbett Bond Debenture Portfolio (Class A) | | 3.06% |
Third Avenue Small Cap Value Portfolio (Class A) | | 3.03% |
Lord Abbett Growth and Income Portfolio (Class A) | | 3.00% |
Met/Dimensional International Small Capital Portfolio (Class A) | | 2.19% |
Loomis Sayles Global Markets Portfolio (Class A) | | 2.11% |
Clarion Global Real Estate Portfolio (Class A) | | 2.11% |
Legg Mason Partners Aggressive Growth Portfolio (Class A) | | 2.10% |
Met/AIM Small Cap Growth Portfolio (Class A) | | 2.04% |
BlackRock High Yield Portfolio (Class A) | | 2.04% |
T. Rowe Price Mid Cap Growth Portfolio (Class A) | | 2.02% |
Goldman Sachs Mid Cap Value Portfolio (Class A) | | 2.00% |
Janus Forty Portfolio (Class A) | | 1.98% |
Met/Artisan Mid Cap Value Portfolio (Class A) | | 1.97% |
Turner Mid Cap Growth Portfolio (Class A) | | 1.95% |
BlackRock Bond Income Portfolio (Class A) | | 1.90% |
Met/Templeton International Bond Portfolio (Class A) | | 1.87% |
MFS® Emerging Markets Equity Portfolio (Class A) | | 1.17% |
Lazard Mid Cap Portfolio (Class A) | | 1.06% |
Van Eck Global Natural Resources Portfolio (Class A) | | 1.05% |
2
| | |
| MetLife Balanced Strategy Portfolio | | For the period ended 6/30/09 |
| Managed by MetLife Advisers, LLC | | |
Portfolio Manager Commentary (continued)
MetLife Balanced Strategy Portfolio managed by
MetLife Advisers, LLC vs. Dow Jones Moderate Index1 and
Balanced Blended Benchmark2
Growth Based on $10,000+
| | | | | | | | | | |
| | | | | Average Annual Return (for the period ended 6/30/09)3 |
| | | | | 6 Months | | 1 Year | | 3 Year | | Since
Inception4 |
| | MetLife Balanced Strategy
Portfolio—Class A | | 8.65% | | -18.96% | | -5.23% | | -0.84% |
| — | | Class B | | 8.53% | | -19.22% | | -5.46% | | -0.69% |
| — | | Dow Jones Moderate Index1 | | 7.11% | | -14.71% | | -1.90% | | 2.20% |
| - - | | Balanced Blended Benchmark2 | | 5.32% | | -16.60% | | -3.03% | | 1.00% |
+The chart reflects the performance of Class B shares of the Portfolio. The performance of Class B shares will differ from that of the other class because of the difference in expenses paid by policyholders investing in the different share classes.
1The Dow Jones Moderate Index is a benchmark designed for asset allocation strategists who are willing to take 60% of the risk of an all equity portfolio. It is a total returns index that is a time-varying weighted average of stocks, bonds, and cash using a combination of various indices (both domestic and foreign) from Barclays and Dow Jones. The index has held an average of 58% in equities over the past three years ending in June 2009.
2The Balanced Blended Benchmark is comprised of 48% Dow Jones U.S. Total Full Cap Index, 35% Barclays Capital U.S. Universal Index and 17% Morgan Stanley Capital International Europe Australasia and Far East Index.
The Dow Jones U.S. Total Full Cap Index measures the performance of all U.S. equity securities with readily available price data.
The Barclays Capital U.S. Universal Index represents the union of the U.S. Aggregate Bond Index, the U.S. High-Yield Corporate Index, the Investment Grade 144A Index, the Eurodollar Index, the U.S. Emerging Markets Index and the non-EIRSA portion of the Commercial Mortgage Backed Securities Index.
The Morgan Stanley Capital International Europe, Australasia and Far East Index (“MSCI EAFE® Index”) is an unmanaged free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the U.S. and Canada.
3“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
4Inception of the Class B shares is 11/4/04. Inception of the Class A shares is 5/2/05. Index returns are based on an inception date of 11/4/04.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Indexes do not include fees or expenses and are not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| MetLife Balanced Strategy Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A(a)(b) | | | | | | | | | | | |
Actual | | 0.81% | | $ | 1,000.00 | | $ | 1,086.50 | | $ | 0.36 |
Hypothetical | | 0.81% | | | 1,000.00 | | | 1,024.45 | | | 0.35 |
| | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class B(a)(b) | | | | | | | | | | | |
Actual | | 1.05% | | $ | 1,000.00 | | $ | 1,085.30 | | $ | 1.60 |
Hypothetical | | 1.05% | | | 1,000.00 | | | 1,023.26 | | | 1.56 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
(a) The annualized expense ratio shown reflects an expense limitation agreement between MetLife Advisers, LLC and the Portfolio as described in Note 3 of the Notes to Financial Statements.
(b) The annualized expense ratio reflects the expenses of both the Portfolio and the Underlying Portfolios in which it invests.
4
Met Investors Series Trust
MetLife Balanced Strategy Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| |
| Investment Company Securities - 100.0% | | | |
Artio International Stock Portfolio
(Class A)(a) | | 22,182,537 | | $ | 172,358,313 |
BlackRock Bond Income Portfolio
(Class A)(a) | | 1,072,214 | | | 106,342,203 |
BlackRock High Yield Portfolio
(Class A)(b) | | 17,093,122 | | | 113,840,192 |
BlackRock Large Cap Value Portfolio
(Class A)(a) | | 33,763,461 | | | 264,367,902 |
Clarion Global Real Estate Portfolio
(Class A)(b) | | 16,089,416 | | | 117,774,522 |
Davis Venture Value Portfolio
(Class A)(a) | | 17,496,261 | | | 398,039,935 |
Goldman Sachs Mid Cap Value Portfolio
(Class A)(b) | | 13,575,068 | | | 111,722,807 |
Harris Oakmark International Portfolio
(Class A)(b) | | 19,050,037 | | | 176,212,842 |
Janus Forty Portfolio (Class A)(b) | | 2,042,560 | | | 110,706,734 |
Jennison Growth Portfolio (Class A)(a) | | 25,144,487 | | | 221,271,488 |
Lazard Mid Cap Portfolio (Class A)(b) | | 7,947,400 | | | 59,049,179 |
Legg Mason Partners Aggressive Growth Portfolio (Class A)(b) | | 23,589,867 | | | 117,477,540 |
Loomis Sayles Global Markets Portfolio
(Class A)(b) | | 14,495,126 | | | 117,990,328 |
Lord Abbett Bond Debenture Portfolio
(Class A)(b) | | 16,382,446 | | | 171,032,737 |
Lord Abbett Growth and Income Portfolio
(Class A)(b) | | 10,567,434 | | | 167,705,181 |
Met/AIM Small Cap Growth Portfolio (Class A)(b) | | 12,153,487 | | | 113,878,177 |
Met/Artisan Mid Cap Value Portfolio (Class A)(a) | | 932,663 | | | 109,923,661 |
Met/Dimensional International Small Capital Portfolio (Class A)(a) | | 10,247,718 | | | 122,255,272 |
Met/Templeton International Bond Portfolio (Class A)(b) | | 10,380,011 | | | 104,422,909 |
| | | | | | |
Security
Description | | Shares | | Value | |
| |
| Investment Company Securities - continued | | | | |
MFS® Emerging Markets Equity Portfolio
(Class A)(b) | | 8,999,608 | | $ | 65,247,158 | |
MFS® Research International Portfolio
(Class A)(b) | | 23,536,851 | | | 179,350,804 | |
MFS® Value Portfolio (Class A)(a) | | 29,297,680 | | | 277,156,056 | |
PIMCO Inflation Protected Bond Portfolio
(Class A)(b) | | 20,498,906 | | | 214,418,557 | |
PIMCO Total Return Portfolio (Class A)(b) | | 73,702,023 | | | 818,829,469 | |
Rainier Large Cap Equity Portfolio (Class A)(b) | | 36,842,649 | | | 217,740,055 | |
T. Rowe Price Mid Cap Growth Portfolio
(Class A)(b) | | 18,277,099 | | | 113,135,240 | |
Third Avenue Small Cap Value Portfolio
(Class A)(b) | | 16,367,378 | | | 169,402,367 | |
Turner Mid Cap Growth Portfolio (Class A)(b) | | 13,208,027 | | | 109,230,384 | |
Van Eck Global Natural Resources Portfolio
(Class A)(a) | | 4,893,119 | | | 58,864,217 | |
Van Kampen Comstock Portfolio (Class A)(b) | | 33,904,946 | | | 229,875,534 | |
Western Asset Management U.S. Government Portfolio (Class A)(a) | | 22,711,802 | | | 259,368,783 | |
| | | | | | |
Total Investment Company Securities
(Cost $6,638,040,601) | | | | | 5,588,990,546 | |
| | | | | | |
| |
TOTAL INVESTMENTS - 100.0%
(Cost $6,638,040,601) | | | 5,588,990,546 | |
| | | | | | |
| | |
| Other Assets and Liabilities (net) - 0.0% | | | | | (1,566,427 | ) |
| | | | | | |
| | |
| NET ASSETS - 100.0% | | | | $ | 5,587,424,119 | |
| | | | | | |
Portfolio Footnotes:
| (a) | | A Portfolio of Metropolitan Series Fund, Inc. |
| (b) | | A Portfolio of Met Investors Series Trust. |
See accompanying notes to financial statements
5
Met Investors Series Trust
MetLife Balanced Strategy Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1—quoted prices in active markets for identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Investment Company Securities | | $ | 5,588,990,546 | | $ | — | | $ | — | | $ | 5,588,990,546 |
TOTAL INVESTMENTS | | $ | 5,588,990,546 | | $ | — | | $ | — | | $ | 5,588,990,546 |
See accompanying notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| MetLife Balanced Strategy Portfolio | | | |
| Assets | | | | |
Investments, at value (a) | | $ | 5,588,990,546 | |
Receivable for Trust shares sold | | | 1,056,312 | |
Receivable from Manager | | | 1,826 | |
| | | | |
Total assets | | | 5,590,048,684 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 172,597 | |
Trust shares redeemed | | | 883,715 | |
Distribution and services fees—Class B | | | 1,142,486 | |
Management fee | | | 259,372 | |
Administration fee | | | 2,010 | |
Custodian and accounting fees | | | 12,843 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 148,115 | |
| | | | |
Total liabilities | | | 2,624,565 | |
| | | | |
| Net Assets | | $ | 5,587,424,119 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 7,473,084,227 | |
Accumulated net realized loss | | | (993,504,621 | ) |
Unrealized depreciation on investments | | | (1,049,050,055 | ) |
Undistributed net investment income | | | 156,894,568 | |
| | | | |
Total | | $ | 5,587,424,119 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 1,272,321 | |
| | | | |
Class B | | | 5,586,151,798 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 160,946 | |
| | | | |
Class B | | | 708,326,831 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 7.91 | |
| | | | |
Class B | | | 7.89 | |
| | | | |
| | | | | |
(a) Investments at cost | | $ | 6,638,040,601 | |
See accompanying notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| MetLife Balanced Strategy Portfolio | | | |
| Investment Income | | | | |
Dividends from Underlying Portfolios | | $ | 164,542,783 | |
| | | | |
Total investment income | | | 164,542,783 | |
| | | | |
| Expenses | | | | |
Management fee | | | 1,402,316 | |
Administration fees | | | 11,901 | |
Deferred Expense Reimbursement | | | 5,478 | |
Custodian and accounting fees | | | 9,173 | |
Distribution and services fees—Class B | | | 6,079,835 | |
Audit and tax services | | | 103,836 | |
Legal | | | 11,507 | |
Trustee fees and expenses | | | 9,699 | |
Insurance | | | 12,827 | |
Other | | | 1,643 | |
| | | | |
Total expenses | | | 7,648,215 | |
| | | | |
Net investment income | | | 156,894,568 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | (929,571,409 | ) |
Capital gain distributions from Underlying Portfolios | | | 28,399,900 | |
| | | | |
Net realized gain (loss) on investments and capital gain from Underlying Portfolios | | | (901,171,509 | ) |
| | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 1,165,078,587 | |
| | | | |
Net change in unrealized appreciation on investments | | | 1,165,078,587 | |
| | | | |
Net realized and unrealized gain on investments | | | 263,907,078 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 420,801,646 | |
| | | | |
See accompanying notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| MetLife Balanced Strategy Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 156,894,568 | | | $ | 115,663,931 | |
Net realized gain (loss) on investments and capital gain distributions from Underlying Portfolios | | | (901,171,509 | ) | | | 162,564,876 | |
Net change in unrealized appreciation (depreciation) on investments | | | 1,165,078,587 | | | | (2,474,910,671 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 420,801,646 | | | | (2,196,681,864 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | — | | | | (89,629 | ) |
Class B | | | — | | | | (285,402,259 | ) |
From net realized gains | | | | | | | | |
Class A | | | — | | | | (98,612 | ) |
Class B | | | — | | | | (391,005,613 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | — | | | | (676,596,113 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 156,699 | | | | 1,307,822 | |
Class B | | | 543,829,367 | | | | 889,500,213 | |
Net asset value of shares issued through acquisition | | | | | | | | |
Class A | | | — | | | | — | |
Class B | | | — | | | | 205,816,249 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | — | | | | 188,241 | |
Class B | | | — | | | | 676,407,872 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (722,813 | ) | | | (113,768 | ) |
Class B | | | (220,248,087 | ) | | | (800,914,061 | ) |
| | | | | | | | |
Net increase in net assets from capital share transactions | | | 323,015,166 | | | | 972,192,568 | |
| | | | | | | | |
| Net Increase (Decrease) in Net Assets | | | 743,816,812 | | | | (1,901,085,409 | ) |
Net assets at beginning of period | | | 4,843,607,307 | | | | 6,744,692,716 | |
| | | | | | | | |
Net assets at end of period | | $ | 5,587,424,119 | | | $ | 4,843,607,307 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 156,894,568 | | | $ | — | |
| | | | | | | | |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| MetLife Balanced Strategy Portfolio | | Class A | | | | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | | | | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005(b) | | | | |
| Net Asset Value, Beginning of Period | | $ | 7.28 | | | $ | 12.15 | | | $ | 12.17 | | | $ | 10.92 | | | $ | 10.04 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.27 | | | | 0.17 | | | | 0.15 | | | | 0.31 | | | | 0.56 | | | | | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.36 | | | | (3.83 | ) | | | 0.47 | | | | 1.03 | | | | 0.47 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.63 | | | | (3.66 | ) | | | 0.62 | | | | 1.34 | | | | 1.03 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | (0.53 | ) | | | (0.24 | ) | | | (0.02 | ) | | | (0.13 | ) | | | | |
Distributions from Net Realized Capital Gains | | | — | | | | (0.68 | ) | | | (0.40 | ) | | | (0.07 | ) | | | (0.02 | ) | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | — | | | | (1.21 | ) | | | (0.64 | ) | | | (0.09 | ) | | | (0.15 | ) | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 7.91 | | | $ | 7.28 | | | $ | 12.15 | | | $ | 12.17 | | | $ | 10.92 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 8.65 | % | | | (31.75 | )% | | | 5.16 | % | | | 12.35 | % | | | 10.21 | % | | | | |
Ratio of Expenses to Average Net Assets After Reimbursement(f) | | | 0.07 | %* | | | 0.06 | % | | | 0.06 | % | | | 0.08 | % | | | 0.03 | %* | | | | |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates(g) | | | 0.07 | %* | | | 0.06 | % | | | 0.06 | % | | | 0.08 | %(e) | | | 0.03 | %* | | | | |
Ratio of Net Investment Income to Average Net Assets(h) | | | 7.59 | %* | | | 1.75 | % | | | 1.22 | % | | | 2.74 | % | | | 7.70 | %* | | | | |
Portfolio Turnover Rate | | | 28.3 | % | | | 23.4 | % | | | 17.0 | % | | | 20.7 | % | | | 17.3 | % | | | | |
Net Assets, End of Period (in millions) | | $ | 1.3 | | | $ | 1.7 | | | $ | 1.1 | | | $ | 0.7 | | | $ | 0.2 | | | | | |
| |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004(c) | |
| Net Asset Value, Beginning of Period | | $ | 7.27 | | | $ | 12.12 | | | $ | 12.15 | | | $ | 10.92 | | | $ | 10.31 | | | $ | 10.00 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.23 | | | | 0.19 | | | | 0.13 | | | | 0.26 | | | | 0.22 | | | | 0.28 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.39 | | | | (3.87 | ) | | | 0.46 | | | | 1.04 | | | | 0.52 | | | | 0.14 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.62 | | | | (3.68 | ) | | | 0.59 | | | | 1.30 | | | | 0.74 | | | | 0.42 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | (0.49 | ) | | | (0.22 | ) | | | (0.00 | )+ | | | (0.11 | ) | | | (0.11 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (0.68 | ) | | | (0.40 | ) | | | (0.07 | ) | | | (0.02 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | — | | | | (1.17 | ) | | | (0.62 | ) | | | (0.07 | ) | | | (0.13 | ) | | | (0.11 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 7.89 | | | $ | 7.27 | | | $ | 12.12 | | | $ | 12.15 | | | $ | 10.92 | | | $ | 10.31 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 8.53 | % | | | (31.93 | )% | | | 4.88 | % | | | 11.98 | % | | | 7.12 | % | | | 4.19 | % |
Ratio of Expenses to Average Net Assets After Reimbursement(f) | | | 0.31 | %* | | | 0.31 | % | | | 0.31 | % | | | 0.33 | % | | | 0.31 | % | | | 0.35 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates(g) | | | 0.31 | %* | | | 0.31 | % | | | 0.31 | % | | | 0.33 | %(e) | | | 0.31 | % | | | 0.38 | %* |
Ratio of Net Investment Income to Average Net Assets(h) | | | 6.45 | %* | | | 1.94 | % | | | 1.05 | % | | | 2.31 | % | | | 2.12 | % | | | 17.21 | %* |
Portfolio Turnover Rate | | | 28.3 | % | | | 23.4 | % | | | 17.0 | % | | | 20.7 | % | | | 17.3 | % | | | 0.0 | %(d) |
Net Assets, End of Period (in millions) | | $ | 5,586.2 | | | $ | 4,841.9 | | | $ | 6,743.6 | | | $ | 5,167.2 | | | $ | 3,529.8 | | | $ | 1,561.2 | |
| + | | Rounds to less than $0.005 per share. |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—05/02/2005. |
| (c) | | Commencement of operations—11/04/2004. |
| (d) | | For the period ended 12/31/2004, the portfolio turnover calculation is zero, due to no sales activity. |
| (e) | | Excludes the effect of deferred expense reimbursement. |
| (f) | | The ratio of operating expenses to average net assets does not include expenses of the Underlying Portfolios in which the Portfolio invests. |
| (g) | | See Note 3 of the Notes to Financial Statements. |
| (h) | | Recognition of net investment income by the Portfolio is affected by the timing of the declaration of dividends by the Underlying Portfolios in which it invests. |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is MetLife Balanced Strategy Portfolio (the “Portfolio”), which is non-diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A and B Shares are currently offered by the Portfolio. Class C and E Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
The Portfolio is designed on established principles of asset allocation and risk tolerance. The Portfolio will invest substantially all of its assets in other Portfolios of the Trust or of Metropolitan Series Fund, Inc. which invest either in equity securities or fixed income securities, as applicable (“Underlying Portfolios”).
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Investments in the Underlying Portfolios are valued at their closing daily net asset value. The net asset value of the Portfolio is calculated based on the net asset values of the Underlying Portfolios in which the Portfolio invests. For information about the use of fair value pricing by the Underlying Portfolios, please refer to the prospectuses of the Underlying Portfolios.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes.
C. Investment Income and Expenses - Income and capital gain distributions from the Underlying Portfolios are recorded on the ex-dividend date.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board of Trustees (the “Board”) and has overall responsibility for the general management and administration of the Trust.
11
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $1,402,316 | | 0.10 | % | | First $500 Million |
| | |
| | 0.075 | % | | $500 Million to $1 Billion |
| | |
| | 0.05 | % | | Over $1 Billion |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
| | | | | | | | | | | | | |
| Expenses Deferred in |
2006 | | | 2007 | | | 2008 | | | 2009 |
| Subject to repayment until December 31, |
| 2011 | | | 2012 | | | 2013 | | | 2014 |
| | | |
| $ | 36,665 | * | | $ | 127,809 | * | | $ | 115,766 | * | | $ | — |
* On November 7, 2008, the Strategic Growth and Income Portfolio merged with and into MetLife Balanced Strategy Portfolio. The repayment of the subsidy amount for the Strategic Growth and Income Portfolio will occur from the MetLife Balanced Strategy Portfolio.
As a result of the Strategic Growth and Income Portfolio acquisition, the Manager was entitled to a subsidy amount of $280,240, which $5,478 was repaid by the Portfolio during the period ended June 30, 2009.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A and Class B Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B distribution plan provides that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% of the average net assets of the Portfolio attributable to its Class B Shares in respect to activities primarily intended to result in the sale of Class B Shares. However, under the Class B distribution agreement, payments to the Distributor for activities pursuant to the Class B distribution plan are currently limited to payments at an annual rate equal to 0.25% of average daily net assets of the Portfolio attributable to its Class B Shares.
Under terms of the Class B distribution plan and distribution agreement, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
12
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Shares Issued
in Connection
with Acquisition | | Reinvestments | | Redemptions | | | Net Increase/
Decrease
in Shares
Outstanding | | | Ending
Shares |
| | | | | | | |
Class A | | | | | | | | | | | | | | | | |
| | | | | | | |
6/30/2009 | | 233,477 | | 21,892 | | — | | — | | (94,423 | ) | | (72,531 | ) | | 160,946 |
12/31/2008 | | 92,198 | | 131,080 | | — | | 22,456 | | (12,257 | ) | | 141,279 | | | 233,477 |
| | | | | | | |
Class B | | | | | | | | | | | | | | | | |
| | | | | | | |
6/30/2009 | | 666,222,285 | | 74,324,555 | | — | | — | | (32,220,009 | ) | | 42,104,546 | | | 708,326,831 |
12/31/2008 | | 556,280,267 | | 87,037,809 | | 27,888,381 | | 75,683,135 | | (80,667,307 | ) | | 109,942,018 | | | 666,222,285 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $ | — | | $ | 1,904,834,509 | | $ | — | | $ | 1,396,275,950 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net
Unrealized
Depreciation | |
| | | |
| $6,638,040,601 | | $ | 74,308,131 | | $ | (1,123,358,186 | ) | | $ | (1,049,050,055 | ) |
6. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $303,866,430 | | $ | 99,521,921 | | $ | 372,729,683 | | $ | 182,306,633 | | $ | 676,596,113 | | $ | 281,828,554 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards | | Total | |
| | | | |
| $ | — | | $ | — | | $ | (2,306,461,754 | ) | | $ | — | | $ | (2,306,461,754 | ) |
7. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
8. Market, Credit and Counterparty Risk
In the normal course of business, the Underlying Portfolios, in which the Portfolio invests, invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Underlying Portfolios may decline in response to certain events, including those directly involving the companies whose securities are owned by the Underlying Portfolios; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Underlying Portfolios may be exposed to counterparty risk, or the risk that an entity with which the Underlying Portfolios have unsettled or open transactions may default. Financial assets, which potentially expose the Underlying Portfolios to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Underlying Portfolios’ exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Underlying Portfolios’ Statements of Assets and Liabilities.
9. Transactions in Securities of Affiliated Issuers
Transactions in the Underlying Portfolios during the period ended June 30, 2009 in which the Portfolio had ownership are as follows:
| | | | | | | | | |
Security Description | | Number of
shares held at
December 31,
2008 | | Shares
purchased
during the
period | | Shares
sold
during the
period | | | Number of
shares held at
June 30,
2009 |
| | | | |
Artio International Stock Portfolio (Class A) | | 13,057,415 | | 9,313,351 | | (188,229 | ) | | 22,182,537 |
| | | | |
BlackRock Bond Income Portfolio (ClassA) | | — | | 1,072,214 | | — | | | 1,072,214 |
| | | | |
BlackRock High Yield Portfolio (Class A) | | 15,687,803 | | 2,211,458 | | (806,139 | ) | | 17,093,122 |
| | | | |
BlackRock Large Cap Value Portfolio (Class A) | | — | | 33,763,461 | | — | | | 33,763,461 |
| | | | |
Clarion Global Real Estate Portfolio (Class A) | | 13,068,125 | | 3,243,851 | | (222,560 | ) | | 16,089,416 |
| | | | |
Davis Venture Value Portfolio (Class A) | | 15,355,305 | | 2,426,884 | | (285,928 | ) | | 17,496,261 |
| | | | |
Goldman Sachs Mid Cap Value Portfolio (Class A)* | | 12,244,748 | | 1,604,309 | | (273,989 | ) | | 13,575,068 |
| | | | |
Harris Oakmark International Portfolio (Class A) | | 11,927,247 | | 7,295,028 | | (172,238 | ) | | 19,050,037 |
| | | | |
Janus Forty Portfolio (Class A) | | — | | 2,042,560 | | — | | | 2,042,560 |
| | | | |
Jennison Growth Portfolio (Class A) | | 12,286,375 | | 13,253,522 | | (395,410 | ) | | 25,144,487 |
| | | | |
Lazard Mid Cap Portfolio (Class A) | | 20,925,423 | | 1,363,486 | | (14,341,509 | ) | | 7,947,400 |
| | | | |
Legg Mason Partners Aggressive Growth Portfolio (Class A) | | 42,900,607 | | 2,370,580 | | (21,681,320 | ) | | 23,589,867 |
| | | | |
Legg Mason Value Equity Portfolio (Class A) | | 39,818,589 | | 5,877,333 | | (45,695,922 | ) | | — |
| | | | |
Loomis Sayles Global Markets Portfolio (Class A) | | 26,964,981 | | 2,180,826 | | (14,650,681 | ) | | 14,495,126 |
| | | | |
Lord Abbett Bond Debenture Portfolio (Class A) | | 24,767,406 | | 3,556,075 | | (11,941,035 | ) | | 16,382,446 |
| | | | |
Lord Abbett Growth and Income Portfolio (Class A) | | 17,922,619 | | 3,237,545 | | (10,592,730 | ) | | 10,567,434 |
| | | | |
Met/AIM Small Cap Growth Portfolio (Class A) | | 11,622,210 | | 1,016,995 | | (485,718 | ) | | 12,153,487 |
| | | | |
Met/Artisan Mid Cap Value Portfolio (Class A) | | 1,341,038 | | 152,110 | | (560,485 | ) | | 932,663 |
| | | | |
Met/Dimensional International Small Capital Portfolio (Class A)* | | 9,404,164 | | 1,234,702 | | (391,148 | ) | | 10,247,718 |
| | | | |
Met/Templeton International Bond Portfolio (Class A) | | — | | 10,380,011 | | — | | | 10,380,011 |
| | | | |
MFS® Emerging Markets Equity Portfolio (Class A) | | 26,959,481 | | 1,770,079 | | (19,729,952 | ) | | 8,999,608 |
| | | | |
MFS® Research International Portfolio (Class A) | | 21,166,405 | | 3,005,623 | | (635,177 | ) | | 23,536,851 |
| | | | |
MFS® Value Portfolio (Class A) | | — | | 29,297,680 | | — | | | 29,297,680 |
| | | | |
PIMCO Inflation Protected Bond Portfolio (Class A) | | 24,413,853 | | 2,587,814 | | (6,502,761 | ) | | 20,498,906 |
| | | | |
PIMCO Total Return Portfolio (Class A) | | 51,094,048 | | 26,860,047 | | (4,252,072 | ) | | 73,702,023 |
| | | | |
Rainier Large Cap Equity Portfolio (Class A)* | | 24,945,606 | | 12,251,624 | | (354,581 | ) | | 36,842,649 |
| | | | |
T. Rowe Price Mid Cap Growth Portfolio (Class A) | | 18,628,541 | | 1,288,298 | | (1,639,740 | ) | | 18,277,099 |
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
9. Transactions in Securities of Affiliated Issuers - continued
| | | | | | | | | |
Security Description | | Number of
shares held at
December 31,
2008 | | Shares
purchased
during the
period | | Shares
sold
during the
period | | | Number of
shares held at
June 30,
2009 |
| | | | |
Third Avenue Small Cap Value Portfolio (Class A) | | 18,518,147 | | 2,631,949 | | (4,782,718 | ) | | 16,367,378 |
| | | | |
Turner Mid Cap Growth Portfolio (Class A)* | | 12,905,305 | | 1,277,619 | | (974,897 | ) | | 13,208,027 |
| | | | |
Van Eck Global Natural Resources Portfolio (Class A) | | 4,711,496 | | 347,801 | | (166,178 | ) | | 4,893,119 |
| | | | |
Van Kampen Comstock Portfolio (Class A) | | 55,580,530 | | 9,256,569 | | (30,932,153 | ) | | 33,904,946 |
| | | | |
Western Asset Management U.S. Government Portfolio (Class A) | | 19,780,985 | | 3,551,268 | | (620,451 | ) | | 22,711,802 |
* The Portfolio had ownership of at least 25% of the outstanding voting securities of the Underlying Portfolio as of June 30, 2009. Once filed, the most recent Annual Report of the Underlying Portfolio will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
| | | | | | | | | | | | | |
Security Description | | Net Realized Gain
(Loss) on Investments
during the period | | | Net Realized Gain
(Loss) on Capital
Gain Distributions
from Affiliates
during the period | | Income earned from
affiliate during the
period | | Ending Value |
| | | | |
Artio International Stock Portfolio (Class A) | | $ | (1,304,419 | ) | | $ | — | | $ | 760,866 | | $ | 172,358,313 |
| | | | |
BlackRock Bond Income Portfolio (Class A) | | | — | | | | — | | | — | | | 106,342,203 |
| | | | |
BlackRock High Yield Portfolio (Class A) | | | (1,841,925 | ) | | | — | | | 6,241,149 | | | 113,840,192 |
| | | | |
BlackRock Large Cap Value Portfolio (Class A) | | | — | | | | — | | | — | | | 264,367,902 |
| | | | |
Clarion Global Real Estate Portfolio (Class A) | | | (1,476,318 | ) | | | — | | | 3,960,251 | | | 117,774,522 |
| | | | |
Davis Venture Value Portfolio (Class A) | | | (2,846,687 | ) | | | — | | | 6,086,927 | | | 398,039,935 |
| | | | |
Goldman Sachs Mid Cap Value Portfolio (Class A) | | | (1,406,507 | ) | | | — | | | 1,702,560 | | | 111,722,807 |
| | | | |
Harris Oakmark International Portfolio (Class A) | | | (1,944,017 | ) | | | — | | | 10,245,082 | | | 176,212,842 |
| | | | |
Janus Forty Portfolio (Class A) | | | | | | | — | | | — | | | 110,706,734 |
| | | | |
Jennison Growth Portfolio (Class A) | | | (1,161,043 | ) | | | — | | | 207,931 | | | 221,271,488 |
| | | | |
Lazard Mid Cap Portfolio (Class A) | | | (85,671,995 | ) | | | — | | | 2,239,342 | | | 59,049,179 |
| | | | |
Legg Mason Partners Aggressive Growth Portfolio (Class A) | | | (69,850,969 | ) | | | — | | | 268,699 | | | 117,477,540 |
| | | | |
Legg Mason Value Equity Portfolio (Class A) | | | (218,177,075 | ) | | | — | | | 4,140,177 | | | — |
| | | | |
Loomis Sayles Global Markets Portfolio (Class A) | | | (36,464,994 | ) | | | — | | | 5,390,719 | | | 117,990,328 |
| | | | |
Lord Abbett Bond Debenture Portfolio (Class A) | | | (26,850,087 | ) | | | — | | | 20,369,924 | | | 171,032,737 |
| | | | |
Lord Abbett Growth and Income Portfolio (Class A) | | | (138,541,460 | ) | | | — | | | 8,258,093 | | | 167,705,181 |
| | | | |
Met/AIM Small Cap Growth Portfolio (Class A) | | | (1,910,288 | ) | | | — | | | — | | | 113,878,177 |
| | | | |
Met/Artisan Mid Cap Value Portfolio (Class A) | | | (76,932,690 | ) | | | — | | | 1,934,920 | | | 109,923,661 |
| | | | |
Met/Dimensional International Small Capital Portfolio
(Class A) | | | (167,802 | ) | | | — | | | — | | | 122,255,272 |
| | | | |
Met/Templeton International Bond Portfolio (Class A) | | | — | | | | — | | | — | | | 104,422,909 |
| | | | |
MFS® Emerging Markets Equity Portfolio (Class A) | | | (86,147,431 | ) | | | — | | | 3,823,618 | | | 65,247,158 |
| | | | |
MFS® Research International Portfolio (Class A) | | | (3,686,618 | ) | | | — | | | 5,773,827 | | | 179,350,804 |
| | | | |
MFS® Value Portfolio (Class A) | | | — | | | | — | | | — | | | 277,156,056 |
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
9. Transactions in Securities of Affiliated Issuers - continued
| | | | | | | | | | | | | |
Security Description | | Net Realized Gain
(Loss) on Investments
during the period | | | Net Realized Gain
(Loss) on Capital
Gain Distributions
from Affiliates
during the period | | Income earned from
affiliate during the
period | | Ending Value |
| | | | |
PIMCO Inflation Protected Bond Portfolio (Class A) | | $ | (801,173 | ) | | $ | — | | $ | 9,758,322 | | $ | 214,418,557 |
| | | | |
PIMCO Total Return Portfolio (Class A) | | | 92,647 | | | | 39,917,458 | | | 32,225,912 | | | 818,829,469 |
| | | | |
Rainier Large Cap Equity Portfolio (Class A) | | | (1,648,456 | ) | | | — | | | 1,530,123 | | | 217,740,055 |
| | | | |
T. Rowe Price Mid Cap Growth Portfolio (Class A) | | | (3,258,657 | ) | | | — | | | — | | | 113,135,240 |
| | | | |
Third Avenue Small Cap Value Portfolio (Class A) | | | (33,631,508 | ) | | | 1,922,332 | | | 3,559,754 | | | 169,402,367 |
| | | | |
Turner Mid Cap Growth Portfolio (Class A) | | | (3,060,640 | ) | | | — | | | — | | | 109,230,384 |
| | | | |
Van Eck Global Natural Resources Portfolio (Class A) | | | 25,160 | | | | — | | | 62,247 | | | 58,864,217 |
| | | | |
Van Kampen Comstock Portfolio (Class A) | | | (130,689,937 | ) | | | — | | | 11,638,539 | | | 229,875,534 |
| | | | |
Western Asset Management U.S. Government Portfolio
(Class A) | | | (216,519 | ) | | | — | | | 10,923,910 | | | 259,368,783 |
10. Acquisitions
As of the close of business on November 7, 2008, MetLife Balanced Strategy Portfolio (“Balanced”) acquired all the net assets of Strategic Growth and Income Portfolio (“Growth and Income”), a series of the Trust, pursuant to a plan of reorganization approved by Growth and Income shareholders on November 5, 2008. The acquisition was accomplished by a tax-free exchange of 27,888,381 Class B shares of Balanced (valued at $205,816,249) in exchange for 29,538,030 Class B shares of Growth and Income outstanding on November 7, 2008. Growth and Income Class B net assets at that date ($205,816,249), including $71,349,690 of unrealized depreciation and $28,152,470 of accumulated net realized losses, were combined with those of Balanced Class B. The aggregate Class B net assets of Balanced immediately before the acquisition were $4,694,649,252. The aggregate Class B net assets of Growth and Income immediately before the acquisition were $205,816,249. The aggregate Class B net assets of Balanced immediately after the acquisition were $4,900,465,501.
11. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
12. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
16
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
17
| | |
| MetLife Defensive Strategy Portfolio | | For the period ended 6/30/09 |
| Managed by MetLife Advisers, LLC | | |
Portfolio Manager Commentary
Performance
For the six-month period ended June 30, 2009, the Class A and B shares of the Portfolio returned 8.41% and 8.17%, respectively, compared to the 5.33% return of its primary index, the Dow Jones Moderately Conservative Index.
Market Environment/Conditions
The worst economic downturn since the 1930s—dubbed “The Great Recession” by some pundits—showed few signs of sustained improvement; although at least the rapid rate of descent appeared to have slowed during the first half of 2009. The Unemployment Rate reached 9.5% in June as over six million jobs were lost over the past twelve months. Other economic statistics were more ambiguous: Consumer Confidence, although still well below its level of two years ago, recovered from the level reached in March and Existing Home Sales improved modestly in response to lower house prices and improved availability of credit.
The Barclays Capital U.S. Aggregate Bond Index produced a modest, but positive total return of 1.9% for the first six months of 2009. The increase in Treasury yields that lowered the price of Treasury bonds was offset by a narrowing of yield spreads, which boosted credit based securities as investors became more positive on the prospects for the economy. The Barclays Capital U.S. Treasury Index was down 4.3% for the six months ending June, while the Barclays Capital U.S. Corporate Investment Grade Index was up 8.3%. Although the Barclays U.S. Corporate High Yield Index was up over 30% for the six-month period, it was still down 2.4% over the previous twelve months. The yield on Three Month Treasury Bills stayed close to 0.2% as the Federal Reserve kept their target rate in the 0.00% to 0.25% range.
The Standard & Poor’s 500 Index, buoyed by a robust 15.9% return for the second quarter, returned 3.2% for the six months ending in June. The rout in stocks that began last summer continued into the first quarter of this year as the severity of the recession became apparent. A turnaround began in early March on improving sentiment and stocks surged over 35% from the low in early March to the end of the June. Although Small Cap stocks had better performance in the second quarter, they were up slightly less than large cap stocks for the full six-month period as measured by the 2.6% rise of the Russell 2000® Index. Growth outperformed Value stocks during the first half of 2009 primarily due to the strength of technology companies compared to the relative weakness in traditional value stocks such as those in the Financials sector. Technology and Basic Materials were the best performing sectors over the six-month period. The Financials sector, despite a nearly 100% return from the middle of March to the end of June, was still among the worst performing sectors for the six-month period (-3.4%). The MSCI EAFE Index was up nearly 8% for the six months ending in June, slightly more than the local return due to a weaker dollar that made foreign securities more valuable to the U.S. dollar based investor. Emerging Market equities and international small cap equities were both up more than the large cap stocks from developed countries.
Portfolio Review/Current Positioning
The Portfolio is a “fund of funds” consisting of other portfolios of the Met Investors Series Trust and the Metropolitan Series Fund, Inc. with a broad allocation goal of 35% in equities and 65% in fixed income. While the broad asset class allocation goals of this Portfolio remained the same, several adjustments to the goals to the sub-asset classes and the underlying portfolio targets were made during the first six months of 2009. This included the elimination of a formal goal for cash, although we still expect the Portfolio will hold some residual cash from the underlying portfolios. In addition there was a slight decrease in the goals to non-core asset classes such as high yield bonds and international stocks.
The Portfolio continues to be diversified across a wide variety of asset classes and underlying portfolios to add value over the long term. During 2008, investors shunned risk and rewarded only what they perceived to be the safest investments. This was especially true in the fixed income area where Treasuries outperformed high yield securities and investment grade corporate bonds by a wide margin. In contrast, exposure to credit based bonds helped actively managed fixed income portfolios during the first six months of 2009. Because of the Portfolios 65% target goal for bonds, this factor was a significant contributor to performing.
Within the fixed income segment, the underlying portfolios with large exposures to high yield bonds, such as the Lord Abbett Bond Debenture Portfolio and the BlackRock High Yield Portfolio, were all up sharply relative to the broad bond indices for the period. Overall high yield exposure was about 8% of the Portfolio, which was in line with its target. The PIMCO Total Return Portfolio—the single largest holding in the Portfolio—was the largest contributor to relative return: it was helped by prescient yield curve positioning that anticipated the steepening of the yield curve and by having larger exposure to credit securities than the broad index. A position in Treasury Inflation Protected Securities (TIPS) also helped the PIMCO Total Return Portfolio. The Western Asset Management U.S. Government Portfolio had an negative impact on relative performance due to its exposure to Treasury securities, which were negative for the period due to the rise in yields, as well as exposure to non-agency mortgage securities, which continue to be hurt by the sub-prime mortgage crisis.
Generally, the underlying equity portfolios with a growth style performed better than those with a value style. This included the Jennison Growth Portfolio, which was helped by an overweight in the strong performing Information Technology sector and good security selection, especially in the Energy and Financials sectors. In Energy, they did not hold Exxon Mobil (-11%), but held Southwestern Energy (+34%); in Financials, they overweighted Goldman Sachs (+76%) and avoided Citigroup (-55%). The Harris Oakmark International Portfolio also performed well, aided by good security selection in the Financial Sector of Western Europe. Holding large overweights in strong performing Credit Suisse and BNP Paribas offset holding weak performing Allianz and UBS. Although the Van Eck Global Natural Resources Portfolio made up only 1% of the Portfolio, it had a positive impact on performance due to its underweighting of
1
| | |
| MetLife Defensive Strategy Portfolio | | For the period ended 6/30/09 |
| Managed by MetLife Advisers, LLC | | |
Portfolio Manager Commentary (continued)
several large, poor performing oil companies (Exxon Mobil, ConocoPhillips, and Chevron) and its overweighting of Metal & Mining stocks, including a position in Freeport-McMoRan Copper & Gold, which doubled during the six-month period.
Detracting the most from the Portfolio’s relative performance were the BlackRock Large Cap Value Portfolio and the Lord Abbett Growth and Income Portfolio. BlackRock’s blend of quantitative and qualitative analysis resulted in a focus on companies with a high-quality bias. During the market rally that began in early March, investors bid up the price of weaker companies that lost the most in the preceding year. Lord Abbett, despite good stock selection in the Financials sector, was adversely impacted by its value style. Despite overall good stock selection in the Financials sector, it was not able to overcome an overweight in that weak sector. The Artio International Stock Portfolio also detracted from the Portfolio’s relative and absolute performance due to a large cash position in a strong market and overall weak stock selection. Most notable was that they did not own several large strong performing companies in the Financials sector: Credit Suisse, BNP Paribas, and Barclays.
MetLife Advisers, LLC
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the advisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
PIMCO Total Return Portfolio (Class A) | | 23.89% |
Western Asset Management U.S. Government Portfolio (Class A) | | 11.33% |
PIMCO Inflation Protected Bond Portfolio (Class A) | | 10.75% |
Lord Abbett Bond Debenture Portfolio (Class A) | | 7.23% |
MFS® Value Portfolio (Class A) | | 5.05% |
BlackRock Large Cap Value Portfolio (Class A) | | 4.82% |
BlackRock Bond Income Portfolio (Class A) | | 3.87% |
Van Kampen Comstock Portfolio (Class A) | | 3.12% |
BlackRock High Yield Portfolio (Class A) | | 3.11% |
Davis Venture Value Portfolio (Class A) | | 3.08% |
Harris Oakmark International Portfolio (Class A) | | 2.16% |
Loomis Sayles Global Markets Portfolio (Class A) | | 2.15% |
Artio International Stock Portfolio (Class A) | | 2.12% |
Lord Abbett Growth and Income Portfolio (Class A) | | 2.05% |
Jennison Growth Portfolio (Class A) | | 2.04% |
Goldman Sachs Mid Cap Value Portfolio (Class A) | | 2.04% |
Rainier Large Cap Equity Portfolio (Class A) | | 1.99% |
Met/Templeton International Bond Portfolio (Class A) | | 1.90% |
Clarion Global Real Estate Portfolio (Class A) | | 1.09% |
MFS® Research International Portfolio (Class A) | | 1.09% |
Van Eck Global Natural Resources Portfolio (Class A) | | 1.07% |
Third Avenue Small Cap Value Portfolio (Class A) | | 1.05% |
Lazard Mid Cap Portfolio (Class A) | | 1.05% |
Met/AIM Small Cap Growth Portfolio (Class A) | | 0.98% |
Met/Artisan Mid Cap Value Portfolio (Class A) | | 0.97% |
2
| | |
| MetLife Defensive Strategy Portfolio | | For the period ended 6/30/09 |
| Managed by MetLife Advisers, LLC | | |
Portfolio Manager Commentary (continued)
MetLife Defensive Strategy Portfolio managed by MetLife Advisers, LLC vs. Dow Jones Moderately Conservative Index1 and Defensive Blended Benchmark2
Growth Based on $10,000+
| | | | | | | | | | |
| | | | | Average Annual Return (for the period ended 6/30/09)3 |
| | | | | 6 Months | | 1 Year | | 3 Year | | Since
Inception4 |
| | MetLife Defensive Strategy
Portfolio—Class A | | 8.41% | | -9.61% | | -0.61% | | 1.37% |
| — | | Class B | | 8.17% | | -9.95% | | -0.87% | | 0.96% |
| — | | Dow Jones Moderately Conservative Index1 | | 5.33% | | -8.11% | | 0.58% | | 2.63% |
| - - | | Defensive Blended Benchmark2 | | 4.42% | | -7.12% | | 1.01% | | 2.60% |
+The chart reflects the performance of Class B shares of the Portfolio. The performance of Class B shares will differ from that of the other class because of the difference in expenses paid by policyholders investing in the different share classes.
1The Dow Jones Moderately Conservative Index is a benchmark designed for asset allocation strategists who are willing to take 40% of the risk of an all equity portfolio. It is a total returns index that is a time-varying weighted average of stocks, bonds, and cash using a combination of various indices (both domestic and foreign) from Barclays and Dow Jones. The index has held an average of 35% in equities over the past three years ending in June 2009.
2The Defensive Blended Benchmark is comprised of 27% Dow Jones U.S. Total Full Cap Index, 65% Barclays Capital U.S. Universal Index and 8% Morgan Stanley Capital International Europe Australasia and Far East Index.
The Dow Jones U.S. Total Full Cap Index measures the performance of all U.S. equity securities with readily available price data.
The Barclays Capital U.S. Universal Index represents the union of the U.S. Aggregate Bond Index, the U.S. High-Yield Corporate Index, the Investment Grade 144A Index, the Eurodollar Index, the U.S. Emerging Markets Index and the non-EIRSA portion of the Commercial Mortgage Backed Securities Index.
The Morgan Stanley Capital International Europe, Australasia and Far East Index (“MSCI EAFE® Index”) is an unmanaged free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the U.S. and Canada.
3“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
4Inception of the Class B shares is 11/4/04. Inception of the Class A shares is 5/2/05. Index returns are based on an inception date of 11/4/04.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Indexes do not include fees or expenses and are not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| MetLife Defensive Strategy Portfolio | | | | | | | | | | | |
| | | | |
Class A(a)(b) | | | | | | | | | | | |
Actual | | 0.70% | | $ | 1,000.00 | | $ | 1,084.10 | | $ | 0.47 |
Hypothetical | | 0.70% | | | 1,000.00 | | | 1,024.35 | | | 0.45 |
| | | | | | | | | | | |
| | | | |
Class B(a)(b) | | | | | | | | | | | |
Actual | | 0.96% | | $ | 1,000.00 | | $ | 1,081.70 | | $ | 1.81 |
Hypothetical | | 0.96% | | | 1,000.00 | | | 1,023.06 | | | 1.76 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
(a) The annualized expense ratio shown reflects an expense limitation agreement between MetLife Advisers, LLC and the Portfolio as described in Note 3 of the Notes to Financial Statements.
(b) The annualized expense ratio reflects the expenses of both the Portfolio and the Underlying Portfolios in which it invests.
4
Met Investors Series Trust
MetLife Defensive Strategy Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Investment Company Securities - 100.0% |
Artio International Stock Portfolio (Class A)(b) | | 4,058,842 | | $ | 31,537,206 |
BlackRock Bond Income Portfolio (Class A)(b) | | 581,653 | | | 57,688,379 |
BlackRock High Yield Portfolio (Class A)(a) | | 6,960,513 | | | 46,357,016 |
BlackRock Large Cap Value Portfolio (Class A)(b) | | 9,162,981 | | | 71,746,146 |
Clarion Global Real Estate Portfolio (Class A)(a) | | 2,228,326 | | | 16,311,347 |
Davis Venture Value Portfolio (Class A)(b) | | 2,016,170 | | | 45,867,873 |
Goldman Sachs Mid Cap Value Portfolio (Class A)(a) | | 3,688,381 | | | 30,355,376 |
Harris Oakmark International Portfolio (Class A)(a) | | 3,481,172 | | | 32,200,841 |
Jennison Growth Portfolio (Class A)(b) | | 3,463,925 | | | 30,482,538 |
Lazard Mid Cap Portfolio (Class A)(a) | | 2,105,190 | | | 15,641,560 |
Loomis Sayles Global Markets Portfolio (Class A)(a) | | 3,938,481 | | | 32,059,236 |
Lord Abbett Bond Debenture Portfolio (Class A)(a) | | 10,328,089 | | | 107,825,251 |
Lord Abbett Growth and Income Portfolio (Class A)(a) | | 1,924,626 | | | 30,543,808 |
Met/AIM Small Cap Growth Portfolio (Class A)(a) | | 1,565,681 | | | 14,670,435 |
Met/Artisan Mid Cap Value Portfolio (Class A)(b) | | 122,402 | | | 14,426,310 |
Met/Templeton International Bond Portfolio (Class A)(a) | | 2,815,576 | | | 28,324,692 |
| | | | | | |
Security
Description | | Shares | | Value | |
|
| Investment Company Securities - continued | |
MFS® Research International Portfolio (Class A)(a) | | 2,132,437 | | $ | 16,249,170 | |
MFS® Value Portfolio (Class A)(b) | | 7,951,960 | | | 75,225,537 | |
PIMCO Inflation Protected Bond Portfolio (Class A)(a) | | 15,309,947 | | | 160,142,045 | |
PIMCO Total Return Portfolio (Class A)(a) | | 32,047,897 | | | 356,052,134 | |
Rainier Large Cap Equity Portfolio (Class A)(a) | | 5,022,204 | | | 29,681,224 | |
Third Avenue Small Cap Value Portfolio (Class A)(a) | | 1,518,719 | | | 15,718,740 | |
Van Eck Global Natural Resources Portfolio (Class A)(b) | | 1,330,010 | | | 16,000,024 | |
Van Kampen Comstock Portfolio (Class A)(a) | | 6,861,019 | | | 46,517,706 | |
Western Asset Management U.S. Government Portfolio (Class A)(b) | | 14,783,894 | | | 168,832,071 | |
| | | | | | |
Total Investment Company Securities
(Cost $1,569,822,139) | | | | | 1,490,456,665 | |
| | | | | | |
| | |
TOTAL INVESTMENTS - 100.0%
(Cost $1,569,822,139) | | | | | 1,490,456,665 | |
| | | | | | |
| |
| Other Assets and Liabilities (net) - 0.0% | | | (437,188 | ) |
| | | | | | |
| | |
| NET ASSETS - 100.0% | | | | $ | 1,490,019,477 | |
| | | | | | |
Portfolio Footnotes:
| (a) | | A Portfolio of Met Investors Series Trust. |
| (b) | | A Portfolio of Metropolitan Series Fund, Inc. |
See accompanying notes to financial statements
5
Met Investors Series Trust
MetLife Defensive Strategy Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1—quoted prices in active markets for identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Investment Company Securities | | $ | 1,490,456,665 | | $ | — | | $ | — | | $ | 1,490,456,665 |
TOTAL INVESTMENTS | | $ | 1,490,456,665 | | $ | — | | $ | — | | $ | 1,490,456,665 |
See accompanying notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| MetLife Defensive Strategy Portfolio | | | |
| Assets | | | | |
Investments, at value (a) | | $ | 1,490,456,665 | |
Receivable for Trust shares sold | | | 1,891,521 | |
| | | | |
Total assets | | | 1,492,348,186 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 979,915 | |
Trust shares redeemed | | | 911,606 | |
Distribution and services fees—Class B | | | 302,312 | |
Management fee | | | 111,762 | |
Administration fee | | | 1,964 | |
Custodian and accounting fees | | | 4,006 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 13,717 | |
| | | | |
Total liabilities | | | 2,328,709 | |
| | | | |
| Net Assets | | $ | 1,490,019,477 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 1,670,075,281 | |
Accumulated net realized loss | | | (163,921,582 | ) |
Unrealized depreciation on investments | | | (79,365,474 | ) |
Undistributed net investment income | | | 63,231,252 | |
| | | | |
Total | | $ | 1,490,019,477 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 40,409 | |
| | | | |
Class B | | | 1,489,979,068 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 4,532 | |
| | | | |
Class B | | | 167,799,618 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 8.92 | |
| | | | |
Class B | | | 8.88 | |
| | | | |
| | | | | |
(a) Investments at cost | | $ | 1,569,822,139 | |
See accompanying notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| MetLife Defensive Strategy Portfolio | | | |
| Investment Income | | | | |
Dividends from Underlying Portfolios | | $ | 65,480,112 | |
| | | | |
Total investment income | | | 65,480,112 | |
| | | | |
| Expenses | | | | |
Management fee | | | 507,223 | |
Administration fees | | | 11,901 | |
Deferred Expense Reimbursement | | | 66,454 | |
Custodian and accounting fees | | | 12,043 | |
Distribution and services fees—Class B | | | 1,606,253 | |
Audit and tax services | | | 14,581 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Insurance | | | 2,246 | |
Other | | | 1,645 | |
| | | | |
Total expenses | | | 2,248,779 | |
| | | | |
Net investment income | | | 63,231,333 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | (155,601,231 | ) |
Capital gain distributions from Underlying Portfolios | | | 14,704,138 | |
| | | | |
Net realized gain (loss) on investments and capital gain from Underlying Portfolios | | | (140,897,093 | ) |
| | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 196,125,503 | |
| | | | |
Net change in unrealized appreciation on investments | | | 196,125,503 | |
| | | | |
Net realized and unrealized gain on investments | | | 55,228,410 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 118,459,743 | |
| | | | |
See accompanying notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| MetLife Defensive Strategy Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 63,231,333 | | | $ | 32,466,683 | |
Net realized gain (loss) on investments and capital gain distributions from Underlying Portfolios | | | (140,897,093 | ) | | | 16,636,884 | |
Net change in unrealized appreciation (depreciation) on investments | | | 196,125,503 | | | | (303,596,726 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 118,459,743 | | | | (254,493,159 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | (1,949 | ) | | | (527 | ) |
Class B | | | (43,226,221 | ) | | | (15,447,927 | ) |
From net realized gains | | | | | | | | |
Class A | | | (1,088 | ) | | | (669 | ) |
Class B | | | (25,171,315 | ) | | | (21,728,145 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (68,400,573 | ) | | | (37,177,268 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 8,312 | | | | 56,516 | |
Class B | | | 361,299,677 | | | | 978,023,100 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | 3,037 | | | | 1,196 | |
Class B | | | 68,397,536 | | | | 37,176,072 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (29,119 | ) | | | (3,806 | ) |
Class B | | | (133,135,477 | ) | | | (389,721,998 | ) |
| | | | | | | | |
Net increase in net assets from capital share transactions | | | 296,543,966 | | | | 625,531,080 | |
| | | | | | | | |
| Net Increase in Net Assets | | | 346,603,136 | | | | 333,860,653 | |
Net assets at beginning of period | | | 1,143,416,341 | | | | 809,555,688 | |
| | | | | | | | |
Net assets at end of period | | $ | 1,490,019,477 | | | $ | 1,143,416,341 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 63,231,252 | | | $ | 43,228,089 | |
| | | | | | | | |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | |
| | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | �� | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| MetLife Defensive Strategy Portfolio | | Class A | | | | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | | | | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005(b) | | | | |
| Net Asset Value, Beginning of Period | | $ 8.68 | | | $ 11.28 | | | $11.10 | | | $10.29 | | | $ 9.82 | | | | |
| | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | 0.44 | | | 0.27 | | | 0.23 | | | 0.36 | | | 0.17 | | | | |
Net Realized/Unrealized Gain (Loss) on Investments | | 0.25 | | | (2.51 | ) | | 0.46 | | | 0.56 | | | 0.43 | | | | |
| | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | 0.69 | | | (2.24 | ) | | 0.69 | | | 0.91 | | | 0.60 | | | | |
| | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | (0.29 | ) | | (0.16 | ) | | (0.25 | ) | | (0.02 | ) | | (0.11 | ) | | | |
Distributions from Net Realized Capital Gains | | (0.16 | ) | | (0.20 | ) | | (0.26 | ) | | (0.08 | ) | | (0.02 | ) | | | |
| | | | | | | | | | | | | | | | | | |
Total Distributions | | (0.45 | ) | | (0.36 | ) | | (0.51 | ) | | (0.10 | ) | | (0.13 | ) | | | |
| | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ 8.92 | | | $ 8.68 | | | $11.28 | | | $11.10 | | | $10.29 | | | | |
| | | | | | | | | | | | | | | | | | |
| Total Return | | 8.41 | % | | (20.48 | )% | | 6.20 | % | | 9.01 | % | | 6.07 | % | | | |
Ratio of Expenses to Average Net Assets After Reimbursement(e) | | 0.09 | %* | | 0.09 | % | | 0.09 | % | | 0.11 | % | | 0.12 | %* | | | |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates(f) | | 0.09 | %* | | 0.09 | % | | 0.09 | % | | 0.12 | % | | 0.12 | %* | | | |
Ratio of Net Investment Income to Average Net Assets(g) | | 10.44 | %* | | 2.74 | % | | 2.05 | % | | 3.44 | % | | 2.53 | %* | | | |
Portfolio Turnover Rate | | 25.3 | % | | 29.5 | % | | 39.2 | % | | 35.3 | % | | 36.1 | % | | | |
Net Assets, End of Period (in millions) | | $ — | ++ | | $ — | ++ | | $ — | ++ | | $ — | ++ | | $ — | ++ | | | |
| |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004(c) | |
| Net Asset Value, Beginning of Period | | $ 8.65 | | | $ 11.25 | | | $11.09 | | | $10.29 | | | $ 9.95 | | | $10.00 | |
| | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | 0.42 | | | 0.29 | | | 0.19 | | | 0.29 | | | 0.19 | | | 0.42 | |
Net Realized/Unrealized Gain (Loss) on Investments | | 0.25 | | | (2.55 | ) | | 0.46 | | | 0.59 | | | 0.26 | | | (0.29 | ) |
| | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | 0.67 | | | (2.26 | ) | | 0.65 | | | 0.88 | | | 0.45 | | | 0.13 | |
| | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | (0.28 | ) | | (0.14 | ) | | (0.23 | ) | | (0.00 | )+ | | (0.09 | ) | | (0.18 | ) |
Distributions from Net Realized Capital Gains | | (0.16 | ) | | (0.20 | ) | | (0.26 | ) | | (0.08 | ) | | (0.02 | ) | | — | |
| | | | | | | | | | | | | | | | | | |
Total Distributions | | (0.44 | ) | | (0.34 | ) | | (0.49 | ) | | (0.08 | ) | | (0.11 | ) | | (0.18 | ) |
| | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ 8.88 | | | $ 8.65 | | | $11.25 | | | $11.09 | | | $10.29 | | | $ 9.95 | |
| | | | | | | | | | | | | | | | | | |
| Total Return | | 8.17 | % | | (20.65 | )% | | 5.92 | % | | 8.63 | % | | 4.48 | % | | 1.34 | % |
Ratio of Expenses to Average Net Assets After Reimbursement(e) | | 0.35 | %* | | 0.35 | % | | 0.35 | % | | 0.35 | % | | 0.35 | % | | 0.35 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates(f) | | 0.35 | %* | | 0.35 | % | | 0.36 | % | | 0.39 | % | | 0.40 | % | | 0.71 | %* |
Ratio of Net Investment Income to Average Net Assets(g) | | 9.84 | %* | | 2.93 | % | | 1.72 | % | | 2.79 | % | | 1.90 | % | | 26.11 | %* |
Portfolio Turnover Rate | | 25.3 | % | | 29.5 | % | | 39.2 | % | | 35.3 | % | | 36.1 | % | | 0.0 | %(d) |
Net Assets, End of Period (in millions) | | $1,490.0 | | | $1,143.4 | | | $809.5 | | | $541.5 | | | $356.1 | | | $129.8 | |
| + | | Rounds to less than $0.005 per share. |
| ++ | | Net Assets less than 1/10 of $1 million. |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—05/02/2005. |
| (c) | | Commencement of operations—11/04/2004. |
| (d) | | For the period ended 12/31/2004, the portfolio turnover calculation is zero, due to no sales activity. |
| (e) | | The ratio of operating expenses to average net assets does not include expenses of the Underlying Portfolios in which the Portfolio invests. |
| (f) | | See Note 3 of the Notes to Financial Statements. |
| (g) | | Recognition of net investment income by the Portfolio is affected by the timing of the declaration of dividends by the Underlying Portfolios in which it invests. |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is MetLife Defensive Strategy Portfolio (the “Portfolio”), which is non-diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A and B Shares are currently offered by the Portfolio. Class C and E Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
The Portfolio is designed on established principles of asset allocation and risk tolerance. The Portfolio will invest substantially all of its assets in other Portfolios of the Trust or of Metropolitan Series Fund, Inc. which invest either in equity securities or fixed income securities, as applicable (“Underlying Portfolios”).
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Investments in the Underlying Portfolios are valued at their closing daily net asset value. The net asset value of the Portfolio is calculated based on the net asset values of the Underlying Portfolios in which the Portfolio invests. For information about the use of fair value pricing by the Underlying Portfolios, please refer to the prospectuses of the Underlying Portfolios.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes.
C. Investment Income and Expenses - Income and capital gain distributions from the Underlying Portfolios are recorded on the ex-dividend date.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board of Trustees (the “Board”) and has overall responsibility for the general management and administration of the Trust.
11
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $ | 507,223 | | 0.10 | % | | First $500 Million |
| | |
| | | 0.075 | % | | $500 Million to $1 Billion |
| | |
| | | 0.05 | % | | Over $1 Billion |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Manager has entered into an expense limitation agreement with the Trust (“Expense Limitation Agreement”) in the interest of limiting expenses of the Portfolio of the Trust. The Expense Limitation Agreement shall continue in effect with respect to the Portfolio until April 30, 2010. Pursuant to that Expense Limitation Agreement, the Manager has agreed to waive or limit its fees and to assume other expenses so that the total annual operating expenses of the Portfolio other than interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with accounting principles generally accepted in the United States of America, other extraordinary expenses not incurred in the ordinary course of the Portfolio’s business, and Underlying Portfolios’ fees and expenses, but including amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act, are limited to the following expense ratios as a percentage of the Portfolio’s average daily net assets:
| | | | | | | | | | | | | | | | | | | | | | |
Maximum Expense
Ratio
under current Expense
Limitation Agreement | | | Expenses Deferred in |
| | 2004 | | 2005 | | 2006 | | 2007 | | 2008 | | 2009 |
| | Subject to repayment until December 31, |
Class A | | | Class B | | | 2009 | | 2010 | | 2011 | | 2012 | | 2013 | | 2014 |
| | | | | | | |
| 0.10 | % | | 0.35 | % | | $ | 32,988 | | $ | 130,573 | | $ | 170,658 | | $ | 54,067 | | $ | 1,813 | | $ | — |
If in any year in which the Management Agreement is still in effect, the estimated aggregate portfolio operating expenses of the Portfolio for the fiscal year are less than the Maximum Expense Ratios for that year, subject to approval by the Trust’s Board, the Manager shall be entitled to reimbursement by the Portfolio to the extent that the charge does not cause the expenses in such subsequent year to exceed the Maximum Expense Ratio as stated above. The Portfolio is not obligated to repay any expense paid by the Manager more than five years after the end of the fiscal year in which such expense was incurred.
The following amount was repaid to the Manager in accordance with the Expense Limitation Agreement during the period ended June 30, 2009: $66,454
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A and Class B Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B distribution plan provides that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% of the average net assets of the Portfolio attributable to its Class B Shares in respect to activities primarily intended to result in the sale of Class B Shares. However, under the Class B distribution agreement, payments to the Distributor for activities pursuant to the Class B distribution plan are currently limited to payments at an annual rate equal to 0.25% of average daily net assets of the Portfolio attributable to its Class B Shares.
Under terms of the Class B distribution plan and distribution agreement, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
12
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
(Decrease)
in Shares
Outstanding | | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 6,464 | | 962 | | 364 | | (3,258 | ) | | (1,932 | ) | | 4,532 |
| | | | | | |
12/31/2008 | | 1,180 | | 5,585 | | 111 | | (412 | ) | | 5,284 | | | 6,464 |
| | | | | | |
Class B | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 132,189,711 | | 42,914,660 | | 8,230,750 | | (15,535,503 | ) | | 35,609,907 | | | 167,799,618 |
| | | | | | |
12/31/2008 | | 71,963,875 | | 95,523,689 | | 3,445,419 | | (38,743,272 | ) | | 60,225,836 | | | 132,189,711 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 635,537,872 | | $ | — | | $ | 329,186,044 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $1,569,822,139 | | $ | 16,639,416 | | $ | (96,004,890 | ) | | $ | (79,365,474 | ) |
6. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $ | 16,351,745 | | $ | 13,196,339 | | $ | 20,825,523 | | $ | 13,778,091 | | $ | 31,177,268 | | $ | 26,974,430 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards | | Total | |
| | | | |
| $43,228,089 | | $ | 25,172,272 | | $ | (298,515,334 | ) | | $ | — | | $ | (230,114,973 | ) |
7. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
8. Market, Credit and Counterparty Risk
In the normal course of business, the Underlying Portfolios, in which the Portfolio invests, invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Underlying Portfolios may decline in response to certain events, including those directly involving the companies whose securities are owned by the Underlying Portfolios; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Underlying Portfolios may be exposed to counterparty risk, or the risk that an entity with which the Underlying Portfolios have unsettled or open transactions may default. Financial assets, which potentially expose the Underlying Portfolios to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Underlying Portfolios’ exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Underlying Portfolios’ Statements of Assets and Liabilities.
9. Transactions in Securities of Affiliated Issuers
Transactions in the Underlying Portfolios during the period ended June 30, 2009 in which the Portfolio had ownership are as follows:
| | | | | | | | | |
Security Description | | Number of shares
held at December 31,
2008 | | Shares purchased
during the period | | Shares sold during the
period | | | Number of shares
held at June 30,
2009 |
| | | | |
Artio International Stock Portfolio (Class A) | | 2,997,599 | | 1,134,059 | | (72,816 | ) | | 4,058,842 |
| | | | |
BlackRock Bond Income Portfolio (Class A) | | — | | 589,727 | | (8,074 | ) | | 581,653 |
| | | | |
BlackRock High Yield Portfolio (Class A) | | 5,576,245 | | 1,674,871 | | (290,603 | ) | | 6,960,513 |
| | | | |
BlackRock Large Cap Value Portfolio (Class A) | | — | | 9,286,491 | | (123,510 | ) | | 9,162,981 |
| | | | |
Clarion Global Real Estate Portfolio (Class A) | | 3,089,876 | | 1,317,333 | | (2,178,883 | ) | | 2,228,326 |
| | | | |
Davis Venture Value Portfolio (Class A) | | 1,034,661 | | 1,014,900 | | (33,391 | ) | | 2,016,170 |
| | | | |
Goldman Sachs Mid Cap Value Portfolio (Class A) | | 2,888,471 | | 868,194 | | (68,284 | ) | | 3,688,381 |
| | | | |
Harris Oakmark International Portfolio (Class A) | | 2,712,336 | | 1,246,790 | | (477,954 | ) | | 3,481,172 |
| | | | |
Jennison Growth Portfolio (Class A) | | 2,894,622 | | 688,950 | | (119,647 | ) | | 3,463,925 |
| | | | |
Lazard Mid Cap Portfolio (Class A) | | 3,290,313 | | 872,885 | | (2,058,008 | ) | | 2,105,190 |
| | | | |
Legg Mason Value Equity Portfolio (Class A) | | 7,074,650 | | 2,485,004 | | (9,559,654 | ) | | — |
| | | | |
Loomis Sayles Global Markets Portfolio (Class A) | | 6,364,878 | | 1,516,508 | | (3,942,905 | ) | | 3,938,481 |
| | | | |
Lord Abbett Bond Debenture Portfolio (Class A) | | 11,723,556 | | 3,545,649 | | (4,941,116 | ) | | 10,328,089 |
| | | | |
Lord Abbett Growth and Income Portfolio (Class A) | | 3,514,855 | | 1,378,490 | | (2,968,719 | ) | | 1,924,626 |
| | | | |
Met AIM Small Cap Growth Portfolio (Class A) | | — | | 1,586,642 | | (20,961 | ) | | 1,565,681 |
| | | | |
Met Artisan Mid Cap Value Portfolio (Class A) | | — | | 124,046 | | (1,644 | ) | | 122,402 |
| | | | |
Met/Dimensional International Small Capital Portfolio (Class A) | | 1,115,110 | | 312,682 | | (1,427,792 | ) | | — |
| | | | |
Met/Templeton International Bond Portfolio (Class A) | | — | | 2,854,822 | | (39,246 | ) | | 2,815,576 |
| | | | |
MFS® Research International Portfolio (Class A) | | 1,795,863 | | 489,094 | | (152,520 | ) | | 2,132,437 |
| | | | |
MFS® Value Portfolio (Class A) | | — | | 8,056,018 | | (104,058 | ) | | 7,951,960 |
| | | | |
PIMCO Inflation Protected Bond Portfolio (Class A) | | 12,724,306 | | 3,360,834 | | (775,193 | ) | | 15,309,947 |
| | | | |
PIMCO Total Return Portfolio (Class A) | | 24,208,038 | | 9,644,977 | | (1,805,118 | ) | | 32,047,897 |
| | | | |
Rainier Large Cap Equity Portfolio (Class A) | | 3,919,714 | | 1,197,057 | | (94,567 | ) | | 5,022,204 |
| | | | |
T. Rowe Price Mid Cap Growth Portfolio (Class A) | | 4,394,101 | | 790,909 | | (5,185,010 | ) | | — |
| | | | |
Third Avenue Small Cap Value Portfolio (Class A) | | 2,180,855 | | 740,221 | | (1,402,357 | ) | | 1,518,719 |
| | | | |
Van Eck Global Natural Resources Portfolio (Class A) | | 1,116,443 | | 281,857 | | (68,290 | ) | | 1,330,010 |
| | | | |
Van Kampen Comstock Portfolio (Class A) | | 8,196,301 | | 3,141,065 | | (4,476,347 | ) | | 6,861,019 |
| | | | |
Western Asset Management U.S. Government Portfolio (Class A) | | 11,257,927 | | 3,812,492 | | (286,525 | ) | | 14,783,894 |
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
9. Transactions in Securities of Affiliated Issuers - continued
| | | | | | | | | | | | | |
Security Description | | Net Realized Gain
(Loss) on Investments
during the period | | | Net Realized Gain
(Loss) on Capital
Gain Distributions
from Affiliates
during the period | | Income earned from
Affiliate during the
period | | Ending Value |
| | | | |
Artio International Stock Portfolio (Class A) | | $ | (404,797 | ) | | $ | — | | $ | 211,855 | | $ | 31,537,206 |
| | | | |
BlackRock Bond Income Portfolio (Class A) | | | 5,946 | | | | — | | | — | | | 57,688,379 |
| | | | |
BlackRock High Yield Portfolio (Class A) | | | (604,152 | ) | | | — | | | 2,577,197 | | | 46,357,016 |
| | | | |
BlackRock Large Cap Value Portfolio (Class A) | | | 35,645 | | | | — | | | — | | | 71,746,146 |
| | | | |
Clarion Global Real Estate Portfolio (Class A) | | | (15,058,868 | ) | | | — | | | 1,111,562 | | | 16,311,347 |
| | | | |
Davis Venture Value Portfolio (Class A) | | | (298,671 | ) | | | — | | | 484,703 | | | 45,867,873 |
| | | | |
Goldman Sachs Mid Cap Value Portfolio (Class A) | | | (328,406 | ) | | | — | | | 474,078 | | | 30,355,376 |
| | | | |
Harris Oakmark International Portfolio (Class A) | | | (4,772,836 | ) | | | — | | | 2,848,894 | | | 32,200,841 |
| | | | |
Jennison Growth Portfolio (Class A) | | | (346,838 | ) | | | — | | | 57,472 | | | 30,482,538 |
| | | | |
Lazard Mid Cap Portfolio (Class A) | | | (10,231,891 | ) | | | — | | | 416,253 | | | 15,641,560 |
| | | | |
Legg Mason Value Equity Portfolio (Class A) | | | (27,676,102 | ) | | | — | | | 867,381 | | | — |
| | | | |
Loomis Sayles Global Markets Portfolio (Class A) | | | (15,100,038 | ) | | | — | | | 1,488,653 | | | 32,059,236 |
| | | | |
Lord Abbett Bond Debenture Portfolio (Class A) | | | (12,386,112 | ) | | | — | | | 11,218,269 | | | 107,825,251 |
| | | | |
Lord Abbett Growth and Income Portfolio (Class A) | | | (31,036,254 | ) | | | — | | | 1,920,350 | | | 30,543,808 |
| | | | |
Met AIM Small Cap Growth Portfolio (Class A) | | | 8,400 | | | | — | | | — | | | 14,670,435 |
| | | | |
Met Artisan Mid Cap Value Portfolio (Class A) | | | 7,783 | | | | — | | | — | | | 14,426,310 |
| | | | |
Met/Dimensional International Small Capital Portfolio (Class A) | | | 831,825 | | | | — | | | — | | | — |
| | | | |
Met/Templeton International Bond Portfolio (Class A) | | | 1,215 | | | | — | | | — | | | 28,324,692 |
| | | | |
MFS® Research International Portfolio (Class A) | | | (943,294 | ) | | | — | | | 535,700 | | | 16,249,170 |
| | | | |
MFS® Value Portfolio (Class A) | | | 64,325 | | | | — | | | — | | | 75,225,537 |
| | | | |
PIMCO Inflation Protected Bond Portfolio (Class A) | | | (167,264 | ) | | | — | | | 5,905,533 | | | 160,142,045 |
| | | | |
PIMCO Total Return Portfolio (Class A) | | | (103,499 | ) | | | 17,357,333 | | | 22,395,299 | | | 356,052,134 |
| | | | |
Rainier Large Cap Equity Portfolio (Class A) | | | (355,192 | ) | | | — | | | 283,033 | | | 29,681,224 |
| | | | |
T. Rowe Price Mid Cap Growth Portfolio (Class A) | | | (7,517,230 | ) | | | — | | | — | | | — |
| | | | |
Third Avenue Small Cap Value Portfolio (Class A) | | | (7,096,982 | ) | | | 178,372 | | | 587,274 | | | 15,718,740 |
| | | | |
Van Eck Global Natural Resources Portfolio (Class A) | | | 77,792 | | | | — | | | 17,229 | | | 16,000,024 |
| | | | |
Van Kampen Comstock Portfolio (Class A) | | | (21,966,829 | ) | | | — | | | 2,030,707 | | | 46,517,706 |
| | | | |
Western Asset Management U.S. Government Portfolio (Class A) | | | (238,907 | ) | | | — | | | 7,217,103 | | | 168,832,071 |
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and has management determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
16
| | |
| MetLife Growth Strategy Portfolio | | For the period ended 6/30/09 |
| Managed by MetLife Advisers, LLC | | |
Portfolio Manager Commentary
Performance
For the six-month period ended June 30, 2009, the Class A and B shares of the Portfolio returned 7.44% and 7.31%, respectively, compared to the 9.13% return of its primary index, the Dow Jones Moderately Aggressive Index.
Market Environment/Conditions
The worst economic downturn since the 1930s—dubbed “The Great Recession” by some pundits—showed few signs of sustained improvement; although at least the rapid rate of descent appeared to have slowed during the first half of 2009. The Unemployment Rate reached 9.5% in June as over six million jobs were lost over the past twelve months. Other economic statistics were more ambiguous: Consumer Confidence, although still well below its level of two years ago, recovered from the level reached in March and Existing Home Sales improved modestly in response to lower house prices and improved availability of credit.
The Barclays Capital U.S. Aggregate Bond Index produced a modest, but positive total return of 1.9% for the first six months of 2009. The increase in Treasury yields that lowered the price of Treasury bonds was offset by a narrowing of yield spreads, which boosted credit based securities as investors became more positive on the prospects for the economy. The Barclays Capital U.S. Treasury Index was down 4.3% for the six months ending June, while the Barclays Capital U.S. Corporate Investment Grade Index was up 8.3%. Although the Barclays U.S. Corporate High Yield Index was up over 30% for the six-month period, it was still down 2.4% over the previous twelve months. The yield on Three Month Treasury Bills stayed close to 0.2% as the Federal Reserve kept their target rate in the 0.00% to 0.25% range.
The Standard & Poor’s 500 Index, buoyed by a robust 15.9% return for the second quarter, returned 3.2% for the six months ending in June. The rout in stocks that began last summer continued into the first quarter of this year as the severity of the recession became apparent. A turnaround began in early March on improving sentiment and stocks surged over 35% from the low in early March to the end of the June. Although Small Cap stocks had better performance in the second quarter, they were up slightly less than large cap stocks for the full six-month period as measured by the 2.6% rise of the Russell 2000® Index. Growth outperformed Value stocks during the first half of 2009 primarily due to the strength of technology companies compared to the relative weakness in traditional value stocks such as those in the Financials sector. Technology and Basic Materials were the best performing sectors over the six-month period. The Financials sector, despite a nearly 100% return from the middle of March to the end of June, was still among the worst performing sectors for the six-month period (-3.4%). The MSCI EAFE Index, was up nearly 8% for the six months ending in June, slightly more than the local return due to a weaker dollar that made foreign securities more valuable to the U.S. dollar based investor. Emerging Market equities and international small cap equities were both up more than the large cap stocks from developed countries.
Portfolio Review/Current Positioning
The Portfolio is a “fund of funds” consisting of other portfolios of the Met Investors Series Trust and the Metropolitan Series Fund, Inc. with a
broad allocation goal of 85% in equities and 15% in fixed income. While the broad asset class allocation goals of this Portfolio remained the same, several adjustments to the goals to the sub-asset classes and the underlying portfolio targets were made during the first six months of 2009. This included the elimination of a formal goal for cash, although we still expect the Portfolio will hold some residual cash from the underlying portfolios. In addition there was a slight increase in the goals to non-core asset classes such as small cap stocks and international stocks.
The Portfolio continues to be diversified across a wide variety of asset classes and underlying portfolios to add value over the long term. During 2008, investors shunned risk and rewarded only what they perceived to be the safest investments. This was especially true in the fixed income area where Treasuries outperformed high yield securities and investment grade corporate bonds by a wide margin. In contrast, exposure to credit based bonds helped actively managed fixed income portfolios during the first six months of 2009.
Factors impacting equities were more significant to the performance attribution of the Portfolio because of the 85% goal for equities. Generally, the underlying equity portfolios with a growth style performed better than those with a value style. This included the Jennison Growth Portfolio, which was helped by an overweight in the strong performing Information Technology sector and good security selection, especially in the Energy and Financials sectors. In Energy, they did not hold Exxon Mobil (-11.5%), but held Southwestern Energy (+34.1%); in Financials, they overweighted Goldman Sachs (+76%) and avoided Citigroup (-55%). The Harris Oakmark International Portfolio also performed well, aided by good security selection in the Financials sector of Western Europe. Holding large overweights in strong performing Credit Suisse and BNP Paribas offset holding weak performing Allianz and UBS. Although the Van Eck Global Natural Resources Portfolio made up only 2% of the Portfolio, it had a positive impact on performance due to its underweighting of several large, poor performing oil companies (Exxon Mobil, ConocoPhillips, and Chevron) and its overweighting of Metal & Mining stocks, including a position in Freeport-McMoRan Copper & Gold, which doubled during the six-month period. The rising tide of the emerging markets during the six months ending June 2009 lifted the MFS® Emerging Market Portfolio to a nearly 30% return and was a positive contributor to both relative and absolute return.
Detracting the most from the Portfolio’s relative performance were the BlackRock Large Cap Value Portfolio and the Lord Abbett Growth and Income Portfolio. BlackRock’s blend of quantitative and qualitative analysis resulted in a focus on companies with a high-quality bias. During the market rally that began in early March, investors bid up the price of weaker companies that lost the most in the preceding year. Lord Abbett, despite good stock selection in the Financials sector, was adversely impacted by its value style. Despite overall good stock selection in the Financials sector, it was not able to overcome an overweight in that weak sector. The Artio International Stock Portfolio also detracted from the Portfolio’s relative and absolute performance due to a large cash position in a strong market and overall weak stock selection. Most notable was that they did not own several large strong performing companies in the Financials sector: Credit Suisse, BNP Paribas, and Barclays.
1
| | |
| MetLife Growth Strategy Portfolio | | For the period ended 6/30/09 |
| Managed by MetLife Advisers, LLC | | |
Portfolio Manager Commentary (continued)
Within the fixed income segment, the underlying portfolios with large exposures to high yield bonds, such as the Lord Abbett Bond Debenture Portfolio and the BlackRock High Yield Portfolio, were all up sharply relative to the broad bond indices for the period. Overall high yield exposure was about 2% of the Portfolio, which was in line with its target. The PIMCO Total Return Portfolio was a large contributor to relative return: it was helped by prescient yield curve positioning that anticipated the steepening of the yield curve and by having larger exposure to credit securities than the broad index. A position in Treasury Inflation Protected Securities (TIPS) also helped the PIMCO Total Return Portfolio.
MetLife Advisers, LLC
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the advisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
Davis Venture Value Portfolio (Class A) | | 8.14% |
Jennison Growth Portfolio (Class A) | | 6.82% |
MFS® Value Portfolio (Class A) | | 5.90% |
Rainier Large Cap Equity Portfolio (Class A) | | 5.80% |
BlackRock Large Cap Value Portfolio (Class A) | | 5.62% |
Third Avenue Small Cap Value Portfolio (Class A) | | 5.06% |
PIMCO Total Return Portfolio (Class A) | | 4.84% |
MFS® Research International Portfolio (Class A) | | 4.21% |
Harris Oakmark International Portfolio (Class A) | | 4.18% |
Van Kampen Comstock Portfolio (Class A) | | 4.17% |
Legg Mason Partners Aggressive Growth Portfolio (Class A) | | 4.10% |
Lord Abbett Growth and Income Portfolio (Class A) | | 3.99% |
Met/AIM Small Cap Growth Portfolio (Class A) | | 3.93% |
PIMCO Inflation Protected Bond Portfolio (Class A) | | 3.81% |
Clarion Global Real Estate Portfolio (Class A) | | 3.13% |
Artio International Stock Portfolio (Class A) | | 3.09% |
Janus Forty Portfolio (Class A) | | 2.93% |
MFS® Emerging Markets Equity Portfolio (Class A) | | 2.21% |
Met/Dimensional International Small Capital Portfolio (Class A) | | 2.17% |
Loomis Sayles Global Markets Portfolio (Class A) | | 2.10% |
Van Eck Global Natural Resources Portfolio (Class A) | | 2.09% |
T. Rowe Price Mid Cap Growth Portfolio (Class A) | | 2.01% |
Goldman Sachs Mid Cap Value Portfolio (Class A) | | 1.98% |
Turner Mid Cap Growth Portfolio (Class A) | | 1.94% |
Met/Artisan Mid Cap Value Portfolio (Class A) | | 1.93% |
Met/Templeton International Bond Portfolio (Class A) | | 1.85% |
Lord Abbett Bond Debenture Portfolio (Class A) | | 1.02% |
BlackRock High Yield Portfolio (Class A) | | 0.98% |
2
| | |
| MetLife Growth Strategy Portfolio | | For the period ended 6/30/09 |
| Managed by MetLife Advisers, LLC | | |
Portfolio Manager Commentary (continued)
MetLife Growth Strategy Portfolio managed by
MetLife Advisers, LLC vs. Dow Jones Moderately Aggressive Index1
and Growth Blended Benchmark2
Growth Based on $10,000+
| | | | | | | | | | |
| | | | | Average Annual Return3 (for the period ended 6/30/09) |
| | | | | 6 Months | | 1 year | | 3 year | | Since
Inception4 |
| | MetLife Growth Strategy
Portfolio—Class A | | 7.44% | | -25.00% | | -8.16% | | -2.31% |
| — | | Class B | | 7.31% | | -25.18% | | -8.37% | | -1.78% |
| — | | Dow Jones Moderately Aggressive Index1 | | 9.13% | | -20.82% | | -4.49% | | 1.54% |
| - - | | Growth Blended Benchmark2 | | 5.64% | | -22.82% | | -5.89% | | -0.23% |
+The chart reflects the performance of Class B shares of the Portfolio. The performance of Class B shares will differ from that of the other class because of the difference in expenses paid by policyholders investing in the different share classes.
1The Dow Jones Moderately Aggressive Index is a benchmark designed for asset allocation strategists who are willing to take 80% of the risk of an all equity portfolio. It is a total returns index that is a time-varying weighted average of stocks, bonds, and cash using a combination of various indices (both domestic and foreign) from Barclays and Dow Jones. The index has held an average of 80% in equities over the past three years ending in June 2009.
2The Growth Blended Benchmark is comprised of 63% Dow Jones U.S. Total Full Cap Index, 15% Barclays Capital U.S. Universal Index and 22% Morgan Stanley Capital International Europe Australasia and Far East Index (the MSCI EAFE® Index).
The Dow Jones U.S. Total Full Cap Index measures the performance of all U.S. equity securities with readily available price data.
The Barclays Capital U.S. Universal Index represents the union of the U.S. Aggregate Bond Index, the U.S. High-Yield Corporate Index, the Investment Grade 144A Index, the Eurodollar Index, the U.S. Emerging Markets Index and the non-EIRSA portion of the Commercial Mortgage Backed Securities Index.
The Morgan Stanley Capital International Europe, Australasia and Far East Index (“MSCI EAFE® Index”) is an unmanaged free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the U.S. and Canada.
3“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
4Inception of the Class B shares is 11/4/04. Inception of the Class A shares is 5/2/05. Index returns are based on an inception date of 11/4/04.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Indexes do not include fees or expenses and are not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| MetLife Growth Strategy Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
| | | | |
Class A(a)(b) | | | | | | | | | | | |
Actual | | 0.90% | | $ | 1,000.00 | | $ | 1,074.40 | | $ | 0.31 |
Hypothetical | | 0.90% | | | 1,000.00 | | | 1,024.50 | | | 0.30 |
| | | | | | | | | | | |
| | | | |
Class B(a)(b) | | | | | | | | | | | |
Actual | | 1.15% | | $ | 1,000.00 | | $ | 1,073.10 | | $ | 1.59 |
Hypothetical | | 1.15% | | | 1,000.00 | | | 1,023.26 | | | 1.56 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
(a) The annualized expense ratio shown reflects an expense limitation agreement between MetLife Advisers, LLC and the Portfolio as described in Note 3 of the Notes to Financial Statements.
(b) The annualized expense ratio reflects the expenses of both the Portfolio and the Underlying Portfolios in which it invests.
4
Met Investors Series Trust
MetLife Growth Strategy Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value
|
| | | | | |
| |
| Investment Company Securities - 100.0% | | | |
Artio International Stock Portfolio (Class A)(b) | | 23,451,268 | | $ | 182,216,352 |
BlackRock High Yield Portfolio (Class A)(a) | | 8,680,407 | | | 57,811,513 |
BlackRock Large Cap Value Portfolio (Class A)(b) | | 42,314,206 | | | 331,320,236 |
Clarion Global Real Estate Portfolio (Class A)(a) | | 25,253,785 | | | 184,857,707 |
Davis Venture Value Portfolio (Class A)(b) | | 21,084,782 | | | 479,678,796 |
Goldman Sachs Mid Cap Value Portfolio (Class A)(a) | | 14,194,083 | | | 116,817,302 |
Harris Oakmark International Portfolio (Class A)(a) | | 26,652,554 | | | 246,536,127 |
Janus Forty Portfolio (Class A)(a) | | 3,202,432 | | | 173,571,794 |
Jennison Growth Portfolio (Class A)(b) | | 45,697,007 | | | 402,133,660 |
Legg Mason Partners Aggressive Growth Portfolio (Class A)(a) | | 48,600,211 | | | 242,029,051 |
Loomis Sayles Global Markets Portfolio (Class A)(a) | | 15,174,272 | | | 123,518,573 |
Lord Abbett Bond Debenture Portfolio (Class A)(a) | | 5,750,507 | | | 60,035,293 |
Lord Abbett Growth and Income Portfolio (Class A)(a) | | 14,816,534 | | | 235,138,393 |
Met/AIM Small Cap Growth Portfolio (Class A)(a) | | 24,762,570 | | | 232,025,276 |
Met/Artisan Mid Cap Value Portfolio (Class A)(b) | | 963,999 | | | 113,616,872 |
Met/Dimensional International Small Capital Portfolio (Class A)(b) | | 10,734,696 | | | 128,064,919 |
Met/Templeton International Bond Portfolio (Class A)(a) | | 10,834,693 | | | 108,997,015 |
MFS® Emerging Markets Equity Portfolio (Class A)(a) | | 17,968,876 | | | 130,274,352 |
| | | | | | |
Security
Description | | Shares | | Value
| |
| | | | | | |
| |
| Investment Company Securities - continued | | | | |
MFS® Research International Portfolio (Class A)(a) | | 32,565,732 | | $ | 248,150,875 | |
MFS® Value Portfolio (Class A)(b) | | 36,755,074 | | | 347,703,004 | |
PIMCO Inflation Protected Bond Portfolio (Class A)(a) | | 21,498,448 | | | 224,873,771 | |
PIMCO Total Return Portfolio (Class A)(a) | | 25,669,490 | | | 285,188,031 | |
Rainier Large Cap Equity Portfolio (Class A)(a) | | 57,834,910 | | | 341,804,320 | |
T. Rowe Price Mid Cap Growth Portfolio (Class A)(a) | | 19,117,255 | | | 118,335,810 | |
Third Avenue Small Cap Value Portfolio (Class A)(a) | | 28,803,062 | | | 298,111,687 | |
Turner Mid Cap Growth Portfolio (Class A)(a) | | 13,803,664 | | | 114,156,305 | |
Van Eck Global Natural Resources Portfolio (Class A)(b) | | 10,253,874 | | | 123,354,099 | |
Van Kampen Comstock Portfolio (Class A)(a) | | 36,264,018 | | | 245,870,040 | |
| | | | | | |
Total Investment Company Securities
(Cost $7,474,282,624) | | | | | 5,896,191,173 | |
| | | | | | |
| | |
TOTAL INVESTMENTS - 100.0%
(Cost $7,474,282,624) | | | | | 5,896,191,173 | |
| | | | | | |
| | |
| Other Assets and Liabilities (net) - 0.0% | | | | | (1,656,516 | ) |
| | | | | | |
| | |
| NET ASSETS - 100.0% | | | | $ | 5,894,534,657 | |
| | | | | | |
Portfolio Footnotes:
| (a) | | A Portfolio of Met Investors Series Trust. |
| (b) | | A Portfolio of Metropolitan Series Fund, Inc. |
See accompanying notes to financial statements
5
Met Investors Series Trust
MetLife Growth Strategy Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1—quoted prices in active markets for identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Investment Company Securities | | $ | 5,896,191,173 | | $ | — | | $ | — | | $ | 5,896,191,173 |
TOTAL INVESTMENTS | | $ | 5,896,191,173 | | $ | — | | $ | — | | $ | 5,896,191,173 |
See accompanying notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| MetLife Growth Strategy Portfolio | | | |
| Assets | | | | |
Investments, at value (a) | | $ | 5,896,191,173 | |
Receivable for Trust shares sold | | | 961,465 | |
Receivable from Manager | | | 1,630 | |
| | | | |
Total assets | | | 5,897,154,268 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 147,011 | |
Trust shares redeemed | | | 814,455 | |
Distribution and services fees—Class B | | | 1,220,202 | |
Management fee | | | 274,990 | |
Administration fee | | | 2,010 | |
Custodian and accounting fees | | | 9,731 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 147,785 | |
| | | | |
Total liabilities | | | 2,619,611 | |
| | | | |
| Net Assets | | $ | 5,894,534,657 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 8,768,147,747 | |
Accumulated net realized loss | | | (1,419,497,684 | ) |
Unrealized depreciation on investments | | | (1,578,091,451 | ) |
Undistributed net investment income | | | 123,976,045 | |
| | | | |
Total | | $ | 5,894,534,657 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 3,068,509 | |
| | | | |
Class B | | | 5,891,466,148 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 401,069 | |
| | | | |
Class B | | | 772,271,488 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 7.65 | |
| | | | |
Class B | | | 7.63 | |
| | | | |
| | | | | |
(a) Investments at cost | | $ | 7,474,282,624 | |
See accompanying notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| MetLife Growth Strategy Portfolio | | | |
| Investment Income | | | | |
Dividends from Underlying Portfolios | | $ | 132,162,175 | |
| | | | |
Total investment income | | | 132,162,175 | |
| | | | |
| Expenses | | | | |
Management fee | | | 1,492,561 | |
Administration fees | | | 11,901 | |
Deferred Expense Reimbursement | | | 4,891 | |
Custodian and accounting fees | | | 9,276 | |
Distribution and services fees—Class B | | | 6,529,987 | |
Audit and tax services | | | 103,833 | |
Legal | | | 11,507 | |
Trustee fees and expenses | | | 9,699 | |
Insurance | | | 10,831 | |
Other | | | 1,644 | |
| | | | |
Total expenses | | | 8,186,130 | |
| | | | |
Net investment income | | | 123,976,045 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | (1,340,514,135 | ) |
Capital gain distributions from Underlying Portfolios | | | 14,280,162 | |
| | | | |
Net realized loss on investments and capital gain from Underlying Portfolios | | | (1,326,233,973 | ) |
| | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 1,598,252,644 | |
| | | | |
Net change in unrealized appreciation on investments | | | 1,598,252,644 | |
| | | | |
Net realized and unrealized gain on investments | | | 272,018,671 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 395,994,716 | |
| | | | |
See accompanying notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| MetLife Growth Strategy Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 123,976,045 | | | $ | 89,753,717 | |
Net realized gain (1oss) on investments and capital gain distributions from Underlying Portfolios | | | (1,326,233,973 | ) | | | 168,877,795 | |
Net change in unrealized appreciation (depreciation) on investments | | | 1,598,252,644 | | | | (3,421,160,292 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 395,994,716 | | | | (3,162,528,780 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | — | | | | (130,392 | ) |
Class B | | | — | | | | (247,396,867 | ) |
From net realized gains | | | | | | | | |
Class A | | | — | | | | (237,898 | ) |
Class B | | | — | | | | (494,824,153 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | — | | | | (742,589,310 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 690,986 | | | | 1,202,294 | |
Class B | | | 366,869,359 | | | | 1,001,886,561 | |
Net asset value of shares issued through acquisition | | | | | | | | |
Class A | | | — | | | | — | |
Class B | | | — | | | | 205,336,951 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | — | | | | 368,290 | |
Class B | | | — | | | | 742,221,020 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (184,922 | ) | | | (1,052,446 | ) |
Class B | | | (251,856,883 | ) | | | (856,089,538 | ) |
| | | | | | | | |
Net increase in net assets from capital share transactions | | | 115,518,540 | | | | 1,093,873,132 | |
| | | | | | | | |
| Net Increase (Decrease) in Net Assets | | | 511,513,256 | | | | (2,811,244,958 | ) |
Net assets at beginning of period | | | 5,383,021,401 | | | | 8,194,266,359 | |
| | | | | | | | |
Net assets at end of period | | $ | 5,894,534,657 | | | $ | 5,383,021,401 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 123,976,045 | | | $ | — | |
| | | | | | | | |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| MetLife Growth Strategy Portfolio | | Class A | | | | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | | | | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005(b) | | | | |
| Net Asset Value, Beginning of Period | | $ | 7.12 | | | $ | 12.89 | | | $ | 12.89 | | | $ | 11.39 | | | $ | 10.19 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.16 | | | | 0.16 | | | | 0.10 | | | | 0.26 | | | | 0.90 | | | | | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.37 | | | | (4.77 | ) | | | 0.55 | | | | 1.33 | | | | 0.44 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.53 | | | | (4.61 | ) | | | 0.65 | | | | 1.59 | | | | 1.34 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | (0.41 | ) | | | (0.19 | ) | | | (0.02 | ) | | | (0.12 | ) | | | | |
Distributions from Net Realized Capital Gains | | | — | | | | (0.75 | ) | | | (0.46 | ) | | | (0.07 | ) | | | (0.02 | ) | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | — | | | | (1.16 | ) | | | (0.65 | ) | | | (0.09 | ) | | | (0.14 | ) | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 7.65 | | | $ | 7.12 | | | $ | 12.89 | | | $ | 12.89 | | | $ | 11.39 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 7.44 | % | | | (37.74 | )% | | | 5.03 | % | | | 14.04 | % | | | 13.20 | % | | | | |
Ratio of Expenses to Average Net Assets After Reimbursement(f) | | | 0.06 | %* | | | 0.06 | % | | | 0.06 | % | | | 0.08 | % | | | 0.04 | %* | | | | |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates(g) | | | 0.06 | %* | | | 0.06 | % | | | 0.06 | % | | | 0.08 | %(e) | | | 0.04 | %* | | | | |
Ratio of Net Investment Income to Average Net Assets(h) | | | 4.56 | %* | | | 1.50 | % | | | 0.77 | % | | | 2.19 | % | | | 11.87 | %* | | | | |
Portfolio Turnover Rate | | | 35.6 | % | | | 23.0 | | | | 15.3 | % | | | 19.8 | % | | | 15.1 | % | | | | |
Net Assets, End of Period (in millions) | | $ | 3.1 | | | $ | 2.4 | | | $ | 3.8 | | | $ | 2.6 | | | $ | 1.2 | | | | | |
| |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004(c) | |
| Net Asset Value, Beginning of Period | | $ | 7.11 | | | $ | 12.85 | | | $ | 12.87 | | | $ | 11.40 | | | $ | 10.56 | | | $ | 10.00 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.16 | | | | 0.13 | | | | 0.07 | | | | 0.22 | | | | 0.22 | | | | 0.19 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.36 | | | | (4.75 | ) | | | 0.53 | | | | 1.32 | | | | 0.74 | | | | 0.44 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.52 | | | | (4.62 | ) | | | 0.60 | | | | 1.54 | | | | 0.96 | | | | 0.63 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | (0.37 | ) | | | (0.16 | ) | | | (0.00 | ) + | | | (0.10 | ) | | | (0.07 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (0.75 | ) | | | (0.46 | ) | | | (0.07 | ) | | | (0.02 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | — | | | | (1.12 | ) | | | (0.62 | ) | | | (0.07 | ) | | | (0.12 | ) | | | (0.07 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 7.63 | | | $ | 7.11 | | | $ | 12.85 | | | $ | 12.87 | | | $ | 11.40 | | | $ | 10.56 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 7.31 | % | | | (37.87 | )% | | | 4.70 | % | | | 13.59 | % | | | 9.12 | % | | | 6.30 | % |
Ratio of Expenses to Average Net Assets After Reimbursement(f) | | | 0.31 | %* | | | 0.31 | % | | | 0.31 | % | | | 0.33 | % | | | 0.31 | % | | | 0.35 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates(g) | | | 0.31 | %* | | | 0.31 | % | | | 0.31 | % | | | 0.33 | %(e) | | | 0.31 | % | | | 0.39 | %* |
Ratio of Net Investment Income to Average Net Assets(h) | | | 4.74 | %* | | | 1.28 | % | | | 0.50 | % | | | 1.81 | % | | | 2.03 | % | | | 11.59 | %* |
Portfolio Turnover Rate | | | 35.6 | % | | | 23.0 | % | | | 15.3 | % | | | 19.8 | % | | | 15.1 | % | | | 0.0 | %(d) |
Net Assets, End of Period (in millions) | | $ | 5,891.5 | | | $ | 5,380.6 | | | $ | 8,190.5 | | | $ | 5,510.3 | | | $ | 3,206.2 | | | $ | 1,379.4 | |
| + | | Rounds to less than $0.005 per share |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—05/02/2005. |
| (c) | | Commencement of operations—11/04/2004. |
| (d) | | For the period ended 12/31/2004, the portfolio turnover calculation is zero, due to no sales activity. |
| (e) | | Excludes the effect of deferred expense reimbursement. |
| (f) | | The ratio of operating expenses to average net assets does not include expenses of the Underlying Portfolios in which the Portfolio invests. |
| (g) | | See Note 3 of the Notes to Financial Statements. |
| (h) | | Recognition of net investment income by the Portfolio is affected by the timing of the declaration of dividends by the Underlying Portfolios in which it invests. |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is MetLife Growth Strategy Portfolio (the “Portfolio”), which is non-diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A and B Shares are currently offered by the Portfolio. Class C and E Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
The Portfolio is designed on established principles of asset allocation and risk tolerance. The Portfolio will invest substantially all of its assets in other Portfolios of the Trust or of Metropolitan Series Fund, Inc. which invest either in equity securities or fixed income securities, as applicable (“Underlying Portfolios”).
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Investments in the Underlying Portfolios are valued at their closing daily net asset value. The net asset value of the Portfolio is calculated based on the net asset values of the Underlying Portfolios in which the Portfolio invests. For information about the use of fair value pricing by the Underlying Portfolios, please refer to the prospectuses of the Underlying Portfolios.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes.
C. Investment Income and Expenses - Income and capital gain distributions from the Underlying Portfolios are recorded on the ex-dividend date.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | | |
Expiring
12/31/2016 | | Total |
| |
| $ | 841,458 | | $ | 841,458 |
The Portfolio acquired capital losses of $26,716,852 in the merger with Strategic Conservative Growth Portfolio on November 7, 2008, which are subject to a first year limitation of $25,875,394.
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
11
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board of Trustees (the “Board”) and has overall responsibility for the general management and administration of the Trust.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $1,492,561 | | 0.10 | % | | First $500 Million |
| | |
| | 0.075 | % | | $500 Million to $1 Billion |
| | |
| | 0.05 | % | | Over $1 Billion |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
| | | | | | | | | | | | | |
| Expenses Deferred in |
2006 | | | 2007 | | | 2008 | | | 2009 |
| Subject to repayment until December 31, |
| 2011 | | | 2012 | | | 2013 | | | 2014 |
| | | |
| $ | 36,665 | * | | $ | 126,028 | * | | $ | 112,802 | * | | $ | — |
* On November 7, 2008, the Strategic Conservative Growth Portfolio merged with and into MetLife Growth Strategy Portfolio. The repayment of the subsidy amount for the Strategic Conservative Growth Portfolio will occur from the MetLife Growth Strategy Portfolio.
As a result of the Strategic Conservative Growth Portfolio acquisition, the Manager was entitled to a subsidy amount of $275,495, which $4,891 was repaid by the Portfolio during the period ended June 30, 2009.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A and Class B Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B distribution plan provides that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% of the average net assets of the Portfolio attributable to its Class B Shares in respect to activities primarily intended to result in the sale of Class B Shares. However, under the Class B distribution agreement, payments to the Distributor for activities pursuant to the Class B distribution plan are currently limited to payments at an annual rate equal to 0.25% of average daily net assets of the Portfolio attributable to its Class B Shares.
Under terms of the Class B distribution plan and distribution agreement, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
12
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Shares Issued
in Connection
with Acquisition | | Reinvestments | | Redemptions | | | Net Increase
in Shares
Outstanding | | Ending
Shares |
| | | | | | | |
Class A | | | | | | | | | | | | | | | |
| | | | | | | |
6/30/2009 | | 334,496 | | 93,948 | | — | | — | | (27,375 | ) | | 66,573 | | 401,069 |
12/31/2008 | | 293,957 | | 105,509 | | — | | 39,202 | | (104,172 | ) | | 40,539 | | 334,496 |
| | | | | | | |
Class B | | | | | | | | | | | | | | | |
| | | | | | | |
6/30/2009 | | 757,246,219 | | 52,976,784 | | — | | — | | (37,951,515 | ) | | 15,025,269 | | 772,271,488 |
12/31/2008 | | 637,247,569 | | 95,040,000 | | 28,244,422 | | 79,520,078 | | (82,805,850 | ) | | 119,998,650 | | 757,246,219 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $ | — | | $ | 2,137,703,455 | | $ | — | | $ | 1,883,719,970 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $7,474,282,624 | | $ | 91,004,139 | | $ | (1,669,095,590 | ) | | $ | (1,578,091,451 | ) |
6. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $ | 266,267,801 | | $ | 77,728,831 | | $ | 476,321,509 | | $ | 218,090,838 | | $ | 742,589,310 | | $ | 295,819,669 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards | | | Total | |
| | | | |
| $ | — | | $ | — | | $ | (3,268,766,348 | ) | | $ | (841,458 | ) | | $ | (3,269,607,806 | ) |
7. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
8. Market, Credit and Counterparty Risk
In the normal course of business, the Underlying Portfolios, in which the Portfolio invests, invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Underlying Portfolios may decline in response to certain events, including those directly involving the companies whose securities are owned by the Underlying Portfolios; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Underlying Portfolios may be exposed to counterparty risk, or the risk that an entity with which the Underlying Portfolios have unsettled or open transactions may default. Financial assets, which potentially expose the Underlying Portfolios to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Underlying Portfolios’ exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Underlying Portfolios’ Statements of Assets and Liabilities.
9. Transactions in Securities of Affiliated Issuers
Transactions in the Underlying Portfolios during the period ended June 30, 2009 in which the Portfolio had ownership are as follows:
| | | | | | | | | |
Security Description | | Number of shares
held at December 31,
2008 | | Shares purchased
during the period | | Shares sold during
the period | | | Number of shares
held at June 30,
2009 |
| | | | |
Artio International Stock Portfolio (Class A) | | 21,116,471 | | 2,773,786 | | (438,989 | ) | | 23,451,268 |
| | | | |
BlackRock High Yield Portfolio (Class A) | | — | | 8,707,490 | | (27,083 | ) | | 8,680,407 |
| | | | |
BlackRock Large Cap Value Portfolio (Class A) | | — | | 42,451,112 | | (136,906 | ) | | 42,314,206 |
| | | | |
Clarion Global Real Estate Portfolio (Class A)* | | 21,754,350 | | 4,004,521 | | (505,086 | ) | | 25,253,785 |
| | | | |
Davis Venture Value Portfolio (Class A) | | 24,349,095 | | 2,280,823 | | (5,545,136 | ) | | 21,084,782 |
| | | | |
Goldman Sachs Mid Cap Value Portfolio (Class A)* | | 13,586,308 | | 1,262,398 | | (654,623 | ) | | 14,194,083 |
| | | | |
Harris Oakmark International Portfolio (Class A) | | 19,663,178 | | 7,405,367 | | (415,991 | ) | | 26,652,554 |
| | | | |
Janus Forty Portfolio (Class A) | | — | | 3,212,357 | | (9,925 | ) | | 3,202,432 |
| | | | |
Jennison Growth Portfolio (Class A)* | | 13,638,870 | | 32,945,315 | | (887,178 | ) | | 45,697,007 |
| | | | |
Lazard Mid Cap Portfolio (Class A) | | 15,486,835 | | 590,399 | | (16,077,234 | ) | | — |
| | | | |
Legg Mason Partners Aggressive Growth Portfolio (Class A)* | | 71,365,336 | | 2,409,543 | | (25,174,668 | ) | | 48,600,211 |
| | | | |
Legg Mason Value Equity Portfolio (Class A) | | 44,214,958 | | 4,877,449 | | (49,092,407 | ) | | — |
| | | | |
Loomis Sayles Global Markets Portfolio (Class A) | | 29,888,222 | | 1,681,342 | | (16,395,292 | ) | | 15,174,272 |
| | | | |
Lord Abbett Bond Debenture Portfolio (Class A) | | 10,948,509 | | 1,235,538 | | (6,433,540 | ) | | 5,750,507 |
| | | | |
Lord Abbett Growth and Income Portfolio (Class A) | | 33,200,096 | | 4,213,836 | | (22,597,398 | ) | | 14,816,534 |
| | | | |
Met/AIM Small Cap Growth Portfolio (Class A)* | | 12,898,961 | | 12,246,854 | | (383,245 | ) | | 24,762,570 |
| | | | |
Met/Artisan Mid Cap Value (Class A) | | 992,269 | | 67,210 | | (95,480 | ) | | 963,999 |
| | | | |
Met/Dimensional International Small Capital Portfolio (Class A)* | | 10,387,289 | | 815,592 | | (468,185 | ) | | 10,734,696 |
| | | | |
Met/Templeton International Bond Portfolio (Class A) | | — | | 10,870,697 | | (36,004 | ) | | 10,834,693 |
| | | | |
MFS® Emerging Markets Equity Portfolio (Class A) | | 31,075,165 | | 1,540,946 | | (14,647,235 | ) | | 17,968,876 |
| | | | |
MFS® Research International Portfolio (Class A) | | 24,222,074 | | 10,423,954 | | (2,080,296 | ) | | 32,565,732 |
| | | | |
MFS® Value Portfolio (Class A) | | — | | 36,868,699 | | (113,625 | ) | | 36,755,074 |
| | | | |
PIMCO Inflation Protected Bond Portfolio (Class A) | | 10,777,318 | | 11,700,611 | | (979,481 | ) | | 21,498,448 |
| | | | |
PIMCO Total Return Portfolio (Class A) | | 18,800,110 | | 8,826,378 | | (1,956,998 | ) | | 25,669,490 |
| | | | |
Rainier Large Cap Equity Portfolio (Class A)* | | 46,164,159 | | 12,934,695 | | (1,263,944 | ) | | 57,834,910 |
| | | | |
T. Rowe Price Mid Cap Growth Portfolio (Class A) | | 20,673,344 | | 729,511 | | (2,285,600 | ) | | 19,117,255 |
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
9. Transactions in Securities of Affiliated Issuers - continued
| | | | | | | | | |
Security Description | | Number of shares
held at December 31,
2008 | | Shares purchased
during the period | | Shares sold during
the period | | | Number of shares
held at June 30,
2009 |
| | | | |
Third Avenue Small Cap Value Portfolio (Class A)* | | 41,123,655 | | 3,449,495 | | (15,770,088 | ) | | 28,803,062 |
| | | | |
Turner Mid Cap Growth Portfolio (Class A)* | | 14,336,594 | | 580,292 | | (1,113,222 | ) | | 13,803,664 |
| | | | |
Van Eck Global Natural Resources Portfolio (Class A)* | | 10,410,008 | | 392,255 | | (548,389 | ) | | 10,253,874 |
| | | | |
Van Kampen Comstock Portfolio (Class A) | | 92,488,640 | | 10,524,639 | | (66,749,261 | ) | | 36,264,018 |
* The Portfolio had ownership of at least 25% of the outstanding voting securities of the Underlying Portfolio as of June 30, 2009. Once filed, the most recent Annual Report of the Underlying Portfolio will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http:// www.sec.gov.
| | | | | | | | | | | | | | |
Security Description | | Net Realized Gain
(Loss) on Investments
during the period | | | Net Realized Gain
(Loss) on Capital
Gain Distributions
from Affiliates
during the period | | Income earned
from affiliate
during the period | | | Ending Value |
| | | | |
Artio International Stock Portfolio (Class A) | | $ | (2,834,023 | ) | | $ | — | | $ | 1,226,131 | | | $ | 182,216,352 |
| | | | |
BlackRock High Yield Portfolio (Class A) | | | 10,858 | | | | — | | | — | | | | 57,811,513 |
| | | | |
BlackRock Large Cap Value Portfolio (Class A) | | | 27,703 | | | | — | | | — | | | | 331,320,236 |
| | | | |
Clarion Global Real Estate Portfolio (Class A) | | | (3,189,514 | ) | | | — | | | 6,377,703 | | | | 184,857,707 |
| | | | |
Davis Venture Value Portfolio (Class A) | | | (40,859,602 | ) | | | — | | | 9,341,762 | | | | 479,678,796 |
| | | | |
Goldman Sachs Mid Cap Value Portfolio (Class A) | | | (3,195,879 | ) | | | — | | | 1,828,422 | | | | 116,817,302 |
| | | | |
Harris Oakmark International Portfolio (Class A) | | | (4,424,873 | ) | | | — | | | 16,516,701 | | | | 246,536,127 |
| | | | |
Janus Forty Portfolio (Class A) | | | 35,985 | | | | — | | | — | | | | 173,571,794 |
| | | | |
Jennison Growth Portfolio (Class A) | | | (3,084,787 | ) | | | — | | | 223,447 | | | | 402,133,660 |
| | | | |
Lazard Mid Cap Portfolio (Class A) | | | (57,083,792 | ) | | | — | | | 1,603,194 | | | | — |
| | | | |
Legg Mason Partners Aggressive Growth Portfolio (Class A) | | | (87,443,931 | ) | | | — | | | 432,919 | | | | 242,029,051 |
| | | | |
Legg Mason Value Equity Portfolio (Class A) | | | (248,701,536 | ) | | | — | | | 4,447,122 | | | | — |
| | | | |
Loomis Sayles Global Markets Portfolio (Class A) | | | (42,258,545 | ) | | | — | | | 5,792,324 | | | | 123,518,573 |
| | | | |
Lord Abbett Bond Debenture Portfolio (Class A) | | | (15,272,423 | ) | | | — | | | 8,753,574 | | | | 60,035,293 |
| | | | |
Lord Abbett Growth and Income Portfolio (Class A) | | | (303,380,853 | ) | | | — | | | 14,786,073 | | | | 235,138,393 |
| | | | |
Met/AIM Small Cap Growth Portfolio (Class A) | | | (2,192,501 | ) | | | — | | | — | | | | 232,025,276 |
| | | | |
Met/Artisan Mid Cap Value (Class A) | | | (13,461,453 | ) | | | — | | | 1,385,327 | | | | 113,616,872 |
| | | | |
Met/Dimensional International Small Capital Portfolio (Class A) | | | (129,110 | ) | | | — | | | — | | | | 128,064,919 |
| | | | |
Met/Templeton International Bond Portfolio (Class A) | | | (321 | ) | | | — | | | — | | | | 108,997,015 |
| | | | |
MFS® Emerging Markets Equity Portfolio (Class A) | | | (59,911,122 | ) | | | — | | | 4,108,424 | | | | 130,274,352 |
| | | | |
MFS® Research International Portfolio (Class A) | | | (15,712,166 | ) | | | — | | | 6,196,740 | | | | 248,150,875 |
| | | | |
MFS® Value Portfolio (Class A) | | | 74,695 | | | | — | | | — | | | | 347,703,004 |
| | | | |
PIMCO Inflation Protected Bond Portfolio (Class A) | | | (42,478 | ) | | | — | | | 4,193,882 | | | | 224,873,771 |
| | | | |
PIMCO Total Return Portfolio (Class A) | | | 136,511 | | | | 31,323,734 | | | (5,492,047 | ) | | | 285,188,031 |
| | | | |
Rainier Large Cap Equity Portfolio (Class A) | | | (5,363,619 | ) | | | — | | | 2,739,281 | | | | 341,804,320 |
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
9. Transactions in Securities of Affiliated Issuers - continued
| | | | | | | | | | | | | |
Security Description | | Net Realized Gain
(Loss) on Investments
during the period | | | Net Realized Gain
(Loss) on Capital
Gain Distributions
from Affiliates
during the period | | Income earned
from affiliate
during the period | | Ending Value |
| | | | |
T. Rowe Price Mid Cap Growth Portfolio (Class A) | | $ | (7,983,131 | ) | | $ | — | | $ | — | | $ | 118,335,810 |
| | | | |
Third Avenue Small Cap Value Portfolio (Class A) | | | (98,985,661 | ) | | | 3,382,891 | | | 8,392,560 | | | 298,111,687 |
| | | | |
Turner Mid Cap Growth Portfolio (Class A) | | | (3,614,406 | ) | | | — | | | — | | | 114,156,305 |
| | | | |
Van Eck Global Natural Resources Portfolio (Class A) | | | 96,963 | | | | — | | | 133,781 | | | 123,354,099 |
| | | | |
Van Kampen Comstock Portfolio (Class A) | | | (321,771,124 | ) | | | — | | | 18,748,392 | | | 245,870,040 |
10. Acquisitions
As of the close of business on November 7, 2008, MetLife Growth Strategy Portfolio (“Growth”) acquired all the net assets of Strategic Conservative Growth Portfolio (“Conservative Growth”), a series of the Trust, pursuant to a plan of reorganization approved by Conservative Growth shareholders on November 5, 2008. The acquisition was accomplished by a tax-free exchange of 28,244,422 Class B shares of Growth (valued at $205,336,951) in exchange for 31,012,551 Class B shares of Conservative Growth outstanding on November 7, 2008. Conservative Growth Class B net assets at that date ($205,336,951), including $88,001,600 of unrealized depreciation and $28,816,585 of accumulated net realized losses, were combined with those of Growth Class B. The aggregate Class B net assets of Growth immediately before the acquisition were $5,245,469,631. The aggregate Class B net assets of Conservative Growth immediately before the acquisition were $205,336,951. The aggregate Class B net assets of Growth immediately after the acquisition were $5,450,806,582.
11. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
12. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
16
| | |
| MetLife Moderate Strategy Portfolio | | For the period ended 6/30/09 |
| Managed by MetLife Advisers, LLC | | |
Portfolio Manager Commentary
Performance
For the six-month period ended June 30, 2009, the Class A and B shares of the Portfolio returned 8.48% and 8.33%, respectively, compared to the 7.11% return of its primary index, the Dow Jones Moderate Index.
Market Environment/Conditions
The worst economic downturn since the 1930s—dubbed “The Great Recession” by some pundits—showed few signs of sustained improvement; although at least the rapid rate of descent appeared to have slowed during the first half of 2009. The Unemployment Rate reached 9.5% in June as over six million jobs were lost over the past twelve months. Other economic statistics were more ambiguous: Consumer Confidence, although still well below its level of two years ago, recovered from the level reached in March and Existing Home Sales improved modestly in response to lower house prices and improved availability of credit.
The Barclays Capital U.S. Aggregate Bond Index produced a modest, but positive total return of 1.9% for the first six months of 2009. The increase in Treasury yields that lowered the price of Treasury bonds was offset by a narrowing of yield spreads, which boosted credit based securities as investors became more positive on the prospects for the economy. The Barclays Capital U.S. Treasury Index was down 4.3% for the six months ending June, while the Barclays Capital U.S. Corporate Investment Grade Index was up 8.3%. Although the Barclays U.S. Corporate High Yield Index was up over 30% for the six-month period, it was still down 2.4% over the previous twelve months. The yield on Three Month Treasury Bills stayed close to 0.2% as the Federal Reserve kept their target rate in the 0.00% to 0.25% range.
The Standard & Poor’s 500 Index, buoyed by a robust 15.9% return for the second quarter, returned 3.2% for the six months ending in June. The rout in stocks that began last summer continued into the first quarter of this year as the severity of the recession became apparent. A turnaround began in early March on improving sentiment and stocks surged over 35% from the low in early March to the end of the June. Although Small Cap stocks had better performance in the second quarter, they were up slightly less than large cap stocks for the full six-month period as measured by the 2.6% rise of the Russell 2000® Index. Growth outperformed Value stocks during the first half of 2009 primarily due to the strength of technology companies compared to the relative weakness in traditional value stocks such as those in the Financials sector. Technology and Basic Materials were the best performing sectors over the six-month period. The Financials sector, despite a nearly 100% return from the middle of March to the end of June, was still among the worst performing sectors for the six-month period (-3.4%). The MSCI EAFE Index was up nearly 8% for the six months ending in June, slightly more than the local return due to a weaker dollar that made foreign securities more valuable to the U.S. dollar based investor. Emerging Market equities and international small cap equities were both up more than the large cap stocks from developed countries.
Portfolio Review/Current Positioning
The Portfolio is a “fund of funds” consisting of other portfolios of the Met Investors Series Trust and the Metropolitan Series Fund, Inc. with a broad allocation goal of 50% in equities and 50% in fixed income. While the broad asset class allocation goals of this Portfolio remained the same, several adjustments to the goals to the sub-asset classes and the underlying portfolio targets were made during the first six months of 2009. This included the elimination of a formal goal for cash, although we still expect the Portfolio will hold some residual cash from the underlying portfolios. In addition there was a slight decrease in the goals to non-core asset classes such as high yield bonds and small cap stocks.
The Portfolio continues to be diversified across a wide variety of asset classes and underlying portfolios to add value over the long term. During 2008, investors shunned risk and rewarded only what they perceived to be the safest investments. This was especially true in the fixed income area where Treasuries outperformed high yield securities and investment grade corporate bonds by a wide margin. In contrast, exposure to credit based bonds helped actively managed fixed income portfolios during the first six months of 2009. This factor was still a significant factor even though the bond exposure or this Portfolio was only 50%.
Within the fixed income segment, the underlying portfolios with large exposures to high yield bonds, such as the Lord Abbett Bond Debenture Portfolio and the BlackRock High Yield Portfolio, were all up sharply relative to the broad bond indices for the period. Overall high yield exposure was about 5% of the Portfolio, which was in line with its target. The PIMCO Total Return Portfolio—the single largest holding in the Portfolio—was the largest contributor to relative return: it was helped by prescient yield curve positioning that anticipated the steepening of the yield curve and by having larger exposure to credit securities than the broad index. A position in Treasury Inflation Protected Securities (TIPS) also helped the PIMCO Total Return Portfolio. The Western Asset Management U.S. Government Portfolio had a negative impact on relative performance due to its exposure to Treasury securities, which were negative for the period due to the rise in yields, as well as exposure to non-agency mortgage securities, which continue to be hurt by the sub-prime mortgage crisis.
Generally, the underlying equity portfolios with a growth style performed better than those with a value style. This included the Jennison Growth Portfolio which was helped by an overweight in the strong performing Information Technology sector and good security selection, especially in the Energy and Financials sectors. In Energy, they did not hold Exxon Mobil (-11.5%), but held Southwestern Energy (+34.1%); in Financials, they overweighted Goldman Sachs (+76%) and avoided Citigroup (-55%). The Harris Oakmark International Portfolio also performed well, aided by good security selection in the Financials Sector of Western Europe. Holding large overweights in strong performing Credit Suisse and BNP Paribas offset holding weak performing Allianz and UBS. Although the Van Eck Global Natural Resources Portfolio made up only 1% of the Portfolio, it had a positive impact on performance due to its underweighting of several large, poor performing oil companies (Exxon Mobil, ConocoPhillips, and Chevron) and its overweighting of Metal & Mining stocks, including a position in Freeport-McMoRan Copper & Gold,
1
| | |
| MetLife Moderate Strategy Portfolio | | For the period ended 6/30/09 |
| Managed by MetLife Advisers, LLC | | |
Portfolio Manager Commentary (continued)
which doubled during the six-month period. The rising tide of the emerging markets during the six months ending June 2009 lifted the MFS® Emerging Market Portfolio to a nearly 30% return and was a positive contributor to both relative and absolute return.
Detracting the most from the Portfolio’s relative performance were the BlackRock Large Cap Value Portfolio and the Lord Abbett Growth and Income Portfolio. BlackRock’s blend of quantitative and qualitative analysis resulted in a focus on companies with a high-quality bias. During the market rally that began in early March, investors bid up the price of weaker companies that lost the most in the preceding year. Lord Abbett, despite good stock selection in the Financials sector, was adversely impacted by its value style. Despite overall good stock selection in the Financials sector, it was not able to overcome an overweight in that weak sector. The Artio International Stock Portfolio also detracted from the Portfolio’s relative and absolute performance due to a large cash position in a strong market and overall weak stock selection. Most notable was that they did not own several large strong performing companies in the Financials sector: Credit Suisse, BNP Paribas, and Barclays.
MetLife Advisers, LLC
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the advisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
PIMCO Total Return Portfolio (Class A) | | 20.71% |
Western Asset Management U.S. Government Portfolio (Class A) | | 7.50% |
Davis Venture Value Portfolio (Class A) | | 6.12% |
MFS® Value Portfolio (Class A) | | 6.00% |
PIMCO Inflation Protected Bond Portfolio (Class A) | | 5.81% |
BlackRock Large Cap Value Portfolio (Class A) | | 5.73% |
Lord Abbett Bond Debenture Portfolio (Class A) | | 5.14% |
Van Kampen Comstock Portfolio (Class A) | | 4.12% |
Lord Abbett Growth and Income Portfolio (Class A) | | 3.03% |
Third Avenue Small Cap Value Portfolio (Class A) | | 3.02% |
Jennison Growth Portfolio (Class A) | | 3.01% |
Rainier Large Cap Equity Portfolio (Class A) | | 2.96% |
Harris Oakmark International Portfolio (Class A) | | 2.14% |
Loomis Sayles Global Markets Portfolio (Class A) | | 2.13% |
Clarion Global Real Estate Portfolio (Class A) | | 2.12% |
MFS® Research International Portfolio (Class A) | | 2.12% |
Artio International Stock Portfolio (Class A) | | 2.09% |
BlackRock High Yield Portfolio (Class A) | | 2.05% |
Goldman Sachs Mid Cap Value Portfolio (Class A) | | 2.01% |
BlackRock Bond Income Portfolio (Class A) | | 1.92% |
Met/Templeton International Bond Portfolio (Class A) | | 1.89% |
MFS® Emerging Markets Equity Portfolio (Class A) | | 1.14% |
Met/Dimensional International Small Capital Portfolio (Class A) | | 1.13% |
Lazard Mid Cap Portfolio (Class A) | | 1.06% |
Van Eck Global Natural Resources Portfolio (Class A) | | 1.06% |
T. Rowe Price Mid Cap Growth Portfolio (Class A) | | 1.05% |
Turner Mid Cap Growth Portfolio (Class A) | | 1.01% |
Met/AIM Small Cap Growth Portfolio (Class A) | | 0.97% |
Met/Artisan Mid Cap Value Portfolio (Class A) | | 0.96% |
2
| | |
| MetLife Moderate Strategy Portfolio | | For the period ended 6/30/09 |
| Managed by MetLife Advisers, LLC | | |
Portfolio Manager Commentary (continued)
MetLife Moderate Strategy Portfolio managed by MetLife Advisers, LLC vs. Dow Jones Moderate Index1 and Moderate Blended Benchmark2
Growth Based on $10,000+
| | | | | | | | | | |
| | | | | Average Annual Return (for the period ended 6/30/09)3 |
| | | | | 6 Months | | 1 Year | | 3 Year | | Since
Inception4 |
| | MetLife Moderate Strategy
Portfolio—Class A | | 8.48% | | -14.35% | | -2.64% | | 0.48% |
| — | | Class B | | 8.33% | | -14.62% | | -2.90% | | 0.27% |
| — | | Dow Jones Moderate Index1 | | 7.11% | | -14.71% | | -1.90% | | 2.20% |
| - - | | Moderate Blended Benchmark2 | | 4.95% | | -11.90% | | -0.95% | | 1.84% |
+The chart reflects the performance of Class B shares of the Portfolio. The performance of Class B shares will differ from that of the other class because of the difference in expenses paid by policyholders investing in the different share classes.
1The Dow Jones Moderate Index is a benchmark designed for asset allocation strategists who are willing to take 60% of the risk of an all equity portfolio. It is a total returns index that is a time-varying weighted average of stocks, bonds, and cash using a combination of various indices (both domestic and foreign) from Barclays and Dow Jones. The index has held an average of 58% in equities over the past three years ending in June 2009.
2The Moderate Blended Benchmark is comprised of 37% Dow Jones U.S. Total Full Cap Index, 50% Barclays Capital U.S. Universal Index and 13% Morgan
Stanley Capital International Europe Australasia and Far East Index (the MSCI EAFE® Index).
The Dow Jones U.S. Total Full Cap Index measures the performance of all U.S. equity securities with readily available price data.
The Barclays Capital U.S. Universal Index represents the union of the U.S. Aggregate Bond Index, the U.S. High-Yield Corporate Index, the Investment Grade 144A Index, the Eurodollar Index, the U.S. Emerging Markets Index and the non-EIRSA portion of the Commercial Mortgage Backed Securities Index.
The Morgan Stanley Capital International Europe, Australasia and Far East Index (“MSCI EAFE® Index”) is an unmanaged free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the U.S. and Canada.
3“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
4Inception of the Class B shares is 11/4/04. Inception of the Class A shares is 5/2/05. Index returns are based on an inception date of 11/4/04.
3
| | |
| MetLife Moderate Strategy Portfolio | | For the period ended 6/30/09 |
| Managed by MetLife Advisers, LLC | | |
Portfolio Manager Commentary (continued)
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Indexes do not include fees or expenses and are not available for direct investment.
4
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| MetLife Moderate Strategy Portfolio | | | | | | | | | | | |
| | | | |
Class A(a)(b) | | | | | | | | | | | |
Actual | | 0.83% | | $ | 1,000.00 | | $ | 1,084.80 | | $ | 0.41 |
Hypothetical | | 0.83% | | | 1,000.00 | | | 1,024.40 | | | 0.40 |
| | | | | | | | | | | |
| | | | |
Class B(a)(b) | | | | | | | | | | | |
Actual | | 1.08% | | $ | 1,000.00 | | $ | 1,083.30 | | $ | 1.70 |
Hypothetical | | 1.08% | | | 1,000.00 | | | 1,023.16 | | | 1.66 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
(a) The annualized expense ratio shown reflects an expense limitation agreement between MetLife Advisers, LLC and the Portfolio as described in Note 3 of the Notes to Financial Statements.
(b) The annualized expense ratio reflects the expenses of both the Portfolio and the Underlying Portfolios in which it invests.
5
Met Investors Series Trust
MetLife Moderate Strategy Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value
|
| |
| Investment Company Securities - 100.0% | | | |
Artio International Stock Portfolio (Class A)(b) | | 6,423,331 | | $ | 49,909,279 |
BlackRock Bond Income Portfolio (Class A)(b) | | 461,975 | | | 45,818,723 |
BlackRock High Yield Portfolio (Class A)(a) | | 7,356,785 | | | 48,996,186 |
BlackRock Large Cap Value Portfolio (Class A)(b) | | 17,451,542 | | | 136,645,577 |
Clarion Global Real Estate Portfolio (Class A)(a) | | 6,923,619 | | | 50,680,889 |
Davis Venture Value Portfolio (Class A)(b) | | 6,419,859 | | | 146,051,797 |
Goldman Sachs Mid Cap Value Portfolio (Class A)(a) | | 5,843,166 | | | 48,089,260 |
Harris Oakmark International Portfolio (Class A)(a) | | 5,508,263 | | | 50,951,437 |
Jennison Growth Portfolio (Class A)(b) | | 8,158,467 | | | 71,794,513 |
Lazard Mid Cap Portfolio (Class A)(a) | | 3,418,345 | | | 25,398,303 |
Loomis Sayles Global Markets Portfolio (Class A)(a) | | 6,234,343 | | | 50,747,550 |
Lord Abbett Bond Debenture Portfolio (Class A)(a) | | 11,735,848 | | | 122,522,258 |
Lord Abbett Growth and Income Portfolio
(Class A)(a) | | 4,548,226 | | | 72,180,340 |
Met/AIM Small Cap Growth Portfolio (Class A)(a) | | 2,485,150 | | | 23,285,857 |
Met/Artisan Mid Cap Value Portfolio (Class A)(b) | | 194,271 | | | 22,896,724 |
Met/Dimensional International Small Capital Portfolio (Class A)(b) | | 2,252,912 | | | 26,877,242 |
Met/Templeton International Bond Portfolio (Class A)(a) | | 4,472,872 | | | 44,997,090 |
MFS® Emerging Markets Equity Portfolio
(Class A)(a) | | 3,743,003 | | | 27,136,771 |
| | | | | | |
Security
Description | | Shares | | Value
| |
| |
| Investment Company Securities - continued | | | | |
MFS® Research International Portfolio (Class A)(a) | | 6,628,179 | | $ | 50,506,724 | |
MFS® Value Portfolio (Class A)(b) | | 15,134,883 | | | 143,175,992 | |
PIMCO Inflation Protected Bond Portfolio
(Class A)(a) | | 13,242,816 | | | 138,519,853 | |
PIMCO Total Return Portfolio (Class A)(a) | | 44,473,226 | | | 494,097,541 | |
Rainier Large Cap Equity Portfolio (Class A)(a) | | 11,946,748 | | | 70,605,282 | |
T. Rowe Price Mid Cap Growth Portfolio (Class A)(a) | | 4,063,153 | | | 25,150,917 | |
Third Avenue Small Cap Value Portfolio (Class A)(a) | | 6,963,483 | | | 72,072,045 | |
Turner Mid Cap Growth Portfolio (Class A)(a) | | 2,924,272 | | | 24,183,731 | |
Van Eck Global Natural Resources Portfolio
(Class A)(b) | | 2,103,280 | | | 25,302,463 | |
Van Kampen Comstock Portfolio
(Class A)(a) | | 14,508,724 | | | 98,369,147 | |
Western Asset Management U.S. Government Portfolio (Class A)(b) | | 15,660,885 | | | 178,847,303 | |
| | | | | | |
Total Investment Company Securities
(Cost $2,655,528,411) | | | | | 2,385,810,794 | |
| | | | | | |
| | |
TOTAL INVESTMENTS - 100.0%
(Cost $2,655,528,411) | | | | | 2,385,810,794 | |
| | | | | | |
| | |
| Other Assets and Liabilities (net) - 0.0% | | | | | (638,711 | ) |
| | | | | | |
| | |
| NET ASSETS - 100.0% | | | | $ | 2,385,172,083 | |
| | | | | | |
Portfolio Footnotes:
| (a) | | A Portfolio of Met Investors Series Trust. |
| (b) | | A Portfolio of Metropolitan Series Fund, Inc. |
See accompanying notes to financial statements
6
Met Investors Series Trust
MetLife Moderate Strategy Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1—quoted prices in active markets for identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Investment Company Securities | | $ | 2,385,810,794 | | $ | — | | $ | — | | $ | 2,385,810,794 |
TOTAL INVESTMENTS | | $ | 2,385,810,794 | | $ | — | | $ | — | | $ | 2,385,810,794 |
See accompanying notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009
| | | | |
| MetLife Moderate Strategy Portfolio | | | |
| Assets | | | | |
Investments, at value (a) | | $ | 2,385,810,794 | |
Receivable for investments sold | | | 146,615 | |
Receivable for Trust shares sold | | | 735,625 | |
| | | | |
Total assets | | | 2,386,693,034 | |
| | | | |
| Liabilities | | | | |
Due to Custodian | | | 1 | |
Payables for: | | | | |
Trust shares redeemed | | | 882,240 | |
Distribution and services fees—Class B | | | 484,779 | |
Management fee | | | 127,820 | |
Administration fee | | | 1,964 | |
Custodian and accounting fees | | | 12,733 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 7,987 | |
| | | | |
Total liabilities | | | 1,520,951 | |
| | | | |
| Net Assets | | $ | 2,385,172,083 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 2,898,395,307 | |
Accumulated net realized loss | | | (326,186,138 | ) |
Unrealized depreciation on investments | | | (269,717,617 | ) |
Undistributed net investment income | | | 82,680,531 | |
| | | | |
Total | | $ | 2,385,172,083 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 1,030,075 | |
| | | | |
Class B | | | 2,384,142,008 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 122,969 | |
| | | | |
Class B | | | 285,064,108 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 8.38 | |
| | | | |
Class B | | | 8.36 | |
| | | | |
| | | | | |
(a) Investments at cost | | $ | 2,655,528,411 | |
See accompanying notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| MetLife Moderate Strategy Portfolio | | | |
| Investment Income | | | | |
Dividends from Underlying Portfolios | | $ | 85,955,547 | |
| | | | |
Total investment income | | | 85,955,547 | |
| | | | |
| Expenses | | | | |
Management fee | | | 689,649 | |
Administration fees | | | 11,901 | |
Custodian and accounting fees | | | 9,150 | |
Distribution and services fees—Class B | | | 2,517,284 | |
Audit and tax services | | | 14,581 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Insurance | | | 4,033 | |
Other | | | 1,897 | |
| | | | |
Total expenses | | | 3,274,928 | |
| | | | |
Net investment income | | | 82,680,619 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | (316,369,876 | ) |
Capital gain distributions from Underlying Portfolios | | | 18,073,688 | |
| | | | |
Net realized loss on investments and capital gain from Underlying Portfolios | | | (298,296,188 | ) |
| | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 392,004,720 | |
| | | | |
Net change in unrealized appreciation on investments | | | 392,004,720 | |
| | | | |
Net realized and unrealized gain on investments | | | 93,708,532 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 176,389,151 | |
| | | | |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| MetLife Moderate Strategy Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 82,680,619 | | | $ | 54,653,304 | |
Net realized gain (loss) on investments and capital gain distributions from Underlying Portfolios | | | (298,296,188 | ) | | | 58,750,134 | |
Net change in unrealized appreciation (depreciation) on investments | | | 392,004,720 | | | | (778,881,328 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 176,389,151 | | | | (665,477,890 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | (38,184 | ) | | | (20,354 | ) |
Class B | | | (76,842,486 | ) | | | (39,083,679 | ) |
From net realized gains | | | | | | | | |
Class A | | | (26,840 | ) | | | (27,369 | ) |
Class B | | | (57,923,961 | ) | | | (59,210,473 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (134,831,471 | ) | | | (98,341,875 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 65,444 | | | | 330,375 | |
Class B | | | 421,181,780 | | | | 704,845,608 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | 65,024 | | | | 47,723 | |
Class B | | | 134,766,447 | | | | 98,294,152 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (29,641 | ) | | | (53,370 | ) |
Class B | | | (128,481,772 | ) | | | (376,422,302 | ) |
| | | | | | | | |
Net increase in net assets from capital share transactions | | | 427,567,282 | | | | 427,042,186 | |
| | | | | | | | |
| Net Increase (Decrease) in Net Assets | | | 469,124,962 | | | | (336,777,579 | ) |
Net assets at beginning of period | | | 1,916,047,121 | | | | 2,252,824,700 | |
| | | | | | | | |
Net assets at end of period | | $ | 2,385,172,083 | | | $ | 1,916,047,121 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 82,680,531 | | | $ | 76,880,582 | |
| | | | | | | | |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| MetLife Moderate Strategy Portfolio | | Class A | | | | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | | | | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005(b) | | | | |
| Net Asset Value, Beginning of Period | | $ | 8.29 | | | $ | 11.73 | | | $ | 11.58 | | | $ | 10.57 | | | $ | 9.91 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.34 | | | | 0.27 | | | | 0.20 | | | | 0.19 | | | | 1.25 | | | | | |
Net Realized/Unrealized Gain (Loss)
on Investments | | | 0.31 | | | | (3.22 | ) | | | 0.54 | | | | 0.93 | | | | (0.44 | ) | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.65 | | | | (2.95 | ) | | | 0.74 | | | | 1.12 | | | | 0.81 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.33 | ) | | | (0.21 | ) | | | (0.27 | ) | | | (0.02 | ) | | | (0.13 | ) | | | | |
Distributions from Net Realized Capital Gains | | | (0.23 | ) | | | (0.28 | ) | | | (0.32 | ) | | | (0.09 | ) | | | (0.02 | ) | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.56 | ) | | | (0.49 | ) | | | (0.59 | ) | | | (0.11 | ) | | | (0.15 | ) | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 8.38 | | | $ | 8.29 | | | $ | 11.73 | | | $ | 11.58 | | | $ | 10.57 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 8.48 | % | | | (26.19 | )% | | | 6.49 | % | | | 10.62 | % | | | 8.16 | % | | | | |
Ratio of Expenses to Average Net Assets After Reimbursement(f) | | | 0.08 | %* | | | 0.07 | % | | | 0.07 | % | | | 0.09 | % | | | 0.09 | %* | | | | |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates(g) | | | 0.08 | %* | | | 0.07 | % | | | 0.07 | % | | | 0.09 | %(e) | | | 0.09 | %* | | | | |
Ratio of Net Investment Income to Average
Net Assets(h) | | | 8.56 | %* | | | 2.74 | % | | | 1.73 | % | | | 1.76 | % | | | 17.59 | %* | | | | |
Portfolio Turnover Rate | | | 28.5 | % | | | 21.6 | % | | | 18.1 | % | | | 22.2 | % | | | 22.6 | % | | | | |
Net Assets, End of Period (in millions) | | $ | 1.0 | | | $ | 0.9 | | | $ | 0.9 | | | $ | 0.9 | | | $ | 0.3 | | | | | |
| MetLife Moderate Strategy Portfolio | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004(c) | |
| Net Asset Value, Beginning of Period | | $ | 8.26 | | | $ | 11.70 | | | $ | 11.56 | | | $ | 10.57 | | | $ | 10.11 | | | $ | 10.00 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.33 | | | | 0.25 | | | | 0.16 | | | | 0.30 | | | | 0.22 | | | | 0.36 | |
Net Realized/Unrealized Gain (Loss)
on Investments | | | 0.31 | | | | (3.23 | ) | | | 0.55 | | | | 0.78 | | | | 0.37 | | | | (0.11 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.64 | | | | (2.98 | ) | | | 0.71 | | | | 1.08 | | | | 0.59 | | | | 0.25 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.31 | ) | | | (0.18 | ) | | | (0.25 | ) | | | (0.00 | )+ | | | (0.11 | ) | | | (0.14 | ) |
Distributions from Net Realized Capital Gains | | | (0.23 | ) | | | (0.28 | ) | | | (0.32 | ) | | | (0.09 | ) | | | (0.02 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.54 | ) | | | (0.46 | ) | | | (0.57 | ) | | | (0.09 | ) | | | (0.13 | ) | | | (0.14 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 8.36 | | | $ | 8.26 | | | $ | 11.70 | | | $ | 11.56 | | | $ | 10.57 | | | $ | 10.11 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 8.33 | % | | | (26.42 | )% | | | 6.21 | % | | | 10.23 | % | | | 5.81 | % | | | 2.55 | % |
Ratio of Expenses to Average Net Assets After Reimbursement(f) | | | 0.33 | %* | | | 0.32 | % | | | 0.32 | % | | | 0.35 | % | | | 0.35 | % | | | 0.35 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates(g) | | | 0.33 | %* | | | 0.32 | % | | | 0.32 | % | | | 0.35 | %(e) | | | 0.35 | % | | | 0.45 | %* |
Ratio of Net Investment Income to Average
Net Assets(h) | | | 8.21 | %* | | | 2.45 | % | | | 1.40 | % | | | 2.70 | % | | | 2.14 | % | | | 22.53 | %* |
Portfolio Turnover Rate | | | 28.5 | % | | | 21.6 | % | | | 18.1 | % | | | 22.2 | % | | | 22.6 | % | | | 0.0 | %(d) |
Net Assets, End of Period (in millions) | | $ | 2,384.1 | | | $ | 1,915.1 | | | $ | 2,251.9 | | | $ | 1,680.4 | | | $ | 1,170.1 | | | $ | 500.3 | |
| + | | Rounds to less than $0.005 per share |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—05/02/2005. |
| (c) | | Commencement of operations—11/04/2004. |
| (d) | | For the period ended 12/31/2004, the portfolio turnover calculation is zero, due to no sales activity. |
| (e) | | Excludes the effect of deferred expense reimbursement. |
| (f) | | The ratio of operating expenses to average net assets does not include expenses of the Underlying Portfolios in which the Portfolio invests. |
| (g) | | See Note 3 of the Notes to Financial Statements. |
| (h) | | Recognition of net investment income by the Portfolio is affected by the timing of the declaration of dividends by the Underlying Portfolios in which it invests. |
See accompanying notes to financial statements
11
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is MetLife Moderate Strategy Portfolio (the “Portfolio”), which is non-diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A and B Shares are currently offered by the Portfolio. Class C and E Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
The Portfolio is designed on established principles of asset allocation and risk tolerance. The Portfolio will invest substantially all of its assets in other Portfolios of the Trust or of Metropolitan Series Fund, Inc. which invest either in equity securities or fixed income securities, as applicable (“Underlying Portfolios”).
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Investments in the Underlying Portfolios are valued at their closing daily net asset value. The net asset value of the Portfolio is calculated based on the net asset values of the Underlying Portfolios in which the Portfolio invests. For information about the use of fair value pricing by the Underlying Portfolios, please refer to the prospectuses of the Underlying Portfolios.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes.
C. Investment Income and Expenses - Income and capital gain distributions from the Underlying Portfolios are recorded on the ex-dividend date.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board of Trustees (the “Board”) and has overall responsibility for the general management and administration of the Trust.
12
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $ | 689,649 | | 0.10 | % | | First $500 Million |
| | |
| | | 0.075 | % | | $500 Million to $1 Billion |
| | |
| | | 0.05 | % | | Over $1 Billion |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A and Class B Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B distribution plan provides that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% of the average net assets of the Portfolio attributable to its Class B Shares in respect to activities primarily intended to result in the sale of Class B Shares. However, under the Class B distribution agreement, payments to the Distributor for activities pursuant to the Class B distribution plan are currently limited to payments at an annual rate equal to 0.25% of average daily net assets of the Portfolio attributable to its Class B Shares.
Under terms of the Class B distribution plan and distribution agreement, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
in Shares
Outstanding | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 110,151 | | 8,111 | | 8,379 | | (3,672 | ) | | 12,818 | | 122,969 |
12/31/2008 | | 80,858 | | 30,243 | | 4,334 | | (5,284 | ) | | 29,293 | | 110,151 |
| | | | | | |
Class B | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 231,784,890 | | 52,311,302 | | 17,389,219 | | (16,421,303 | ) | | 53,279,218 | | 285,064,108 |
12/31/2008 | | 192,395,065 | | 68,440,824 | | 8,935,832 | | (37,986,831 | ) | | 39,389,825 | | 231,784,890 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $ | — | | $ | 976,251,173 | | $ | — | | $ | 582,659,044 |
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
5. Investment Transactions - continued
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $2,655,528,411 | | $ | 27,984,942 | | $ | (297,702,559 | ) | | $ | (269,717,617 | ) |
6. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $ | 40,263,688 | | $ | 38,452,860 | | $ | 58,078,187 | | $ | 48,893,624 | | $ | 98,341,875 | | $ | 87,346,484 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards | | Total | |
| | | | |
| $76,898,492 | | $ | 57,932,600 | | $ | (689,611,994 | ) | | $ | — | | $ | (554,780,902 | ) |
7. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
8. Market, Credit and Counterparty Risk
In the normal course of business, the Underlying Portfolios, in which the Portfolio invests, invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Underlying Portfolios may decline in response to certain events, including those directly involving the companies whose securities are owned by the Underlying Portfolios; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Underlying Portfolios may be exposed to counterparty risk, or the risk that an entity with which the Underlying Portfolios have unsettled or open transactions may default. Financial assets, which potentially expose the Underlying Portfolios to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Underlying Portfolios’ exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Underlying Portfolios’ Statements of Assets and Liabilities.
9. Transactions in Securities of Affiliated Issuers
Transactions in the Underlying Portfolios during the period ended June 30, 2009 in which the Portfolio had ownership are as follows:
| | | | | | | | | |
Security Description | | Number of shares
held at December 31,
2008 | | Shares purchased
during the period | | Shares sold during
the period | | | Number of shares
held at June 30,
2009 |
| | | | |
Artio International Stock Portfolio (Class A) | | 5,022,439 | | 1,499,285 | | (98,393 | ) | | 6,423,331 |
| | | | |
BlackRock Bond Income Portfolio (Class A) | | — | | 462,492 | | (517 | ) | | 461,975 |
| | | | |
BlackRock High Yield Portfolio (Class A) | | 6,221,418 | | 1,447,758 | | (312,391 | ) | | 7,356,785 |
| | | | |
BlackRock Large Cap Value Portfolio (Class A) | | — | | 17,470,430 | | (18,888 | ) | | 17,451,542 |
| | | | |
Clarion Global Real Estate Portfolio (Class A) | | 5,173,556 | | 1,865,009 | | (114,946 | ) | | 6,923,619 |
| | | | |
Davis Venture Value Portfolio (Class A) | | 4,337,033 | | 2,171,879 | | (89,053 | ) | | 6,419,859 |
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
9. Transactions in Securities of Affiliated Issuers - continued
| | | | | | | | | |
Security Description | | Number of shares
held at December 31,
2008 | | Shares purchased
during the period | | Shares sold during
the period | | | Number of shares
held at June 30,
2009 |
| | | | |
Goldman Sachs Mid Cap Value Portfolio (Class A) | | 4,842,141 | | 1,092,355 | | (91,330 | ) | | 5,843,166 |
| | | | |
Harris Oakmark International Portfolio (Class A) | | 4,549,291 | | 1,599,193 | | (640,221 | ) | | 5,508,263 |
| | | | |
Jennison Growth Portfolio (Class A) | | 4,855,679 | | 3,422,475 | | (119,687 | ) | | 8,158,467 |
| | | | |
Lazard Mid Cap Portfolio (Class A) | | 8,274,152 | | 1,249,652 | | (6,105,459 | ) | | 3,418,345 |
| | | | |
Legg Mason Value Equity Portfolio (Class A) | | 15,729,962 | | 3,651,114 | | (19,381,076 | ) | | — |
| | | | |
Loomis Sayles Global Markets Portfolio (Class A) | | 10,666,947 | | 1,656,065 | | (6,088,669 | ) | | 6,234,343 |
| | | | |
Lord Abbett Bond Debenture Portfolio (Class A)* | | 15,707,189 | | 3,531,296 | | (7,502,637 | ) | | 11,735,848 |
| | | | |
Lord Abbett Growth and Income Portfolio (Class A) | | 7,080,586 | | 1,986,522 | | (4,518,882 | ) | | 4,548,226 |
| | | | |
Met/AIM Small Cap Growth Portfolio (Class A) | | — | | 2,487,769 | | (2,619 | ) | | 2,485,150 |
| | | | |
Met/Artisan Mid Cap Value Portfolio (Class A) | | — | | 194,478 | | (207 | ) | | 194,271 |
| | | | |
Met/Dimensional International Small Capital Portfolio (Class A) | | 3,727,836 | | 749,980 | | (2,224,904 | ) | | 2,252,912 |
| | | | |
Met/Templeton International Bond Portfolio (Class A) | | — | | 4,477,894 | | (5,022 | ) | | 4,472,872 |
| | | | |
MFS® Emerging Markets Equity Portfolio (Class A) | | 7,104,441 | | 990,075 | | (4,351,513 | ) | | 3,743,003 |
| | | | |
MFS® Research International Portfolio (Class A) | | 3,250,274 | | 3,911,546 | | (533,641 | ) | | 6,628,179 |
| | | | |
MFS® Value Portfolio (Class A) | | — | | 15,150,601 | | (15,718 | ) | | 15,134,883 |
| | | | |
PIMCO Inflation Protected Bond Portfolio (Class A) | | 15,490,382 | | 2,866,868 | | (5,114,434 | ) | | 13,242,816 |
| | | | |
PIMCO Total Return Portfolio (Class A) | | 32,089,958 | | 14,938,764 | | (2,555,496 | ) | | 44,473,226 |
| | | | |
Rainier Large Cap Equity Portfolio (Class A) | | 9,857,503 | | 2,274,301 | | (185,056 | ) | | 11,946,748 |
| | | | |
T.Rowe Price Mid Cap Growth Portfolio (Class A) | | 7,363,325 | | 893,947 | | (4,194,119 | ) | | 4,063,153 |
| | | | |
Third Avenue Small Cap Value Portfolio (Class A) | | 5,486,271 | | 1,588,702 | | (111,490 | ) | | 6,963,483 |
| | | | |
Turner Mid Cap Growth Portfolio (Class A) | | 5,098,082 | | 859,857 | | (3,033,667 | ) | | 2,924,272 |
| | | | |
Van Eck Global Natural Resources Portfolio (Class A) | | 1,864,404 | | 319,088 | | (80,212 | ) | | 2,103,280 |
| | | | |
Van Kampen Comstock Portfolio (Class A) | | 19,235,360 | | 5,201,236 | | (9,927,872 | ) | | 14,508,724 |
| | | | |
Western Asset Management U.S. Government Portfolio (Class A) | | 12,548,281 | | 3,450,760 | | (338,156 | ) | | 15,660,885 |
* The Portfolio had ownership of at least 25% of the outstanding voting securities of the Underlying Portfolio as of June 30, 2009. Once filed, the most recent Annual Report of the Underlying Portfolio will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
| | | | | | | | | | | | | |
Security Description | | Net Realized Gain
(Loss) on Investments
during the period | | | Net Realized Gain
(Loss) on Capital
Gain Distributions
from Affiliates
during the period | | Income earned from
affiliate during the
period | | Ending Value |
| | | | |
Artio International Stock Portfolio (Class A) | | $ | (655,778 | ) | | $ | — | | $ | 320,509 | | $ | 49,909,279 |
| | | | |
BlackRock Bond Income Portfolio (Class A) | | | 281 | | | | — | | | — | | | 45,818,723 |
| | | | |
BlackRock High Yield Portfolio (Class A) | | | (704,174 | ) | | | — | | | 2,618,404 | | | 48,996,186 |
| | | | |
BlackRock Large Cap Value Portfolio (Class A) | | | 5,776 | | | | — | | | — | | | 136,645,577 |
| | | | |
Clarion Global Real Estate Portfolio (Class A) | | | (716,098 | ) | | | — | | | 1,668,530 | | | 50,680,889 |
| | | | |
Davis Venture Value Portfolio (Class A) | | | (843,000 | ) | | | — | | | 1,827,702 | | | 146,051,797 |
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
9. Transactions in Securities of Affiliated Issuers - continued
| | | | | | | | | | | | | |
Security Description | | Net Realized Gain
(Loss) on Investments
during the period | | | Net Realized Gain
(Loss) on Capital
Gain Distributions
from Affiliates
during the period | | Income earned from
affiliate during the
period | | Ending Value |
| | | | |
Goldman Sachs Mid Cap Value Portfolio (Class A) | | $ | (514,162 | ) | | $ | — | | $ | 716,315 | | $ | 48,089,260 |
| | | | |
Harris Oakmark International Portfolio (Class A) | | | (4,557,574 | ) | | | — | | | 4,299,033 | | | 50,951,437 |
| | | | |
Jennison Growth Portfolio (Class A) | | | (604,611 | ) | | | — | | | 87,273 | | | 71,794,513 |
| | | | |
Lazard Mid Cap Portfolio (Class A) | | | (35,700,740 | ) | | | — | | | 942,065 | | | 25,398,303 |
| | | | |
Legg Mason Value Equity Portfolio (Class A) | | | (80,471,350 | ) | | | — | | | 1,742,119 | | | — |
| | | | |
Loomis Sayles Global Markets Portfolio (Class A) | | | (16,946,214 | ) | | | — | | | 2,262,191 | | | 50,747,550 |
| | | | |
Lord Abbett Bond Debenture Portfolio (Class A) | | | (18,288,019 | ) | | | — | | | 13,680,671 | | | 122,522,258 |
| | | | |
Lord Abbett Growth and Income Portfolio (Class A) | | | (58,685,759 | ) | | | — | | | 3,472,029 | | | 72,180,340 |
| | | | |
Met/AIM Small Cap Growth Portfolio (Class A) | | | 1,591 | | | | — | | | — | | | 23,285,857 |
| | | | |
Met/Artisan Mid Cap Value Portfolio (Class A) | | | 1,302 | | | | — | | | — | | | 22,896,724 |
| | | | |
Met/Dimensional International Small Capital Portfolio (Class A) | | | 604,472 | | | | — | | | — | | | 26,877,242 |
| | | | |
Met/Templeton International Bond Portfolio (Class A) | | | 57 | | | | — | | | — | | | 44,997,090 |
| | | | |
MFS® Emerging Markets Equity Portfolio (Class A) | | | (19,852,947 | ) | | | — | | | 1,067,513 | | | 27,136,771 |
| | | | |
MFS® Research International Portfolio (Class A) | | | (3,886,219 | ) | | | — | | | 806,995 | | | 50,506,724 |
| | | | |
MFS® Value Portfolio (Class A) | | | 11,895 | | | | — | | | — | | | 143,175,992 |
| | | | |
PIMCO Inflation Protected Bond Portfolio (Class A) | | | (196,612 | ) | | | — | | | 6,547,917 | | | 138,519,853 |
| | | | |
PIMCO Total Return Portfolio (Class A) | | | 492,877 | | | | 24,086,966 | | | 23,861,211 | | | 494,097,541 |
| | | | |
Rainier Large Cap Equity Portfolio (Class A) | | | (819,765 | ) | | | — | | | 643,188 | | | 70,605,282 |
| | | | |
T.Rowe Price Mid Cap Growth Portfolio (Class A) | | | (13,198,793 | ) | | | — | | | — | | | 25,150,917 |
| | | | |
Third Avenue Small Cap Value Portfolio (Class A) | | | (927,378 | ) | | | 817,854 | | | 912,578 | | | 72,072,045 |
| | | | |
Turner Mid Cap Growth Portfolio (Class A) | | | (15,654,556 | ) | | | — | | | — | | | 24,183,731 |
| | | | |
Van Eck Global Natural Resources Portfolio (Class A) | | | 18,881 | | | | — | | | 26,111 | | | 25,302,463 |
| | | | |
Van Kampen Comstock Portfolio (Class A) | | | (44,160,062 | ) | | | — | | | 4,283,372 | | | 98,369,147 |
| | | | |
Western Asset Management U.S. Government Portfolio (Class A) | | | (123,227 | ) | | | — | | | 7,338,689 | | | 178,847,303 |
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
16
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
17
| | |
| MFS® Emerging Markets Equity Portfolio | | For the period ended 6/30/09 |
| Managed by Massachusetts Financial Services Company | | |
Portfolio Manager Commentary
Performance
For the six months ended June 30, 2009, the Portfolio had a return of 29.11% and 29.04% for Class A and B Shares, respectively, versus 36.01% for its benchmark, the MSCI Emerging Markets Index.
Market Environment/Conditions
As the first half of 2009 drew to a close, the global economy began to pull out of recession. Data, especially in the second quarter, provided a mixed picture of a global economy struggling to emerge from the worst recession since the Great Depression. Signs of economic and financial recovery emerged most prominently in Asia and more tentatively in Europe and the United States. Overall, we saw reports that showed better-than-expected production and consumer spending. At the same time, the labor and housing markets remained under pressure and are likely to continue to prevent a more buoyant recovery.
Overall, concern over the widespread failure of the financial systems seemed to have waned by the end of the first half. The efforts of the world’s largest economies to loosen credit conditions and stimulate their respective economies helped prevent a deeper recession from unfolding, while at the same time boosting consumer confidence and setting the stage for a stock market rally.
Portfolio Review/Current Positioning
Stock selection in the financial services sector detracted from the Portfolio’s performance relative to the MSCI Emerging Markets Index. Industrial & Commercial Bank of China (Hong Kong) and Polish banking firms, Bank Polski S.A. and Bank Pekao S.A., were among the Portfolio’s top detractors during the investment period.
A combination of stock selection and an overweighted position in the consumer staples sector was another negative factor for relative performance. Top relative detractors within this sector included tobacco company British American Tobacco (U.K.) and property management company Tradewinds Corporation Bhd (Malaysia).
An overweighted position in the technology sector detracted from relative performance. No individual securities within this sector were among the Portfolio’s top detractors over the reporting period.
Elsewhere, wireless communications company China Mobile (Hong Kong), water and waste management services firm Manila Water Company (Philippines), petrochemical company Reliance Industries (India), and Israeli drug manufacturer Teva Pharmaceutical Industries held back relative results as these stocks underperformed the benchmark.
The Portfolio’s cash position was also a detractor from relative performance. The Portfolio holds cash to buy new holdings and to provide liquidity. In a period when equity markets rose, as measured by the Portfolio’s benchmark, holding cash hurt performance versus the benchmark, which has no cash position.
During the reporting period, currency exposure was a detractor from the Portfolio’s relative performance. All of MFS' investment decisions are driven by the fundamentals of each individual opportunity and, as such, it is common for our portfolios to have different currency exposure than the benchmark.
Though largely offset by an overweighted position, stock selection in the utilities and communications sector had a positive impact on the Portfolio’s relative performance. Within this sector, the Portfolio’s holdings of electricity distributor Eletropaulo Metropolitana Electricid S.A. (Brazil), integrated communications services company Reliance Communications (India), and oil and gas company Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Indonesia) were among the top relative contributors for the reporting period. Not holding poor-performing fixed-line telecom services company Telefonos de Mexico also helped.
Stock selection in the basic materials sector benefited relative performance. Within this sector, petrochemical products manufacturer LG Chem (South Korea) was a top relative contributor. Not holding steel products manufacturer POSCO (South Korea) also aided relative returns as this stock underperformed the benchmark over the reporting period.
Stocks in other sectors that aided relative performance included auto maker Astra International (Indonesia), natural gas producer Gazprom (Russia), and grocery store operator Bim Birlesik Magazalar (Turkey). Not holding poor-performing petrochemical company Sasol (South Africa) also aided relative returns.
Nicholas Smithie
Portfolio Manager, Investment Officer
Jose Luis Garcia
Portfolio Manager for Latin American Securities
Robert Lau
Investment Officer
Massachusetts Financial Services Company
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
1
| | |
| MFS® Emerging Markets Equity Portfolio | | For the period ended 6/30/09 |
| Managed by Massachusetts Financial Services Company | | |
Portfolio Manager Commentary (continued)
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
Petroleo Brasileiro S.A. (ADR) | | 4.27% |
Samsung Electronics Co., Ltd. | | 3.64% |
Teva Pharmaceutical Industries, Ltd. (ADR) | | 3.25% |
Gazprom (ADR) | | 2.73% |
LG Chem, Ltd. | | 2.40% |
China Construction Bank Corp. | | 2.35% |
Infosys Technologies, Ltd. (ADR) | | 2.10% |
Vale S.A. (ADR) | | 2.07% |
MTN Group, Ltd. | | 2.04% |
Hong Kong Exchanges & Clearing, Ltd. | | 1.95% |
Portfolio Composition (% of portfolio market value)
As of 6/30/09
2
| | |
| MFS® Emerging Markets Equity Portfolio | | For the period ended 6/30/09 |
| Managed by Massachusetts Financial Services Company | | |
Portfolio Manager Commentary (continued)
MFS® Emerging Markets Equity Portfolio managed by
Massachusetts Financial Services Company vs. Morgan Stanley Capital International (MSCI) Emerging Markets (EMF) Index (net)SM1
Growth Based on $10,000+
| | | | | | | | | | |
| | | | | Average Annual Return2
(for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | 3 Year | | Since
Inception3 |
| — | | MFS® Emerging Markets Equity
Portfolio—Class A | | 29.11% | | -36.87% | | -1.45% | | -5.48% |
| | Class B | | 29.04% | | -37.03% | | -1.70% | | -5.74% |
| - - | | Morgan Stanley Capital International (MSCI) Emerging Markets (EMF) Index (net)SM1 | | 36.01% | | -28.07% | | 2.95% | | -0.81% |
+The chart reflects the performance of Class A shares of the Portfolio. The performance of Class A shares will differ from that of the other class of shares because of the difference in expenses paid by policyholders investing in the different share class.
1The Morgan Stanley Capital International (MSCI) Emerging Markets (EMF) Index (net)SM is an unmanaged market capitalization weighted equity index composed of companies that are representative of the market structure of the following 22 countries: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand and Turkey.
2“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
3Inception of Class A and Class B shares is 5/1/06. Index returns are based on an inception date of 5/1/06.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Index does not include fees or expenses and is not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| MFS® Emerging Markets Equity Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 1.18% | | $ | 1,000.00 | | $ | 1,291.10 | | $ | 6.70 |
Hypothetical | | 1.18% | | | 1,000.00 | | | 1,018.94 | | | 5.91 |
| | | | | | | | | | | |
| | | | |
Class B | | | | | | | | | | | |
Actual | | 1.43% | | $ | 1,000.00 | | $ | 1,290.40 | | $ | 8.12 |
Hypothetical | | 1.43% | | | 1,000.00 | | | 1,017.70 | | | 7.15 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
4
Met Investors Series Trust
MFS® Emerging Markets Equity Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | |
| Common Stocks - 95.7% | | | | | |
| Bermuda - 0.7% |
Credicorp, Ltd. | | 27,280 | | $ | 1,587,696 |
Dufry South America, Ltd. (BDR) | | 189,230 | | | 2,357,793 |
| | | | | |
| | | | | 3,945,489 |
| | | | | |
| Brazil - 11.6% |
BM&F BOVESPA S.A. | | 435,500 | | | 2,610,120 |
Brasil Brokers Participacoes | | 1,235,400 | | | 1,772,490 |
CIA Brasileira de Meios de Pagamento* | | 371,640 | | | 3,186,026 |
CSU Cardsystem S.A.* | | 915,500 | | | 2,165,899 |
Diagnosticos da America S.A.* | | 138,100 | | | 2,417,014 |
Empresa Brasileira de Aeronautica S.A. (ADR)(a) | | 44,390 | | | 735,098 |
Equatorial Energia S.A. | | 162,700 | | | 1,303,752 |
Itau Unibanco Banco Multiplo S.A. (ADR) | | 265,872 | | | 4,208,754 |
Kroton Educacional S.A. | | 221,200 | | | 1,485,546 |
Natura Cosmeticos S.A. | | 150,110 | | | 1,974,991 |
OdontoPrev S.A. | | 179,700 | | | 2,661,443 |
Petroleo Brasileiro S.A. (ADR) | | 600,630 | | | 24,613,817 |
Redecard S.A. | | 188,000 | | | 2,883,846 |
Totvs S.A. | | 50,000 | | | 1,700,585 |
Vale S.A. (ADR)(a) | | 676,860 | | | 11,933,042 |
Vivo Participacoes S.A. (ADR) | | 76,780 | | | 1,454,213 |
| | | | | |
| | | | | 67,106,636 |
| | | | | |
| Cayman Islands - 1.8% |
Hengan International Group Co., Ltd. | | 1,032,000 | | | 4,779,236 |
Stella International Holdings, Ltd. | | 3,627,500 | | | 5,847,346 |
| | | | | |
| | | | | 10,626,582 |
| | | | | |
| Chile - 0.7% |
Banco Santander Chile S.A. (ADR) | | 84,740 | | | 3,956,511 |
| | | | | |
| China - 8.0% |
Anhui Conch Cement Co., Ltd. | | 1,236,000 | | | 7,703,964 |
Bank of China, Ltd. | | 19,385,000 | | | 9,185,249 |
China Construction Bank Corp. | | 17,563,000 | | | 13,555,589 |
China Life Insurance Co., Ltd. | | 2,294,000 | | | 8,529,636 |
China Merchants Bank Co., Ltd. | | 411,350 | | | 935,166 |
China Shenhua Energy Co., Ltd. | | 1,659,000 | | | 6,045,325 |
| | | | | |
| | | | | 45,954,929 |
| | | | | |
| Colombia - 0.2% |
Bancolombia S.A. (ADR) | | 46,570 | | | 1,420,385 |
| | | | | |
| Czech Republic - 0.8% |
CEZ | | 99,990 | | | 4,530,409 |
| | | | | |
| Estonia - 0.2% |
AS Eesti Telekom (GDR) | | 62,567 | | | 1,142,624 |
| | | | | |
| Hong Kong - 10.1% |
China Mobile, Ltd. | | 301,000 | | | 3,018,235 |
China Overseas Land & Investment, Ltd. | | 2,832,000 | | | 6,513,251 |
China Unicom, Ltd. (ADR)(a) | | 394,060 | | | 5,256,760 |
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Hong Kong - continued |
CNOOC, Ltd. | | 8,290,000 | | $ | 10,207,720 |
First Pacific Co., Ltd. | | 11,698,000 | | | 6,727,867 |
Hang Lung Properties, Ltd. | | 1,755,000 | | | 5,691,644 |
Hong Kong Exchanges & Clearing, Ltd. | | 723,300 | | | 11,230,895 |
Li & Fung, Ltd. | | 3,672,000 | | | 9,744,816 |
| | | | | |
| | | | | 58,391,188 |
| | | | | |
| India - 10.4% |
BEML, Ltd. | | 19,700 | | | 443,154 |
Dabur India, Ltd. | | 1,159,238 | | | 3,085,388 |
Housing Development Finance Corp., Ltd.* | | 171,980 | | | 8,436,679 |
Infosys Technologies, Ltd.
(ADR)(a) | | 328,450 | | | 12,080,391 |
National Aluminium Co., Ltd. | | 1,201,206 | | | 7,590,686 |
Oil & Natural Gas Corp., Ltd. | | 377,501 | | | 8,385,091 |
Reliance Industries, Ltd.* | | 226,820 | | | 9,590,946 |
Steel Authority of India, Ltd. | | 3,167,645 | | | 10,106,526 |
| | | | | |
| | | | | 59,718,861 |
| | | | | |
| Indonesia - 1.3% |
PT Astra International Tbk | | 1,820,000 | | | 4,235,441 |
PT Hanjaya Mandala Sampoerna Tbk | | 3,364,500 | | | 3,068,085 |
| | | | | |
| | | | | 7,303,526 |
| | | | | |
| Israel - 3.3% |
Teva Pharmaceutical Industries, Ltd. (ADR)(a) | | 379,880 | | | 18,743,279 |
| | | | | |
| Luxembourg - 0.3% |
Tenaris S.A. (ADR)(a) | | 61,080 | | | 1,651,603 |
| | | | | |
| Malaysia - 1.9% |
Genting Berhad | | 5,173,700 | | | 8,281,095 |
Tradewinds (Malaysia) Berhad | | 3,445,800 | | | 2,817,606 |
| | | | | |
| | | | | 11,098,701 |
| | | | | |
| Mexico - 6.2% |
America Movil S.A.B. de C.V. (ADR) | | 276,360 | | | 10,700,659 |
Banco Compartamos S.A. de C.V.(a) | | 442,900 | | | 1,425,748 |
Bolsa Mexicana de Valores S.A. de C.V.* | | 3,365,400 | | | 3,078,897 |
Corporacion Moctezuma S.A.B. de C.V. | | 1,555,400 | | | 2,916,825 |
Desarrolladora Homex S.A. de C.V. (ADR)*(a) | | 38,950 | | | 1,086,316 |
Genomma Lab Internacional S.A. de C.V.*(a) | | 4,277,000 | | | 3,831,710 |
Grupo Continental S.A.(a) | | 1,190,530 | | | 2,074,409 |
Grupo Financiero Banorte S.A.B. de C.V.(a) | | 963,600 | | | 2,333,774 |
Grupo Mexico S.A. de C.V. | | 1,077,573 | | | 1,178,096 |
Grupo Televisa S.A. (ADR) | | 222,000 | | | 3,774,000 |
Kimberly-Clark de Mexico, S.A.B. de C.V. - Class A(a) | | 616,440 | | | 2,351,788 |
Urbi, Desarrollos Urbanos, S.A. de C.V.* | | 609,960 | | | 926,196 |
| | | | | |
| | | | | 35,678,418 |
| | | | | |
See accompanying notes to financial statements
5
Met Investors Series Trust
MFS® Emerging Markets Equity Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Panama - 0.3% |
Copa Holdings S.A. - Class A | | 44,120 | | $ | 1,800,978 |
| | | | | |
| Philippines - 1.0% |
Manila Water Co. | | 9,158,000 | | | 2,753,640 |
Philippine Long Distance Telephone Co. | | 61,980 | | | 3,083,629 |
| | | | | |
| | | | | 5,837,269 |
| | | | | |
| Russia - 5.9% |
Gazprom (ADR) | | 770,900 | | | 15,708,619 |
LUKOIL (ADR) | | 242,680 | | | 10,767,711 |
Mobile Telesystems (ADR) | | 133,030 | | | 4,912,798 |
Vimpel-Communications (ADR)* | | 217,410 | | | 2,558,916 |
| | | | | |
| | | | | 33,948,044 |
| | | | | |
| South Africa - 8.2% |
African Bank Investments, Ltd. | | 796,447 | | | 2,861,753 |
Aveng, Ltd. | | 482,160 | | | 2,177,544 |
Foschini, Ltd. | | 639,216 | | | 4,154,276 |
Gold Fields, Ltd. | | 323,270 | | | 3,886,412 |
Impala Platinum Holdings, Ltd. | | 243,469 | | | 5,370,365 |
Lewis Group, Ltd. | | 621,662 | | | 3,879,788 |
Massmart Holdings, Ltd. | | 260,023 | | | 2,695,257 |
MTN Group, Ltd. | | 768,780 | | | 11,764,801 |
Murray & Roberts Holdings, Ltd. | | 286,849 | | | 1,861,284 |
Pretoria Portland Cement Co., Ltd. | | 870,357 | | | 3,266,327 |
Shoprite Holdings, Ltd. | | 385,047 | | | 2,740,471 |
Truworths International, Ltd. | | 577,652 | | | 2,764,516 |
| | | | | |
| | | | | 47,422,794 |
| | | | | |
| South Korea - 10.3% |
Hana Financial Group, Inc. | | 271,780 | | | 5,797,691 |
Hyundai Mobis | | 72,127 | | | 6,288,370 |
KT&G Corp. | | 111,639 | | | 6,305,554 |
LG Chem, Ltd. | | 126,764 | | | 13,823,174 |
Samsung Electronics Co., Ltd. | | 45,254 | | | 20,958,166 |
Samsung Fire & Marine Insurance Co., Ltd. | | 40,534 | | | 5,965,111 |
| | | | | |
| | | | | 59,138,066 |
| | | | | |
| Taiwan - 8.2% |
Acer, Inc. | | 3,224,000 | | | 5,581,064 |
High Tech Computer Corp. | | 604,696 | | | 8,502,876 |
Hon Hai Precision Industry Co., Ltd. | | 2,323,450 | | | 7,152,008 |
MediaTek, Inc. | | 495,880 | | | 5,898,668 |
Taiwan Semiconductor Manufacturing Co., Ltd. | | 6,217,755 | | | 10,328,538 |
Taiwan Semiconductor Manufacturing Co., Ltd.(ADR) | | 1,048,497 | | | 9,866,357 |
| | | | | |
| | | | | 47,329,511 |
| | | | | |
| Thailand - 0.6% |
PTT Exploration and Production Public Co., Ltd. | | 843,500 | | | 3,367,068 |
| | | | | |
| | | | | | | |
Security
Description | | Shares/Par
Amount | | Value | |
| | | | | | | |
|
| Turkey - 1.5% | |
BIM Birlesik Magazalar A.S. | | | 107,812 | | $ | 3,773,956 | |
Turkiye Garanti Bankasi A.S.* | | | 1,844,249 | | | 4,962,488 | |
| | | | | | | |
| | | | | | 8,736,444 | |
| | | | | | | |
| United Kingdom - 2.2% | |
British American Tobacco Plc(a) | | | 151,234 | | | 4,177,136 | |
Standard Chartered Plc | | | 435,500 | | | 8,529,679 | |
| | | | | | | |
| | | | | | 12,706,815 | |
| | | | | | | |
Total Common Stocks
(Cost $556,098,719) | | | | | | 551,556,130 | |
| | | | | | | |
| | |
| Preferred Stocks - 3.3% | | | | | | | |
| Brazil - 3.3% | | | | | | | |
AES Tiete S.A. | | | 137,600 | | | 1,428,156 | |
Companhia de Bebidas das Americas(ADR)(a) | | | 89,910 | | | 5,828,865 | |
Duratex S.A. | | | 204,100 | | | 2,254,394 | |
Eletropaulo Metropolitana de Sao Paulo S.A. | | | 300,680 | | | 5,312,957 | |
Suzano Papel e Celulose S.A.* | | | 141,700 | | | 1,092,939 | |
Universo Online S.A. | | | 248,800 | | | 917,731 | |
Usinas Siderurgicas de Minas Gerais S.A. - Class A | | | 90,050 | | | 1,906,374 | |
| | | | | | | |
| | | | | | 18,741,416 | |
| | | | | | | |
Total Preferred Stocks
(Cost $18,453,748) | | | | | | 18,741,416 | |
| | | | | | | |
| | |
| Rights - 0.0% | | | | | | | |
| Brazil - 0.0% | | | | | | | |
Brasil Brokers Participacoes* | | | 4,933 | | | 0 | |
Kroton Educacional S.A.* | | | 224,751 | | | 0 | |
| | | | | | | |
Total Rights
(Cost $0) | | | | | | 0 | |
| | | | | | | |
| |
| Short-Term Investments - 6.3% | | | | |
| Commercial Paper - 1.1% | | | | | | | |
Citigroup Funding, Inc.
1.000%, due 07/01/09 | | $ | 6,395,000 | | | 6,395,000 | |
| | | | | | | |
| Mutual Funds - 5.2% | | | | | | | |
State Street Navigator Securities Lending Trust Prime Portfolio(b) | | | 29,747,354 | | | 29,747,354 | |
| | | | | | | |
| Total Short-Term Investments (Cost $36,142,354) | | | | | | 36,142,354 | |
| | | | | | | |
| |
TOTAL INVESTMENTS - 105.3%
(Cost $610,694,821) | | | 606,439,900 | |
| | | | | | | |
| | |
Other Assets and Liabilities
(net) - (5.3)% | | | | | | (30,269,125 | ) |
| | | | | | | |
| | |
| NET ASSETS - 100.0% | | | | | $ | 576,170,775 | |
| | | | | | | |
See accompanying notes to financial statements
6
Met Investors Series Trust
MFS® Emerging Markets Equity Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
Portfolio Footnotes:
| * | | Non-income producing security |
| (a) | | All or a portion of security is on loan. |
| (b) | | Represents investment of collateral received from securities lending transactions. |
ADR - American Depositary Receipt
BDR - Brazilian Depositary Receipt
GDR - Global Depositary Receipt
The following table summarizes the top ten sector diversification of the portfolio holdings of the MFS® Emerging Markets Portfolio at June 30, 2009.
| | |
Ten Largest Industries as of
June 30, 2009 (Unaudited) | | Percent of
Total
Net Assets |
Oil, Gas & Consumable Fuels | | 15.4% |
Commercial Banks | | 9.8% |
Semiconductors & Semiconductor Equipment | | 8.2% |
Metals & Mining | | 7.3% |
Wireless Telecommunication Services | | 6.1% |
Diversified Financial Services | | 4.0% |
Pharmaceuticals | | 3.9% |
IT Services | | 3.0% |
Insurance | | 2.5% |
Computers & Peripherals | | 2.4% |
See accompanying notes to financial statements
7
Met Investors Series Trust
MFS® Emerging Markets Equity Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1—quoted prices in active markets for identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Common Stocks | | | | | | | | | | | | |
Bermuda | | $ | 3,945,489 | | $ | — | | $ | — | | $ | 3,945,489 |
Brazil | | | 67,106,636 | | | — | | | — | | | 67,106,636 |
Cayman Islands | | | — | | | 10,626,582 | | | — | | | 10,626,582 |
Chile | | | 3,956,511 | | | — | | | — | | | 3,956,511 |
China | | | — | | | 45,954,929 | | | — | | | 45,954,929 |
Colombia | | | 1,420,385 | | | — | | | — | | | 1,420,385 |
Czech Republic | | | — | | | 4,530,409 | | | — | | | 4,530,409 |
Estonia | | | — | | | 1,142,624 | | | — | | | 1,142,624 |
Hong Kong | | | 5,256,760 | | | 53,134,428 | | | — | | | 58,391,188 |
India | | | 12,080,391 | | | 47,638,470 | | | — | | | 59,718,861 |
Indonesia | | | — | | | 7,303,526 | | | — | | | 7,303,526 |
Israel | | | 18,743,279 | | | — | | | — | | | 18,743,279 |
Luxembourg | | | 1,651,603 | | | — | | | — | | | 1,651,603 |
Malaysia | | | — | | | 11,098,701 | | | — | | | 11,098,701 |
Mexico | | | 35,678,418 | | | — | | | — | | | 35,678,418 |
Panama | | | 1,800,978 | | | — | | | — | | | 1,800,978 |
Philippines | | | — | | | 5,837,269 | | | — | | | 5,837,269 |
Russia | | | 18,239,425 | | | 15,708,619 | | | — | | | 33,948,044 |
South Africa | | | — | | | 47,422,794 | | | — | | | 47,422,794 |
South Korea | | | — | | | 59,138,066 | | | — | | | 59,138,066 |
Taiwan | | | 9,866,357 | | | 37,463,154 | | | — | | | 47,329,511 |
Thailand | | | 3,367,068 | | | — | | | — | | | 3,367,068 |
Turkey | | | — | | | 8,736,444 | | | — | | | 8,736,444 |
United Kingdom | | | — | | | 12,706,815 | | | — | | | 12,706,815 |
Total Common Stocks | | | 183,113,300 | | | 368,442,830 | | | — | | | 551,556,130 |
Preferred Stocks | | | | | | | | | | | | |
Brazil | | | 18,741,416 | | | — | | | — | | | 18,741,416 |
Total Preferred Stocks | | | 18,741,416 | | | — | | | — | | | 18,741,416 |
Rights | | | | | | | | | | | | |
Brazil | | | 0 | | | — | | | — | | | 0 |
Total Rights | | | 0 | | | — | | | — | | | 0 |
Short-Term Investments | | | | | | | | | | | | |
Commercial Paper | | | 6,395,000 | | | — | | | — | | | 6,395,000 |
Mutual Funds | | | 29,747,354 | | | — | | | — | | | 29,747,354 |
Total Short-Term Investments | | | 36,142,354 | | | — | | | — | | | 36,142,354 |
TOTAL INVESTMENTS | | $ | 237,997,070 | | $ | 368,442,830 | | $ | — | | $ | 606,439,900 |
See accompanying notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| MFS® Emerging Markets Equity Portfolio | | | |
| Assets | | | | |
Investments, at value (a)(b) | | $ | 606,439,900 | |
Cash | | | 24,333 | |
Cash denominated in foreign currencies (c) | | | 295,504 | |
Receivable for Trust shares sold | | | 382,069 | |
Dividends receivable | | | 2,996,176 | |
| | | | |
Total assets | | | 610,137,982 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 3,108,816 | |
Trust shares redeemed | | | 424,144 | |
Distribution and services fees—Class B | | | 43,238 | |
Collateral for securities on loan | | | 29,747,354 | |
Management fee | | | 475,866 | |
Administration fee | | | 3,417 | |
Custodian and accounting fees | | | 117,770 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 43,175 | |
| | | | |
Total liabilities | | | 33,967,207 | |
| | | | |
| Net Assets | | $ | 576,170,775 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 867,070,230 | |
Accumulated net realized loss | | | (292,355,625 | ) |
Unrealized depreciation on investments and foreign currency | | | (4,236,057 | ) |
Undistributed net investment income | | | 5,692,227 | |
| | | | |
Total | | $ | 576,170,775 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 365,645,981 | |
| | | | |
Class B | | | 210,524,794 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 50,442,256 | |
| | | | |
Class B | | | 29,198,343 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 7.25 | |
| | | | |
Class B | | | 7.21 | |
| | | | |
| | | | | |
(a) Investments at cost | | $ | 610,694,821 | |
(b) Includes cash collateral for securities loaned of | | | 29,747,354 | |
(c) Cost of cash denominated in foreign currencies | | | 295,319 | |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| MFS® Emerging Markets Equity Portfolio | | | |
| Investment Income | | | | |
Dividends (1) | | $ | 8,975,191 | |
Interest (2) | | | 153,342 | |
| | | | |
Total investment income | | | 9,128,533 | |
| | | | |
| Expenses | | | | |
Management fee | | | 2,770,649 | |
Administration fees | | | 23,737 | |
Custodian and accounting fees | | | 374,804 | |
Distribution and services fees—Class B | | | 199,075 | |
Audit and tax services | | | 20,776 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 21,354 | |
Insurance | | | 3,495 | |
Other | | | 3,243 | |
| | | | |
Total expenses | | | 3,443,566 | |
| | | | |
Net investment income | | | 5,684,967 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments, Futures Contracts and Foreign Currency | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | (132,807,504 | ) |
Futures contracts | | | 2,937,470 | |
Foreign currency | | | 322,051 | |
| | | | |
Net realized loss on investments, futures contracts and foreign currency | | | (129,547,983 | ) |
| | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 264,049,202 | |
Foreign currency | | | 13,047 | |
| | | | |
Net change in unrealized appreciation on investments and foreign currency | | | 264,062,249 | |
| | | | |
Net realized and unrealized gain on investments, futures contracts and foreign currency | | | 134,514,266 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 140,199,233 | |
| | | | |
| | | | | |
(1) Dividend income is net of foreign withholding taxes of: | | $ | 662,281 | |
(2) Interest income includes securities lending net income of: | | | 148,940 | |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| MFS® Emerging Markets Equity Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 5,684,967 | | | $ | 15,836,465 | |
Net realized loss on investments, futures contracts and foreign currency | | | (129,547,983 | ) | | | (162,539,234 | ) |
Net change in unrealized appreciation (depreciation) on investments and foreign currency | | | 264,062,249 | | | | (398,716,776 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 140,199,233 | | | | (545,419,545 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | (10,503,630 | ) | | | (7,713,482 | ) |
Class B | | | (3,450,912 | ) | | | (1,095,523 | ) |
From net realized gains | | | | | | | | |
Class A | | | — | | | | (51,772,072 | ) |
Class B | | | — | | | | (7,966,418 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (13,954,542 | ) | | | (68,547,495 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 94,052,342 | | | | 356,885,130 | |
Class B | | | 46,488,345 | | | | 240,263,935 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | 10,503,630 | | | | 59,485,554 | |
Class B | | | 3,450,912 | | | | 9,061,941 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (262,044,303 | ) | | | (67,523,998 | ) |
Class B | | | (19,685,278 | ) | | | (58,726,178 | ) |
| | | | | | | | |
Net increase (decrease) in net assets from capital share transactions | | | (127,234,352 | ) | | | 539,446,384 | |
| | | | | | | | |
| Net Decrease in Net Assets | | | (989,661 | ) | | | (74,520,656 | ) |
Net assets at beginning of period | | | 577,160,436 | | | | 651,681,092 | |
| | | | | | | | |
Net assets at end of period | | $ | 576,170,775 | | | $ | 577,160,436 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 5,692,227 | | | $ | 13,961,802 | |
| | | | | | | | |
See accompanying notes to financial statements
11
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | |
| | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | |
| MFS® Emerging Markets Equity Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006(b) | |
| Net Asset Value, Beginning of Period | | $ | 5.75 | | | $ | 14.39 | | | $ | 10.51 | | | $ | 10.00 | |
| | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.06 | | | | 0.23 | | | | 0.18 | | | | 0.12 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 1.58 | | | | (7.42 | ) | | | 3.71 | | | | 0.48 | |
| | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 1.64 | | | | (7.19 | ) | | | 3.89 | | | | 0.60 | |
| | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.14 | ) | | | (0.19 | ) | | | (0.01 | ) | | | (0.09 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (1.26 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
Total Distributions | | | (0.14 | ) | | | (1.45 | ) | | | (0.01 | ) | | | (0.09 | ) |
| | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 7.25 | | | $ | 5.75 | | | $ | 14.39 | | | $ | 10.51 | |
| | | | | | | | | | | | | | | | |
| Total Return | | | 29.11 | % | | | (55.38 | )% | | | 36.93 | % | | | 6.04 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 1.18 | %* | | | 1.11 | % | | | 1.17 | % | | | 1.30 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 1.18 | %* | | | 1.11 | % | | | 1.25 | %(c) | | | 1.49 | %* |
Ratio of Net Investment Income to Average Net Assets | | | 2.09 | %* | | | 2.34 | % | | | 1.49 | % | | | 1.91 | %* |
Portfolio Turnover Rate | | | 71.8 | % | | | 107.6 | % | | | 126.8 | % | | | 58.2 | % |
Net Assets, End of Period (in millions) | | $ | 365.6 | | | $ | 437.0 | | | $ | 572.9 | | | $ | 368.3 | |
| |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006(b) | |
| Net Asset Value, Beginning of Period | | $ | 5.71 | | | $ | 14.32 | | | $ | 10.49 | | | $ | 10.00 | |
| | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.06 | | | | 0.21 | | | | 0.13 | | | | 0.07 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 1.57 | | | | (7.39 | ) | | | 3.71 | | | | 0.51 | |
| | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 1.63 | | | | (7.18 | ) | | | 3.84 | | | | 0.58 | |
| | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.13 | ) | | | (0.17 | ) | | | (0.01 | ) | | | (0.09 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (1.26 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
Total Distributions | | | (0.13 | ) | | | (1.43 | ) | | | (0.01 | ) | | | (0.09 | ) |
| | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 7.21 | | | $ | 5.71 | | | $ | 14.32 | | | $ | 10.49 | |
| | | | | | | | | | | | | | | | |
| Total Return | | | 29.04 | % | | | (55.53 | )% | | | 36.62 | % | | | 5.78 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 1.43 | %* | | | 1.38 | % | | | 1.46 | % | | | 1.55 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 1.43 | %* | | | 1.38 | % | | | 1.52 | %(c) | | | 1.92 | %* |
Ratio of Net Investment Income to Average Net Assets | | | 2.01 | %* | | | 2.21 | % | | | 1.06 | % | | | 1.12 | %* |
Portfolio Turnover Rate | | | 71.8 | % | | | 107.6 | % | | | 126.8 | % | | | 58.2 | % |
Net Assets, End of Period (in millions) | | $ | 210.5 | | | $ | 140.3 | | | $ | 78.8 | | | $ | 23.4 | |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—05/01/2006. |
| (c) | | Excludes effect of deferred expense reimbursement. |
See accompanying notes to financial statements
12
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is MFS® Emerging Markets Equity Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A and B Shares are currently offered by the Portfolio. Class C and E Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2006 through 2008 tax year remains subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | |
Expiring
12/31/2016 | | Total |
| |
| $ | 139,768,419 | | $139,768,419 |
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Forward Foreign Currency Contracts - The Portfolio may enter into forward foreign currency contracts to hedge its portfolio holdings against future movements in certain foreign currency exchange rates. A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a set price. Forward currency contracts are valued at the forward rate and are marked-to-market daily. The change in market value is recorded by the Portfolio as an unrealized gain or loss. When the contract is closed, the Portfolio recognizes a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.
The use of forward foreign currency contracts does not eliminate fluctuations in the underlying prices of the securities of the Portfolio, but it does establish a rate of exchange that can be achieved in the future. Although forward foreign currency contracts to sell limit the risk of loss due to a decline in the value of the currency holdings, they also limit any potential gain that might result should the value of the currency increase. In addition, the Portfolio could be exposed to risks if the counterparties to the contracts are unable to meet the terms of the contracts.
G. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the portfolio and the Agent.
H. Foreign Currency Translation - The books and records of the Portfolio are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars on a daily basis using prevailing exchange rates. Purchases and sales of securities are translated at the rates of exchange prevailing when such securities were acquired or sold. Income is translated at rates of exchange prevailing when interest is accrued or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
Reported net realized foreign exchange gains or losses arise from activity in forward foreign currency contracts; sales of foreign currencies; currency gains or losses realized between the trade and settlement dates on securities transactions; and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Portfolio’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end; from changes in the exchange rates of foreign currency held; and from changes in the contract value of forward foreign currency contracts.
I. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
J. Forward Commitments, When-Issued and Delayed Delivery Securities - The Portfolio may purchase securities on a when-issued or delayed delivery basis and may purchase or sell securities on a forward commitment basis. Settlement of such transactions normally occurs within a month or more after the purchase or sale commitment is made. The Portfolio may purchase securities under such conditions only with the intention of actually acquiring them, but may enter into a separate agreement to sell the securities before the settlement date. Since the value of securities purchased may fluctuate prior to settlement, the Portfolio may be required to pay more at settlement than the security is worth. In addition, the purchaser is not entitled to any of the interest earned prior to settlement. Upon making a commitment to purchase a security on a when-issued, delayed delivery or forward commitment basis, the Portfolio will hold liquid assets in a segregated account at the Portfolio’s custodian bank worth at least the equivalent of the amount due. The liquid assets will be monitored on a daily basis and adjusted as necessary to maintain the necessary value.
K. Financial Derivative Instruments - Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133, (“FAS 161” or the “Statement”) requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. The disclosure requirements of FAS 161 distinguish between derivatives which are accounted for as “hedges” under FAS 133 and those that do not qualify for such accounting. The Portfolio reflects derivatives at fair value and recognizes changes in fair value through the Statement of Operations, and as such do not qualify for FAS 133 hedge accounting treatment
L. Futures Contracts - The Portfolio may buy and sell futures contracts (on recognized exchanges) as a hedge, to maintain exposure to the broad equity markets, manage exposure to the securities markets or to movements in interest rates or to enhance return. The Portfolio may be subject to equity price risk, interest rate risk, and foreign currency exchange rate risk in the normal course of pursuing its investment objectives. Futures contracts are agreements to buy or sell a security, or deliver a final cash settlement price in connection with an index, interest rate, currency, or other contracts not calling for physical delivery, for a set price in the future. The Portfolio must post an amount equal to a portion of the total market value of the futures contract as futures variation margin, which is returned when the Portfolio’s obligations under the contract have been satisfied. From time to time thereafter, the Portfolio may have to post variation margin to maintain this amount as the market value of the contract fluctuates. Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities. During the period ended June 30, 2009, the Portfolio entered into Equity Index Futures which were subject to equity price risk. At June 30, 2009, the Portfolio did not have any open futures contracts. For the period ended June 30, 2009, the Portfolio had realized gains in the amount of $2,937,470 which is located in Net realized gain (loss) on Futures Contracts in the Statement of Operations.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with Massachusetts Financial Services Company (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $2,770,649 | | 1.05 | % | | First $250 Million |
| | |
| | 1.00 | % | | $250 Million to $500 Million |
| | |
| | 0.85 | % | | $500 Million to $1 Billion |
| | |
| | 0.75 | % | | Over $1 Billion |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Manager has entered into an expense limitation agreement with the Trust (“Expense Limitation Agreement”) in the interest of limiting expenses of the Portfolio of the Trust. The Expense Limitation Agreement shall continue in effect with respect to the Portfolio until April 30, 2010. Pursuant to that Expense Limitation Agreement, the Manager has agreed to waive or limit its fees and to assume other expenses so that the total annual operating expenses of the Portfolio other than interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with accounting principles generally accepted in the United States of America, and other extraordinary expenses not incurred in the ordinary course of the Portfolio’s business, but including amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act, are limited to the following expense ratios as a percentage of the Portfolio’s average daily net assets:
| | | | |
Maximum Expense Ratio under current Expense Limitation Agreement | |
|
|
| Class A | | | Class B | |
| |
| 1.30 | % | | 1.55 | % |
If in any year in which the Management Agreement is still in effect, the estimated aggregate portfolio operating expenses of the Portfolio for the fiscal year are less than the Maximum Expense Ratios for that year, subject to approval by the Trust’s Board, the Manager shall be entitled to reimbursement by the Portfolio to the extent that the charge does not cause the expenses in such subsequent year to exceed the Maximum Expense Ratios as stated above. The Portfolio is not obligated to repay any expense paid by the Manager more than five years after the end of the fiscal year in which such expense was incurred.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A and Class B Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B distribution plan provides that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% of the average net assets of the Portfolio attributable to its Class B Shares in respect to activities primarily intended to result in the sale of Class B Shares. However, under the Class B distribution agreement, payments to the Distributor for activities pursuant to the Class B distribution plan are currently limited to payments at an annual rate equal to 0.25% of average daily net assets of the Portfolio attributable to its Class B Shares.
Under terms of the Class B distribution plan and distribution agreement, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
16
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
(Decrease)
in Shares
Outstanding | | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 76,037,660 | | 14,880,391 | | 1,736,137 | | (42,211,932 | ) | | (25,595,404 | ) | | 50,442,256 |
12/31/2008 | | 39,821,776 | | 38,440,613 | | 4,751,243 | | (6,975,972 | ) | | 36,215,884 | | | 76,037,660 |
| | | | | | |
Class B | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 24,561,384 | | 7,269,910 | | 573,241 | | (3,206,192 | ) | | 4,636,959 | | | 29,198,343 |
12/31/2008 | | 5,501,041 | | 24,196,082 | | 727,283 | | (5,863,022 | ) | | 19,060,343 | | | 24,561,384 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 381,727,106 | | $ | — | | $ | 488,059,663 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $610,694,821 | | $ | 48,372,084 | | $ | (52,627,005 | ) | | $ | (4,254,921 | ) |
6. Securities Lending
As of June 30, 2009, the Portfolio had loaned securities which were collateralized by short-term investments. The value of securities on loan and the value of the related collateral were as follows:
| | | | | | | | | |
Value of
Securities | | Value of
Cash
Collateral | | Value of
Non-Cash
Collateral* | | Total
Collateral |
| | | |
| $28,914,908 | | $ | 29,747,354 | | $ | — | | $ | 29,747,354 |
* The Portfolio cannot repledge or resell this collateral. The non-cash collateral is typically comprised of government securities and/or bank letters of credit.
7. Distributions to Shareholders
The tax character of distributions paid for the year ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $ | 36,432,381 | | $ | 344,266 | | $ | 32,115,114 | | $ | — | | $ | 68,547,495 | | $ | 344,266 |
17
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
7. Distributions to Shareholders - continued
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net Unrealized
Depreciation | | | Loss Carryforwards | | | Total | |
| | | | |
| $13,954,444 | | $ | — | | $ | (291,330,171 | ) | | $ | (139,768,419 | ) | | $ | (417,144,146 | ) |
8. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
9. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
18
| | |
| MFS® Research International Portfolio | | For the period ended 6/30/09 |
| Managed by Massachusetts Financial Services Company | | |
Portfolio Manager Commentary
Performance
For the six months ended June 30, 2009, the Portfolio had a return of 7.18%, 6.98% and 7.20% for Class A, B and E Shares, respectively, versus 7.95% and 13.92% for its benchmarks the MSCI EAFE® Index and MSCI All Country World (ex U.S.) Index.
Market Environment/Conditions
As the first half of 2009 drew to a close, the global economy began to pull out of recession. Data, especially in the second quarter, provided a mixed picture of a global economy struggling to emerge from the worst recession since the Great Depression. Signs of economic and financial recovery emerged most prominently in Asia and more tentatively in Europe and the United States. Overall, we saw reports that showed better-than-expected production and consumer spending. At the same time, the labor and housing markets remained under pressure and are likely to continue to prevent a more buoyant recovery.
Overall, concern over the widespread failure of the financial systems seemed to have waned by the end of the first half. The efforts of the world’s largest economies to loosen credit conditions and stimulate their respective economies helped prevent a deeper recession from unfolding, while at the same time boosting consumer confidence and setting the stage for a stock market rally.
Portfolio Review/Current Positioning
Security selection in the capital goods sector was the primary detractor from the Portfolio’s performance relative to the MSCI EAFE® Index. Several holdings within this sector were among the top detractors for the reporting period. These included special warehousing and storage company Brambles Industries (Australia) and railroad company East Japan Railway.
Stock selection in the financial services sector also hurt relative results. Holdings of insurance firm AXA (France) and our overweight in wealth management and investment firm UBS (Switzerland) were among the Portfolio’s top detractors. The Portfolio’s holdings of financial services firm Barclays (U.K.) during the early part of the reporting hurt relative returns as the stock declined substantially during that time. The Portfolio sold out of the Barclays position early in the period and, consequently, missed the stock’s price appreciation in the second half of the period. Not owning strong-performing financial services firm Credit Suisse Group (Switzerland) also had a negative impact on relative performance.
Stocks in other sectors that dampened relative returns included telecommunications company KDDI Corp. (Japan), integrated oil company TOTAL (France), pharmaceutical company Roche Holding (Switzerland), and convenient store chain Lawson (Japan).
During the reporting period, the Portfolio’s currency exposure hurt relative performance. All of MFS' investment decisions are driven by the fundamentals of each individual opportunity and, as such, it is common for our portfolios to have different currency exposure than the benchmark.
Stock selection in the energy sector boosted relative performance. Within this sector, oil and gas exploration and production company Petroleo Brasileiro (Brazil) was among the Portfolio’s top contributors.
Stock selection in the consumer cyclicals and technology sectors was another positive factor in relative results. Within the consumer cyclicals sector, strong-performing consumer products trading company Li & Fung (Hong Kong) and advertising and marketing firm WPP Group (U.K.) were top contributors over the reporting period. In the technology sector, information technology products maker Acer (Taiwan) was another top contributor.
Elsewhere, financial services firm BNP Paribas (France), shipyard operator Keppel (Singapore), industrial machinery manufacturer Bucyrus International (U.S.), energy company Paladin Energy (Australia), banking firm Bank of Cyprus (Cyprus), and paint and specialty chemicals manufacturer Akzo Nobel (The Netherlands) aided relative returns.
Team Managed
The Portfolio is managed by a committee of research analysts under the general supervision of Thomas Melendez and Jose Luis Garcia.
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
1
| | |
| MFS® Research International Portfolio | | For the period ended 6/30/09 |
| Managed by Massachusetts Financial Services Company | | |
Portfolio Manager Commentary (continued)
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
Total S.A. | | 2.89% |
Nestle S.A. | | 2.65% |
HSBC Holdings Plc | | 2.55% |
Roche Holdings AG | | 2.53% |
E. On AG | | 2.44% |
Royal Dutch Shell Plc—Class A | | 2.26% |
BNP Paribas | | 2.17% |
Vodafone Group Plc | | 2.00% |
GDF Suez | | 1.96% |
BHP Billiton Plc | | 1.92% |
Portfolio Composition (% of portfolio market value)
As of 6/30/09
2
| | |
| MFS® Research International Portfolio | | For the period ended 6/30/09 |
| Managed by Massachusetts Financial Services Company | | |
Portfolio Manager Commentary (continued)
MFS® Research International Portfolio managed by
Massachusetts Financial Services Company vs. MSCI EAFE® Index (net)1
and Morgan Stanley Capital International AC World (ex-U.S.) Index (net)2
Growth Based on $10,000+
| | | | | | | | | | | | |
| | | | | Average Annual Return (for the period ended 6/30/09)3 |
| | | | | 6 Months | | 1 Year | | 3 Year | | 5 Year | | Since
Inception4 |
— | | MFS® Research International Portfolio—Class A | | 7.18% | | -31.89% | | -6.77% | | 3.57% | | 3.25% |
| | Class B | | 6.98% | | -32.04% | | -6.99% | | 3.30% | | 2.36% |
| | Class E | | 7.20% | | -31.89% | | -6.88% | | 3.44% | | 5.50% |
| - - | | MSCI EAFE® Index (net)1 | | 7.95% | | -31.35% | | -7.98% | | 2.31% | | 1.33% |
| — | | Morgan Stanley Capital International AC World (ex-U.S.) Index (net)2 | | 13.92% | | -30.92% | | -5.80% | | 4.48% | | 2.93% |
+The chart reflects the performance of Class B shares of the Portfolio. The performance of Class B shares will differ from that of the other classes because of the difference in expenses paid by policyholders investing in the different share classes.
1The Morgan Stanley Capital International Europe, Australasia and Far East Index (“MSCI EAFE® Index”) is an unmanaged free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the U.S. and Canada.
2The Morgan Stanley Capital International AC World (ex-U.S.) Index (net) (“MSCI ACWI (ex-US) Index (net)”) is an unmanaged free float-adjusted
market capitalization index that is designed to measure equity market performance in the global developed and emerging markets, excluding the U.S.
3“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
4Inception of the Class A shares is 5/1/01. Inception of the Class B shares is 2/12/01. Inception of the Class E shares is 11/1/01. Index returns are based on an inception date of 2/12/01.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Indexes do not include fees or expenses and are not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| MFS® Research International Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.83% | | $ | 1,000.00 | | $ | 1,071.80 | | $ | 4.26 |
Hypothetical | | 0.83% | | | 1,000.00 | | | 1,020.68 | | | 4.16 |
| | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class B | | | | | | | | | | | |
Actual | | 1.08% | | $ | 1,000.00 | | $ | 1,069.80 | | $ | 5.54 |
Hypothetical | | 1.08% | | | 1,000.00 | | | 1,019.44 | | | 5.41 |
| | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class E | | | | | | | | | | | |
Actual | | 0.98% | | $ | 1,000.00 | | $ | 1,072.00 | | $ | 5.03 |
Hypothetical (5% return before expenses) | | 0.98% | | | 1,000.00 | | | 1,019.93 | | | 4.91 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
4
Met Investors Series Trust
MFS® Research International Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value
|
| | | | | |
|
| Common Stocks - 98.8% |
| Australia - 0.9% |
Paladin Energy, Ltd.*(a) | | 2,363,272 | | $ | 9,300,595 |
QBE Insurance Group, Ltd.(a) | | 301,190 | | | 4,803,348 |
| | | | | |
| | | | | 14,103,943 |
| | | | | |
| Bermuda - 0.5% |
Esprit Holdings, Ltd. | | 1,439,620 | | | 8,052,754 |
| | | | | |
| Brazil - 1.1% |
Itau Unibanco Banco Multiplo
S.A. (ADR) | | 654,994 | | | 10,368,555 |
Petroleo Brasileiro S.A. (ADR) | | 168,570 | | | 6,907,999 |
| | | | | |
| | | | | 17,276,554 |
| | | | | |
| Canada - 0.8% |
Nexen, Inc. | | 286,950 | | | 6,237,078 |
Rogers Communications,
Inc.(a) | | 225,390 | | | 5,796,629 |
| | | | | |
| | | | | 12,033,707 |
| | | | | |
| Cayman Islands - 1.1% |
Hengan International Group Co., Ltd. | | 1,654,870 | | | 7,663,774 |
Shimao Property Holdings, Ltd.(a) | | 5,004,500 | | | 9,634,856 |
| | | | | |
| | | | | 17,298,630 |
| | | | | |
| China - 3.7% |
Bank of China, Ltd. | | 35,424,000 | | | 16,785,053 |
China Construction Bank Corp. | | 31,454,000 | | | 24,277,031 |
China Life Insurance Co., Ltd.(a) | | 4,173,000 | | | 15,516,203 |
| | | | | |
| | | | | 56,578,287 |
| | | | | |
| Cyprus - 0.8% |
Bank of Cyprus Public Co., Ltd. | | 2,184,627 | | | 12,174,510 |
| | | | | |
| Finland - 1.3% |
Nokia OYJ | | 1,354,150 | | | 19,750,042 |
| | | | | |
| France - 11.6% |
BNP Paribas(a) | | 506,497 | | | 32,848,629 |
Compagnie Generale des Etablissements Michelin - Class B(a) | | 112,400 | | | 6,420,228 |
GDF Suez(a) | | 796,156 | | | 29,724,558 |
Groupe DANONE(a) | | 418,850 | | | 20,701,220 |
LVMH Moet Hennessy Louis Vuitton S.A.(a) | | 301,510 | | | 23,063,889 |
Schneider Electric S.A.(a) | | 258,882 | | | 19,787,210 |
Total S.A. | | 809,760 | | | 43,831,780 |
| | | | | |
| | | | | 176,377,514 |
| | | | | |
| Germany - 11.3% |
Allianz SE(a) | | 142,550 | | | 13,173,857 |
Bayer AG(a) | | 316,500 | | | 16,984,501 |
Deutsche Boerse AG(a) | | 93,550 | | | 7,266,654 |
E. On AG(a) | | 1,044,294 | | | 37,044,081 |
Linde AG(a) | | 304,760 | | | 25,040,605 |
Merck KGaA(a) | | 235,340 | | | 23,978,417 |
SAP AG(a) | | 360,780 | | | 14,536,343 |
| | | | | |
Security
Description | | Shares | | Value
|
| | | | | |
|
| Germany - continued |
Siemens AG(a) | | 357,880 | | $ | 24,761,171 |
Symrise AG(a) | | 536,393 | | | 7,933,447 |
| | | | | |
| | | | | 170,719,076 |
| | | | | |
| Hong Kong - 2.3% |
China Unicom (Hong Kong), Ltd. | | 5,900,850 | | | 7,847,536 |
CNOOC, Ltd. | | 3,276,170 | | | 4,034,044 |
Li & Fung, Ltd.(a) | | 4,099,030 | | | 10,878,075 |
Sun Hung Kai Properties, Ltd. | | 998,000 | | | 12,460,680 |
| | | | | |
| | | | | 35,220,335 |
| | | | | |
| India - 1.4% |
BEML, Ltd. | | 98,506 | | | 2,215,905 |
HDFC Bank, Ltd. (ADR) | | 116,300 | | | 11,994,019 |
Unitech Ltd. | | 4,453,235 | | | 7,398,597 |
| | | | | |
| | | | | 21,608,521 |
| | | | | |
| Ireland - 1.1% |
CRH Plc | | 710,312 | | | 16,274,853 |
| | | | | |
| Italy - 3.6% |
Eni S.p.A. | | 1,141,490 | | | 27,062,989 |
Saipem S.p.A. | | 298,810 | | | 7,289,682 |
Unione Di Banche Italiance SCPA | | 1,571,325 | | | 20,499,362 |
| | | | | |
| | | | | 54,852,033 |
| | | | | |
| Japan - 16.7% |
Aeon Credit Service Co., Ltd.(a) | | 1,152,900 | | | 14,995,031 |
Bridgestone Corp.(a) | | 497,700 | | | 7,766,837 |
Chiba Bank, Ltd. (The) | | 1,693,000 | | | 11,004,600 |
Daiichi Sankyo Co., Ltd. | | 881,100 | | | 15,750,663 |
East Japan Railway Co. | | 307,100 | | | 18,474,260 |
GLORY, Ltd.(a) | | 778,400 | | | 15,383,401 |
Inpex Holdings, Inc. | | 1,455 | | | 11,578,035 |
Japan Tobacco, Inc. | | 4,015 | | | 12,502,249 |
JGC Corp.(a) | | 1,087,000 | | | 17,468,378 |
KDDI Corp. | | 2,070 | | | 10,963,832 |
Konica Minolta Holdings, Inc. | | 843,000 | | | 8,750,821 |
Lawson, Inc. | | 319,400 | | | 14,022,160 |
Mitsubishi Corp. | | 769,500 | | | 14,118,086 |
Nomura Research Institute, Ltd.(a) | | 615,200 | | | 13,634,207 |
Ricoh Co., Ltd. | | 717,000 | | | 9,175,528 |
Santen Pharmaceutical Co., Ltd. | | 212,500 | | | 6,456,708 |
Shizuoka Bank, Ltd. (The)(a) | | 745,000 | | | 7,351,806 |
Sumitomo Mitsui Financial Group, Inc.(a) | | 441,100 | | | 17,819,800 |
Tokyo Gas Co., Ltd. | | 1,306,000 | | | 4,664,393 |
Yamato Holdings Co., Ltd.(a) | | 1,608,000 | | | 21,342,864 |
| | | | | |
| | | | | 253,223,659 |
| | | | | |
| Mexico - 2.2% |
America Movil S.A.B. de C.V. (ADR) | | 388,490 | | | 15,042,333 |
Corporacion Moctezuma S.A.B. de C.V. | | 581,760 | | | 1,090,968 |
Grupo Televisa S.A. (ADR) | | 451,510 | | | 7,675,670 |
See accompanying notes to financial statements
5
Met Investors Series Trust
MFS® Research International Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value
|
| | | | | |
|
| Mexico - continued |
Kimberly-Clark de Mexico, S.A.B. de C.V. -
Class A(a) | | 1,585,010 | | $ | 6,046,993 |
Urbi, Desarrollos Urbanos, S.A. de C.V.*(a) | | 1,770,720 | | | 2,688,755 |
| | | | | |
| | | | | 32,544,719 |
| | | | | |
| Netherlands - 4.4% |
Akzo Nobel N.V.(a) | | 541,940 | | | 23,833,654 |
Heineken N.V. | | 369,700 | | | 13,727,534 |
Koninklijke (Royal) KPN N.V. | | 1,727,310 | | | 23,780,662 |
TNT N.V. | | 281,409 | | | 5,477,821 |
| | | | | |
| | | | | 66,819,671 |
| | | | | |
| Norway - 0.7% |
Storebrand ASA* | | 2,475,430 | | | 10,814,280 |
| | | | | |
| Papua New Guinea - 0.5% |
Lihir Gold, Ltd.*(a) | | 3,183,001 | | | 7,411,364 |
| | | | | |
| Singapore - 1.6% |
Keppel Corp., Ltd. | | 5,103,000 | | | 24,232,308 |
| | | | | |
| South Korea - 1.6% |
Samsung Electronics Co., Ltd. | | 31,239 | | | 14,467,498 |
Samsung Fire & Marine Insurance Co., Ltd. | | 61,158 | | | 9,000,203 |
| | | | | |
| | | | | 23,467,701 |
| | | | | |
| Spain - 1.4% |
Inditex S.A. | | 423,590 | | | 20,344,304 |
| | | | | |
| Sweden - 1.3% |
Assa Abloy AB - Class B(a) | | 1,376,130 | | | 19,139,061 |
| | | | | |
| Switzerland - 10.7% |
Actelion, Ltd.* | | 208,018 | | | 10,905,382 |
Geberit AG(a) | | 152,853 | | | 18,833,351 |
Julius Baer Holding AG | | 282,948 | | | 11,029,085 |
Nestle S.A. | | 1,066,288 | | | 40,231,831 |
Roche Holdings AG | | 282,090 | | | 38,367,399 |
Swiss Re. | | 248,780 | | | 8,228,724 |
UBS AG* | | 1,177,667 | | | 14,404,469 |
Zurich Financial Services AG | | 109,960 | | | 19,458,626 |
| | | | | |
| | | | | 161,458,867 |
| | | | | |
| Taiwan - 1.2% |
Acer, Inc. | | 5,752,000 | | | 9,957,284 |
Taiwan Semiconductor Manufacturing Co., Ltd. | | 5,166,000 | | | 8,581,429 |
| | | | | |
| | | | | 18,538,713 |
| | | | | |
| United Kingdom - 13.5% |
ARM Holdings Plc(a) | | 4,855,230 | | | 9,590,265 |
BHP Billiton Plc | | 1,292,080 | | | 29,180,203 |
HSBC Holdings Plc | | 4,666,490 | | | 38,732,343 |
Reckitt Benckiser Group Plc | | 345,440 | | | 15,740,232 |
Reed Elsevier Plc | | 992,070 | | | 7,395,802 |
Royal Dutch Shell Plc - Class A | | 1,369,750 | | | 34,298,003 |
| | | | | | | |
Security
Description | | Shares/Par
Amount | | Value
| |
| | | | | | | |
|
| United Kingdom - continued | |
Smith & Nephew Plc(a) | | | 1,436,716 | | $ | 10,649,527 | |
Tullow Oil Plc | | | 506,351 | | | 7,832,445 | |
Vodafone Group Plc | | | 15,702,030 | | | 30,346,057 | |
WPP Plc | | | 3,169,603 | | | 21,077,469 | |
| | | | | | | |
| | | | | | 204,842,346 | |
| | | | | | | |
| United States - 1.5% | |
Bucyrus International, Inc. | | | 388,220 | | | 11,087,563 | |
Marathon Oil Corp. | | | 194,550 | | | 5,861,792 | |
Synthes, Inc.* | | | 58,000 | | | 5,612,892 | |
| | | | | | | |
| | | | | | 22,562,247 | |
| | | | | | | |
Total Common Stocks
(Cost $1,706,946,081) | | | | | | 1,497,719,999 | |
| | | | | | | |
|
| Preferred Stock - 0.2% | |
| Brazil - 0.2% | |
Duratex S.A.
(Cost - $5,662,566) | | | 337,950 | | | 3,732,839 | |
| | | | | | | |
|
| Short-Term Investments - 15.1% | |
| Mutual Funds - 14.3% | |
State Street Navigator Securities Lending Trust Prime Portfolio(b) | | | 216,253,209 | | | 216,253,209 | |
| | | | | | | |
| Repurchase Agreement - 0.8% | |
State Street Bank & Trust Co., Repurchase Agreement dated 06/30/09 at 0.010% to be repurchased at $12,168,003 on 07/01/09 collateralized by $12,350,000 FNMA at 1.722% due 05/10/11 with a value of $12,411,750. | | $ | 12,168,000 | | | 12,168,000 | |
| | | | | | | |
Total Short-Term Investments
(Cost $228,421,209) | | | | | | 228,421,209 | |
| | | | | | | |
| |
TOTAL INVESTMENTS - 114.1%
(Cost $1,941,029,856) | | | 1,729,874,047 | |
| | | | | | | |
| |
| Other Assets and Liabilities (net) - (14.1)% | | | (213,355,370 | ) |
| | | | | | | |
| | |
| NET ASSETS - 100.0% | | | | | $ | 1,516,518,677 | |
| | | | | | | |
Portfolio Footnotes:
| * | | Non-income producing security. |
| (a) | | All or a portion of security is on loan. |
| (b) | | Represents investment of collateral received from securities lending transactions. |
ADR - American Depositary Receipt
FNMA - Federal National Mortgage Association
See accompanying notes to financial statements
6
Met Investors Series Trust
MFS® Research International Portfolio
The following table summarizes the top ten sector diversification of the portfolio holdings of the MFS® Research International Portfolio at June 30, 2009.
| | |
Ten Largest Industries as of
June 30, 2009 (Unaudited) | | Percent of
Net Assets |
Commercial Banks | | 13.4% |
Oil, Gas & Consumable Fuels | | 10.3% |
Pharmaceuticals | | 6.7% |
Insurance | | 5.3% |
Wireless Telecommunication Services | | 4.1% |
Food Products | | 4.0% |
Chemicals | | 3.7% |
Industrial Conglomerates | | 3.2% |
Building Products | | 2.8% |
Electric Utilities | | 2.4% |
See accompanying notes to financial statements
7
Met Investors Series Trust
MFS® Research International Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1—quoted prices in active markets for identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Common Stocks | | | | | | | | | | | | |
Australia | | $ | — | | $ | 14,103,943 | | $ | — | | $ | 14,103,943 |
Bermuda | | | — | | | 8,052,754 | | | — | | | 8,052,754 |
Brazil | | | 17,276,554 | | | — | | | — | | | 17,276,554 |
Canada | | | 12,033,707 | | | — | | | — | | | 12,033,707 |
Cayman Islands | | | — | | | 17,298,630 | | | — | | | 17,298,630 |
China | | | — | | | 56,578,287 | | | — | | | 56,578,287 |
Cyprus | | | — | | | 12,174,510 | | | — | | | 12,174,510 |
Finland | | | — | | | 19,750,042 | | | — | | | 19,750,042 |
France | | | — | | | 176,377,514 | | | — | | | 176,377,514 |
Germany | | | — | | | 170,719,076 | | | — | | | 170,719,076 |
Hong Kong | | | — | | | 35,220,335 | | | — | | | 35,220,335 |
India | | | 11,994,019 | | | 9,614,502 | | | — | | | 21,608,521 |
Ireland | | | — | | | 16,274,853 | | | — | | | 16,274,853 |
Italy | | | — | | | 54,852,033 | | | — | | | 54,852,033 |
Japan | | | — | | | 253,223,659 | | | — | | | 253,223,659 |
Mexico | | | 32,544,719 | | | — | | | — | | | 32,544,719 |
Netherlands | | | — | | | 66,819,671 | | | — | | | 66,819,671 |
Norway | | | — | | | 10,814,280 | | | — | | | 10,814,280 |
Papua New Guinea | | | — | | | 7,411,364 | | | — | | | 7,411,364 |
Singapore | | | — | | | 24,232,308 | | | — | | | 24,232,308 |
South Korea | | | — | | | 23,467,701 | | | — | | | 23,467,701 |
Spain | | | — | | | 20,344,304 | | | — | | | 20,344,304 |
Sweden | | | — | | | 19,139,061 | | | — | | | 19,139,061 |
Switzerland | | | — | | | 161,458,867 | | | — | | | 161,458,867 |
Taiwan | | | — | | | 18,538,713 | | | — | | | 18,538,713 |
United Kingdom | | | — | | | 204,842,346 | | | — | | | 204,842,346 |
United States | | | 16,949,355 | | | 5,612,892 | | | — | | | 22,562,247 |
Total Common Stocks | | | 90,798,354 | | | 1,406,921,645 | | | — | | | 1,497,719,999 |
Preferred Stock | | | | | | | | | | | | |
Brazil | | | 3,732,839 | | | — | | | — | | | 3,732,839 |
Short-Term Investments | | | | | | | | | | | | |
Mutual Funds | | | 216,253,209 | | | — | | | — | | | 216,253,209 |
See accompanying notes to financial statements
8
Met Investors Series Trust
MFS® Research International Portfolio
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Repurchase Agreement | | $ | — | | $ | 12,168,000 | | $ | — | | $ | 12,168,000 |
Total Short-Term Investments | | | 216,253,209 | | | 12,168,000 | | | — | | | 228,421,209 |
TOTAL INVESTMENTS | | $ | 310,784,402 | | $ | 1,419,089,645 | | $ | — | | $ | 1,729,874,047 |
FAS 157 Level 3 Reconciliation Disclosure
Following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value:
Asset Valuation Inputs
| | | | | | | | | | | | | | | | | | | | | | | | |
| Investments in Securities | | Balance as of
December 31,
2008 | | Realized
Loss | | | Change in
Unrealized
Appreciation | | Net
Purchases | | Net Sales | | | Net Transfers
Out of Level 3 | | | Balance as of
June 30,
2009 |
| Common Stock | | | | | | | | | | | | | | | | | | | | | | | | |
Japan | | $ | 37,047,987 | | $ | (5,947,794 | ) | | $ | 324,481 | | $ | 9,437,320 | | $ | (4,567,933 | ) | | $ | (36,294,061 | ) | | $ | — |
| Total | | $ | 37,047,987 | | $ | (5,947,794 | ) | | $ | 324,481 | | $ | 9,437,320 | | $ | (4,567,933 | ) | | $ | (36,294,061 | ) | | $ | — |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| MFS® Research International Portfolio | | | |
| Assets | | | | |
Investments, at value(a)(b) | | $ | 1,717,706,047 | |
Repurchase Agreement | | | 12,168,000 | |
Cash | | | 92 | |
Cash denominated in foreign currencies(c) | | | 764,021 | |
Receivable for investments sold | | | 122,075 | |
Receivable for Trust shares sold | | | 387,868 | |
Dividends receivable | | | 4,974,121 | |
Interest receivable | | | 3 | |
| | | | |
Total assets | | | 1,736,122,227 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 1,220,506 | |
Trust shares redeemed | | | 723,869 | |
Distribution and services fees—Class B | | | 120,880 | |
Distribution and services fees—Class E | | | 2,214 | |
Collateral for securities on loan | | | 216,253,209 | |
Management fee | | | 886,986 | |
Administration fee | | | 9,077 | |
Custodian and accounting fees | | | 235,001 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 148,381 | |
| | | | |
Total liabilities | | | 219,603,550 | |
| | | | |
| Net Assets | | $ | 1,516,518,677 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 2,306,741,127 | |
Accumulated net realized loss | | | (603,514,306 | ) |
Unrealized depreciation on investments and foreign currency | | | (211,106,279 | ) |
Undistributed net investment income | | | 24,398,135 | |
| | | | |
Total | | $ | 1,516,518,677 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 916,107,823 | |
| | | | |
Class B | | | 582,983,774 | |
| | | | |
Class E | | | 17,427,080 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 120,166,534 | |
| | | | |
Class B | | | 76,962,800 | |
| | | | |
Class E | | | 2,294,166 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 7.62 | |
| | | | |
Class B | | | 7.57 | |
| | | | |
Class E | | | 7.60 | |
| | | | |
| | | | | |
(a) Investments at cost, excluding repurchase agreement | | $ | 1,928,861,856 | |
(b) Includes cash collateral for securities loaned of | | | 216,253,209 | |
(c) Cost of cash denominated in foreign currencies | | | 767,376 | |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| MFS® Research International Portfolio | | | |
| Investment Income | | | | |
Dividends (1) | | $ | 28,850,988 | |
Interest (2) | | | 1,581,696 | |
| | | | |
Total investment income | | | 30,432,684 | |
| | | | |
| Expenses | | | | |
Management fee | | | 4,640,663 | |
Administration fees | | | 53,391 | |
Custodian and accounting fees | | | 521,058 | |
Distribution and services fees—Class B | | | 627,310 | |
Distribution and services fees—Class E | | | 12,309 | |
Audit and tax services | | | 22,162 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 69,738 | |
Insurance | | | 21,012 | |
Other | | | 5,493 | |
| | | | |
Total expenses | | | 5,999,569 | |
| | | | |
Net investment income | | | 24,433,115 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency | | | | |
Net realized loss on: | | | | |
Investments | | | (235,280,666 | ) |
Foreign currency | | | (256,587 | ) |
| | | | |
Net realized loss on investments and foreign currency | | | (235,537,253 | ) |
| | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 310,522,820 | |
Foreign currency | | | 63,415 | |
| | | | |
Net change in unrealized appreciation on investments and foreign currency | | | 310,586,235 | |
| | | | |
Net realized and unrealized gain on investments and foreign currency | | | 75,048,982 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 99,482,097 | |
| | | | |
| | | | | |
(1) Dividend income is net of foreign withholding taxes of: | | $ | 3,433,775 | |
(2) Interest income includes securities lending net income of: | | | 1,580,444 | |
See accompanying notes to financial statements
11
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| MFS® Research International Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 24,433,115 | | | $ | 49,194,903 | |
Net realized loss on investments and foreign currency | | | (235,537,253 | ) | | | (356,227,974 | ) |
Net change in unrealized appreciation (depreciation) on investments and foreign currency | | | 310,586,235 | | | | (703,624,736 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 99,482,097 | | | | (1,010,657,807 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | (30,224,454 | ) | | | (18,044,533 | ) |
Class B | | | (18,321,308 | ) | | | (13,551,852 | ) |
Class E | | | (590,422 | ) | | | (577,493 | ) |
From net realized gains | | | | | | | | |
Class A | | | — | | | | (91,449,495 | ) |
Class B | | | — | | | | (78,062,607 | ) |
Class E | | | — | | | | (3,147,806 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (49,136,184 | ) | | | (204,833,786 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 140,719,773 | | | | 787,629,297 | |
Class B | | | 57,650,091 | | | | 229,562,923 | |
Class E | | | 923,032 | | | | 9,717,365 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | 30,224,454 | | | | 109,494,028 | |
Class B | | | 18,321,308 | | | | 91,614,459 | |
Class E | | | 590,422 | | | | 3,725,299 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (124,320,681 | ) | | | (293,024,079 | ) |
Class B | | | (40,136,492 | ) | | | (163,838,026 | ) |
Class E | | | (3,522,332 | ) | | | (8,194,242 | ) |
| | | | | | | | |
Net increase in net assets from capital share transactions | | | 80,449,575 | | | | 766,687,024 | |
| | | | | | | | |
| Net Increase (Decrease) in Net Assets | | | 130,795,488 | | | | (448,804,569 | ) |
Net assets at beginning of period | | | 1,385,723,189 | | | | 1,834,527,758 | |
| | | | | | | | |
Net assets at end of period | | $ | 1,516,518,677 | | | $ | 1,385,723,189 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 24,398,135 | | | $ | 49,101,204 | |
| | | | | | | | |
See accompanying notes to financial statements
12
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| MFS® Research International Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 7.41 | | | $ | 14.43 | | | $ | 15.04 | | | $ | 13.00 | | | $ | 11.72 | | | $ | 9.81 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.13 | | | | 0.30 | | | | 0.22 | | | | 0.19 | | | | 0.14 | | | | 0.08 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.35 | | | | (5.76 | ) | | | 1.68 | | | | 3.17 | | | | 1.83 | | | | 1.85 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.48 | | | | (5.46 | ) | | | 1.90 | | | | 3.36 | | | | 1.97 | | | | 1.93 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.27 | ) | | | (0.26 | ) | | | (0.24 | ) | | | (0.27 | ) | | | (0.07 | ) | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | (1.30 | ) | | | (2.27 | ) | | | (1.05 | ) | | | (0.62 | ) | | | (0.02 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.27 | ) | | | (1.56 | ) | | | (2.51 | ) | | | (1.32 | ) | | | (0.69 | ) | | | (0.02 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 7.62 | | | $ | 7.41 | | | $ | 14.43 | | | $ | 15.04 | | | $ | 13.00 | | | $ | 11.72 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 7.18 | % | | | (42.25 | )% | | | 13.60 | % | | | 26.91 | % | | | 16.77 | % | | | 19.72 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.83 | %* | | | 0.77 | % | | | 0.79 | % | | | 0.94 | % | | | 0.93 | % | | | 1.06 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.83 | %* | | | 0.77 | % | | | 0.79 | % | | | 0.95 | % | | | 0.93 | %(b) | | | 0.94 | %(b) |
Ratio of Net Investment Income to Average Net Assets | | | 3.86 | %* | | | 2.85 | % | | | 1.54 | % | | | 1.34 | % | | | 1.18 | % | | | 0.75 | % |
Portfolio Turnover Rate | | | 37.1 | % | | | 75.4 | % | | | 65.5 | % | | | 104.1 | % | | | 84.5 | % | | | 98.5 | % |
Net Assets, End of Period (in millions) | | $ | 916.1 | | | $ | 840.8 | | | $ | 959.1 | | | $ | 706.0 | | | $ | 624.2 | | | $ | 304.0 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 7.35 | | | $ | 14.32 | | | $ | 14.95 | | | $ | 12.94 | | | $ | 11.68 | | | $ | 9.79 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.12 | | | | 0.27 | | | | 0.19 | | | | 0.15 | | | | 0.11 | | | | 0.05 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.35 | | | | (5.71 | ) | | | 1.65 | | | | 3.15 | | | | 1.81 | | | | 1.86 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.47 | | | | (5.44 | ) | | | 1.84 | | | | 3.30 | | | | 1.92 | | | | 1.91 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.25 | ) | | | (0.23 | ) | | | (0.20 | ) | | | (0.24 | ) | | | (0.04 | ) | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | (1.30 | ) | | | (2.27 | ) | | | (1.05 | ) | | | (0.62 | ) | | | (0.02 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.25 | ) | | | (1.53 | ) | | | (2.47 | ) | | | (1.29 | ) | | | (0.66 | ) | | | (0.02 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 7.57 | | | $ | 7.35 | | | $ | 14.32 | | | $ | 14.95 | | | $ | 12.94 | | | $ | 11.68 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 6.98 | % | | | (42.36 | )% | | | 13.29 | % | | | 26.56 | % | | | 16.42 | % | | | 19.56 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 1.08 | %* | | | 1.01 | % | | | 1.04 | % | | | 1.19 | % | | | 1.19 | % | | | 1.32 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 1.08 | %* | | | 1.01 | % | | | 1.04 | % | | | 1.20 | % | | | 1.19 | %(b) | | | 1.18 | %(b) |
Ratio of Net Investment Income to Average Net Assets | | | 3.63 | %* | | | 2.54 | % | | | 1.31 | % | | | 1.12 | % | | | 0.90 | % | | | 0.47 | % |
Portfolio Turnover Rate | | | 37.1 | % | | | 75.4 | % | | | 65.5 | % | | | 104.1 | % | | | 84.5 | % | | | 98.5 | % |
Net Assets, End of Period (in millions) | | $ | 583.0 | | | $ | 525.7 | | | $ | 842.8 | | | $ | 623.0 | | | $ | 443.5 | | | $ | 396.0 | |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Excludes effect of deferred expense reimbursement. |
See accompanying notes to financial statements
13
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| MFS® Research International Portfolio | | Class E | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 7.37 | | | $ | 14.36 | | | $ | 14.99 | | | $ | 12.96 | | | $ | 11.70 | | | $ | 9.80 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.12 | | | | 0.29 | | | | 0.20 | | | | 0.16 | | | | 0.13 | | | | 0.07 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.36 | | | | (5.74 | ) | | | 1.66 | | | | 3.17 | | | | 1.81 | | | | 1.85 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.48 | | | | (5.45 | ) | | | 1.86 | | | | 3.33 | | | | 1.94 | | | | 1.92 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.25 | ) | | | (0.24 | ) | | | (0.22 | ) | | | (0.25 | ) | | | (0.06 | ) | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | (1.30 | ) | | | (2.27 | ) | | | (1.05 | ) | | | (0.62 | ) | | | (0.02 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.25 | ) | | | (1.54 | ) | | | (2.49 | ) | | | (1.30 | ) | | | (0.68 | ) | | | (0.02 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 7.60 | | | $ | 7.37 | | | $ | 14.36 | | | $ | 14.99 | �� | | $ | 12.96 | | | $ | 11.70 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 7.20 | % | | | (42.33 | )% | | | 13.38 | % | | | 26.79 | % | | | 16.52 | % | | | 19.64 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.98 | %* | | | 0.91 | % | | | 0.94 | % | | | 1.09 | % | | | 1.09 | % | | | 1.22 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.98 | %* | | | 0.91 | % | | | 0.94 | % | | | 1.10 | % | | | 1.09 | %(b) | | | 1.09 | %(b) |
Ratio of Net Investment Income to Average Net Assets | | | 3.59 | %* | | | 2.66 | % | | | 1.41 | % | | | 1.18 | % | | | 1.07 | % | | | 0.72 | % |
Portfolio Turnover Rate | | | 37.1 | % | | | 75.4 | % | | | 65.5 | % | | | 104.1 | % | | | 84.5 | % | | | 98.5 | % |
Net Assets, End of Period (in millions) | | $ | 17.4 | | | $ | 19.2 | | | $ | 32.6 | | | $ | 26.7 | | | $ | 14.6 | | | $ | 11.3 | |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Excludes effect of deferred expense reimbursement. |
See accompanying notes to financial statements
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is MFS® Research International Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A, B and E Shares are currently offered by the Portfolio. Class C Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | | | | | | | | |
Expiring
12/31/2009 | | Expiring
12/31/2010 | | Expiring
12/31/2016 | | Total |
| | | |
| $ | 36,862 | | $ | 6,377,357 | | $ | 337,233,962 | | $ | 337,648,181 |
The Portfolio acquired losses of $37,816,349 in the merger with J.P. Morgan International Equity Portfolio on April 28, 2003, which are subject to an annual limitation of $2,138,073.
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Futures Contracts - The Portfolio may buy and sell futures contracts (on recognized exchanges) as a hedge, to maintain exposure to the broad equity markets or to enhance return. The Portfolio may be subject to equity price risk, interest rate risk, and foreign currency exchange rate risk in the normal course of pursuing its investment objectives. Futures contracts are agreements to buy or sell a security, or deliver a final cash settlement price in connection with an index, interest rate, currency, or other contracts not calling for physical delivery, for a set price in the future. The Portfolio must post an amount equal to a portion of the total market value of the futures contract as futures variation margin, which is returned when the Portfolio’s obligations under the contract have been satisfied. From time to time thereafter, the Portfolio may have to post variation margin to maintain this amount as the market value of the contract fluctuates. Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities.
G. Forward Foreign Currency Contracts - The Portfolio may enter into forward foreign currency contracts to hedge its portfolio holdings against future movements in certain foreign currency exchange rates. A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a set price. Forward currency contracts are valued at the forward rate and are marked-to-market daily. The change in market value is recorded by the Portfolio as an unrealized gain or loss. When the contract is closed, the Portfolio recognizes a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.
The use of forward foreign currency contracts does not eliminate fluctuations in the underlying prices of the securities of the Portfolio, but it does establish a rate of exchange that can be achieved in the future. Although forward foreign currency contracts to sell limit the risk of loss due to a decline in the value of the currency holdings, they also limit any potential gain that might result should the value of the currency increase. In addition, the Portfolio could be exposed to risks if the counterparties to the contracts are unable to meet the terms of the contracts.
H. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the collateral decreases below the value of the securities loaned.
16
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
I. Foreign Currency Translation - The books and records of the Portfolio are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars on a daily basis using prevailing exchange rates. Purchases and sales of securities are translated at the rates of exchange prevailing when such securities were acquired or sold. Income is translated at rates of exchange prevailing when interest is accrued or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in forward foreign currency contracts; sales of foreign currencies; currency gains or losses realized between the trade and settlement dates on securities transactions; and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Portfolio’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end; from changes in the exchange rates of foreign currency held; and from changes in the contract value of forward foreign currency contracts.
J. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
K. Forward Commitments, When-Issued and Delayed Delivery Securities - The Portfolio may purchase securities on a when-issued or delayed delivery basis and may purchase or sell securities on a forward commitment basis. Settlement of such transactions normally occurs within a month or more after the purchase or sale commitment is made. The Portfolio may purchase securities under such conditions only with the intention of actually acquiring them, but may enter into a separate agreement to sell the securities before the settlement date. Since the value of securities purchased may fluctuate prior to settlement, the Portfolio may be required to pay more at settlement than the security is worth. In addition, the purchaser is not entitled to any of the interest earned prior to settlement. Upon making a commitment to purchase a security on a when-issued, delayed delivery or forward commitment basis, the Portfolio will hold liquid assets in a segregated account at the Portfolio’s custodian bank worth at least the equivalent of the amount due. The liquid assets will be monitored on a daily basis and adjusted as necessary to maintain the necessary value.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with Massachusetts Financial Services Company (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $ | 4,640,663 | | 0.80 | % | | First $200 Million |
| | |
| | | 0.75 | % | | $200 Million to $500 Million |
| | |
| | | 0.70 | % | | $500 Million to $1 Billion |
| | |
| | | 0.65 | % | | Over $1 Billion |
17
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A, Class B and Class E Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B and Class E distribution plans provide that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%, respectively, of the average net assets of the Portfolio attributable to its Class B and Class E shares in respect to activities primarily intended to result in the sale of Class B and Class E Shares. However, under the Class B and Class E distribution agreements, payments to the Distributor for activities pursuant to the Class B and Class E distribution plans are currently limited to payments at an annual rate equal to 0.25% and 0.15% of average daily net assets of the Portfolio attributable to its Class B and Class E Shares, respectively.
Under terms of the Class B and Class E distribution plans and distribution agreements, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B and Class E Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
(Decrease)
in Shares
Outstanding | | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 113,455,032 | | 20,532,849 | | 4,671,477 | | (18,492,824 | ) | | 6,711,502 | | | 120,166,534 |
12/31/2008 | | 66,478,767 | | 67,903,709 | | 8,780,596 | | (29,708,040 | ) | | 46,976,265 | | | 113,455,032 |
| | | | | | |
Class B | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 71,554,303 | | 8,578,388 | | 2,849,348 | | (6,019,239 | ) | | 5,408,497 | | | 76,962,800 |
12/31/2008 | | 58,852,198 | | 20,720,766 | | 7,400,198 | | (15,418,859 | ) | | 12,702,105 | | | 71,554,303 |
| | | | | | |
Class E | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 2,599,903 | | 136,473 | | 91,539 | | (533,749 | ) | | (305,737 | ) | | 2,294,166 |
12/31/2008 | | 2,271,794 | | 842,133 | | 300,185 | | (814,209 | ) | | 328,109 | | | 2,599,903 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $ | — | | $ | 545,778,273 | | $ | — | | $ | 482,564,967 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $1,941,029,856 | | $ | 86,978,735 | | $ | (298,134,544 | ) | | $ | (211,155,809 | ) |
18
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
6. Securities Lending
As of June 30, 2009, the Portfolio had loaned securities which were collateralized by short term investments. The value of securities on loan and the value of the related collateral were as follows:
| | | | | | | | | |
Value of
Securities | | Value of
Cash
Collateral | | Value of
Non-Cash
Collateral* | | Total
Collateral |
| | | |
| $205,646,062 | | $ | 216,253,209 | | $ | — | | $ | 216,253,209 |
* The Portfolio cannot repledge or resell this collateral. The non-cash collateral is typically comprised of government securities and/or bank letters of credit.
7. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $ | 101,637,300 | | $ | 128,029,763 | | $ | 103,196,486 | | $ | 106,999,191 | | $ | 204,833,786 | | $ | 235,028,954 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net Unrealized
Depreciation | | | Loss Carryforwards | | | Total | |
| | | | |
| $ | 49,136,166 | | $ | — | | $ | (546,056,348 | ) | | $ | (343,648,181 | ) | | $ | (840,568,363 | ) |
8. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
9. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS
19
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
11. Recent Accounting Pronouncement - continued
157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
20
| | |
| Oppenheimer Capital Appreciation Portfolio | | For the period ended 6/30/09 |
| Managed by OppenheimerFunds, Inc. | | |
Portfolio Manager Commentary
Performance
During the semi-annual period ended June 30, 2009, the Portfolio had a return of 17.30%, 17.22% and 17.35% for Class A, B and E Shares, respectively, versus the Russell 1000® Growth Index (the “Index”), which returned 11.53%, and the S&P 500® Index, which returned 3.16%.
Market Environment/Conditions
The global recession that defined 2008 continued in the first half of 2009, as unemployment rates climbed, housing prices slumped and consumer confidence remained depressed. The economic downturn had been intensified by a global banking crisis that led to the failures of major financial institutions and nearly froze conditions in some credit markets. In response, the Fed reduced short-term interest rates aggressively, including a cut in mid-December 2008 that drove its target for the overnight federal funds rate to an unprecedented low of 0% to 0.25%. As interest rates declined, so did yields of money market instruments.
Pronounced signs of economic weakness persisted through much of the first quarter of 2009. January saw a sharp decline in housing prices, while in February and March the U.S. economy lost more than 600,000 jobs in each month. Meanwhile, the Conference Board’s consumer confidence index fell to its lowest reading since recordkeeping began in 1967 in February 2009. In early March, the U.S. stock market hit a multi-year low.
Yet, investor sentiment soon began to improve as evidence appeared that global credit markets were thawing in response to massive remedial efforts by U.S. government and monetary authorities. The Fed engaged in massive purchases of U.S. Treasury securities and U.S. government agency securities to bolster slumping fixed-income markets, and they continued to implement the Term Asset-Backed Securities Loan Facility (TALF) that it had implemented in late 2008. The U.S. government enacted the $787 billion American Recovery and Reinvestment Act of 2009 and also continued to purchase certain financial instruments from eligible money market funds as needed.
As it became clearer that these remedial measures had helped to avert a collapse of the U.S. banking system, investor sentiment began to improve. Investors began to look forward to better credit-market conditions, and they became more tolerant of the risks they previously had shunned. Investors capitalized on historically low valuations among stocks and higher yielding bonds, sparking impressive springtime rallies over the second quarter of the year. Conversely, U.S. Treasury securities gave back some of their previous gains. However, in the absence of inflationary pressures or data showing actual economic improvement, the Fed consistently maintained its low target for short-term interest rates through the reporting period’s end.
Portfolio Review/Current Positioning
The Portfolio outperformed the Index in eight of the ten Index sectors, with financials, information technology and industrials sectors leading the pack. The Portfolio underperformed in the consumer discretionary sector and slightly underperformed in the health care sector.
Within financials, the Portfolio maintained an overweight position in the sector, which helped relative performance, though relative returns were primarily driven by stock selection. Within the sector, a number of securities had double-digit positive performance as financial stocks rebounded over the second half of the reporting period after enduring a tough bout in 2008 and early 2009. For the Portfolio, positive contributors included Goldman Sachs Group, Inc., IntercontinentalExchange, Inc., Credit Suisse Group AG, MSCI, Inc. and BM&F BOVESPA SA. In general, financials had a strong reporting period as market volatility lessened, most major global financial markets stabilized and overall conditions for financial institutions showed improvement.
An overweight to the information technology sector helped relative Portfolio performance, though, once again, prudent stock selection was the main contributor to relative performance. Like financials, the information technology sector rebounded partly as a result of renewed market optimism that market conditions have improved. One of the Portfolio’s largest holdings, QUALCOMM, Inc., performed well for the Portfolio during the reporting period. QUALCOMM, a leading manufacturer of the CDMA chip-technology that is used in 3G wireless communications, weathered the economic downturn relatively well during the period and continued to expand on its product line. Research in Motion Ltd., a Canadian developer of mobile communications and wireless email products including the BlackBerry smartphone, saw its stock price jump during the period as year-over-year revenue growth and net income jumped in the 1st quarter of 2009 as did sales of Blackberry devices. Other solid contributors to the Portfolio’s performance included Google, Inc., Apple, Inc., Broadcom Corp. and NVIDIA Corp.
The Portfolio outperformed the Index in the industrials sector mainly due to underweight position that was further enhanced by good stock selection. The main contributor to the Portfolio’s performance in this sector was Joy Global, Inc., which had a strong reporting period. The Portfolio was heavily overweight Joy Global relative to the Index.
Another individual holding of note was Crown Castle International Corp. within the telecommunication services sector. As market conditions improved for the company, which is the largest cell phone tower company in the U.S., its stock price rose significantly.
The Portfolio underperformed versus the Index in consumer discretionary due to an underweight to the sector and to weaker stock selection. An overweight to Apollo Group, Inc. detracted from the Portfolio’s performance as the stock had a difficult reporting period. The Portfolio’s performance also was hurt by an underweight to the internet and catalog retail subsector within consumer discretionary, as certain stocks included in that subsector performed strongly. In terms of the health care sector, while the Portfolio’s underperformance was slight relative the Index, the Portfolio’s overweight to the sector hurt relative Portfolio performance as it was one of the weaker performing sectors within the Index.
At the end of the period the Portfolio was positioned slightly overweight in materials, telecommunications, information technology, healthcare,
1
| | |
| Oppenheimer Capital Appreciation Portfolio | | For the period ended 6/30/09 |
| Managed by OppenheimerFunds, Inc. | | |
Portfolio Manager Commentary (continued)
and slightly larger overweights in energy and financials. The Portfolio was underweight in consumer staples, industrials and consumer discretionary, and did not hold any positions within the utilities sector.
Marc Baylin, CFA; Vice President and Portfolio Manager
OppenheimerFunds, Inc.
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
Google, Inc.—Class A | | 3.65% |
QUALCOMM, Inc. | | 3.58% |
Apple, Inc. | | 3.30% |
Monsanto Co. | | 2.58% |
Baxter International, Inc. | | 2.12% |
PepsiCo, Inc. | | 2.07% |
Nestle S.A. | | 2.02% |
Express Scripts, Inc. | | 1.97% |
Wal-Mart Stores, Inc. | | 1.89% |
Occidental Petroleum Corp. | | 1.86% |
Portfolio Composition (% of portfolio market value)
As of 6/30/09
2
| | |
| Oppenheimer Capital Appreciation Portfolio | | For the period ended 6/30/09 |
| Managed by OppenheimerFunds, Inc. | | |
Portfolio Manager Commentary (continued)
Oppenheimer Capital Appreciation Portfolio managed by
OppenheimerFunds, Inc. vs. Russell 1000® Growth Index1 and S&P 500® Index2
Growth Based on $10,000+
| | | | | | | | | | | | |
| | | | | Average Annual Return3
(for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | 3 Year | | 5 Year | | Since
Inception4 |
— | | Oppenheimer Capital Appreciation Portfolio—Class A | | 17.30% | | -30.26% | | -7.71% | | -2.96% | | -2.07% |
| | Class B | | 17.22% | | -30.38% | | -7.90% | | -3.18% | | -3.84% |
| | Class E | | 17.35% | | -30.30% | | -7.78% | | — | | -3.53% |
| — | | Russell 1000® Growth Index1 | | 11.53% | | -24.50% | | -5.45% | | -1.83% | | -3.97% |
| - - | | S&P 500® Index2 | | 3.16% | | -26.21% | | -8.22% | | -2.24% | | -2.37% |
+The chart reflects the performance of Class B shares of the Portfolio. The performance of Class B shares will differ from that of the other classes because of the difference in expenses paid by policyholders investing in the different share classes.
1The Russell 1000® Growth Index is an unmanaged measure of performance of the largest capitalized U.S. companies, within Russell 1000 companies, that have higher price-to-book ratios and higher forecasted growth values.
2The S&P 500® Index is an unmanaged index consisting of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value weighted index (stock price times number of shares outstanding), with each stock’s weight in the Index proportionate to its market value.
3“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
4Inception of Class A shares is 1/2/02. Inception of the Class B shares is 2/12/01. Inception of the Class E shares is 5/1/05. Index returns are based on an inception date of 2/12/01.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Indexes do not include fees or expenses and are not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| Oppenheimer Capital Appreciation Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.67% | | $ | 1,000.00 | | $ | 1,173.00 | | $ | 3.61 |
Hypothetical | | 0.67% | | | 1,000.00 | | | 1,021.44 | | | 3.36 |
| | | | | | | | | | | |
| | | | |
Class B | | | | | | | | | | | |
Actual | | 0.92% | | $ | 1,000.00 | | $ | 1,172.20 | | $ | 4.95 |
Hypothetical | | 0.92% | | | 1,000.00 | | | 1,020.23 | | | 4.61 |
| | | | | | | | | | | |
| | | | |
Class E | | | | | | | | | | | |
Actual | | 0.82% | | $ | 1,000.00 | | $ | 1,173.50 | | $ | 4.42 |
Hypothetical | | 0.82% | | | 1,000.00 | | | 1,020.73 | | | 4.11 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
4
Met Investors Series Trust
Oppenheimer Capital Appreciation Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | |
| Common Stocks - 98.6% | | | | | |
| Aerospace & Defense - 3.3% | | | | | |
General Dynamics Corp. | | 73,640 | | $ | 4,078,920 |
Goodrich Corp. | | 48,430 | | | 2,420,047 |
Lockheed Martin Corp. | | 146,680 | | | 11,829,742 |
United Technologies Corp. | | 65,240 | | | 3,389,870 |
| | | | | |
| | | | | 21,718,579 |
| | | | | |
| Beverages - 2.1% | | | | | |
PepsiCo, Inc. | | 245,260 | | | 13,479,490 |
| | | | | |
| Biotechnology - 4.3% | | | | | |
Amgen, Inc.* | | 78,820 | | | 4,172,731 |
Celgene Corp.* | | 206,520 | | | 9,879,917 |
Gilead Sciences, Inc.* | | 228,310 | | | 10,694,040 |
Vertex Pharmaceuticals, Inc.*(a) | | 96,290 | | | 3,431,776 |
| | | | | |
| | | | | 28,178,464 |
| | | | | |
| Capital Markets - 4.3% | | | | | |
Charles Schwab Corp. (The) | | 364,070 | | | 6,385,788 |
Credit Suisse Group AG | | 168,079 | | | 7,670,632 |
Goldman Sachs Group, Inc. (The) | | 55,130 | | | 8,128,367 |
Julius Baer Holding AG | | 76,320 | | | 2,974,892 |
T. Rowe Price Group, Inc. | | 66,770 | | | 2,782,306 |
| | | | | |
| | | | | 27,941,985 |
| | | | | |
| Chemicals - 5.3% | | | | | |
Ecolab, Inc. | | 36,130 | | | 1,408,709 |
Monsanto Co. | | 225,500 | | | 16,763,670 |
Potash Corp. of Saskatchewan, Inc. | | 65,000 | | | 6,048,250 |
Praxair, Inc. | | 141,180 | | | 10,033,662 |
| | | | | |
| | | | | 34,254,291 |
| | | | | |
| Commercial Banks - 0.7% | | | | | |
Wells Fargo & Co. | | 175,030 | | | 4,246,228 |
| | | | | |
| Communications Equipment - 6.6% | | | |
F5 Networks, Inc.*(a) | | 90,810 | | | 3,141,118 |
Juniper Networks, Inc.* | | 203,290 | | | 4,797,644 |
QUALCOMM, Inc. | | 515,060 | | | 23,280,712 |
Research In Motion, Ltd.* | | 167,650 | | | 11,911,532 |
| | | | | |
| | | | | 43,131,006 |
| | | | | |
| Computers & Peripherals - 5.7% | | | | | |
Apple, Inc.* | | 150,940 | | | 21,498,384 |
Dell, Inc.* | | 119,670 | | | 1,643,069 |
Hewlett-Packard Co. | | 198,800 | | | 7,683,620 |
NetApp, Inc.* | | 329,200 | | | 6,491,824 |
| | | | | |
| | | | | 37,316,897 |
| | | | | |
| Construction & Engineering - 0.5% | | | |
Quanta Services, Inc.*(a) | | 152,420 | | | 3,525,475 |
| | | | | |
| Diversified Consumer Services - 1.4% | | | |
Apollo Group, Inc. - Class A* | | 123,650 | | | 8,793,988 |
| | | | | |
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| |
| Diversified Financial Services - 3.7% | | | |
BM&F BOVESPA S.A. | | 944,800 | | $ | 5,662,551 |
IntercontinentalExchange, Inc.* | | 99,430 | | | 11,358,883 |
MSCI, Inc. - Class A* | | 300,070 | | | 7,333,711 |
| | | | | |
| | | | | 24,355,145 |
| | | | | |
| Electrical Equipment - 1.5% | | | | | |
ABB, Ltd.* | | 600,015 | | | 9,441,926 |
| | | | | |
| Energy Equipment & Services - 2.9% | | | |
Cameron International Corp.* | | 155,950 | | | 4,413,385 |
Schlumberger, Ltd. | | 171,730 | | | 9,292,311 |
Transocean, Ltd.* | | 34,170 | | | 2,538,489 |
Weatherford International, Ltd.* | | 144,600 | | | 2,828,376 |
| | | | | |
| | | | | 19,072,561 |
| | | | | |
| Food & Staples Retailing - 1.9% | | | | | |
Wal - Mart Stores, Inc. | | 253,280 | | | 12,268,883 |
| | | | | |
| Food Products - 2.7% | | | | | |
Cadbury Plc | | 497,814 | | | 4,251,737 |
Nestle S.A. | | 348,809 | | | 13,160,820 |
| | | | | |
| | | | | 17,412,557 |
| | | | | |
| Health Care Equipment & Supplies - 4.1% | | | |
Baxter International, Inc. | | 260,330 | | | 13,787,077 |
C.R. Bard, Inc. | | 46,580 | | | 3,467,881 |
DENTSPLY International, Inc.(a) | | 195,860 | | | 5,977,647 |
Stryker Corp. | | 86,780 | | | 3,448,637 |
| | | | | |
| | | | | 26,681,242 |
| | | | | |
| Health Care Providers & Services - 3.5% | | | |
Express Scripts, Inc.* | | 186,870 | | | 12,847,312 |
Henry Schein, Inc.*(a) | | 106,860 | | | 5,123,937 |
Medco Health Solutions, Inc.* | | 102,660 | | | 4,682,323 |
| | | | | |
| | | | | 22,653,572 |
| | | | | |
| Hotels, Restaurants & Leisure - 0.6% | | | |
McDonald’s Corp. | | 73,530 | | | 4,227,240 |
| | | | | |
| Household Products - 1.1% | | | | | |
Colgate - Palmolive Co. | | 97,970 | | | 6,930,398 |
| | | | | |
| Internet Software & Services - 4.5% | | | |
eBay, Inc.* | | 307,470 | | | 5,266,961 |
Google, Inc. - Class A* | | 56,280 | | | 23,727,085 |
| | | | | |
| | | | | 28,994,046 |
| | | | | |
| IT Services - 5.2% | | | | | |
Accenture, Ltd. - Class A | | 181,800 | | | 6,083,028 |
MasterCard, Inc. - Class A(a) | | 68,850 | | | 11,519,294 |
SAIC, Inc.* | | 258,640 | | | 4,797,772 |
Visa, Inc. - Class A(a) | | 186,340 | | | 11,601,528 |
| | | | | |
| | | | | 34,001,622 |
| | | | | |
| Life Sciences Tools & Services - 2.4% | | | |
Illumina, Inc.*(a) | | 153,710 | | | 5,985,467 |
Thermo Fisher Scientific, Inc.* | | 232,830 | | | 9,492,479 |
| | | | | |
| | | | | 15,477,946 |
| | | | | |
See accompanying notes to financial statements
5
Met Investors Series Trust
Oppenheimer Capital Appreciation Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | |
| Machinery - 0.7% | | | | | |
Joy Global, Inc. | | 124,860 | | $ | 4,459,999 |
| | | | | |
| Media - 2.2% | | | | | |
Cablevision Systems Corp. - Class A | | 343,770 | | | 6,672,576 |
McGraw-Hill Cos., Inc. (The) | | 143,080 | | | 4,308,139 |
Walt Disney Co. (The) | | 153,110 | | | 3,572,056 |
| | | | | |
| | | | | 14,552,771 |
| | | | | |
| Oil, Gas & Consumable Fuels - 5.9% | | | |
Apache Corp. | | 70,130 | | | 5,059,880 |
Occidental Petroleum Corp. | | 184,310 | | | 12,129,441 |
Range Resources Corp. | | 151,770 | | | 6,284,796 |
Southwestern Energy Co.* | | 93,360 | | | 3,627,036 |
XTO Energy, Inc. | | 295,367 | | | 11,265,297 |
| | | | | |
| | | | | 38,366,450 |
| | | | | |
| Pharmaceuticals - 3.8% | | | | | |
Abbott Laboratories | | 110,980 | | | 5,220,499 |
Allergan, Inc. | | 126,070 | | | 5,998,411 |
Novo Nordisk A/S - Class B | | 59,200 | | | 3,215,733 |
Roche Holdings AG | | 46,709 | | | 6,352,947 |
Shire, Ltd. | | 299,390 | | | 4,128,496 |
| | | | | |
| | | | | 24,916,086 |
| | | | | |
| Real Estate Management & Development - 0.4% |
Jones Lang LaSalle, Inc.(a) | | 88,180 | | | 2,886,131 |
| | | | | |
| Road & Rail - 0.5% | | | | | |
Burlington Northern Santa Fe Corp. | | 43,900 | | | 3,228,406 |
| | | | | |
| Semiconductors & Semiconductor Equipment - 5.3% | | | | | |
Applied Materials, Inc. | | 415,910 | | | 4,562,533 |
Broadcom Corp. - Class A* | | 349,050 | | | 8,652,949 |
MEMC Electronic Materials, Inc.* | | 211,900 | | | 3,773,939 |
NVIDIA Corp.*(a) | | 850,380 | | | 9,600,790 |
Texas Instruments, Inc. | | 378,830 | | | 8,069,079 |
| | | | | |
| | | | | 34,659,290 |
| | | | | |
| Software - 4.9% | | | | | |
Adobe Systems, Inc.* | | 275,620 | | | 7,800,046 |
Microsoft Corp. | | 391,370 | | | 9,302,865 |
Nintendo Co., Ltd. | | 26,200 | | | 7,203,245 |
Oracle Corp. | | 202,930 | | | 4,346,760 |
Salesforce.com, Inc.*(a) | | 89,580 | | | 3,419,269 |
| | | | | |
| | | | | 32,072,185 |
| | | | | |
| Specialty Retail - 1.1% | | | | | |
Bed Bath & Beyond, Inc.*(a) | | 64,110 | | | 1,971,383 |
Staples, Inc. | | 263,200 | | | 5,308,744 |
| | | | | |
| | | | | 7,280,127 |
| | | | | |
| Textiles, Apparel & Luxury Goods - 2.3% | | | |
Coach, Inc. | | 299,570 | | | 8,052,441 |
NIKE, Inc. - Class B | | 62,860 | | | 3,254,891 |
Polo Ralph Lauren Corp.(a) | | 63,120 | | | 3,379,445 |
| | | | | |
| | | | | 14,686,777 |
| | | | | |
| | | | | | | |
Security
Description | | Shares/Par
Amount | | Value | |
| | |
| Tobacco - 1.0% | | | | | | | |
Philip Morris International, Inc. | | | 145,110 | | $ | 6,329,698 | |
| | | | | | | |
| Wireless Telecommunication Services - 2.2% | | | | |
Crown Castle International Corp.* | | | 357,180 | | | 8,579,464 | |
NII Holdings, Inc.* | | | 287,750 | | | 5,487,392 | |
| | | | | | | |
| | | | | | 14,066,856 | |
| | | | | | | |
Total Common Stocks
(Cost $728,497,837) | | | | | | 641,608,317 | |
| | | | | | | |
| |
| Short-Term Investments - 5.5% | | | | |
| Mutual Funds - 4.3% | | | | | | | |
State Street Navigator Securities Lending Trust Prime Portfolio(b) | | | 27,822,122 | | | 27,822,122 | |
| Repurchase Agreement - 1.2% | | | | |
State Street Bank & Trust Co., Repurchase Agreement, dated 06/30/09 at 0.010% to be repurchased at $7,712,002 on 07/01/09 collateralized by $7,830,000 FNMA at 1.722% due 05/10/11 with a value of $7,869,150. | | $ | 7,712,000 | | | 7,712,000 | |
| | | | | | | |
Total Short-Term Investments
(Cost $35,534,122) | | | | | | 35,534,122 | |
| | | | | | | |
| | |
TOTAL INVESTMENTS - 104.1%
(Cost $764,031,959) | | | | | | 677,142,439 | |
| | | | | | | |
| |
| Other Assets and Liabilities (net) - (4.1)% | | | (26,428,629 | ) |
| | | | | | | |
| | |
| NET ASSETS - 100.0% | | | | | $ | 650,713,810 | |
| | | | | | | |
Portfolio Footnotes:
| * | | Non-income producing security. |
| (a) | | All or a portion of security is on loan. |
| (b) | | Represents investment of collateral received from securities lending transactions. |
FNMA - Federal National Mortgage Association
See accompanying notes to financial statements
6
Met Investors Series Trust
Oppenheimer Capital Appreciation Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1—quoted prices in active markets for identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs (Level 3) | | Total |
Common Stocks | | | | | | | | | | | | |
Aerospace & Defense | | $ | 21,718,579 | | $ | — | | $ | — | | $ | 21,718,579 |
Beverages | | | 13,479,490 | | | — | | | — | | | 13,479,490 |
Biotechnology | | | 28,178,464 | | | — | | | — | | | 28,178,464 |
Capital Markets | | | 17,296,461 | | | 10,645,524 | | | — | | | 27,941,985 |
Chemicals | | | 34,254,291 | | | — | | | — | | | 34,254,291 |
Commercial Banks | | | 4,246,228 | | | — | | | — | | | 4,246,228 |
Communications Equipment | | | 43,131,006 | | | — | | | — | | | 43,131,006 |
Computers & Peripherals | | | 37,316,897 | | | — | | | — | | | 37,316,897 |
Construction & Engineering | | | 3,525,475 | | | — | | | — | | | 3,525,475 |
Diversified Consumer Services | | | 8,793,988 | | | — | | | — | | | 8,793,988 |
Diversified Financial Services | | | 24,355,145 | | | — | | | — | | | 24,355,145 |
Electrical Equipment | | | — | | | 9,441,926 | | | — | | | 9,441,926 |
Energy Equipment & Services | | | 19,072,561 | | | — | | | — | | | 19,072,561 |
Food & Staples Retailing | | | 12,268,883 | | | — | | | — | | | 12,268,883 |
Food Products | | | — | | | 17,412,557 | | | — | | | 17,412,557 |
Health Care Equipment & Supplies | | | 26,681,242 | | | — | | | — | | | 26,681,242 |
Health Care Providers & Services | | | 22,653,572 | | | — | | | — | | | 22,653,572 |
Hotels, Restaurants & Leisure | | | 4,227,240 | | | — | | | — | | | 4,227,240 |
Household Products | | | 6,930,398 | | | — | | | — | | | 6,930,398 |
Internet Software & Services | | | 28,994,046 | | | — | | | — | | | 28,994,046 |
IT Services | | | 34,001,622 | | | — | | | — | | | 34,001,622 |
Life Sciences Tools & Services | | | 15,477,946 | | | — | | | — | | | 15,477,946 |
Machinery | | | 4,459,999 | | | — | | | — | | | 4,459,999 |
Media | | | 14,552,771 | | | — | | | — | | | 14,552,771 |
Oil, Gas & Consumable Fuels | | | 38,366,450 | | | — | | | — | | | 38,366,450 |
Pharmaceuticals | | | 11,218,910 | | | 13,697,176 | | | — | | | 24,916,086 |
Real Estate Management & Development | | | 2,886,131 | | | — | | | — | | | 2,886,131 |
Road & Rail | | | 3,228,406 | | | — | | | — | | | 3,228,406 |
Semiconductors & Semiconductor Equipment | | | 34,659,290 | | | — | | | — | | | 34,659,290 |
Software | | | 24,868,940 | | | 7,203,245 | | | — | | | 32,072,185 |
Specialty Retail | | | 7,280,127 | | | — | | | — | | | 7,280,127 |
Textiles, Apparel & Luxury Goods | | | 14,686,777 | | | — | | | — | | | 14,686,777 |
See accompanying notes to financial statements
7
Met Investors Series Trust
Oppenheimer Capital Appreciation Portfolio
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs (Level 3) | | Total |
Tobacco | | $ | 6,329,698 | | $ | — | | $ | — | | $ | 6,329,698 |
Wireless Telecommunication Services | | | 14,066,856 | | | — | | | — | | | 14,066,856 |
Total Common Stocks | | | 583,207,889 | | | 58,400,428 | | | — | | | 641,608,317 |
Short-Term Investments | | | | | | | | | | | | |
Mutual Funds | | | 27,822,122 | | | — | | | — | | | 27,822,122 |
Repurchase Agreement | | | — | | | 7,712,000 | | | — | | | 7,712,000 |
Total Short-Term Investments | | | 27,822,122 | | | 7,712,000 | | | — | | | 35,534,122 |
TOTAL INVESTMENTS | | $ | 611,030,011 | | $ | 66,112,428 | | $ | — | | $ | 677,142,439 |
See accompanying notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| Oppenheimer Capital Appreciation Portfolio | | | |
| Assets | | | | |
Investments, at value (a)(b) | | $ | 669,430,439 | |
Repurchase Agreement | | | 7,712,000 | |
Cash | | | 48 | |
Cash denominated in foreign currencies (c) | | | 615,915 | |
Receivable for investments sold | | | 4,133,321 | |
Receivable for Trust shares sold | | | 113,642 | |
Dividends receivable | | | 826,219 | |
Interest receivable | | | 2 | |
| | | | |
Total assets | | | 682,831,586 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 3,585,973 | |
Trust shares redeemed | | | 193,600 | |
Distribution and services fees—Class B | | | 61,185 | |
Distribution and services fees—Class E | | | 484 | |
Collateral for securities on loan | | | 27,822,122 | |
Management fee | | | 325,585 | |
Administration fee | | | 3,884 | |
Custodian and accounting fees | | | 27,562 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 93,954 | |
| | | | |
Total liabilities | | | 32,117,776 | |
| | | | |
| Net Assets | | $ | 650,713,810 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 961,833,855 | |
Accumulated net realized loss | | | (225,638,998 | ) |
Unrealized depreciation on investments and foreign currency | | | (86,883,871 | ) |
Undistributed net investment income | | | 1,402,824 | |
| | | | |
Total | | $ | 650,713,810 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 350,471,423 | |
| | | | |
Class B | | | 296,322,948 | |
| | | | |
Class E | | | 3,919,439 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 75,988,269 | |
| | | | |
Class B | | | 64,996,927 | |
| | | | |
Class E | | | 852,454 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 4.61 | |
| | | | |
Class B | | | 4.56 | |
| | | | |
Class E | | | 4.60 | |
| | | | |
| | | | | |
(a) Investments at cost, excluding repurchase agreement | | $ | 756,319,959 | |
(b) Includes cash collateral for securities loaned of | | | 27,822,122 | |
(c) Cost of cash denominated in foreign currencies | | | 605,795 | |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| Oppenheimer Capital Appreciation Portfolio | | | |
| Investment Income | | | | |
Dividends (1) | | $ | 3,552,941 | |
Interest (2) | | | 151,632 | |
| | | | |
Total investment income | | | 3,704,573 | |
| | | | |
| Expenses | | | | |
Management fee | | | 1,778,515 | |
Administration fees | | | 24,934 | |
Custodian and accounting fees | | | 57,433 | |
Distribution and services fees—Class B | | | 329,726 | |
Distribution and services fees—Class E | | | 2,425 | |
Audit and tax services | | | 21,302 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 31,683 | |
Insurance | | | 11,179 | |
Other | | | 4,613 | |
| | | | |
Total expenses | | | 2,288,243 | |
| | | | |
Net investment income | | | 1,416,330 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | (71,067,032 | ) |
Foreign currency | | | 34,701 | |
| | | | |
Net realized loss on investments and foreign currency | | | (71,032,331 | ) |
| | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 165,575,423 | |
Foreign currency | | | 12,569 | |
| | | | |
Net change in unrealized appreciation on investments and foreign currency | | | 165,587,992 | |
| | | | |
Net realized and unrealized gain on investments and foreign currency | | | 94,555,661 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 95,971,991 | |
| | | | |
| | | | | |
(1) Dividend income is net of foreign withholding taxes of: | | $ | 114,914 | |
(2) Interest income includes securities lending net income of: | | | 151,076 | |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| Oppenheimer Capital Appreciation Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 1,416,330 | | | $ | 1,925,140 | |
Net realized loss on investments, futures contracts and foreign currency | | | (71,032,331 | ) | | | (141,399,415 | ) |
Net change in unrealized appreciation (depreciation) on investments and foreign currency | | | 165,587,992 | | | | (350,602,697 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 95,971,991 | | | | (490,076,972 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | — | | | | (3,858,156 | ) |
Class B | | | — | | | | (14,707,653 | ) |
Class E | | | — | | | | (193,554 | ) |
From net realized gains | | | | | | | | |
Class A | | | — | | | | (28,241,748 | ) |
Class B | | | — | | | | (117,716,758 | ) |
Class E | | | — | | | | (1,458,331 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | — | | | | (166,176,200 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 4,471,342 | | | | 587,063,000 | |
Class B | | | 15,301,005 | | | | 44,454,846 | |
Class E | | | 1,195,924 | | | | 2,611,928 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | — | | | | 32,099,904 | |
Class B | | | — | | | | 132,424,411 | |
Class E | | | — | | | | 1,651,885 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (18,126,559 | ) | | | (140,290,392 | ) |
Class B | | | (22,397,018 | ) | | | (109,815,299 | ) |
Class E | | | (926,479 | ) | | | (2,886,071 | ) |
| | | | | | | | |
Net increase (decrease) in net assets from capital share transactions | | | (20,481,785 | ) | | | 547,314,212 | |
| | | | | | | | |
| Net Increase (Decrease) in Net Assets | | | 75,490,206 | | | | (108,938,960 | ) |
Net assets at beginning of period | | | 575,223,604 | | | | 684,162,564 | |
| | | | | | | | |
Net assets at end of period | | $ | 650,713,810 | | | $ | 575,223,604 | |
| | | | | | | | |
Net assets at end of period includes undistributed (distributions in excess of) net investment income | | $ | 1,402,824 | | | $ | (13,506 | ) |
| | | | | | | | |
See accompanying notes to financial statements
11
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Oppenheimer Capital Appreciation Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 3.93 | | | $ | 9.94 | | | $ | 9.27 | | | $ | 8.69 | | | $ | 8.36 | | | $ | 8.33 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.01 | | | | 0.02 | | | | 0.03 | | | | 0.02 | | | | 0.03 | | | | 0.07 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.67 | | | | (3.49 | ) | | | 1.26 | | | | 0.66 | | | | 0.39 | | | | 0.47 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.68 | | | | (3.47 | ) | | | 1.29 | | | | 0.68 | | | | 0.42 | | | | 0.54 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | (0.31 | ) | | | (0.01 | ) | | | (0.03 | ) | | | (0.01 | ) | | | (0.06 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (2.23 | ) | | | (0.61 | ) | | | (0.07 | ) | | | (0.08 | ) | | | (0.45 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | — | | | | (2.54 | ) | | | (0.62 | ) | | | (0.10 | ) | | | (0.09 | ) | | | (0.51 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 4.61 | | | $ | 3.93 | | | $ | 9.94 | | | $ | 9.27 | | | $ | 8.69 | | | $ | 8.36 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 17.30 | % | | | (45.80 | )% | | | 14.45 | % | | | 7.81 | % | | | 4.99 | % | | | 6.70 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.67 | %* | | | 0.62 | % | | | 0.62 | % | | | 0.65 | % | | | 0.69 | % | | | 0.68 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.67 | %* | | | 0.62 | % | | | 0.62 | % | | | 0.65 | % | | | 0.64 | %(b) | | | 0.69 | %(b) |
Ratio of Net Investment Income to Average Net Assets | | | 0.60 | %* | | | 0.38 | % | | | 0.33 | % | | | 0.22 | % | | | 0.42 | % | | | 0.90 | % |
Portfolio Turnover Rate | | | 27.3 | % | | | 84.4 | % | | | 70.8 | % | | | 60.7 | % | | | 72.4 | % | | | 65.3 | % |
Net Assets, End of Period (in millions) | | $ | 350.4 | | | $ | 312.0 | | | $ | 124.7 | | | $ | 505.6 | | | $ | 664.2 | | | $ | 298.0 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 3.89 | | | $ | 9.86 | | | $ | 9.20 | | | $ | 8.62 | | | $ | 8.31 | | | $ | 8.29 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income (Loss)(a) | | | 0.01 | | | | 0.01 | | | | 0.00 | + | | | (0.01 | ) | | | 0.01 | | | | 0.06 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.66 | | | | (3.47 | ) | | | 1.27 | | | | 0.67 | | | | 0.38 | | | | 0.46 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.67 | | | | (3.46 | ) | | | 1.27 | | | | 0.66 | | | | 0.39 | | | | 0.52 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | (0.28 | ) | | | — | | | | (0.01 | ) | | | — | | | | (0.05 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (2.23 | ) | | | (0.61 | ) | | | (0.07 | ) | | | (0.08 | ) | | | (0.45 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | — | | | | (2.51 | ) | | | (0.61 | ) | | | (0.08 | ) | | | (0.08 | ) | | | (0.50 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 4.56 | | | $ | 3.89 | | | $ | 9.86 | | | $ | 9.20 | | | $ | 8.62 | | | $ | 8.31 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 17.22 | % | | | (45.94 | )% | | | 14.29 | % | | | 7.62 | % | | | 4.71 | % | | | 6.40 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.92 | %* | | | 0.88 | % | | | 0.89 | % | | | 0.90 | % | | | 0.94 | % | | | 0.95 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.92 | %* | | | 0.88 | % | | | 0.89 | % | | | 0.90 | % | | | 0.89 | %(b) | | | 0.91 | %(b) |
Ratio of Net Investment Income (Loss) to Average Net Assets | | | 0.35 | %* | | | 0.12 | % | | | 0.03 | % | | | (0.06 | )% | | | 0.18 | % | | | 0.67 | % |
Portfolio Turnover Rate | | | 27.3 | % | | | 84.4 | % | | | 70.8 | % | | | 60.7 | % | | | 72.4 | % | | | 65.3 | % |
Net Assets, End of Period (in millions) | | $ | 296.3 | | | $ | 260.1 | | | $ | 553.3 | | | $ | 535.1 | | | $ | 501.8 | | | $ | 634.6 | |
| + | | Rounds to less than $0.005 per share |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Excludes effect of deferred expense reimbursement. |
See accompanying notes to financial statements
12
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | |
| | | | | |
| | | | | | | | | | | | | | | | |
| Oppenheimer Capital Appreciation Portfolio | | Class E | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005(c) | |
| Net Asset Value, Beginning of Period | | $ | 3.92 | | | $ | 9.93 | | | $ | 9.25 | | | $ | 8.68 | | | $ | 7.97 | |
| | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.01 | | | | 0.01 | | | | 0.01 | | | | 0.00 | + | | | 0.01 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.67 | | | | (3.49 | ) | | | 1.28 | | | | 0.67 | | | | 0.79 | |
| | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.68 | | | | (3.48 | ) | | | 1.29 | | | | 0.67 | | | | 0.80 | |
| | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | (0.30 | ) | | | (0.00 | )+ | | | (0.03 | ) | | | (0.01 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (2.23 | ) | | | (0.61 | ) | | | (0.07 | ) | | | (0.08 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | — | | | | (2.53 | ) | | | (0.61 | ) | | | (0.10 | ) | | | (0.09 | ) |
| | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 4.60 | | | $ | 3.92 | | | $ | 9.93 | | | $ | 9.25 | | | $ | 8.68 | |
| | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 17.35 | % | | | (45.91 | )% | | | 14.48 | % | | | 7.68 | % | | | 10.01 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.82 | %* | | | 0.78 | % | | | 0.80 | % | | | 0.80 | % | | | 0.83 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.82 | %* | | | 0.78 | % | | | N/A | | | | 0.80 | % | | | 0.80 | %(b)* |
Ratio of Net Investment Income to Average Net Assets | | | 0.45 | %* | | | 0.22 | % | | | 0.13 | % | | | 0.03 | % | | | 0.15 | %* |
Portfolio Turnover Rate | | | 27.3 | % | | | 84.4 | % | | | 70.8 | % | | | 60.7 | % | | | 72.4 | % |
Net Assets, End of Period (in millions) | | $ | 3.9 | | | $ | 3.1 | | | $ | 6.2 | | | $ | 2.5 | | | $ | 0.9 | |
| + | | Rounds to less than $0.005 per share |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Excludes effect of deferred expense reimbursement. |
| (c) | | Commencement of operations—05/02/2005. |
See accompanying notes to financial statements
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is Oppenheimer Capital Appreciation Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A, B and E Shares are currently offered by the Portfolio. Class C is not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | | |
Expiring
12/31/2016 | | Total |
| |
| $ | 140,690,487 | | $ | 140,690,487 |
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
G. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
H. Foreign Currency Translation - The books and records of the Portfolio are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars on a daily basis using prevailing exchange rates. Purchases and sales of securities are translated at the rates of exchange prevailing when such securities were acquired or sold. Income is translated at rates of exchange prevailing when interest is accrued or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in forward foreign currency contracts; sales of foreign currencies; currency gains or losses realized between the trade and settlement dates on securities transactions; and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Portfolio’s books and the U.S. dollar equivalent of the amounts actually received
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end; from changes in the exchange rates of foreign currency held; and from changes in the contract value of forward foreign currency contracts.
I. Forward Foreign Currency Contracts - The Portfolio may enter into forward foreign currency contracts to hedge its portfolio holdings against future movements in certain foreign currency exchange rates. A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a set price. Forward currency contracts are valued at the forward rate and are marked-to-market daily. The change in market value is recorded by the Portfolio as an unrealized gain or loss. When the contract is closed, the Portfolio recognizes a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.
The use of forward foreign currency contracts does not eliminate fluctuations in the underlying prices of the securities of the Portfolio, but it does establish a rate of exchange that can be achieved in the future. Although forward foreign currency contracts to sell limit the risk of loss due to a decline in the value of the currency holdings, they also limit any potential gain that might result should the value of the currency increase. In addition, the Portfolio could be exposed to risks if the counterparties to the contracts are unable to meet the terms of the contracts.
J. Futures Contracts - The Portfolio may buy and sell futures contracts (on recognized exchanges) as a hedge, to maintain exposure to the broad equity markets or to enhance return. The Portfolio may be subject to equity price risk, interest rate risk, and foreign currency exchange rate risk in the normal course of pursuing its investment objectives. Futures contracts are agreements to buy or sell a security, or deliver a final cash settlement price in connection with an index, interest rate, currency, or other contracts not calling for physical delivery, for a set price in the future. The Portfolio must post an amount equal to a portion of the total market value of the futures contract as futures variation margin, which is returned when the Portfolio’s obligations under the contract have been satisfied. From time to time thereafter, the Portfolio may have to post variation margin to maintain this amount as the market value of the contract fluctuates. Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with OppenheimerFunds, Inc. (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $1,778,515 | | 0.65 | % | | First $150 Million |
| | |
| | 0.625 | % | | $150 Million to $300 Million |
| | |
| | 0.60 | % | | $300 Million to $500 Million |
| | |
| | 0.55 | % | | $500 Million to $700 Million |
| | |
| | 0.525 | % | | $700 Million to $900 Million |
| | |
| | 0.50 | % | | Over $900 Million |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Manager has entered into an expense limitation agreement with the Trust (“Expense Limitation Agreement”) in the interest of limiting expenses of the Portfolio of the Trust. The Expense Limitation Agreement shall continue in effect with respect to the Portfolio until April 30, 2010.
16
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
Pursuant to that Expense Limitation Agreement, the Manager has agreed to waive or limit its fees and to assume other expenses so that the total annual operating expenses of the Portfolio other than interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with accounting principles generally accepted in the United States of America, and other extraordinary expenses not incurred in the ordinary course of the Portfolio’s business, but including amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act, are limited to the following expense ratios as a percentage of the Portfolio’s average daily net assets:
| | | | |
Maximum Expense Ratio under current Expense Limitation Agreement |
|
|
Class A | | Class B | | Class E |
| | |
| 0.75% | | 1.00% | | 0.90% |
If in any year in which the Management Agreement is still in effect, the estimated aggregate Portfolio Operating Expenses of the Portfolio for the fiscal year are less than the Maximum Expense Ratios for that year, subject to approval by the Trust’s Board, the Manager shall be entitled to reimbursement by the Portfolio to the extent that the charge does not cause the expenses in such subsequent year to exceed the Maximum Expense Ratios as stated above. The Portfolio is not obligated to repay any expense paid by the Manager more than five years after the end of the fiscal year in which such expense was incurred.
For the period July 1, 2005 through October 31, 2006, if the average monthly net assets of the Portfolio were in excess of $1 billion, a discount to the total fees for the Portfolio for that month of 2.5% was applied. Such fee was accrued daily and paid monthly by the tenth business day following the end of the month in which such fee was accrued. If the Adviser shall serve for less than the whole of any month, the foregoing compensation was prorated. For the purpose of determining fees payable to the Adviser, the value of the Portfolio’s net assets was computed at the times and in the manner specified in the Trust’s Registration Statement.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A, Class B and Class E Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B and Class E distribution plans provide that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%, respectively, of the average net assets of the Portfolio attributable to its Class B and Class E Shares in respect to activities primarily intended to result in the sale of Class B and Class E Shares. However, under the Class B and Class E distribution agreements, payments to the Distributor for activities pursuant to the Class B and Class E distribution plans are currently limited to payments at an annual rate equal to 0.25% and 0.15% of average daily net assets of the Portfolio attributable to its Class B and Class E Shares, respectively.
Under terms of the Class B and Class E distribution plans and distribution agreements, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B and Class E Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
(Decrease)
in Shares
Outstanding | | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 79,465,458 | | 1,099,988 | | — | | (4,577,177 | ) | | (3,477,189 | ) | | 75,988,269 |
12/31/2008 | | 12,539,417 | | 84,699,201 | | 4,692,969 | | (22,466,129 | ) | | 66,926,041 | | | 79,465,458 |
17
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
4. Shares of Beneficial Interest - continued
| | | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
(Decrease)
in Shares
Outstanding | | | Ending
Shares |
| | | | | | |
Class B | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 66,926,060 | | 3,751,347 | | — | | (5,680,480 | ) | | (1,929,133 | ) | | 64,996,927 |
12/31/2008 | | 56,112,903 | | 7,370,595 | | 19,531,624 | | (16,089,062 | ) | | 10,813,157 | | | 66,926,060 |
| | | | | | |
Class E | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 797,065 | | 289,774 | | — | | (234,385 | ) | | 55,389 | | | 852,454 |
12/31/2008 | | 627,281 | | 397,702 | | 241,857 | | (469,775 | ) | | 169,784 | | | 797,065 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 156,654,869 | | $ | — | | $ | 172,950,558 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $764,031,959 | | $ | 20,801,075 | | $ | (107,690,595 | ) | | $ | (86,889,520 | ) |
6. Securities Lending
As of June 30, 2009, the Portfolio had loaned securities which were collateralized by short-term investments. The value of securities on loan and the value of the related collateral were as follows:
| | | | | | | | | |
Value of
Securities | | Value of
Cash
Collateral | | Value of
Non-Cash
Collateral* | | Total
Collateral |
| | | |
| $27,190,842 | | $ | 27,822,122 | | $ | — | | $ | 27,822,122 |
* The Portfolio cannot repledge or resell this collateral. The non-cash collateral is typically comprised of government securities and/or bank letters of credit.
7. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $18,990,316 | | $ | 10,500,629 | | $ | 147,185,884 | | $ | 59,930,535 | | $ | 166,176,200 | | $ | 70,431,164 |
18
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
7. Distributions to Shareholders - continued
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net Unrealized
Depreciation | | | Loss Carryforwards | | | Total | |
| | | | |
| $ | — | | $ | — | | $ | (266,401,549 | ) | | $ | (140,690,487 | ) | | $ | (407,092,036 | ) |
8. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
9. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
19
| | |
| PIMCO Inflation Protected Bond Portfolio | | For the period ended 6/30/09 |
| Managed by Pacific Investment Management Company LLC | | |
Portfolio Manager Commentary
Performance
During the period ended June 30, 2009, the Portfolio had a return of 10.84%, 10.62% and 10.72% for Class A, B and E Shares, respectively, versus 6.21% for its benchmark, the Barclays Capital: U.S. TIPS Index.
Market Environment/Conditions
Interest rates rose and capital flowed back toward riskier assets during the first half of 2009. Government policy initiatives helped restore a measure of stability to financial markets after the extreme stress and volatility of last year. Treasury Inflation Protected Securities (TIPS) gained 6.21 percent during the first half as represented by the Barclays Capital U.S. TIPS Index. TIPS far outperformed their nominal Treasury counterparts, as nominals ended in deep negative territory. Although real yields rose, nominal yields rose considerably more leading to the strong outperformance of TIPS over nominal Treasuries. The difference in these yields of comparable maturity, or the breakeven inflation rate (also the level of inflation it takes for a TIPS issue to breakeven with a nominal Treasury) increased as a result. Part of this outperformance was due to markets pricing in higher inflation expectations, in addition to market concerns that massive fiscal expenditures could lead to a glut of nominal Treasuries.
While measures of inflation expectations increased in the first six months of 2009, actual inflation, especially when adjusted for food and energy prices, was subdued. With unemployment approaching 10 percent in the U.S. there was plenty of slack in the economy to restrain price increases. Perhaps the most encouraging economic news came on the final day of the period, with data showing a slower rate of decline in residential property prices. That raised hopes that the real estate slump might be nearing a bottom.
Portfolio Review/Current Positioning
Regarding curve strategies, an emphasis on short and intermediate securities in the U.S. was positive for performance as the U.S. yield curve steepened by 131 basis points (“bps”) year-to-date. Although curve positioning was positive, an underweight to TIPS in favor of U.S. nominal bond exposure detracted from returns as TIPS outperformed nominal Treasuries during the first half of 2009. An overweight to total U.S. duration also detracted from returns as nominal yields rose over the period. 10-year U.S. Treasuries rose 132 bps and 30-year U.S. Treasuries rose 165 bps over the first six months of the year.
On a duration-adjusted basis, sectors that trade at a spread to U.S. Treasuries outperformed. Exposure to high quality agency mortgages was positive for performance as mortgages have outperformed like-duration Treasuries year-to-date. The primary driver of Agency Mortgage-Backed Securities (“MBS”) has been the government’s purchases of mortgages through the Federal Reserve MBS Purchase Program. Year-to-date the Fed has purchased nearly $600 billion of Agency MBS, driving spreads tighter and rates lower. Additionally, within the Investment-grade credit sector, an emphasis on bonds of financial companies was positive for performance during the first half of 2009, as major banks began to wean themselves off government aid. Spreads also benefited from the positive outcome of the government’s stress tests which helped calm investor sentiment. Financials’ spreads tightened 200 basis points year-to-date.
The Portfolio favors high quality, yield-oriented securities in an environment of low growth and political uncertainty. With regard to duration, the Portfolio is overweight nominal duration as Treasury yields are near the top of our expected range over a cyclical time frame, and has a near-index duration exposure to TIPS in favor of high quality, higher yielding assets. Regarding yield curve strategies, the Portfolio is positioned for a nominal yield curve steepening strategy in the U.S. as the Federal Reserve is likely to tighten more slowly than markets expect.
Additionally, the Portfolio holds Japanese Inflation Linked Bonds, as the current level of relatively high real yields does not reflect our expectations of continued slow economic growth and has an emphasis on nominal duration over real duration in the U.K. and Eurozone. Long-dated inflation linked bonds in the U.K. remain rich from continued liability-matching demand, while Eurozone inflation, particularly French inflation is likely to move lower. Lastly, the Portfolio has a modest allocation to Agency mortgages. These securities remain a relatively attractive source of high quality income, though their recent rally has driven their yield premiums closer to fair value.
Mihir Worah
Executive Vice President
Pacific Investment Management Company LLC
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
1
| | |
| PIMCO Inflation Protected Bond Portfolio | | For the period ended 6/30/09 |
| Managed by Pacific Investment Management Company LLC | | |
Portfolio Manager Commentary (continued)
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
U.S. Treasury Inflation Index Note (2.000%, due 01/15/14) | | 12.30% |
U.S. Treasury Inflation Index Note (3.000%, due 07/15/12) | | 9.87% |
U.S. Treasury Inflation Index Bond (3.875%, due 04/15/29) | | 7.17% |
U.S. Treasury Inflation Index Note (2.000%, due 07/15/14) | | 6.73% |
U.S. Treasury Inflation Index Bond (2.625%, due 07/15/17) | | 6.56% |
U.S. Treasury Inflation Index Bond (3.625%, due 04/15/28) | | 6.53% |
U.S. Treasury Inflation Index Bond (2.375%, due 04/15/11) | | 6.34% |
U.S. Treasury Inflation Index Bond (2.375%, due 01/15/25) | | 5.95% |
U.S. Treasury Inflation Index Note (2.000%, due 01/15/16) | | 4.90% |
Federal National Mortgage Assoc. (5.500%, due TBA) | | 4.41% |
Portfolio Composition (% of portfolio market value)
As of 6/30/09
2
| | |
| PIMCO Inflation Protected Bond Portfolio | | For the period ended 6/30/09 |
| Managed by Pacific Investment Management Company LLC | | |
Portfolio Manager Commentary (continued)
PIMCO Inflation Protected Bond Portfolio managed by
Pacific Investment Management Company LLC vs. Barclays Capital: U.S. TIPS Index1
Growth Based on $10,000+
| | | | | | | | | | | | |
| | | | | Average Annual Return2 (for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | 3 Year | | 5 Year | | Since
Inception3 |
| — | | PIMCO Inflation Protected Bond Portfolio— Class A | | 10.84% | | -1.40% | | 5.28% | | 4.54% | | 5.05% |
| | Class B | | 10.62% | | -1.71% | | 4.99% | | 4.27% | | 4.78% |
| | Class E | | 10.72% | | -1.54% | | 5.12% | | — | | 4.94% |
| - - | | Barclays Capital: U.S. TIPS Index1 | | 6.21% | | -1.11% | | 5.78% | | 4.94% | | 5.24% |
+The chart reflects the performance of Class A shares of the Portfolio. The performance of Class A shares will differ from that of the other classes of shares because of the difference in expenses paid by policyholders investing in the different share classes.
1The Barclays Capital: U.S. TIPS Index represents an unmanaged market index made up of U.S. Treasury Inflation Linked Index Securities.
2“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
3Inception of Class A and Class B shares is 5/1/03. Inception of Class E shares is 5/1/06. Index returns are based on an inception date of 5/1/03.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Index does not include fees or expenses and is not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| PIMCO Inflation Protected Bond Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
| | | | |
Class A | | | | | | | | | | | |
Actual | | 0.53% | | $ | 1,000.00 | | $ | 1,108.40 | | $ | 2.77 |
Hypothetical | | 0.53% | | | 1,000.00 | | | 1,022.17 | | | 2.66 |
| | | | | | | | | | | |
| | | | |
Class B | | | | | | | | | | | |
Actual | | 0.78% | | $ | 1,000.00 | | $ | 1,106.20 | | $ | 4.07 |
Hypothetical | | 0.78% | | | 1,000.00 | | | 1,020.93 | | | 3.91 |
| | | | | | | | | | | |
| | | | |
Class E | | | | | | | | | | | |
Actual | | 0.68% | | $ | 1,000.00 | | $ | 1,107.20 | | $ | 3.55 |
Hypothetical | | 0.68% | | | 1,000.00 | | | 1,021.42 | | | 3.41 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
4
Met Investors Series Trust
PIMCO Inflation Protected Bond Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| | |
| Municipals - 0.6% | | | | | | |
Buckeye Tobacco Settlement Financing Authority
5.875%, due 06/01/47 | | $ | 1,000,000 | | $ | 565,750 |
California County Tobacco Securitization Agency
5.625%, due 06/01/23 | | | 125,000 | | | 114,544 |
Dallas, Texas Area Rapid Transit
5.000%, due 12/01/36 (AMBAC) | | | 3,400,000 | | | 3,389,766 |
Golden State Tobacco Securitization Corp.
5.750%, due 06/01/47 | | | 100,000 | | | 60,075 |
Los Angeles Department of Water & Power, Systems, Subser A-2
5.000%, due 07/01/44 (AMBAC) | | | 3,800,000 | | | 3,590,582 |
New York City Municipal Water Finance Authority
5.000%, due 06/15/38 | | | 900,000 | | | 889,119 |
Tobacco Settlement Financing Corp. | | | | | | |
6.000%, due 06/01/23 | | | 780,000 | | | 708,099 |
7.467%, due 06/01/47 | | | 1,150,000 | | | 772,685 |
| | | | | | |
Total Municipals
(Cost $11,398,829) | | | | | | 10,090,620 |
| | | | | | |
| Asset-Backed Securities - 9.4% | | | | | | |
Ace Securities Corp.
0.364%, due 07/25/36 - 12/25/36(a) | | | 171,787 | | | 130,121 |
Argent Securities, Inc.
0.364%, due 10/25/36(a) | | | 18,095 | | | 17,788 |
Asset Backed Funding Certificates | | | | | | |
0.664%, due 06/25/34 (a) | | | 877,507 | | | 431,036 |
0.374%, due 11/25/36(a) | | | 25,674 | | | 24,551 |
Asset Backed Securities Corp. Home Equity 0.364%, due 12/25/36(a) | | | 806,274 | | | 740,457 |
Banc of America Commercial Mortgage, Inc. | | | | | | |
5.658%, due 06/10/49(a) | | | 1,100,000 | | | 781,589 |
5.744%, due 02/10/51(a) | | | 1,100,000 | | | 890,321 |
Banc of America Funding Corp.
4.585%, due 02/20/36(a) | | | 2,308,858 | | | 1,755,046 |
Banc of America Large Loan, Inc.
0.829%, due 08/14/29 (144A)(a)(b) | | | 6,227,037 | | | 4,625,305 |
Banc of America Mortgage Securities
6.500%, due 09/25/33 | | | 142,484 | | | 134,865 |
Bear Stearns ALT-A Trust
0.474%, due 02/25/34(a) | | | 484,350 | | | 274,908 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Asset-Backed Securities - continued |
Bear Stearns ARM Trust | | | | | | |
4.828%, due 01/25/35(a) | | $ | 6,368,448 | | $ | 5,369,125 |
2.960%, due 03/25/35(a) | | | 1,744,402 | | | 1,509,386 |
Bear Stearns Asset Backed Securities Trust | | | | | | |
0.974%, due 10/25/32(a) | | | 41,083 | | | 25,334 |
0.644%, due 01/25/36(a) | | | 31,591 | | | 28,875 |
0.364%, due 11/25/36(a) | | | 51,233 | | | 45,147 |
1.314%, due 10/25/37(a) | | | 4,641,295 | | | 2,502,041 |
Bear Stearns Commercial Mortgage Securities
6.440%, due 06/16/30 | | | 15,020 | | | 14,989 |
Bear Stearns Mortgage Funding Trust
0.384%, due 02/25/37(a) | | | 1,911,028 | | | 1,473,561 |
Bear Stearns Structured Products, Inc.
5.644%, due 01/26/36(a) | | | 1,233,822 | | | 681,909 |
Capital Auto Receivables Asset Trust | | | | | | |
1.239%, due 03/15/11(a) | | | 765,372 | | | 766,297 |
1.769%, due 10/15/12(a) | | | 7,100,000 | | | 7,053,477 |
Carrington Mortgage Loan Trust
0.634%, due 10/25/35(a) | | | 696,319 | | | 540,600 |
Chase Issuance Trust | | | | | | |
0.569%, due 09/15/11(a) | | | 1,300,000 | | | 1,299,822 |
0.969%, due 11/15/11(a) | | | 14,700,000 | | | 14,712,605 |
Citigroup Commercial Mortgage Trust
0.389%, due 08/15/21 (144A)(a)(c) | | | 4,032 | | | 3,413 |
Citigroup Mortgage Loan Trust, Inc. | | | | | | |
2.990%, due 12/25/35(a) | | | 135,325 | | | 110,479 |
4.700%, due 12/25/35(a) | | | 3,040,982 | | | 2,456,859 |
Countrywide Alternative Loan Trust | | | | | | |
0.594%, due 12/25/35(a) | | | 81,246 | | | 38,171 |
0.395%, due 09/20/46(a) | | | 129,974 | | | 126,857 |
0.495%, due 02/20/47(a) | | | 1,186,870 | | | 462,126 |
0.494%, due 05/25/47(a) | | | 385,288 | | | 144,807 |
Countrywide Asset-Backed Certificates | | | | | | |
0.364%, due 03/25/37 - 05/25/47(a) | | | 367,388 | | | 347,893 |
0.394%, due 06/25/37(a) | | | 1,128,822 | | | 1,044,062 |
0.424%, due 10/25/46(a) | | | 265,821 | | | 250,319 |
Countrywide Home Loans | | | | | | |
3.759%, due 11/19/33(a) | | | 156,764 | | | 141,832 |
4.543%, due 08/25/34(a) | | | 582,072 | | | 358,798 |
0.604%, due 04/25/35(a) | | | 1,784,684 | | | 803,208 |
0.654%, due 06/25/35 (144A)(a)(c) | | | 472,553 | | | 343,442 |
Credit Suisse First Boston Mortgage Securities Corp.
4.938%, due 12/15/40 | | | 304,560 | | | 305,783 |
See accompanying notes to financial statements
5
Met Investors Series Trust
PIMCO Inflation Protected Bond Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Asset-Backed Securities - continued |
Daimler Chrysler Auto Trust | | | | | | |
1.248%, due 07/08/11(a) | | $ | 12,039,435 | | $ | 12,047,408 |
1.798%, due 09/10/12(a) | | | 1,000,000 | | | 996,129 |
Deutsche Alt-A Securities, Inc. Mortgage Loan Trust | | | | | | |
0.414%, due 10/25/36(a) | | | 238,814 | | | 204,772 |
5.869%, due 10/25/36 | | | 1,400,000 | | | 757,250 |
5.886%, due 10/25/36 | | | 1,400,000 | | | 757,924 |
Equity One ABS, Inc.
0.614%, due 04/25/34(a) | | | 121,664 | | | 46,223 |
First Franklin Mortgage Loan Asset Backed Certificates | | | | | | |
0.364%, due 11/25/36 - 12/25/36(a) | | | 663,547 | | | 625,313 |
0.354%, due 01/25/38(a) | | | 572,754 | | | 527,789 |
First Horizon Pass Trust Mortgage
3.572%, due 06/25/34(a) | | | 626,304 | | | 405,713 |
Ford Credit Auto Owner Trust
1.219%, due 01/15/11(a) | | | 9,019,454 | | | 9,026,883 |
Fremont Home Loan Trust | | | | | | |
0.364%, due 10/25/36(a) | | | 35,833 | | | 22,406 |
0.374%, due 01/25/37(a) | | | 251,232 | | | 163,016 |
GE Capital Commercial Mortgage Corp.
4.229%, due 12/10/37 | | | 3,536,883 | | | 3,547,050 |
Greenpoint Mortgage Funding Trust | | | | | | |
0.534%, due 06/25/45(a) | | | 822,106 | | | 350,602 |
0.584%, due 11/25/45(a) | | | 373,957 | | | 178,281 |
0.394%, due 10/25/46(a) | | | 372,731 | | | 307,119 |
GS Mortgage Loan Trust
4.470%, due 09/25/35(a) | | | 1,518,907 | | | 1,279,056 |
GSAMP Trust | | | | | | |
0.604%, due 03/25/34(a) | | | 49,849 | | | 49,323 |
0.384%, due 10/25/36(a) | | | 8,473 | | | 6,838 |
0.354%, due 10/25/46(a) | | | 45,242 | | | 42,856 |
0.414%, due 01/25/47(a) | | | 352,521 | | | 324,507 |
Harborview Mortgage Loan Trust | | | | | | |
0.533%, due 05/19/35(a) | | | 192,139 | | | 86,172 |
0.403%, due 01/19/38(a) | | | 136,214 | | | 125,919 |
HSI Asset Securitization Corp. Trust
0.364%, due 10/25/36(a) | | | 96,284 | | | 56,803 |
Impac Secured Assets Corp.
0.394%, due 01/25/37(a) | | | 104,262 | | | 97,850 |
Indymac Index Mortgage Loan Trust
0.404%, due 11/25/46(a) | | | 430,822 | | | 401,407 |
Indymac Residential Asset Backed Trust
0.364%, due 11/25/36(a) | | | 9,176 | | | 9,073 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Asset-Backed Securities - continued |
JPMorgan Chase Commercial Mortgage Securities Corp.
5.794%, due 02/12/51 | | $ | 1,500,000 | | $ | 1,124,742 |
JPMorgan Mortgage Acquisition Corp. | | | | | | |
0.364%, due 07/25/36 - 08/25/36(a) | | | 213,882 | | | 200,303 |
0.377%, due 11/25/36(a) | | | 43,894 | | | 41,502 |
0.374%, due 03/25/47(a) | | | 1,372,876 | | | 988,344 |
JPMorgan Mortgage Trust
5.009%, due 07/25/35(a) | | | 1,073,377 | | | 820,991 |
Lehman XS Trust | | | | | | |
0.384%, due 05/25/46(a) | | | 1,319 | | | 1,302 |
0.394%, due 11/25/46(a) | | | 456,622 | | | 382,243 |
Long Beach Mortgage Loan Trust | | | | | | |
0.494%, due 08/25/35(a) | | | 19,653 | | | 19,105 |
0.354%, due 11/25/36(a) | | | 22,310 | | | 20,710 |
Master Adjustable Rate Mortgages Trust | | | | | | |
4.081%, due 12/25/33(a) | | | 632,674 | | | 533,140 |
3.469%, due 11/21/34(a) | | | 600,000 | | | 379,291 |
MBNA Credit Card Master Note Trust
0.419%, due 12/15/11(a) | | | 100,000 | | | 99,989 |
Mellon Residential Funding Corp. | | | | | | |
0.759%, due 12/15/30(a) | | | 170,851 | | | 137,746 |
0.669%, due 11/15/31(a) | | | 748,855 | | | 544,531 |
Merrill Lynch Floating Trust
0.389%, due 06/15/22 (144A)(a)(c) | | | 166,319 | | | 116,813 |
Merrill Lynch Mortgage Investors Trust | | | | | | |
4.250%, due 10/25/35(a) | | | 4,050,750 | | | 3,270,686 |
0.384%, due 08/25/36 - 07/25/37(a) | | | 318,778 | | | 308,434 |
0.364%, due 05/25/37(a) | | | 83,038 | | | 81,435 |
Morgan Stanley Capital, Inc. | | | | | | |
0.364%, due 09/25/36 - 11/25/36(a) | | | 833,186 | | | 793,145 |
0.354%, due 10/25/36(a) | | | 171,250 | | | 160,548 |
Nomura Asset Acceptance Corp.
0.454%, due 01/25/36 (144A)(a)(c) | | | 36,394 | | | 31,941 |
Option One Mortgage Loan Trust | | | | | | |
0.364%, due 01/25/37(a) | | | 492,397 | | | 466,902 |
0.354%, due 02/25/37(a) | | | 2,098 | | | 2,069 |
Park Place Securities, Inc.
0.574%, due 09/25/35(a) | | | 30,826 | | | 19,630 |
Residential Accredit Loans, Inc. | | | | | | |
0.614%, due 08/25/35(a) | | | 317,834 | | | 145,651 |
2.700%, due 09/25/45(a) | | | 341,922 | | | 147,394 |
See accompanying notes to financial statements
6
Met Investors Series Trust
PIMCO Inflation Protected Bond Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Asset-Backed Securities - continued |
Residential Asset Securities Corp.
0.384%, due 11/25/36(a) | | $ | 177,595 | | $ | 175,040 |
Residential Asset Securitization Trust
6.500%, due 08/25/36 | | | 1,000,000 | | | 478,659 |
Securitized Asset Backed Receivables LLC Trust
0.364%, due 09/25/36(a) | | | 33,314 | | | 29,288 |
Securitized Asset Sales, Inc.
4.848%, due 11/26/23(a) | | | 8,096 | | | 7,323 |
Sequoia Mortgage Trust
0.663%, due 10/19/26(a) | | | 301,720 | | | 228,888 |
SLM Student Loan Trust | | | | | | |
1.072%, due 04/25/14(a) | | | 1,118,886 | | | 1,115,937 |
2.592%, due 04/25/23(a) | | | 31,627,453 | | | 32,297,205 |
Small Business Administration Participation Certificates | | | | | | |
4.880%, due 11/01/24 | | | 3,464,235 | | | 3,604,760 |
5.510%, due 11/01/27 | | | 7,089,264 | | | 7,470,972 |
5.170%, due 01/01/28 | | | 6,035,266 | | | 6,372,218 |
Soundview Home Equity Loan Trust | | | | | | |
0.374%, due 11/25/36 (144A)(a)(c) | | | 146,223 | | | 78,801 |
0.394%, due 01/25/37(a) | | | 137,194 | | | 133,777 |
Specialty Underwriting & Residential Finance Trust
0.359%, due 11/25/37(a) | | | 8,946 | | | 8,648 |
Structured Adjustable Rate Mortgage Loan Trust | | | | | | |
4.802%, due 02/25/34(a) | | | 440,759 | | | 332,348 |
2.610%, due 01/25/35(a) | | | 253,447 | | | 110,627 |
Structured Asset Investment Loan Trust
0.364%, due 07/25/36(a) | | | 29,600 | | | 26,852 |
Structured Asset Mortgage Investments, Inc. | | | | | | |
0.643%, due 10/19/34(a) | | | 196,344 | | | 149,851 |
0.504%, due 06/25/36(a) | | | 218,192 | | | 82,768 |
0.384%, due 08/25/36(a) | | | 203,679 | | | 195,056 |
Structured Asset Securities Corp. | | | | | | |
4.900%, due 04/25/35 | | | 959,086 | | | 568,472 |
4.504%, due 10/25/35 (144A)(a)(c)(k) | | | 329,177 | | | 226,672 |
0.364%, due 05/25/36 - 10/25/36(a) | | | 321,100 | | | 293,646 |
TBW Mortgage Backed Pass Through Certificates | | | | | | |
0.414%, due 09/25/36(a) | | | 9,004 | | | 8,957 |
0.424%, due 01/25/37(a) | | | 333,384 | | | 302,759 |
6.015%, due 07/25/37 | | | 600,000 | | | 307,638 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Asset-Backed Securities - continued |
Thornburg Mortgage Securities Trust
0.434%, due 09/25/46(a) | | $ | 1,638,471 | | $ | 1,503,981 |
Truman Capital Mortgage Loan Trust
0.654%, due 01/25/34 (144A)(a)(c) | | | 13,597 | | | 13,412 |
Wachovia Bank Commercial Mortgage Trust | | | | | | |
0.399%, due 06/15/20 (144A)(a)(c) | | | 4,120,895 | | | 3,034,761 |
0.409%, due 09/15/21 (144A)(a)(c) | | | 2,789,136 | | | 2,010,077 |
WaMu Mortgage Pass Through Certificates | | | | | | |
2.540%, due 11/25/42(a) | | | 61,936 | | | 35,715 |
0.604%, due 10/25/45(a) | | | 2,343,884 | | | 1,229,431 |
0.574%, due 11/25/45(a) | | | 368,655 | | | 178,864 |
2.340%, due 02/25/46(a) | | | 377,577 | | | 167,624 |
2.880%, due 07/25/46(a) | | | 1,452,126 | | | 611,767 |
2.840%, due 11/25/46(a) | | | 301,633 | | | 197,623 |
2.150%, due 12/25/46(a) | | | 205,663 | | | 80,093 |
Wells Fargo Mortgage Backed Securities Trust
3.581%, due 09/25/34(a) | | | 395,933 | | | 344,524 |
| | | | | | |
Total Asset-Backed Securities
(Cost $180,876,095) | | | | | | 160,064,507 |
| | | | | | |
|
| Domestic Bonds & Debt Securities - 15.0% |
| Airlines - 0.1% | | | | | | |
Southwest Airlines Co.
5.125%, due 03/01/17 | | | 1,000,000 | | | 860,738 |
| | | | | | |
| Capital Markets - 3.1% | | | | | | |
Bear Stearns Cos., Inc.
0.854%, due 11/28/11(a) | | | 1,000,000 | | | 976,333 |
Goldman Sachs Group, Inc. (The) | | | | | | |
0.934%, due 11/16/09(a) | | | 7,000,000 | | | 6,994,267 |
0.901%, due 06/28/10(a) | | | 4,400,000 | | | 4,377,419 |
6.150%, due 04/01/18 | | | 2,100,000 | | | 2,047,912 |
Lehman Brothers Holdings, Inc. | | | | | | |
0.000%, due 11/24/08 - 12/23/44(d) | | | 6,600,000 | | | 1,006,500 |
7.000%, due 09/27/27(d) | | | 400,000 | | | 61,000 |
Merrill Lynch & Co., Inc. | | | | | | |
3.188%, due 05/12/10(a) | | | 6,800,000 | | | 6,763,443 |
6.400%, due 08/28/17 | | | 2,700,000 | | | 2,393,847 |
6.875%, due 04/25/18 | | | 6,900,000 | | | 6,396,562 |
Morgan Stanley | | | | | | |
1.357%, due 01/18/11(a) | | | 4,000,000 | | | 3,876,856 |
6.000%, due 04/28/15 | | | 16,600,000 | | | 16,576,727 |
See accompanying notes to financial statements
7
Met Investors Series Trust
PIMCO Inflation Protected Bond Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| | |
| Capital Markets - continued | | | | | | |
Small Business Administration
4.504%, due 02/10/14 | | $ | 954,616 | | $ | 975,298 |
| | | | | | |
| | | | | | 52,446,164 |
| | | | | | |
| Commercial Banks - 2.8% | | | | | | |
ANZ National International, Ltd.
6.200%, due 07/19/13 (144A)(c) | | | 3,600,000 | | | 3,711,910 |
Bank of Ireland Plc
0.663%, due 12/18/09(a) | | | 1,100,000 | | | 1,089,921 |
Barclays Bank Plc | | | | | | |
6.200%, due 09/26/14(d) | | | 700,000 | | | 106,750 |
7.434%, due 09/29/49 (144A)(a)(c) | | | 700,000 | | | 469,646 |
Commonwealth Bank of Australia 1.108%, due 06/25/14 (144A)(a)(c) | | | 7,900,000 | | | 7,873,361 |
Dexia Credit Local
1.262%, due 09/23/11 (144A)(a)(c) | | | 2,700,000 | | | 2,703,471 |
DNB North Bank ASA
1.209%, due 10/13/09 (144A)(a)(c) | | | 1,200,000 | | | 1,192,571 |
Export-Import Bank of Korea
1.386%, due 10/04/11 (144A)(a)(c) | | | 1,600,000 | | | 1,604,184 |
ING Bank Australia, Ltd.
3.870%, due 06/24/14(a)(e)(k) | | | 800,000 | | | 643,848 |
National Australia Bank, Ltd. | | | | | | |
1.424%, due 02/08/10 (144A)(a)(c) | | | 11,500,000 | | | 11,499,908 |
5.350%, due 06/12/13 (144A)(c) | | | 3,100,000 | | | 3,195,833 |
Royal Bank of Scotland Plc
7.092%, due 10/29/49(a)(f) | | | 500,000 | | | 241,845 |
UBS AG
1.927%, due 05/05/10(a) | | | 11,500,000 | | | 11,536,754 |
Wachovia Bank National Association
0.726%, due 12/02/10(a) | | | 2,300,000 | | | 2,269,649 |
| | | | | | |
| | | | | | 48,139,651 |
| | | | | | |
| Computers & Peripherals - 0.3% | | | | | | |
Hewlett-Packard Co.
2.250%, due 05/27/11 | | | 100,000 | | | 100,351 |
Lexmark International, Inc.
5.900%, due 06/01/13 | | | 5,000,000 | | | 4,801,510 |
| | | | | | |
| | | | | | 4,901,861 |
| | | | | | |
| Consumer Finance - 1.2% | | | | | | |
American Express Bank FSB S.A. | | | | | | |
5.500%, due 04/16/13 | | | 1,500,000 | | | 1,473,291 |
6.000%, due 09/13/17 | | | 2,000,000 | | | 1,827,204 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| | |
| Consumer Finance - continued | | | | | | |
American Express Centurion Bank | | | | | | |
0.399%, due 07/13/10 (a) | | $ | 5,000,000 | | $ | 4,866,600 |
6.000%, due 09/13/17 | | | 2,600,000 | | | 2,375,365 |
American Express Co.
7.000%, due 03/19/18 | | | 2,490,000 | | | 2,421,752 |
American Express Credit Corp.
1.708%, due 05/27/10(a) | | | 1,700,000 | | | 1,678,750 |
Ford Motor Credit Co. LLC | | | | | | |
7.250%, due 10/25/11 | | | 5,800,000 | | | 5,019,158 |
7.800%, due 06/01/12 | | | 400,000 | | | 344,380 |
| | | | | | |
| | | | | | 20,006,500 |
| | | | | | |
| Diversified Financial Services - 3.1% |
Atlas Reinsurance Plc
5.520%, due 01/10/10 (144A)(a)(b)(f) | | | 400,000 | | | 557,177 |
Bank of America Corp. | | | | | | |
1.127%, due 11/06/09(a) | | | 900,000 | | | 898,453 |
1.339%, due 04/30/12(a) | | | 2,000,000 | | | 2,025,896 |
C10 Capital SPV, Ltd.
6.722%, due 12/01/49 (144A)(a)(c) | | | 600,000 | | | 307,588 |
Citigroup, Inc. | | | | | | |
0.631%, due 12/28/09(a) | | | 10,000,000 | | | 9,904,900 |
0.944%, due 05/18/11(a) | | | 3,300,000 | | | 3,119,648 |
8.400%, due 04/29/49(a) | | | 5,000,000 | | | 3,756,600 |
General Electric Capital Corp. | | | | | | |
1.122%, due 10/26/09(a) | | | 1,000,000 | | | 999,912 |
1.124%, due 05/08/13(a) | | | 9,300,000 | | | 8,120,453 |
1.616%, due 05/22/13(a) | | | 12,200,000 | | | 10,965,616 |
Green Valley, Ltd.
5.045%, due 01/10/11 (144A)(a)(b)(f) | | | 500,000 | | | 674,257 |
HSBC Finance Corp.
1.162%, due 10/21/09(a) | | | 2,100,000 | | | 2,094,011 |
International Lease Finance Corp.
6.625%, due 11/15/13 | | | 1,100,000 | | | 847,427 |
Longpoint Re, Ltd.
5.874%, due 05/08/10 (144A)(a)(b) | | | 1,400,000 | | | 1,365,330 |
Residential Reinsurance 2007, Ltd.
7.918%, due 06/07/10 (144A)(a)(b) | | | 1,600,000 | | | 1,542,117 |
Santander Perpetual S.A. Unipersonal
6.671%, due 10/29/49 (144A)(a)(c) | | | 3,000,000 | | | 2,223,240 |
TransCapitalInvest, Ltd.
7.700%, due 08/07/13 (144A)(c) | | | 2,700,000 | | | 2,600,980 |
See accompanying notes to financial statements
8
Met Investors Series Trust
PIMCO Inflation Protected Bond Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Diversified Financial Services - continued |
Vita Capital II, Ltd.
2.108%, due 01/01/10 (144A)(a)(b) | | $ | 400,000 | | $ | 390,962 |
Vita Capital III, Ltd.
2.328%, due 01/01/12 (144A)(a)(b) | | | 800,000 | | | 694,290 |
| | | | | | |
| | | | | | 53,088,857 |
| | | | | | |
| Diversified Telecommunication Services - 1.6% |
AT&T, Inc.
1.116%, due 02/05/10(a) | | | 12,300,000 | | | 12,310,455 |
Qwest Capital Funding, Inc.
7.000%, due 08/03/09 | | | 2,000,000 | | | 2,005,000 |
Verizon Wireless Capital LLC
3.316%, due 05/20/11 (144A)(a)(c) | | | 12,000,000 | | | 12,406,560 |
| | | | | | |
| | | | | | 26,722,015 |
| | | | | | |
| Electric Utilities - 0.1% | | | | | | |
Exelon Corp.
4.900%, due 06/15/15 | | | 1,000,000 | | | 932,256 |
NiSource Finance Corp.
1.231%, due 11/23/09(a) | | | 800,000 | | | 793,724 |
| | | | | | |
| | | | | | 1,725,980 |
| | | | | | |
| Health Care Providers & Services - 0.0% |
UnitedHealth Group, Inc.
4.875%, due 02/15/13 | | | 200,000 | | | 202,324 |
| | | | | | |
| Household Durables - 0.1% | | | | | | |
Black & Decker Corp. (The)
8.950%, due 04/15/14 | | | 2,000,000 | | | 2,194,950 |
| | | | | | |
| Independent Power Producers & Energy Traders - 0.0% |
Constellation Energy Group, Inc.
4.550%, due 06/15/15 | | | 200,000 | | | 173,568 |
| | | | | | |
| Insurance - 1.6% | | | | | | |
Allstate Life Global Funding II
5.375%, due 04/30/13 | | | 4,300,000 | | | 4,449,958 |
American International Group, Inc. | | | | | | |
8.250%, due 08/15/18 (144A)(c) | | | 1,700,000 | | | 1,001,776 |
8.175%, due 05/15/58 (144A)(a)(c) | | | 2,700,000 | | | 770,980 |
Foundation Re II, Ltd.
7.576%, due 11/26/10 (144A)(a)(b) | | | 1,000,000 | | | 936,323 |
Merna Reinsurance, Ltd.
1.248%, due 07/07/10 (144A)(a)(b) | | | 4,000,000 | | | 3,722,400 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| | |
| Insurance - continued | | | | | | |
Pricoa Global Funding
I 0.734%, due 06/26/12 (144A)(a)(c) | | $ | 17,300,000 | | $ | 16,080,540 |
| | | | | | |
| | | | | | 26,961,977 |
| | | | | | |
| IT Services - 0.1% |
Western Union Co. (The)
5.930%, due 10/01/16 | | | 2,000,000 | | | 2,022,150 |
| | | | | | |
| Media - 0.4% |
EchoStar DBS Corp.
7.000%, due 10/01/13 | | | 6,200,000 | | | 5,921,000 |
| | | | | | |
| Pharmaceuticals - 0.5% |
GlaxoSmithKline Capital, Inc.
1.545%, due 05/13/10(a) | | | 8,300,000 | | | 8,359,743 |
| | | | | | |
Total Domestic Bonds & Debt Securities
(Cost $271,170,168) | | | | | | 253,727,478 |
| | | | | | |
|
| Foreign Bonds & Debt Securities - 2.5% |
| Japan - 2.5% |
Japanese Government CPI Linked Bond
0.800%, due 12/10/15(g) | | | 2,610,720,000 | | | 23,870,179 |
1.100%, due 12/10/16(g) | | | 912,730,000 | | | 8,359,776 |
1.200%, due 12/10/17(g) | | | 311,240,000 | | | 2,812,695 |
1.400%, due 06/10/18(g) | | | 859,140,000 | | | 7,786,528 |
| | | | | | |
Total Foreign Bonds & Debt Securities
(Cost $41,063,454) | | | | | | 42,829,178 |
| | | | | | |
| U.S. Government & Agency Obligations - 115.3% |
Federal Home Loan Mortgage Corp.
0.703%, due 03/09/11(a) | | | 694,000 | | | 696,552 |
0.926%, due 05/04/11(a) | | | 763,000 | | | 764,966 |
5.500%, due 05/15/16 - 03/01/38 | | | 22,287,685 | | | 22,956,782 |
4.500%, due 05/15/17 | | | 269,484 | | | 278,679 |
5.000%, due 12/14/18 - 02/15/20 | | | 5,809,000 | | | 5,853,919 |
0.549%, due 02/15/19(a) | | | 14,764,864 | | | 14,495,229 |
0.469%, due 07/15/19 - 10/15/20(a) | | | 9,029,860 | | | 8,851,777 |
4.000%, due 10/15/23 | | | 58,052 | | | 58,174 |
0.669%, due 12/15/30(a) | | | 266,192 | | | 262,675 |
0.574%, due 08/25/31(a) | | | 116,917 | | | 93,961 |
4.034%, due 01/01/34(a) | | | 279,197 | | | 282,656 |
6.000%, due 05/01/35 | | | 110,518 | | | 116,167 |
6.500%, due 10/01/37 - 04/01/38 | | | 600,000 | | | 638,416 |
Federal National Mortgage Assoc.
0.966%, due 08/05/10 (a) | | | 684,000 | | | 685,380 |
0.464%, due 08/25/34(a) | | | 267,613 | | | 254,911 |
See accompanying notes to financial statements
9
Met Investors Series Trust
PIMCO Inflation Protected Bond Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| U.S. Government & Agency Obligations - continued |
4.287%, due 11/01/34(a) | | $ | 3,113,357 | | $ | 3,148,003 |
4.644%, due 01/01/35(a) | | | 432,327 | | | 446,122 |
4.590%, due 05/25/35(a) | | | 1,982,327 | | | 1,980,001 |
5.500%, due 07/01/36 - 11/01/38 | | | 8,943,682 | | | 9,249,424 |
6.000%, due 11/01/36 - 01/01/39 | | | 46,052,876 | | | 48,144,645 |
0.374%, due 12/25/36(a) | | | 428,131 | | | 386,528 |
0.514%, due 10/27/37(a) | | | 6,400,000 | | | 5,828,000 |
5.500%, due 09/01/38 | | | 454,235 | | | 469,632 |
5.000%, due 03/01/39 | | | 920,662 | | | 938,895 |
0.664%, due 05/25/42(a) | | | 205,021 | | | 184,229 |
5.950%, due 02/25/44 | | | 521,636 | | | 551,549 |
2.638%, due 03/01/44 - 09/01/44(a) | | | 4,050,890 | | | 4,032,623 |
5.000%, due TBA(h) | | | 71,900,000 | | | 73,214,404 |
5.500%, due TBA(h) | | | 72,500,000 | | | 74,844,940 |
FHLMC Structured Pass Through Securities
2.638%, due 10/25/44(a) | | | 7,097,409 | | | 6,986,910 |
2.639%, due 02/25/45(a) | | | 2,077,765 | | | 1,980,505 |
Government National Mortgage Assoc.
5.500%, due 07/15/33 | | | 5,124 | | | 5,325 |
6.000%, due 12/15/37 - 07/15/38 | | | 1,453,424 | | | 1,515,520 |
6.500%, due 12/15/38 | | | 546,030 | | | 580,988 |
U.S. Treasury Inflation Index Bond | | | | | | |
2.375%, due 04/15/11 - 01/15/27 | | | 326,545,665 | | | 337,821,581 |
2.000%, due 04/15/12 - 01/15/26 | | | 131,637,461 | | | 131,988,937 |
2.625%, due 07/15/17 | | | 104,188,548 | | | 111,156,157 |
1.625%, due 01/15/18 | | | 32,467,182 | | | 32,193,224 |
1.375%, due 07/15/18 | | | 3,856,281 | | | 3,746,616 |
1.750%, due 01/15/28 | | | 72,262,380 | | | 68,355,731 |
3.625%, due 04/15/28 | | | 90,748,340 | | | 110,656,257 |
3.875%, due 04/15/29 | | | 95,589,530 | | | 121,518,189 |
3.375%, due 04/15/32 | | | 2,042,125 | | | 2,569,248 |
U.S. Treasury Inflation Index Note
3.500%, due 01/15/11 | | | 54,761,970 | | | 57,209,173 |
3.375%, due 01/15/12 | | | 3,722,542 | | | 3,961,015 |
3.000%, due 07/15/12 | | | 157,688,737 | | | 167,248,617 |
1.875%, due 07/15/13 - 07/15/15 | | | 46,847,262 | | | 47,919,524 |
2.000%, due 01/15/14 - 01/15/16 | | | 396,819,048 | | | 405,798,775 |
0.875%, due 04/30/11 | | | 1,060,000 | | | 1,057,226 |
0.625%, due 04/15/13 | | | 10,087,800 | | | 9,980,617 |
1.625%, due 01/15/15 | | | 18,536,722 | | | 18,472,993 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| U.S. Government & Agency Obligations - continued |
2.500%, due 07/15/16 - 01/15/29 | | $ | 10,814,454 | | $ | 11,472,854 |
2.125%, due 01/15/19 | | | 19,167,216 | | | 19,820,090 |
| | | | | | |
Total U.S. Government & Agency Obligations
(Cost $1,887,652,268) | | | | | | 1,953,725,311 |
| | | | | | |
| Loan Participation - 0.7% |
Chrysler Finco
4.320%, due 08/03/14(a) | | | 6,486,962 | | | 6,022,061 |
Ford Motor Corp.
3.320%, due 12/15/13(a) | | | 654,522 | | | 471,910 |
4.140%, due 12/16/13(a) | | | 329,125 | | | 237,299 |
HCA, Inc.
2.848%, due 11/14/13(a) | | | 5,285,611 | | | 4,783,843 |
| | | | | | |
Total Loan Participation
(Cost $12,374,535) | | | | | | 11,515,113 |
| | | | | | |
|
| Convertible Preferred Stock - 0.0% |
| Commercial Banks - 0.0% |
Wells Fargo & Co., Series L 7.500%
(Cost - $900,000) | | | 900 | | | 706,473 |
| | | | | | |
| Purchased Option - 0.0% | | | | | | |
OTC EPUT 6.0%, Expires 07/06/09, Strike Price $85.00
(Cost - $1,758) | | | 15,000,000 | | | 0 |
| | | | | | |
|
| Short-Term Investments - 17.4% |
| Repurchase Agreements - 17.2% |
JPMorgan Securities, Inc., Repurchase Agreement, dated 06/30/09 at 0.090% to be repurchased at $216,000,540 on 07/01/09 collateralized by $204,014,000 FHLMC at 4.875% due 06/13/18 with a value of $220,411,030. | | | 216,000,000 | | | 216,000,000 |
State Street Bank & Trust Co., Repurchase Agreement, dated 06/30/09 at 0.010% to be repurchased at $13,115,739 on 07/01/09 collateralized by 13,020,000 FHLMC at 5.755% due 08/27/14 with a value of $13,378,050. | | | 13,115,735 | | | 13,115,735 |
See accompanying notes to financial statements
10
Met Investors Series Trust
PIMCO Inflation Protected Bond Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | | |
Security
Description | | Par
Amount | | Value | |
| | | | | | | |
| Repurchase Agreements - continued | |
State Street Bank & Trust Co., Repurchase Agreement, dated 06/30/09 at 0.010% to be repurchased at $48,946,092 on 07/01/09 collateralized by 50,000,000 FHLMC at 0.000% due 12/24/09 with a value of $49,925,000. (i) | | $ | 48,946,079 | | $ | 48,946,079 | |
State Street Bank & Trust Co., Repurchase Agreement, dated 06/30/09 at 0.010% to be repurchased at $14,482,190 on 07/01/09 collateralized by 14,700,000 FHLMC at 0.900% due 04/08/10 with a value of $14,773,500. | | | 14,482,186 | | | 14,482,186 | |
| | | | | | | |
| | | | | | 292,544,000 | |
| | | | | | | |
| U.S. Government & Agency Discount Note - 0.2% | |
U.S. Treasury Bill 0.120%, due 07/23/09(i)(j) | | | 3,104,000 | | | 3,103,772 | |
| | | | | | | |
Total Short-Term Investments
(Cost $295,647,772) | | | | | | 295,647,772 | |
| | | | | | | |
| | |
TOTAL INVESTMENTS - 160.9%
(Cost $2,701,084,879) | | | | | | 2,728,306,452 | |
| | | | | | | |
| |
| Other Assets and Liabilities (net) - (60.9)% | | | (1,033,031,280 | ) |
| | | | | | | |
| | |
| NET ASSETS - 100.0% | | | | | $ | 1,695,275,172 | |
| | | | | | | |
Portfolio Footnotes:
| (a) | | Variable or floating rate security. The stated rate represents the rate at June 30, 2009. |
| (b) | | Securities that may be resold to “qualified institutional buyers” under Rule 144A or securities offered pursuant to Section 4(2) of the Securities Act of 1933, as amended. These securities have been determined to be illiquid by the Portfolio’s adviser. These securities represent in the aggregate $14,508,161 of net assets. |
| (c) | | Securities that may be resold to “qualified institutional buyers” under Rule 144A or securities offered pursuant to Section 4(2) of the Securities Act of 1933, as amended. These securities have been determined to be liquid under the guidelines established by the Board of Trustees. These securities represent in the aggregate $73,501,880 of net assets. |
| (d) | | Security is in default and/or issuer is in bankruptcy. |
| (e) | | Par shown in Australian Dollar. Value is shown in USD. |
| (f) | | Par shown in Euro Currency. Value is shown in USD. |
| (g) | | Par shown in Japanese Yen. Value is shown in USD. |
| (h) | | This security is traded on a “to-be-announced” basis. |
| (i) | | Zero coupon bond - Interest rate represents current yield to maturity. |
| (j) | | Security or a portion of the security was pledged to cover margin requirements for future contracts. At the period end, the value of the securities pledged amounted to $3,103,772. |
| (k) | | Security is valued in good faith at fair value by or under the direction of the Board of Trustees. |
AMBAC - Ambac Indemnity Corporation
FHLMC - Federal Home Loan Mortgage Corporation
See accompanying notes to financial statements
11
Met Investors Series Trust
PIMCO Inflation Protected Bond Portfolio
| | | | | | | | | | | | | | | | | | |
| Written Call Options | | Counterparty | | Expiration | | Strike
Price | | Number of
Contracts | | | Premium | | | Value | |
| | | | | | |
U.S. Treasury Notes 10 Year Futures | | Citigroup Global Markets, Inc. | | 08/21/2009 | | $ | 120.00 | | (46 | ) | | $ | (20,872 | ) | | $ | (19,406 | ) |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| Written Put Options | | Counterparty | | Expiration | | Strike
Price | | Number of
Contracts | | | Premium | | | Value | |
| | | | | | |
CME APUT EuroDollar Future | | Citigroup Global Markets, Inc. | | 09/14/2009 | | $ | 98.50 | | (217 | ) | | $ | (53,906 | ) | | $ | (9,494 | ) |
| | | | | | |
CME APUT EuroDollar Future | | Citigroup Global Markets, Inc. | | 09/14/2009 | | | 98.63 | | (128 | ) | | | (20,460 | ) | | | (6,400 | ) |
| | | | | | |
IRO USD 2 Year Swaption | | JPMorgan Securities, Inc. | | 07/27/2009 | | | 2.00 | | (36,100,000 | ) | | | (155,230 | ) | | | (29,266 | ) |
| | | | | | |
IRO USD 7 Year Swaption | | Citibank | | 08/21/2009 | | | 4.25 | | (112,000,000 | ) | | | (921,200 | ) | | | (622,285 | ) |
| | | | | | |
IRO USD 7 Year Swaption | | Deutsche Bank Securities, Inc. | | 08/21/2009 | | | 4.25 | | (19,000,000 | ) | | | (95,950 | ) | | | (105,566 | ) |
| | | | | | |
IRO USD 7 Year Swaption | | Goldman Sachs & Co. | | 09/20/2010 | | | 5.37 | | (14,000,000 | ) | | | (450,100 | ) | | | (252,139 | ) |
| | | | | | |
IRO USD 7 Year Swaption | | Morgan Stanley & Co., Inc. | | 09/20/2010 | | | 5.37 | | (14,000,000 | ) | | | (117,600 | ) | | | (252,139 | ) |
| | | | | | |
U.S. Treasury Notes 10 Year Futures | | Citigroup Global Markets, Inc. | | 08/21/2009 | | | 110.00 | | (46,000 | ) | | | (21,447 | ) | | | (10,063 | ) |
| | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | $ | (1,835,893 | ) | | $ | (1,287,352 | ) |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Forward Sales Commitments | | Counterparty | | Interest Rate | | | Maturity | | Proceeds | | | Value | |
| | | | | |
Federal National Mortgage Assoc. | | Morgan Stanley & Co., Inc. | | 5.000 | % | | TBA | | $ | (74,150,312 | ) | | $ | (75,352,794 | ) |
| | | | | |
Federal National Mortgage Assoc. | | Morgan Stanley & Co., Inc. | | 5.500 | % | | TBA | | | (84,763,750 | ) | | | (85,684,552 | ) |
| | | | | |
Federal National Mortgage Assoc. | | JPMorgan Securities, Inc. | | 6.000 | % | | TBA | | | (841,500 | ) | | | (846,875 | ) |
| | | | | |
Government National Mortgage Assoc. | | Goldman Sachs & Co. | | 6.500 | % | | TBA | | | (630,563 | ) | | | (636,657 | ) |
| | | | | | | | | | | | | | | |
| | | | | |
| | | | | | | | | $ | (160,386,125 | ) | | $ | (162,520,878 | ) |
| | | | | | | | | | | | | | | |
The following table summarizes the credit composition of the portfolio holdings of the PIMCO Inflation Protected Bond Portfolio at June 30, 2009, based upon credit quality ratings issued by Standard & Poor’s. For securities not rated by Standard & Poor’s, the equivalent Moody’s rating is used.
| | | |
| Portfolio Composition by Credit Quality (Unaudited) | | Percent of
Portfolio | |
AAA/Government/Government Agency | | 86.61 | % |
AA | | 4.79 | |
A | | 5.25 | |
BBB | | 1.10 | |
BB | | 0.47 | |
B | | 0.08 | |
Below B | | 0.42 | |
Other | | 1.28 | |
| | | |
Total: | | 100.00 | % |
| | | |
See accompanying notes to financial statements
12
Met Investors Series Trust
PIMCO Inflation Protected Bond Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1— quoted prices in active markets for identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets (Level 1) | | Significant
Other
Observable
Inputs (Level 2) | | Significant
Unobservable
Inputs (Level 3) | | Total |
Municipals | | $ | — | | $ | 10,090,620 | | $ | — | | $ | 10,090,620 |
Asset-Backed Securities | | | — | | | 159,837,835 | | | 226,672 | | | 160,064,507 |
Domestic Bonds & Debt Securities | | | | | | | | | | | | |
Airlines | | | — | | | 860,738 | | | — | | | 860,738 |
Capital Markets | | | — | | | 52,446,164 | | | — | | | 52,446,164 |
Commercial Banks | | | — | | | 47,495,803 | | | 643,848 | | | 48,139,651 |
Computers & Peripherals | | | — | | | 4,901,861 | | | — | | | 4,901,861 |
Consumer Finance | | | — | | | 20,006,500 | | | — | | | 20,006,500 |
Diversified Financial Services | | | — | | | 53,088,857 | | | — | | | 53,088,857 |
Diversified Telecommunication Services | | | — | | | 26,722,015 | | | — | | | 26,722,015 |
Electric Utilities | | | — | | | 1,725,980 | | | — | | | 1,725,980 |
Health Care Providers & Services | | | — | | | 202,324 | | | — | | | 202,324 |
Household Durables | | | — | | | 2,194,950 | | | — | | | 2,194,950 |
Independent Power Producers & Energy Traders | | | — | | | 173,568 | | | — | | | 173,568 |
Insurance | | | — | | | 26,961,977 | | | — | | | 26,961,977 |
IT Services | | | — | | | 2,022,150 | | | — | | | 2,022,150 |
Media | | | — | | | 5,921,000 | | | — | | | 5,921,000 |
Pharmaceuticals | | | — | | | 8,359,743 | | | — | | | 8,359,743 |
Total Domestic Bonds & Debt Securities | | | — | | | 253,083,630 | | | 643,848 | | | 253,727,478 |
Foreign Bonds & Debt Securities | | | | | | | | | | | | |
Japan | | | — | | | 42,829,178 | | | — | | | 42,829,178 |
Total Foreign Bonds & Debt Securities | | | — | | | 42,829,178 | | | — | | | 42,829,178 |
U.S. Government & Agency Obligations | | | — | | | 1,953,725,311 | | | — | | | 1,953,725,311 |
Loan Participation | | | — | | | 11,515,113 | | | — | | | 11,515,113 |
Convertible Preferred Stock | | | | | | | | | | | | |
Commercial Banks | | | 706,473 | | | — | | | — | | | 706,473 |
Purchased Option | | | 0 | | | — | | | — | | | 0 |
Short-Term Investments | | | | | | | | | | | | |
Repurchase Agreements | | | — | | | 292,544,000 | | | — | | | 292,544,000 |
U.S. Government & Agency Discount Note | | | — | | | 3,103,772 | | | — | | | 3,103,772 |
Total Short-Term Investments | | | — | | | 295,647,772 | | | — | | | 295,647,772 |
TOTAL INVESTMENTS | | $ | 706,473 | | $ | 2,726,729,459 | | $ | 870,520 | | $ | 2,728,306,452 |
See accompanying notes to financial statements
13
Met Investors Series Trust
PIMCO Inflation Protected Bond Portfolio
| | | | | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets (Level 1) | | | Significant
Other
Observable
Inputs (Level 2) | | | Significant
Unobservable
Inputs (Level 3) | | Total | |
Forward Contracts | | | | | | | | | | | | | | | |
Forward Currency Contracts | | $ | — | | | $ | (347,716 | ) | | $ | — | | $ | (347,716 | ) |
Futures Contracts | | | | | | | | | | | | | | | |
Futures Contracts Long | | | (86,807 | ) | | | — | | | | — | | | (86,807 | ) |
Options | | | | | | | | | | | | | | | |
Options Written | | | 69,565 | | | | 478,684 | | | | — | | | 548,249 | |
TBA Sale Commitments | | | | | | | | | | | | | | | |
Federal Agency | | | — | | | | (2,134,753 | ) | | | — | | | (2,134,753 | ) |
Swaps | | | | | | | | | | | | | | | |
Swap Commitments | | | — | | | | 7,158,623 | | | | — | | | 7,158,623 | |
FAS 157 Level 3 Reconciliation Disclosure
Following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value:
Asset Valuation Inputs
| | | | | | | | | | | | | | | | | | | | | | | |
| Investments in Securities | | Balance as of
December 31,
2008 | | Realized
Loss | | Change in
Unrealized
Depreciation | | | Net
Purchases | | Net Sales | | | Net Transfers
in of Level 3 | | Balance as of
June 30,
2009 |
| Asset-Backed Securities | | $ | — | | $ | 125 | | $ | (5,152 | ) | | $ | — | | $ | (24,273 | ) | | $ | 255,972 | | $ | 226,672 |
| Domestic Bonds & Debt Securities | | | | | | | | | | | | | | | | | | | | | | | |
Commercial Banks | | | — | | | — | | | 12,888 | | | | 630,960 | | | — | | | | — | | | 643,848 |
| Total | | $ | — | | $ | 125 | | $ | 7,736 | | | $ | 630,960 | | $ | (24,273 | ) | | $ | 255,972 | | $ | 870,520 |
See accompanying notes to financial statements
14
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| PIMCO Inflation Protected Bond Portfolio | | | |
| Assets | | | | |
Investments, at value (a) | | $ | 2,435,762,452 | |
Repurchase Agreements | | | 292,544,000 | |
Cash | | | 774 | |
Cash denominated in foreign currencies (b) | | | 2,215,589 | |
Receivable for investments sold | | | 395,027,364 | |
Receivable for Trust shares sold | | | 937,990 | |
Interest receivable | | | 16,707,273 | |
Swap interest receivable | | | 382,919 | |
Swap premium paid | | | 153,632,487 | |
Unrealized appreciation on swap contracts | | | 22,079,814 | |
Unrealized appreciation on forward currency contracts | | | 224,335 | |
| | | | |
Total assets | | | 3,319,514,997 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 1,319,382,980 | |
Payable for cash collateral | | | 24,279,797 | |
Trust shares redeemed | | | 105,383 | |
Forward sales commitments, at value (c) | | | 162,520,878 | |
Variation margin on financial futures contracts | | | 165,081 | |
Unrealized depreciation on forward currency contracts | | | 572,051 | |
Unrealized depreciation on swap contracts | | | 14,921,191 | |
Outstanding written options (d) | | | 1,306,759 | |
Distribution and services fees—Class B | | | 141,508 | |
Distribution and services fees—Class E | | | 5,213 | |
Interest payable swap position | | | 174,766 | |
Swap premium received | | | 780,378 | |
Premium for written swaps | | | 99,035,976 | |
Management fee | | | 658,651 | |
Administration fee | | | 9,951 | |
Custodian and accounting fees | | | 49,519 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 126,316 | |
| | | | |
Total liabilities | | | 1,624,239,825 | |
| | | | |
| Net Assets | | $ | 1,695,275,172 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 1,731,422,531 | |
Accumulated net realized loss | | | (86,324,590 | ) |
Unrealized appreciation on investments, futures contracts, written options contracts, short sales, swap contracts and foreign currency | | | 30,088,016 | |
Undistributed net investment income | | | 20,089,215 | |
| | | | |
Total | | $ | 1,695,275,172 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 936,515,833 | |
| | | | |
Class B | | | 715,369,672 | |
| | | | |
Class E | | | 43,389,667 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 89,566,075 | |
| | | | |
Class B | | | 68,587,905 | |
| | | | |
Class E | | | 4,161,705 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 10.46 | |
| | | | |
Class B | | | 10.43 | |
| | | | |
Class E | | | 10.43 | |
| | | | |
| | | | | |
(a) Investments at cost, excluding repurchase agreements | | $ | 2,408,540,879 | |
(b) Identified cost of foreign cash | | | 2,186,931 | |
(c) Proceeds of forward sales commitments | | | 160,386,125 | |
(d) Cost of written options | | | 1,856,766 | |
See accompanying notes to financial statements
15
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| PIMCO Inflation Protected Bond Portfolio | | | |
| Investment Income | | | | |
Dividends (1) | | $ | 45,976 | |
Interest | | | 24,273,551 | |
| | | | |
Total investment income | | | 24,319,527 | |
| | | | |
| Expenses | | | | |
Management fee | | | 3,679,323 | |
Administration fees | | | 61,823 | |
Custodian and accounting fees | | | 112,161 | |
Distribution and services fees—Class B | | | 756,153 | |
Distribution and services fees—Class E | | | 29,868 | |
Audit and tax services | | | 62,536 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 44,420 | |
Insurance | | | 16,694 | |
Other | | | 5,102 | |
| | | | |
Total expenses | | | 4,794,513 | |
| | | | |
Net investment income | | | 19,525,014 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments, Futures Contracts, Written Options Contracts, Swaps Contracts and Foreign Currency | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | 85,913,778 | |
Futures contracts | | | 36,183,757 | |
Written options contracts | | | (1,024,284 | ) |
Swap contracts | | | (37,211,997 | ) |
Foreign currency | | | (3,495,034 | ) |
| | | | |
Net realized gain on investments, futures contracts, written options contracts, swaps contracts and foreign currency | | | 80,366,220 | |
| | | | |
Net change in unrealized appreciation (depreciation) on: | | | | |
Investments | | | 35,943,414 | |
Futures contracts | | | (38,088,001 | ) |
Written options contracts | | | 2,734,234 | |
Forward sales commitments | | | 11,615 | |
Swap contracts | | | 47,941,382 | |
Foreign currency | | | 5,948,397 | |
| | | | |
Net change in unrealized appreciation on investments, futures contracts, written options contracts, short sales, swaps contracts and foreign currency | | | 54,491,041 | |
| | | | |
Net realized and unrealized gain on investments, futures contracts, written options contracts, short sales, swap contracts and foreign currency | | | 134,857,261 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 154,382,275 | |
| | | | |
| | | | | |
(1) Dividend income is net of foreign withholding taxes of: | | $ | 48 | |
See accompanying notes to financial statements
16
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| PIMCO Inflation Protected Bond Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 19,525,014 | | | $ | 55,960,869 | |
Net realized gain (loss) on investments, futures contracts, written options contracts, swap contracts and foreign currency | | | 80,366,220 | | | | (132,105,270 | ) |
Net change in unrealized appreciation (depreciation) on investments, futures contracts, written options contracts, short sales, swap contracts and foreign currency | | | 54,491,041 | | | | (59,336,294 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 154,382,275 | | | | (135,480,695 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | (34,784,871 | ) | | | (35,085,881 | ) |
Class B | | | (23,506,074 | ) | | | (19,856,826 | ) |
Class E | | | (1,585,313 | ) | | | (1,391,966 | ) |
From net realized gains | | | | | | | | |
Class A | | | — | | | | (1,852,515 | ) |
Class B | | | — | | | | (1,097,413 | ) |
Class E | | | — | | | | (73,870 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (59,876,258 | ) | | | (59,358,471 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 223,663,488 | | | | 382,731,082 | |
Class B | | | 162,748,229 | | | | 425,874,848 | |
Class E | | | 6,505,984 | | | | 58,901,566 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | 34,784,871 | | | | 36,938,396 | |
Class B | | | 23,506,074 | | | | 20,954,239 | |
Class E | | | 1,585,313 | | | | 1,465,836 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (200,223,876 | ) | | | (341,573,326 | ) |
Class B | | | (52,156,765 | ) | | | (228,554,164 | ) |
Class E | | | (6,043,177 | ) | | | (21,806,980 | ) |
| | | | | | | | |
Net increase in net assets from capital share transactions | | | 194,370,141 | | | | 334,931,497 | |
| | | | | | | | |
| Net Increase in Net Assets | | | 288,876,158 | | | | 140,092,331 | |
Net assets at beginning of period | | | 1,406,399,014 | | | | 1,266,306,683 | |
| | | | | | | | |
Net assets at end of period | | $ | 1,695,275,172 | | | $ | 1,406,399,014 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 20,089,215 | | | $ | 59,384,103 | |
| | | | | | | | |
See accompanying notes to financial statements
17
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| PIMCO Inflation Protected Bond Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 9.84 | | | $ | 10.98 | | | $ | 10.08 | | | $ | 10.78 | | | $ | 10.64 | | | $ | 10.29 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.13 | | | | 0.40 | | | | 0.49 | | | | 0.43 | | | | 0.31 | | | | 0.16 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.91 | | | | (1.09 | ) | | | 0.65 | | | | (0.40 | ) | | | (0.15 | ) | | | 0.81 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 1.04 | | | | (0.69 | ) | | | 1.14 | | | | 0.03 | | | | 0.16 | | | | 0.97 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.42 | ) | | | (0.43 | ) | | | (0.24 | ) | | | (0.43 | ) | | | — | | | | (0.11 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (0.02 | ) | | | — | | | | (0.30 | ) | | | (0.02 | ) | | | (0.51 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.42 | ) | | | (0.45 | ) | | | (0.24 | ) | | | (0.73 | ) | | | (0.02 | ) | | | (0.62 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 10.46 | | | $ | 9.84 | | | $ | 10.98 | | | $ | 10.08 | | | $ | 10.78 | | | $ | 10.64 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 10.84 | % | | | (6.88 | )% | | | 11.08 | % | | | 0.65 | % | | | 1.48 | % | | | 9.41 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.53 | %* | | | 0.53 | % | | | 0.55 | % | | | 0.58 | % | | | 0.55 | % | | | 0.62 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.53 | %* | | | 0.53 | % | | | 0.55 | % | | | 0.58 | % | | | N/A | | | | N/A | |
Ratio of Net Investment Income to Average Net Assets | | | 2.67 | %* | | | 3.74 | % | | | 4.78 | % | | | 4.21 | % | | | 2.85 | % | | | 1.39 | % |
Portfolio Turnover Rate | | | 297.4 | % | | | 1,143.3 | % | | | 945.3 | % | | | 851.3 | % | | | 1,228.7 | % | | | 1,173.9 | % |
Net Assets, End of Period (in millions) | | $ | 936.5 | | | $ | 824.7 | | | $ | 857.5 | | | $ | 885.5 | | | $ | 585.8 | | | $ | 331.3 | |
| |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 9.80 | | | $ | 10.96 | | | $ | 10.06 | | | $ | 10.76 | | | $ | 10.63 | | | $ | 10.29 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.13 | | | | 0.37 | | | | 0.46 | | | | 0.40 | | | | 0.27 | | | | 0.08 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.89 | | | | (1.10 | ) | | | 0.66 | | | | (0.41 | ) | | | (0.12 | ) | | | 0.84 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 1.02 | | | | (0.73 | ) | | | 1.12 | | | | (0.01 | ) | | | 0.15 | | | | 0.92 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.39 | ) | | | (0.41 | ) | | | (0.22 | ) | | | (0.39 | ) | | | — | | | | (0.07 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (0.02 | ) | | | — | | | | (0.30 | ) | | | (0.02 | ) | | | (0.51 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.39 | ) | | | (0.43 | ) | | | (0.22 | ) | | | (0.69 | ) | | | (0.02 | ) | | | (0.58 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 10.43 | | | $ | 9.80 | | | $ | 10.96 | | | $ | 10.06 | | | $ | 10.76 | | | $ | 10.63 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 10.62 | % | | | (7.06 | )% | | | 10.80 | % | | | 0.39 | % | | | 1.39 | % | | | 8.99 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.78 | %* | | | 0.78 | % | | | 0.80 | % | | | 0.82 | % | | | 0.80 | % | | | 0.81 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.78 | %* | | | 0.78 | % | | | 0.80 | % | | | 0.82 | % | | | N/A | | | | N/A | |
Ratio of Net Investment Income to Average Net Assets | | | 2.50 | %* | | | 3.44 | % | | | 4.52 | % | | | 3.93 | % | | | 2.52 | % | | | 0.73 | % |
Portfolio Turnover Rate | | | 297.4 | % | | | 1,143.3 | % | | | 945.3 | % | | | 851.3 | % | | | 1,228.7 | % | | | 1,173.9 | % |
Net Assets, End of Period (in millions) | | $ | 715.4 | | | $ | 542.9 | | | $ | 401.6 | | | $ | 367.0 | | | $ | 385.4 | | | $ | 502.3 | |
| (a) | | Per share amounts based on average shares outstanding during the period. |
See accompanying notes to financial statements
18
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | |
| | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | |
| PIMCO Inflation Protected Bond Portfolio | | Class E | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006(b) | |
| Net Asset Value, Beginning of Period | | $ | 9.80 | | | $ | 10.96 | | | $ | 10.06 | | | $ | 9.92 | |
| | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.13 | | | | 0.37 | | | | 0.48 | | | | 0.29 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.90 | | | | (1.09 | ) | | | 0.65 | | | | (0.15 | ) |
| | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 1.03 | | | | (0.72 | ) | | | 1.13 | | | | 0.14 | |
| | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.40 | ) | | | (0.42 | ) | | | (0.23 | ) | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | (0.02 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
Total Distributions | | | (0.40 | ) | | | (0.44 | ) | | | (0.23 | ) | | | — | |
| | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 10.43 | | | $ | 9.80 | | | $ | 10.96 | | | $ | 10.06 | |
| | | | | | | | | | | | | | | | |
| Total Return | | | 10.72 | % | | | (6.92 | )% | | | 10.93 | % | | | 1.41 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.68 | %* | | | 0.68 | % | | | 0.71 | % | | | 0.75 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.68 | %* | | | 0.68 | % | | | 0.71 | % | | | 0.75 | %* |
Ratio of Net Investment Income to Average Net Assets | | | 2.49 | %* | | | 3.47 | % | | | 4.63 | % | | | 4.23 | %* |
Portfolio Turnover Rate | | | 297.4 | % | | | 1,143.3 | % | | | 945.3 | % | | | 851.3 | % |
Net Assets, End of Period (in millions) | | $ | 43.4 | | | $ | 38.8 | | | $ | 7.3 | | | $ | 3.3 | |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—05/01/2006. |
See accompanying notes to financial statements
19
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is PIMCO Inflation Protected Bond Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A, B and E Shares are currently offered by the Portfolio. Class C is not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Financial futures contracts and options thereon, which are traded on exchanges, are valued at their closing prices as of the close of such exchanges. Effective September 4, 2007, exchange traded options are valued at the mean price and previously were valued at the last sale price. Options traded in the over the counter (“OTC”) market are valued at the last ask price (options written) or the last bid price (options purchased). Swap agreements and options thereon are valued based upon quoted fair valuations received daily by the Portfolio from a pricing service or counterparty. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
Short positions traded in the OTC market are valued at the last available ask price.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
20
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | |
Expiring
12/31/2016 | | Total |
| |
| $ | 2,146,834 | | $2,146,834 |
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Financial Derivative Instruments - Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133, (“FAS 161” or the “Statement”) requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. The disclosure requirements of FAS 161 distinguish between derivatives which are accounted for as “hedges” under FAS 133 and those that do not qualify for such accounting. The Portfolio reflects derivatives at fair value and recognizes changes in fair value through the Statement of Operations, and as such do not qualify for FAS 133 hedge accounting treatment.
G. Futures Contracts - The Portfolio may buy and sell futures contracts (on recognized exchanges) as a hedge, to maintain exposure to the broad equity markets, manage exposure to the securities markets or to movements in interest rates, or to enhance returns. The Portfolio may be subject to equity price risk, interest rate risk, and foreign currency exchange rate risk in the normal course of pursuing its investment objectives. Futures contracts are agreements to buy or sell a security, or deliver a final cash settlement price in connection with an index, interest rate, currency, or other contracts not calling for physical delivery, for a set price in the future. The Portfolio must post an amount equal to a portion of the total market value of the futures contract as futures variation margin, which is returned when the Portfolio’s obligations under the contract have been satisfied. From time to time thereafter, the Portfolio may have to post variation margin to maintain this amount as the market value of the contract fluctuates. Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities.
H. Options Contracts - A purchased option contract gives the buyer the right, but not the obligation, to buy (call) or sell (put) an underlying instrument at a fixed exercise price during a specified period. These contracts are generally used by the Portfolio to provide the return of an index without purchasing all of the securities underlying the index or as a substitute for purchasing or selling specific securities.
Purchases of put and call options are recorded as investments, the value of which are marked-to-market daily. When a purchased option expires, the Portfolio will realize a loss equal to the premium paid. When the Portfolio enters into a closing sale transaction, the Portfolio will realize a gain or loss depending on whether the sales proceeds from the closing sale transaction are greater or less than the cost of the option. When the Portfolio exercises a put option, it will realize a gain or loss from the sale of the underlying security and the proceeds from such sale will be decreased by the premium originally paid. When the Portfolio exercises a call option, the cost of the security which the Portfolio purchases upon exercise will be increased by the premium originally paid.
21
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
The premium received for a written option is recorded as an asset and on equivalent liability. The liability is marked-to-market daily based on the option’s quoted market price. When an option expires or the Portfolio enters into a closing purchase transaction, the Portfolio realizes a gain (or loss if the cost of the closing purchase transaction exceeds the premium received when the option was sold) without regard to any unrealized gain or loss on the underlying security and the liability related to such option is eliminated. When a written call option is exercised, the Portfolio realizes a gain or loss from the sale of the underlying security and the proceeds from such sale are increased by the premium originally received. If a written put option is exercised, the amount of the premium originally received will reduce the cost of the underlying security purchased.
The risk associated with purchasing options is limited to the premium originally paid. The risk in writing a covered call option is that the Portfolio may forego the opportunity for profit if the market price of the underlying security increases and the option is exercised. The risk in writing a put option is that the Portfolio may incur a loss if the market price of the underlying security decreases and the option is exercised. The Portfolio, as a writer of an option, has no control over whether the underlying instrument may be sold (call) or purchased (put) and as a result bears the market risk of an unfavorable change in the price of the instrument underlying the written option. There is the risk the Portfolio may not be able to enter into a closing transaction because of an illiquid market. This loss can be greater than premium received. In addition, the Portfolio could be exposed to risks if the counterparties to the transactions are unable to meet the terms of the contracts.
I. Forward Foreign Currency Contracts - The Portfolio may enter into forward foreign currency contracts to hedge its portfolio holdings against future movements in certain foreign currency exchange rates. A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a set price. Forward currency contracts are valued at the forward rate and are marked-to-market daily. The change in market value is recorded by the Portfolio as an unrealized gain or loss. When the contract is closed, the Portfolio recognizes a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The use of forward foreign currency contracts does not eliminate fluctuations in the underlying prices of the securities of the Portfolio, but it does establish a rate of exchange that can be achieved in the future. Although forward foreign currency contracts to sell limit the risk of loss due to a decline in the value of the currency holdings, they also limit any potential gain that might result should the value of the currency increase. In addition, the Portfolio could be exposed to risks if the counterparties to the contracts are unable to meet the terms of the contracts.
J. Foreign Currency Translation - The books and records of the Portfolio are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars on a daily basis using prevailing exchange rates. Purchases and sales of securities are translated at the rates of exchange prevailing when such securities were acquired or sold. Income is translated at rates of exchange prevailing when interest is accrued or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in forward foreign currency contracts; sales of foreign currencies; currency gains or losses realized between the trade and settlement dates on securities transactions; and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Portfolio’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end; from changes in the exchange rates of foreign currency held; and from changes in the contract value of forward foreign currency contracts.
K. Short Sales - The Portfolio may enter into a “short sale” of securities in circumstances in which, at the time the short position is open, the Portfolio owns an equal amount of the securities sold short or owns preferred stocks or debt securities, convertible or exchangeable without payment of further consideration, into an equal number of securities sold short. This kind of short sale, which is referred to as one “against the box,” may be entered into by the Portfolio to, for example, lock in a sale price for a security the Portfolio does not wish to sell immediately.
The Portfolio may also make short sales of a security it does not own, in anticipation of a decline in the market value of that security. To complete such a transaction, the Portfolio must borrow the security to make delivery to the buyer. The Portfolio then is obligated to replace the security borrowed by purchasing it at market price at the time of replacement. The price at such time may be more or less than the price at which the security was sold by the Portfolio. Until the security is replaced, the Portfolio is required to pay to the lender any dividends or interest which accrue during the period of the loan. To borrow the security, the Portfolio also may be required to pay a premium, which would increase the cost of the security sold. The proceeds of the short sale will be retained by the broker, to the extent necessary to meet margin requirements, until the short position is closed out. Until the Portfolio replaces a borrowed security, the Portfolio will segregate with its custodian, or earmark, cash or other liquid assets at such a level that (i) the amount segregated, or earmarked, plus the amount deposited with the broker as collateral will equal the current value of the security sold short and (ii) the amount segregated plus the amount deposited with the broker as collateral will not be less than the market value of the security at the time it was sold short. The Portfolio will incur a loss as a result of the short sale if the price of the security increases between the date of the short sale and the date on which the Portfolio replaces the borrowed security. The Portfolio will realize a gain if the security declines in price between those dates. This result is the opposite of what one would expect from a cash purchase of a long position in a security. The amount of any gain will be decreased, and the amount of any loss increased, by the amount of any premium, dividends or interest the
22
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
Portfolio may be required to pay in connection with a short sale. No more than one third of the Portfolio’s net assets will be, when added together: (i) deposited as collateral for the obligation to replace securities borrowed to effect short sales; and (ii) segregated in connection with short sales.
L. Swap Agreements - The Portfolio may enter into swap contracts. Swap contracts are derivatives agreements to exchange the return generated by one instrument for the return generated by another instrument. The payment streams are calculated by reference to a specified index and agreed upon notional amount. The term “specified index” includes, but is not limited to, currencies, fixed interest rates, prices and total return on interest rate indices, fixed income indices, stock indices and commodity indices (as well as amounts derived from arithmetic operations on these indices). The currency swaps in which the Portfolio may enter will generally involve an agreement to pay interest streams in one currency based on a specified index in exchange for receiving interest streams denominated in another currency. Such swaps may involve initial and final exchanges that correspond to the agreed upon notional amount. A Portfolio will usually enter into swaps on a net basis, i.e., the two payment streams are netted out in a cash settlement on the payment date or dates specified in the instrument, with the Portfolio receiving or paying, as the case may be, only the net amount of the two payments. The Portfolio’s obligations under a swap agreement will be accrued daily (offset against any amounts owing to the Portfolio) and any accrued but unpaid net amounts owed to a swap counterparty will be covered by designating the segregation, either on its records or with the Trust’s custodian, of cash or other liquid assets, to avoid any potential leveraging of the Portfolio. The Portfolio may enter into OTC swap transactions with counterparties that are approved by the investment adviser in accordance with guidelines established by the Board. These guidelines provide for a minimum credit rating for each counterparty and various credit enhancement techniques (for example, collateralization of amounts due from counterparties) to limit exposure to counterparties that have lower credit ratings.
The swaps in which the Portfolio may engage may include instruments under which one party pays a single or periodic fixed amount(s) (or premium), and the other party pays periodic amounts based on the movement of a specified index. Swaps do not involve the delivery of securities, other underlying assets, or principal. Accordingly, the risk of loss with respect to swaps is limited to the net amount of payments the Portfolio is contractually obligated to make. If the other party to a swap defaults, the Portfolio’s risk of loss consists of the net amount of payments that the Portfolio contractually is entitled to receive. Currency swaps usually involve the delivery of the entire principal value of one designated currency in exchange for the other designated currency. Therefore, the entire principal value of a currency swap is subject to the risk that the other party to the swap will default on its contractual delivery obligations. If there is a default by the counterparty, the Portfolio may have contractual remedies pursuant to the agreements related to the transaction. The swap market has grown substantially in recent years with a large number of banks and investment banking firms acting both as principals and as agents utilizing standardized swap documentation. As a result, the swap market has become relatively liquid. Certain swap transactions involve more recent innovations for which standardized documentation has not yet been fully developed and, accordingly, they are less liquid than traditional swap transactions.
The use of swaps is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. If an investment adviser is incorrect in its forecasts of market values, interest rates, and currency exchange rates, the investment performance of the Portfolio would be less favorable than it would have been if this investment technique were not used.
The Portfolio may enter into interest rate swaps and the purchase or sale of related caps and floors. The Portfolio may enter into these transactions primarily to manage its exposure to interest rates, to protect against currency fluctuations, or to preserve a return or spread on a particular investment. The Portfolio is subject to interest rate risk exposure in the normal course of pursuing its investment objectives. Because the Portfolio holds fixed rate bonds, the value of these bonds may decrease if interest rates rise. To help hedge against this risk and to maintain its ability to generate income at prevailing market rates, the Portfolio may enter into interest rate swap contracts. Interest rate swaps are arrangements between two parties to exchange cash flows based on a notional principal amount, to manage the Portfolio’s exposure to interest rates. Interest rate swap contracts are marked-to-market daily based upon quotations from market makers and the change, if any, is recorded as unrealized gain or loss. Payments received or made are recorded as realized gains or loss. The Portfolio could be exposed to credit or market risk due to unfavorable changes in the fluctuation of interest rates or if the counterparty defaults on its obligation to perform. Risks may exceed amounts recognized on the Statement of Assets and Liabilities. A currency swap is an agreement to exchange cash flows on a notional amount of two or more currencies based on the relative value differential among them. An index swap is an agreement to swap cash flows on a notional amount based on changes in the values of the reference indices. The purchase of a cap entitles the purchaser, to the extent that a specific index exceeds a predetermined interest rate, to receive payments of interest on a notional principal amount from the party selling such cap. The purchase of a floor entitles the purchaser to receive payments on a notional principal amount from the party selling such floor to the extent that a specified index falls below a predetermined interest rate or amount. The Portfolio’s maximum risk of loss from counterparty credit risk is the discounted net value of the cash flows to be received from/paid to the counterparty over the contract’s remaining life, to the extent that that amount is positive. This risk is mitigated by having a master netting arrangement between the Portfolio and the counterparty and by the posting of collateral by the counterparty to the Portfolio to cover the Portfolio’s exposure to the counterparty.
The Portfolio is subject to credit risk in the normal course of pursuing its investment objectives. The Portfolio may enter into credit default swaps to manage its exposure to the market or certain sectors of the market, to reduce its risk exposure to defaults of corporate and sovereign issuers, or to create exposure to corporate or sovereign issuers to which it is not otherwise exposed. As the seller in a credit default swap contract, the Portfolio would be required to pay the par (or other agreed upon) value of a referenced debt obligation to the counterparty in the event of a
23
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
default by a third party, such as a U.S. or foreign corporate issuer, on the debt obligation. In return, the Portfolio would receive from the counterparty an upfront or periodic stream of payments over the term of the contract provided that no event of default has occurred. If no default occurs, the Portfolio would keep the stream of payments and would have no payment obligations. An upfront payment received by the Portfolio, as the protection seller, is recorded as a liability on the books. An upfront payment made by the Portfolio, as the protection buyer, is recorded as an asset on the books. As the seller, the Portfolio would be subject to investment exposure on the notional amount of the swap. The Portfolio may also purchase credit default swap contracts in order to hedge against the risk of default of debt securities held in its portfolio, in which case the Portfolio would function as the counterparty referenced in the preceding paragraph. This would involve the risk that the investment may expire worthless and would only generate income in the event of an actual default by the issuer of the underlying obligation (as opposed to a credit downgrade or other indication of financial instability). It would also involve credit risk—the seller may fail to satisfy its payment obligations to the Portfolio in the event of a default. The Portfolio’s maximum risk of loss from counterparty risk, either as the protection seller or as the protection buyer, is the fair value of the contract. This risk is mitigated by having a master netting arrangement between the fund and the counterparty and by the posting of collateral by the counterparty to the Portfolio to cover the Portfolio’s exposure to the counterparty.
Implied credit spreads, represented in absolute terms, utilized in determining the market value of credit default swap agreements on corporate issues or sovereign issues of an emerging country as of period end are disclosed in the footnotes to the Schedules of Investments and serve as an indicator of the status of the payment/performance risk and represent the likelihood or risk of default for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to be made to enter into the agreement. For credit default swap agreements on asset-backed securities and credit indices, the quoted market prices and resulting values serve as the indicator of the current status of the payment/performance risk. Wider credit spreads represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement.
The maximum potential amount of future payments (undiscounted) that a Portfolio as a seller of protection could be required to make under a credit default swap agreement would be an amount equal to the notional amount of the agreement. Notional amounts of all credit default swap agreements outstanding as of June 30, 2009 for which a Portfolio is the seller of protection are disclosed in the notes to the Schedules of Investments. These potential amounts would be partially offset by any recovery values of the respective referenced obligations, upfront payments received upon entering into the agreement, or net amounts received from the settlement of buy protection credit default swap agreements entered into by a Portfolio for the same referenced entity or entities.
Swap agreements are marked to market daily. The change in value, if any, is recorded as unrealized gain or loss in the Statement of Operations. A liquidation payment received or made at the termination of the swap is recorded as realized gain or loss in the Statement of Operations. Net periodic payments are included as part of realized gain (loss) on the Statement of Operations.
At June 30, 2009, the Portfolio had following derivatives (not designated as hedging instruments under SFAS No.133), grouped into appropriate risk categories that illustrate how and why the Portfolio uses derivative instruments:
| | | | | | | | | | | | |
| | | Asset Derivatives | | | Liability Derivatives | |
Derivatives not accounted for as
hedging instruments under Statement 133 | | Balance Sheet Location | | Fair Value | | | Balance Sheet Location | | Fair Value | |
| | | | |
Interest Rate Contracts | | Unrealized appreciation on
Swap Contracts | | $ | 7,302,436 | | | Unrealized depreciation on
Swap Contracts | | $ | (16,215,306 | ) |
| | | | |
Foreign Exchange Contracts | | Unrealized appreciation on
Forward Currency Contracts | | | 224,335 | | | Unrealized depreciation on
Forward Currency Contracts | | | (572,051 | ) |
| | | | |
Credit Contracts | | Unrealized appreciation on
Swap Contracts | | | 409,601 | | | Unrealized depreciation on
Swap Contracts | | | (104,035 | ) |
| | | | |
Equity Contracts | | Variation on margin on
Financial Futures Contracts | | | 49,946 | * | | Variation on margin on
Financial Futures Contracts | | | (45,363 | )* |
| | | | | | | | | | | | |
| | | | |
Total | | | | $ | 8,111,355 | | | | | $ | (17,192,983 | ) |
| | | | | | | | | | | | |
* Includes cumulative appreciation/depreciation of futures contracts as reported in Portfolio of Investments. Only the current day’s variation margin is reported within the Statement of Asset and Liabilities.
24
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
Transactions in derivative instruments during the six months ended June 30, 2009, were as follows:
| | | | | | | | | | | | | | |
Derivatives not accounted for as hedging
instruments under Statement 133 Location | | Interest Rate
Contracts | | | Credit
Contracts | | Other
Contracts | | Total | |
| | | | |
Statement of Operations—Realized Gain (Loss) | | | | | | | | | | | | | | |
| | | | |
Investments | | $ | (1,584,267 | ) | | $ | — | | $ | 444,626 | | $ | (1,139,641 | ) |
| | | | |
Futures Contracts | | | 35,907,806 | | | | — | | | — | | | 35,907,8056 | |
| | | | |
Swap Contracts | | | (40,388,962 | ) | | | 3,671,613 | | | — | | | (36,717,349 | ) |
| | | | |
Options Contracts | | | (257,703 | ) | | | — | | | — | | | (257,703 | ) |
| | | | | | | | | | | | | | |
| | | | |
Total | | $ | (5,950,065 | ) | | $ | 3,671,613 | | $ | 444,626 | | $ | (1,833,827 | ) |
| | | | | | | | | | | | | | | | | | |
Location | | Interest Rate
Contracts | | | Foreign
Exchange
Contracts | | Credit
Contracts | | | Other
Contracts | | Total | |
| | | | | |
| Statement of Operations—Change in Unrealized Gain (Loss) | | | | | | | | | | | | | | | | | | |
| | | | | |
Investments | | $ | 2,380,148 | | | $ | — | | $ | — | | | $ | — | | $ | 2,380,148 | |
| | | | | |
Futures Contracts | | | (38,088,001 | ) | | | — | | | — | | | | — | | | (38,088,001 | ) |
| | | | | |
Swap Contracts | | | 65,680,869 | | | | — | | | (5,375,806 | ) | | | — | | | 60,305,063 | |
| | | | | |
Foreign Currency | | | — | | | | 5,117,208 | | | — | | | | — | | | 5,117,208 | |
| | | | | |
Options Contracts | | | 319,812 | | | | — | | | — | | | | 72,588 | | | 392,400 | |
| | | | | | | | | | | | | | | | | | |
| | | | | |
Total | | $ | 30,292,827 | | | $ | 5,117,208 | | $ | (5,375,806 | ) | | $ | 72,588 | | $ | 30,106,818 | |
| | | | | | | | | | | | | | | |
Number of Contracts, Nominal Amounts or Shares/Units* | | Interest Rate
Contracts Risk | | | Credit Contracts
Risk | | Other
Contracts Risk | | | Total | |
| | | | |
Options Written(1) | | $ | (181,100,000 | ) | | $ | — | | $ | (954,500 | ) | | $ | (182,054,500 | ) |
| | | | |
Swaptions(1) | | | (14,000,000 | ) | | | — | | | — | | | | (14,000,000 | ) |
| | | | |
Swaps Contracts(2) | | | 36,800,000 | | | | 10,200,000 | | | — | | | | 47,000,000 | |
| | | | |
Futures Contracts(2) | | | 92,375,000 | | | | — | | | — | | | | 92,375,000 | |
(1) Amount(s) represent(s) number of contracts or number of Shares/Units.
(2) Amount(s) represent(s) notional amounts.
* Calculated based on number of contracts or notional amounts as of the prior fiscal year-end and each subsequent fiscal quarter-end.
M. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
The Portfolio may enter into reverse repurchase agreements with broker-dealers and other financial institutions, under which it sells a security and agrees to repurchase it at a mutually agreed upon date and price, reflecting the interest rate effective for the term of the agreement. The Portfolio will earmark, or establish and maintain a segregated account with an approved custodian containing cash or other liquid securities having a value not less than the repurchase price (including accrued interest). The assets contained in the segregated account will be marked-to-market daily and additional assets will be placed in such account on any day in which the assets fall below the repurchase price (plus accrued interest). The Portfolio’s liquidity and ability to manage its assets might be affected when it sets aside cash or portfolio securities to cover
25
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
such commitments. Reverse repurchase agreements involve the risk that the market value of the securities retained in lieu of sale may decline below the price of the securities the Portfolio has sold but is obligated to repurchase. In the event the buyer of securities under a reverse repurchase agreement files for bankruptcy or becomes insolvent, such buyer or its trustee or receiver may receive an extension of time to determine whether to enforce the Portfolio’s obligation to repurchase the securities, and a Portfolio’s use of the proceeds of the reverse repurchase agreement may effectively be restricted pending such decision.
N. Forward Commitments, When-Issued and Delayed Delivery Securities - The Portfolio may purchase securities on a when-issued or delayed delivery basis and may purchase or sell securities on a forward commitment basis. Settlement of such transactions normally occurs within a month or more after the purchase or sale commitment is made. The Portfolio may purchase securities under such conditions only with the intention of actually acquiring them, but may enter into a separate agreement to sell the securities before the settlement date. Since the value of securities purchased may fluctuate prior to settlement, the Portfolio may be required to pay more at settlement than the security is worth. In addition, the purchaser is not entitled to any of the interest earned prior to settlement. Upon making a commitment to purchase a security on a when-issued, delayed delivery or forward commitment basis, the Portfolio will hold liquid assets in a segregated account at the Portfolio’s custodian bank worth at least the equivalent of the amount due. The liquid assets will be monitored on a daily basis and adjusted as necessary to maintain the necessary value.
O. Loan Participations - The Portfolio may invest in loans arranged through private negotiation between one or more financial institutions. The Portfolio’s investment in any such loan may be in the form of a participation in or an assignment of the loan. In connection with purchasing participations, the Portfolio generally will have no right to enforce compliance by the borrower with the terms of the loan agreement relating to the loan, nor any rights of set-off against the borrower and the Portfolio may not benefit directly from any collateral supporting the loan in which it has purchased the participation.
P. Mortgage Related and Other Asset Backed Securities - The Portfolio may invest in mortgage related or other asset-backed securities. These securities may include mortgage pass-through securities, collateralized mortgaged obligations (“CMOs”), commercial mortgage-backed securities, mortgage dollar rolls, CMO residuals, stripped mortgage backed securities (“SMBS”) and other securities that directly or indirectly represent a participation in, or are secured by a payable from, mortgage loans on real property or other receivables. The value of some mortgage or asset-backed securities may be particularly sensitive to changes in prevailing interest rates. Early repayment of principal on some mortgage-related securities may expose the Portfolio to a lower rate of return upon reinvestment of principal. The value of these securities may fluctuate in response to the market’s perception of the creditworthiness of the issuers. Additionally, although mortgages and mortgage-related securities are generally supported by some form of government or private guarantee and/or insurance, there is no assurance that private guarantors or insurers will meet their obligations.
One type of SMBS has one class receiving all of the interest from the mortgage assets (the interest-only or “IO” class), while the other class will receive all of the principal (the principal-only or “PO” class). Payments received for the IOs are included in interest income on the Statement of Operations of the Portfolio. Because principal will not be received at the maturity of an IO, adjustments are made to the book value on the security on a daily basis until maturity. These adjustments are included in interest income on the Statement of Operations of the Portfolio. Payments received for POs are treated as reductions to the cost and par value of the securities. Details of mortgage related and other asset-backed securities held at year end are included in the Portfolio’s Portfolio of Investments.
The Portfolio may invest a significant portion of its assets in securities of issuers that hold mortgage and asset backed securities and direct investments in securities backed by commercial and residential mortgage loans and other financial assets. The value and related income of these securities are sensitive to changes in economic conditions, including delinquencies and/or defaults, and may be negatively impacted by increased volatility of market prices and periods of illiquidity.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with Pacific Investment Management Company LLC (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
26
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $3,679,323 | | 0 | .50 | % | | First $1.2 Billion |
| | |
| | 0 | .45 | % | | Over $1.2 Billion |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A, Class B and Class E Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B and Class E distribution plans provide that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%, respectively, of the average net assets of the Portfolio attributable to its Class B and Class E Shares in respect to activities primarily intended to result in the sale of Class B and Class E Shares. However, under the Class B and Class E distribution agreements, payments to the Distributor for activities pursuant to the Class B and Class E distribution plans are currently limited to payments at an annual rate equal to 0.25% and 0.15% of average daily net assets of the Portfolio attributable to its Class B and Class E Shares, respectively.
Under terms of the Class B and Class E distribution plans and distribution agreements, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B and Class E Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
in Shares
Outstanding | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 83,843,735 | | 22,096,210 | | 3,475,012 | | (19,848,882 | ) | | 5,722,340 | | 89,566,075 |
12/31/2008 | | 78,065,795 | | 34,924,889 | | 3,376,453 | | (32,523,402 | ) | | 5,777,940 | | 83,843,735 |
| | | | | | |
Class B | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 55,385,444 | | 15,997,439 | | 2,352,960 | | (5,147,938 | ) | | 13,202,461 | | 68,587,905 |
12/31/2008 | | 36,654,339 | | 38,712,122 | | 1,918,886 | | (21,899,903 | ) | | 18,731,105 | | 55,385,444 |
| | | | | | |
Class E | | | | | | | | | | | | | |
6/30/2009 | | 3,962,243 | | 637,538 | | 158,849 | | (596,925 | ) | | 199,462 | | 4,161,705 |
12/31/2008 | | 662,072 | | 5,285,639 | | 134,357 | | (2,119,825 | ) | | 3,300,171 | | 3,962,243 |
27
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $7,420,003,276 | | $ | 75,748,203 | | $ | 7,539,051,503 | | $ | 121,554,085 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net
Unrealized
Appreciation |
| | | |
| $2,701,084,879 | | $ | 72,349,097 | | $ | (45,127,524 | ) | | $ | 27,221,573 |
6. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $ | 59,358,471 | | $ | 32,293,304 | | $ | — | | $ | — | | $ | 59,358,471 | | $ | 32,293,304 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards | | | Total | |
| | | | |
| $ | 60,649,210 | | $ | — | | (189,155,755 | ) | | $ | (2,146,834 | ) | | $ | (130,653,379 | ) |
7. Futures Contracts
The futures contracts outstanding as of June 30, 2009 and the description and unrealized appreciation (depreciation) were as follows:
| | | | | | | | | | | | | |
Description | | Counterparty | | Expiration Date | | Number of
Contracts | | Notional Value | | Unrealized
Appreciation/
(Depreciation) | |
| | | | | |
Euribor Futures | | Citigroup Global Markets, Inc. | | June 2010—Long | | 66 | | $ | 22,765,178 | | $ | 35,856 | |
| | | | | |
Euribor Futures | | Citigroup Global Markets, Inc. | | September 2010—Long | | 67 | | | 23,036,132 | | | 14,090 | |
| | | | | |
Euro Dollar Futures | | Citigroup Global Markets, Inc. | | December 2009—Long | | 34 | | | 8,423,075 | | | (3,825 | ) |
| | | | | |
Sterling Futures | | Merrill Lynch, Pierce, Fenner & Smith, Inc. | | June 2010—Long | | 405 | | | 81,499,305 | | | (132,928 | ) |
| | | | | | | | | | | | | |
| | | | | |
| | | | | | | | | | | $ | (86,807 | ) |
| | | | | | | | | | | | | |
8. Forward Foreign Currency Contracts
Forward Foreign Currency Contracts to Buy:
| | | | | | | | | | | | | | | |
Settlement Date | | Counterparty | | Contracts to Buy | | Value at
June 30, 2009 | | In Exchange for U.S.$ | | Net Unrealized
Appreciation/
(Depreciation) |
| | | | | | |
07/23/2009 | | Goldman Sachs & Co. | | 373,000 | | AUD | | $ | 299,944 | | $ | 293,112 | | $ | 6,832 |
| | | | | | |
08/04/2009 | | HSBC Bank Plc | | 2,610,624 | | BRL | | | 1,320,253 | | | 1,190,706 | | | 129,547 |
28
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
8. Forward Foreign Currency Contracts - continued
| | | | | | | | | | | | | | | | |
Settlement Date | | Counterparty | | Contracts to Buy | | Value at
June 30, 2009 | | In Exchange for U.S.$ | | Net Unrealized
Appreciation/
(Depreciation) | |
| | | | | | |
07/15/2009 | | Deutsche Bank Securities, Inc. | | 5,017,312 | | CNY | | $ | 734,541 | | $ | 782,000 | | $ | (47,459 | ) |
| | | | | | |
07/15/2009 | | Deutsche Bank Securities, Inc. | | 10,205,220 | | CNY | | | 1,494,058 | | | 1,580,000 | | | (85,942 | ) |
| | | | | | |
07/15/2009 | | HSBC Bank Plc | | 15,865,956 | | CNY | | | 2,322,798 | | | 2,430,000 | | | (107,202 | ) |
| | | | | | |
09/08/2009 | | Barclays Bank Plc | | 18,343,680 | | CNY | | | 2,687,462 | | | 2,720,000 | | | (32,538 | ) |
| | | | | | |
09/08/2009 | | HSBC Bank Plc | | 20,664,180 | | CNY | | | 3,027,430 | | | 3,060,000 | | | (32,570 | ) |
| | | | | | |
09/08/2009 | | Citibank | | 6,411,885 | | CNY | | | 939,381 | | | 930,000 | | | 9,381 | |
| | | | | | |
03/29/2010 | | HSBC Bank Plc | | 4,547,441 | | CNY | | | 670,270 | | | 672,400 | | | (2,130 | ) |
| | | | | | |
03/29/2010 | | Citibank | | 4,725,924 | | CNY | | | 696,577 | | | 699,619 | | | (3,042 | ) |
| | | | | | |
03/29/2010 | | Deutsche Bank Securities, Inc. | | 9,252,768 | | CNY | | | 1,363,811 | | | 1,372,000 | | | (8,189 | ) |
| | | | | | |
03/29/2010 | | Deutsche Bank Securities, Inc. | | 3,159,881 | | CNY | | | 465,750 | | | 468,200 | | | (2,450 | ) |
| | | | | | |
03/29/2010 | | JPMorgan Securities, Inc. | | 42,500 | | CNY | | | 6,264 | | | 6,288 | | | (24 | ) |
| | | | | | |
03/29/2010 | | Barclays Bank Plc | | 664,700 | | CNY | | | 97,973 | | | 98,372 | | | (399 | ) |
| | | | | | |
03/29/2010 | | Deutsche Bank Securities, Inc. | | 5,374 | | CNY | | | 792 | | | 794 | | | (2 | ) |
| | | | | | |
03/29/2010 | | Deutsche Bank Securities, Inc. | | 21,743,796 | | CNY | | | 3,204,924 | | | 3,214,160 | | | (9,236 | ) |
| | | | | | |
07/02/2009 | | Royal Bank of Scotland Plc | | 225,000 | | GBP | | | 370,102 | | | 352,819 | | | 17,283 | |
| | | | | | |
11/27/2009 | | Citibank | | 325,605 | | MXN | | | 24,211 | | | 21,845 | | | 2,366 | |
| | | | | | |
11/27/2009 | | JPMorgan Securities, Inc. | | 49,304 | | MXN | | | 3,666 | | | 3,649 | | | 17 | |
| | | | | | |
08/12/2009 | | Barclays Bank Plc | | 11,111 | | MYR | | | 3,156 | | | 3,114 | | | 42 | |
| | | | | | |
07/30/2009 | | HSBC Bank Plc | | 1,070,336 | | SGD | | | 738,939 | | | 740,000 | | | (1,061 | ) |
| | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | $ | (166,776 | ) |
| | | | | | | | | | | | | | | | |
Forward Foreign Currency Contracts to Sell:
| | | | | | | | | | | | | | | | |
Settlement Date | | Counterparty | | Contracts to Deliver | | Value at
June 30, 2009 | | In Exchange for U.S.$ | | Net Unrealized
Appreciation/
(Depreciation) | |
07/23/2009 | | Barclays Bank Plc | | 800,000 | | AUD | | $ | 643,311 | | $ | 644,112 | | $ | 801 | |
| | | | | | |
07/23/2009 | | JPMorgan Securities, Inc. | | 3,550,000 | | AUD | | | 2,854,693 | | | 2,830,145 | | | (24,548 | ) |
| | | | | | |
07/02/2009 | | Royal Bank of Scotland Plc | | 1,032,000 | | CHF | | | 949,533 | | | 967,968 | | | 18,435 | |
| | | | | | |
10/01/2009 | | JPMorgan Securities, Inc. | | 1,032,000 | | CHF | | | 950,683 | | | 953,974 | | | 3,291 | |
| | | | | | |
07/15/2009 | | Deutsche Bank Securities, Inc. | | 9,344,692 | | CNY | | | 1,368,076 | | | 1,372,000 | | | 3,924 | |
| | | | | | |
07/15/2009 | | Deutsche Bank Securities, Inc. | | 21,743,796 | | CNY | | | 3,183,321 | | | 3,182,640 | | | (681 | ) |
| | | | | | |
09/08/2009 | | JPMorgan Securities, Inc. | | 8,064,721 | | CNY | | | 1,181,531 | | | 1,154,164 | | | (27,367 | ) |
| | | | | | |
07/27/2009 | | Barclays Bank Plc | | 5,389,000 | | EUR | | | 7,555,418 | | | 7,519,595 | | | (35,823 | ) |
| | | | | | |
07/02/2009 | | Citibank | | 2,491,000 | | GBP | | | 4,097,444 | | | 3,854,137 | | | (243,308 | ) |
| | | | | | |
07/02/2009 | | Goldman Sachs & Co. | | 185,000 | | GBP | | | 304,306 | | | 296,901 | | | (7,405 | ) |
| | | | | | |
07/02/2009 | | Barclays Bank Plc | | 135,000 | | GBP | | | 222,061 | | | 219,764 | | | (2,297 | ) |
| | | | | | |
08/06/2009 | | JPMorgan Securities, Inc. | | 2,586,000 | | GBP | | | 4,253,557 | | | 4,255,372 | | | 1,815 | |
| | | | | | |
07/02/2009 | | Royal Bank of Scotland Plc | | 3,576,356,000 | | JPY | | | 37,087,587 | | | 37,118,188 | | | 30,601 | |
29
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
8. Forward Foreign Currency Contracts - continued
| | | | | | | | | | | | | | | | |
Settlement Date | | Counterparty | | Contracts to Deliver | | Value at
June 30, 2009 | | In Exchange for U.S.$ | | Net Unrealized
Appreciation/
(Depreciation) | |
| | | | | | |
07/02/2009 | | Credit Suisse First Boston Corp. | | 9,157,000 | | JPY | | $ | 94,960 | | $ | 93,149 | | $ | (1,811 | ) |
| | | | | | |
08/04/2009 | | JPMorgan Securities, Inc. | | 3,585,513,000 | | JPY | | | 37,197,114 | | | 37,322,152 | | | 125,037 | |
| | | | | | |
07/30/2009 | | Citibank | | 1,070,336 | | SGD | | | 738,939 | | | 717,335 | | | (21,604 | ) |
| | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | $ | (180,940 | ) |
| | | | | | | | | | | | | | | | |
AUD - Australian Dollar
BRL - Brazilian Real
CHF - Swiss Franc
CNY - China Yuan Renminbi
EUR - Euro Dollar
GBP - Great Britain Pound
JPY - Japanese Yen
MXN - Mexican Peso
MYR - Malaysian Ringgit
SGD - Singapore Dollar
9. Options
During the period ended June 30, 2009 the following options contracts were written:
| | | | | | | |
| | | Number of
Contracts | | | Premium | |
Options outstanding at December 31, 2008 | | 45,500,099 | | | $ | 1,243,060 | |
Options written | | 285,401,839 | | | | 2,081,542 | |
Options bought back | | (27,900,000 | ) | | | (742,000 | ) |
Options closed and expired | | (107,901,501 | ) | | | (725,837 | ) |
Options exercised | | — | | | | — | |
| | | | | | | |
Options outstanding at June 30, 2009 | | 195,100,437 | | | $ | 1,856,765 | |
| | | | | | | |
10. Swap Agreements
Open interest rate swap agreements at June 30, 2009 were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | |
Pay/Receive
Floating Rate | | Floating Rate Index | | Fixed Rate | | | Maturity Date | | Counterparty | | Notional Amount | | Market Value | | | Upfront
Premium
Paid/(Received) | | | Unrealized
Appreciation/
(Depreciation) | |
Receive | | 3M-USD-LIBOR-BBA | | 4.000 | % | | 12/16/2014 | | Deutsche Bank Securities, Inc. | | USD | | 30,900,000 | | $ | 950,928 | | | $ | 194,670 | | | $ | 756,258 | |
| | | | | | | | | |
Receive | | 3M-USD-LIBOR-BBA | | 3.500 | % | | 6/24/2016 | | Deutsche Bank Securities, Inc. | | USD | | 5,900,000 | | | 33,297 | | | | — | | | | 33,297 | |
| | | | | | | | | |
Receive | | 3-Month BRL-CDI | | 12.540 | % | | 1/2/2012 | | Morgan Stanley & Co., Inc. | | BRL | | 2,500,000 | | | 38,916 | | | | (7,260 | ) | | | 46,176 | |
| | | | | | | | | |
Receive | | BRL PTAX | | 10.115 | % | | 1/2/2012 | | Morgan Stanley & Co., Inc. | | BRL | | 66,200,000 | | | (1,455,695 | ) | | | (1,087,869 | ) | | | (367,826 | ) |
| | | | | | | | | |
Receive | | EUR-EURIBOR | | 4.500 | % | | 3/18/2011 | | Goldman Sachs & Co. | | EUR | | 1,200,000 | | | 78,295 | | | | (2,522 | ) | | | 80,817 | |
| | | | | | | | | |
Pay | | N/A | | 2.261 | % | | 7/14/2011 | | JPMorgan Securities, Inc. | | EUR | | 82,600,000 | | | 4,913,086 | | | | — | | | | 4,913,086 | |
| | | | | | | | | |
Pay | | Interp Index | | 2.352 | % | | 10/15/2016 | | JPMorgan Securities, Inc. | | EUR | | 2,500,000 | | | (81,554 | ) | | | — | | | | (81,554 | ) |
| | | | | | | | | |
Pay | | 6-Month GBP-LIBOR | | 5.000 | % | | 3/18/2014 | | Goldman Sachs & Co. | | GBP | | 16,200,000 | | | 1,595,405 | | | | 122,603 | | | | 1,472,802 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | | | | | | | $ | 6,072,678 | | | $ | (780,378 | ) | | $ | 6,853,056 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
30
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
10. Swap Agreements - continued
Open credit default swap agreements at June 30, 2009 were as follows:
Credit Default Swaps on Corporate and Sovereign Issuers - Buy Protection(1)
| | | | | | | | | | | | | | | | | | | | | | | | |
Reference Obligation | | Fixed Deal
(Pay) Rate | | | Maturity
Date | | Counterparty | | Implied Credit
Spread at June 30,
2009(2) | | | Notional
Amount(3) | | Market Value | | | Upfront Premium
Paid/(Received) | | Unrealized
Appreciation/
(Depreciation) | |
Black and Decker Corp. (The)
8.950%, due 04/15/2014 | | (2.200 | %) | | 6/20/2014 | | Citibank | | 1.599 | % | | $ | 2,000,000 | | $ | (53,975 | ) | | $ | — | | $ | (53,975 | ) |
| | | | | | | | |
Constellation Energy Group, Inc.
4.550%, due 06/15/2015 | | (0.960 | %) | | 6/20/2015 | | JPMorgan Securities, Inc. | | 1.636 | % | | | 200,000 | | | 7,012 | | | | — | | | 7,012 | |
| | | | | | | | |
Echostar DBS Corp.
6.625%, due 10/01/2014 | | (3.650 | %) | | 12/20/2013 | | Citibank | | 3.532 | % | | | 6,200,000 | | | (28,940 | ) | | | — | | | (28,940 | ) |
| | | | | | | | |
Exelon Corp.
4.900%, due 06/15/2015 | | (0.960 | %) | | 6/20/2015 | | Citibank | | 2.179 | % | | | 1,000,000 | | | 61,709 | | | | — | | | 61,709 | |
| | | | | | | | |
International Lease
Finance Corp.
6.625%, due 11/15/2013 | | (1.530 | %) | | 12/20/2013 | | JPMorgan Securities, Inc. | | 9.152 | % | | | 1,100,000 | | | 255,340 | | | | — | | | 255,340 | |
| | | | | | | | |
Lexmark International, Inc.
5.900%, due 06/01/2013 | | (1.170 | %) | | 6/20/2013 | | JPMorgan Securities, Inc. | | 1.398 | % | | | 5,000,000 | | | 42,135 | | | | — | | | 42,135 | |
| | | | | | | | |
Qwest Capital Funding, Inc.
7.075%, due 02/15/2031 | | (3.250 | %) | | 9/20/2009 | | JPMorgan Securities, Inc. | | 5.977 | % | | | 2,000,000 | | | 12,237 | | | | — | | | 12,237 | |
| | | | | | | | |
Southwest Airlines Co.
5.125%, due 03/01/2017 | | (1.320 | %) | | 3/20/2017 | | Bank of America Securities LLC | | 1.822 | % | | | 1,000,000 | | | 31,169 | | | | — | | | 31,169 | |
| | | | | | | | |
Western Union Co. (The)
5.930%, due 10/01/2016 | | (0.795 | %) | | 12/20/2016 | | Bank of America Securities LLC | | 0.635 | % | | | 2,000,000 | | | (21,120 | ) | | | — | | | (21,120 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
| | | | | | | | | | | | | | | $ | 305,567 | | | $ | — | | $ | 305,567 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
BRL - Brazilian Real
EUR - Euro Dollar
GBP - British Pound
USD - United States Dollar
| (1) | | If the Portfolio is a buyer of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Portfolio will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and deliver the referenced obligation or underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index. |
| (2) | | Implied credit spreads, represented in absolute terms, utilized in determining the market value of credit default swap agreements on corporate issues or sovereign issues of an emerging country as of period end serve as an indicator of the current status of the payment/performance risk and represent the likelihood or risk of default for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to be made to enter into the agreement. Wider credit spreads represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement. A credit spread identified as “Defaulted” indicates a credit event has occurred for the referenced entity or obligation. |
| (3) | | The maximum potential amount of future undiscounted payments that the Portfolio could be required to make under a credit default swap contract would be the notional amount of the contract. These potential amounts would be partially offset by any recovery values of the referenced debt obligation or net amounts received from the settlement purchased protection credit default swap contracts entered into by the Portfolio for the same referenced debt obligation. |
11. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
12. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and
31
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
12. Market, Credit and Counterparty Risk - continued
price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
13. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
14. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
32
| | |
| PIMCO Total Return Portfolio | | For the period ended 6/30/09 |
| Managed by Pacific Investment Management Company LLC | | |
Portfolio Manager Commentary
Performance
During the period ended June 30, 2009, the Portfolio had a return of 9.43%, 9.28% and 9.39% for Class A, B and E Shares, respectively, versus 1.90% for its benchmark, the Barclays Capital U.S. Aggregate Bond Index.
Market Environment/Conditions
Interest rates rose and capital flowed back toward riskier assets during the first half of 2009. Government policy initiatives helped restore a measure of stability to financial markets after the extreme stress and volatility of last year. The Barclays Capital U.S. Aggregate Index, a widely used index of U.S. high-grade bonds, returned 1.90 percent for the first six months of 2009. The Index was weighed down by the negative performance of its Treasury component. Yields on Treasuries climbed sharply, especially intermediate and longer maturities, resulting in a steeper yield curve. The yield on the benchmark 10-year Treasury ended the period at 3.54 percent, up 132 basis points from the start of the year. The 10-year Treasury yield touched 4 percent in the second quarter before falling back. Higher Treasury yields were a drag on economic recovery as they muted the impact of narrower yield and credit premiums for borrowers, especially in the home mortgage market. While some of the weakening in Treasury valuations could be explained by a reversal of last year’s flight to liquidity and quality, other factors were in play as well. Investors worried that the massive new issuance of Treasuries looming on the horizon would overwhelm demand. Another concern was that the Federal Reserve’s injection of liquidity into the economy via purchases of Treasuries and other securities, a tactic known as quantitative easing, would eventually fuel inflation once the economy started to recover.
While measures of inflation expectations increased in the first six months of 2009, actual inflation, especially when adjusted for food and energy prices, was subdued. With unemployment approaching 10 percent in the U.S. there was plenty of slack in the economy to restrain price increases. Perhaps the most encouraging economic news came on the final day of the period, with data showing a slower rate of decline in residential property prices. That raised hopes that the real estate slump might be nearing a bottom.
Portfolio Review/Current Positioning
Yield curve steepening strategies, including exposure to short maturities in the U.S., U.K. and Europe, were positive for performance as yield curves generally steepened across the globe; the US yield curve steepened by 131 basis points (“bps”), the U.K. curve steepened by 41 bps, and the European yield curve steepened by 105 bps. However, above-benchmark duration positioning was negative for performance during the first half of 2009 as Treasury yields rose sharply. 10-year U.S. Treasuries rose 132 bps and 30-year U.S. Treasuries rose 165 bps over the first six months of the year.
On a duration-adjusted basis, sectors that trade at a spread to U.S. Treasuries outperformed. A substantial overweight to high quality agency mortgage pass-through securities significantly added to performance as these bonds outperformed. The primary driver of
Agency Mortgage-Backed Securities (“MBS”) has been the government’s purchases of mortgages through the Federal Reserve MBS Purchase Program. Year-to-date the Fed has purchased nearly $600 billion of Agency MBS, driving spreads tighter and rates lower. Additionally, within the Investment-grade credit sector, an emphasis on bonds of financial companies was positive for performance during the first half of 2009, as major banks began to wean themselves off government aid. Spreads also benefited from the positive outcome of the government’s stress tests which helped calm investor sentiment. Financials’ spreads tightened 200 basis points year-to-date.
Holdings of real return bonds also added to year-to-date performance. Inflation-Linked bonds continued to outpace their nominal Treasury counterparts as investors sought protection against inflation. Lastly, a tactical allocation to municipals was positive for performance as yield differences between municipals and Treasuries continued to narrow over the first half of the year.
The Portfolio favors high quality, yield-oriented securities in an environment of low growth and political uncertainty. With regard to duration and curve positioning, the Portfolio is overweight duration as Treasury yields are near the top of our expected range over a cyclical time frame, and is positioned for yield curve steepening in the U.S., Europe and the U.K. as central banks are likely to tighten more slowly than markets expect.
The Portfolio is modestly overweight to Agency mortgages. These securities remain a relatively attractive source of high quality income, though their recent rally has driven their yield premiums closer to fair value. The Portfolio also has an emphasis on high-grade corporate sectors with defensive characteristics and assets that typically provide strong collateral, such as pipeline, utility, telecom and energy companies. Additionally, the Portfolio has exposure to municipal bonds, especially longer maturities, which still offer attractive relative value versus taxable bonds, as well as an allocation to U.S. Treasury Inflation Protected Securities, where new issuance is expected to be light and which offer a potential hedge against long-run inflation risks.
William H. Gross, CFA
Managing Director, Co-Chief Investment Officer
Pacific Investment Management Company LLC
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon
1
| | |
| PIMCO Total Return Portfolio | | For the period ended 6/30/09 |
| Managed by Pacific Investment Management Company LLC | | |
Portfolio Manager Commentary (continued)
as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
Federal National Mortgage Assoc. (6.000%, due TBA) | | 23.48% |
Federal Home Loan Mortgage Corp. (0.936%, due 08/05/11) | | 11.87% |
Federal Home Loan Mortgage Corp. (5.500%, due TBA) | | 9.52% |
Federal Home Loan Mortgage Corp. (0.926%, due 05/04/11) | | 7.22% |
Federal National Mortgage Assoc. (5.500%, due TBA) | | 1.77% |
Federal National Mortgage Assoc. (5.500%, due 09/01/38) | | 1.70% |
Brazil Notas do Tesouro Nacional, Series F (10.000%, due 12/01/12) | | 1.58% |
U.S. Treasury Inflation Index Note (1.625%, due 01/15/15) | | 1.57% |
Federal National Mortgage Assoc. (6.000%, due 08/01/37) | | 1.12% |
GlaxoSmithKline Capital, Inc. (4.850%, due 05/15/13) | | 0.91% |
Portfolio Composition (% of portfolio market value)
As of 6/30/09
2
| | |
| PIMCO Total Return Portfolio | | For the period ended 6/30/09 |
| Managed by Pacific Investment Management Company LLC | | |
Portfolio Manager Commentary (continued)
PIMCO Total Return Portfolio managed by
Pacific Investment Management Company LLC vs. Barclays Capital U.S. Aggregate Bond Index1
Growth Based on $10,000+
| | | | | | | | | | | | |
| | | | | Average Annual Return2 (for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | 3 Year | | 5 Year | | Since
Inception3 |
| | PIMCO Total Return
Portfolio—Class A | | 9.43% | | 10.48% | | 7.69% | | 5.94% | | 6.24% |
| — | | Class B | | 9.28% | | 10.24% | | 7.45% | | 5.67% | | 5.85% |
| | Class E | | 9.39% | | 10.35% | | 7.56% | | 5.78% | | 5.37% |
| - - | | Barclays Capital U.S. Aggregate Bond Index1 | | 1.90% | | 6.05% | | 6.43% | | 5.01% | | 5.49% |
+The chart reflects the performance of Class B shares of the Portfolio. The performance of Class B shares will differ from that of the other classes because of the difference in expenses paid by policyholders investing in the different share classes.
1The Barclays Capital U.S. Aggregate Bond Index includes most obligations of the U.S. Treasury, agencies and quasi-federal corporations, most publicly issued investment grade corporate bonds and most bonds backed by mortgage pools of GNMA, FNMA and FHLMC.
2“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
3Inception of the Class A shares is 5/1/01. Inception of the Class B shares is 2/12/01. Inception of the Class E shares is 11/1/01. Index returns are based on an inception date of 2/12/01.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Index does not include fees or expenses and is not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| PIMCO Total Return Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
| | | | |
Class A | | | | | | | | | | | |
Actual | | 0.52% | | $ | 1,000.00 | | $ | 1,094.30 | | $ | 2.70 |
Hypothetical | | 0.52% | | | 1,000.00 | | | 1,022.22 | | | 2.61 |
| | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class B | | | | | | | | | | | |
Actual | | 0.77% | | $ | 1,000.00 | | $ | 1,092.80 | | $ | 4.00 |
Hypothetical | | 0.77% | | | 1,000.00 | | | 1,020.98 | | | 3.86 |
| | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class E | | | | | | | | | | | |
Actual | | 0.67% | | $ | 1,000.00 | | $ | 1,093.90 | | $ | 3.48 |
Hypothetical | | 0.67% | | | 1,000.00 | | | 1,021.47 | | | 3.36 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
4
Met Investors Series Trust
PIMCO Total Return Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Municipals - 2.5% |
Badger Tobacco Asset Securitization Corp. | | | | | | |
6.125%, due 06/01/27 | | $ | 190,000 | | $ | 205,253 |
6.375%, due 06/01/32 | | | 360,000 | | | 402,462 |
Buckeye Tobacco Settlement Financing Authority
5.875%, due 06/01/47 | | | 4,600,000 | | | 2,602,450 |
Chicago Transit Authority Transfer Tax Receipts Revenue, Series A
6.300%, due 12/01/21 | | | 400,000 | | | 414,088 |
6.899%, due 12/01/40 | | | 7,300,000 | | | 7,811,511 |
Series B | | | | | | |
6.300%, due 12/01/21 | | | 700,000 | | | 724,654 |
6.899%, due 12/01/40 | | | 7,200,000 | | | 7,704,504 |
Clark County NV, Refunding
4.750%, due 06/01/30 | | | 5,500,000 | | | 4,926,405 |
Dallas, Texas Area Rapid Transit
5.000%, due 12/01/36 (AMBAC) | | | 19,500,000 | | | 19,441,305 |
Golden State Tobacco Securitization Corp., Series A-1
5.000%, due 06/01/33 | | | 10,000,000 | | | 6,706,900 |
Houston, Texas Utilities System, Series A
5.000%, due 11/15/36 | | | 2,700,000 | | | 2,629,152 |
Illinois Finance Authority, Peoples Gas Light & Coke
5.000%, due 02/01/33 (AMBAC) | | | 7,410,000 | | | 7,170,583 |
Los Angeles Community College District, Election 2001, Series A
5.000%, due 08/01/32 (FGIC) | | | 4,300,000 | | | 4,090,805 |
Los Angeles Department of Water & Power, Systems, Subser A-2
5.000%, due 07/01/44 (AMBAC) | | | 8,600,000 | | | 8,126,054 |
Los Angeles Unified School District, Refunding, Series A
4.500%, due 07/01/25 - 01/01/28 | | | 8,700,000 | | | 7,953,073 |
NY City Municipal Water Finance Authority Water & Sewer Revenue, Series CC
5.000%, due 06/15/34 | | | 21,800,000 | | | 21,584,616 |
Palomar Community College District, Series A
4.750%, due 05/01/32 | | | 300,000 | | | 274,062 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Municipals - continued |
State of California General Obligation Unlimited Refunding | | | | | | |
4.500%, due 08/01/28 (AMBAC) | | $ | 1,000,000 | | $ | 799,710 |
5.000%, due 06/01/37 | | | 3,500,000 | | | 2,942,065 |
State of California General Obligation Unlimited, Build America Bonds, Taxable Various Purposes | | | | | | |
7.500%, due 04/01/34 | | | 2,900,000 | | | 2,654,486 |
7.550%, due 04/01/39 | | | 2,900,000 | | | 2,643,060 |
State of California General Obligation Unlimited, Taxable Various Purposes
5.650%, due 04/01/39(a) | | | 2,700,000 | | | 2,657,907 |
State of Texas Transportation Commission Mobility Funding, Series A
4.750%, due 04/01/35 | | | 4,800,000 | | | 4,593,504 |
State of Texas Transportation Commission Revenue, First Tier, Series A
4.750%, due 04/01/24 | | | 10,000,000 | | | 10,360,700 |
Tobacco Settlement Financing Corp. | | | | | | |
5.000%, due 06/01/41 | | | 900,000 | | | 487,683 |
7.467%, due 06/01/47 | | | 8,080,000 | | | 5,428,952 |
Tobacco Settlement Funding Corp. | | | | | | |
5.875%, due 05/15/39 | | | 2,000,000 | | | 1,573,880 |
6.250%, due 06/01/42 | | | 1,300,000 | | | 955,994 |
University of Arkansas, Various Facility Fayetteville Campus
5.000%, due 11/01/31 (AMBAC) | | | 1,300,000 | | | 1,303,861 |
University of California, Ltd. Project, Series D
5.000%, due 05/15/37 (FSA) | | | 2,700,000 | | | 2,586,357 |
| | | | | | |
Total Municipals
(Cost $145,811,456) | | | | | | 141,756,036 |
| | | | | | |
| Asset-Backed Securities - 7.5% |
Adjustable Rate Mortgage Trust | | | | | | |
4.574%, due 05/25/35(a) | | | 2,519,510 | | | 2,191,076 |
5.383%, due 11/25/35(a) | | | 1,354,022 | | | 928,640 |
American Home Mortgage Assets
2.260%, due 11/25/46(a) | | | 6,991,326 | | | 2,336,764 |
American Home Mortgage Investment Trust
4.390%, due 02/25/45 | | | 3,975,739 | | | 3,133,593 |
Asset Backed Funding Certificates | | | | | | |
0.664%, due 06/25/34(a) | | | 4,350,587 | | | 2,137,030 |
0.374%, due 01/25/37(a) | | | 848,384 | | | 700,893 |
See accompanying notes to financial statements
5
Met Investors Series Trust
PIMCO Total Return Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Asset-Backed Securities - continued |
Asset Backed Securities Corp.
0.394%, due 05/25/37(a) | | $ | 785,283 | | $ | 625,875 |
Aurum CLO, Ltd.
1.561%, due 04/15/14 (144A)(a)(b)(c) | | | 7,021,960 | | | 6,529,404 |
Banc of America Commercial Mortgage, Inc.
5.451%, due 01/15/49 | | | 8,400,000 | | | 6,288,896 |
Banc of America Funding Corp. | | | | | | |
3.781%, due 05/25/35(a) | | | 6,620,361 | | | 5,628,990 |
4.585%, due 02/20/36(a) | | | 14,446,856 | | | 10,981,572 |
6.102%, due 01/20/47(a) | | | 834,763 | | | 444,592 |
Banc of America Mortgage Securities, Inc. | | | | | | |
0.764%, due 01/25/34(a) | | | 979,431 | | | 892,452 |
5.000%, due 05/25/34 | | | 2,395,963 | | | 2,351,898 |
Bank of America Commercial Mortgage, Inc.
4.890%, due 04/11/37 | | | 203,379 | | | 203,538 |
BCAP LLC Trust
0.484%, due 01/25/37(a) | | | 5,316,685 | | | 2,031,365 |
Bear Stearns Adjustable Rate Mortgage Trust | | | | | | |
5.088%, due 02/25/33(a) | | | 55,593 | | | 49,840 |
4.550%, due 08/25/35(a) | | | 2,790,362 | | | 2,465,004 |
4.620%, due 08/25/35(a) | | | 95,570 | | | 83,695 |
4.740%, due 10/25/35(a) | | | 3,643,894 | | | 3,515,439 |
Bear Stearns ALT-A Trust | | | | | | |
1.154%, due 11/25/34(a) | | | 1,838,515 | | | 291,355 |
5.362%, due 05/25/35(a) | | | 3,648,843 | | | 2,364,223 |
5.490%, due 09/25/35(a) | | | 2,816,415 | | | 1,530,126 |
5.673%, due 11/25/36(a) | | | 4,850,883 | | | 2,468,931 |
5.694%, due 11/25/36(a) | | | 8,573,091 | | | 4,346,766 |
Bear Stearns Asset Backed Securities Trust | | | | | | |
0.714%, due 10/27/32(a) | | | 51,903 | | | 35,513 |
0.814%, due 06/25/35(a) | | | 67,695 | | | 63,404 |
1.314%, due 10/25/37(a) | | | 9,375,864 | | | 5,054,363 |
Bear Stearns Commercial Mortgage Securities, Inc. | | | | | | |
5.060%, due 11/15/16 | | | 38,305 | | | 38,677 |
5.331%, due 02/11/44 | | | 400,000 | | | 324,749 |
5.471%, due 01/12/45 | | | 1,100,000 | | | 916,509 |
5.700%, due 06/11/50 | | | 6,400,000 | | | 5,101,761 |
Bear Stearns Mortgage Funding Trust
0.384%, due 02/25/37(a) | | | 4,723,485 | | | 3,642,196 |
Bear Stearns Structured Products, Inc. | | | | | | |
5.644%, due 01/26/36(a) | | | 2,930,328 | | | 1,619,534 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Asset-Backed Securities - continued |
5.714%, due 12/26/46(a) | | $ | 2,076,182 | | $ | 1,264,668 |
Carrington Mortgage Loan Trust
0.634%, due 10/25/35(a) | | | 1,695,385 | | | 1,316,243 |
Cendant Mortgage Corp.
5.986%, due 07/25/43 (144A)(a)(b) | | | 107,481 | | | 107,424 |
Chase Issuance Trust
0.969%, due 11/15/11(a) | | | 48,800,000 | | | 48,841,846 |
Chevy Chase Mortgage Funding Corp. | | | | | | |
0.564%, due 08/25/35 (144A)(a)(b) | | | 142,745 | | | 92,642 |
0.444%, due 05/25/48 (144A)(a)(b) | | | 5,878,684 | | | 2,149,684 |
Citibank Omni Master Trust
1.415%, due 12/23/13 (144A)(a)(b) | | | 4,700,000 | | | 4,692,848 |
Citigroup Mortgage Loan Trust, Inc. | | | | | | |
4.050%, due 08/25/35(a) | | | 9,568,499 | | | 7,617,451 |
4.248%, due 08/25/35(a) | | | 3,303,815 | | | 2,630,999 |
4.700%, due 12/25/35 | | | 15,745,527 | | | 12,721,070 |
0.374%, due 01/25/37 - 07/25/45(a) | | | 1,824,595 | | | 1,291,800 |
Commercial Mortgage Pass Through Certificates
5.306%, due 12/10/46 | | | 1,900,000 | | | 1,390,473 |
Countrywide Alternative Loan Trust | | | | | | |
4.686%, due 05/25/35 (144A)(a)(d) | | | 10,183,662 | | | 744,129 |
0.525%, due 03/20/46(a) | | | 385,699 | | | 158,603 |
Countrywide Asset-Backed Certificates
0.394%, due 06/25/37(a) | | | 830,016 | | | 767,692 |
Countrywide Home Loans | | | | | | |
5.750%, due 05/25/33 | | | 166,147 | | | 163,858 |
0.634%, due 03/25/35(a) | | | 1,914,200 | | | 873,822 |
0.604%, due 04/25/35(a) | | | 209,963 | | | 94,495 |
0.654%, due 06/25/35 (144A)(a)(b) | | | 9,073,009 | | | 6,594,086 |
5.781%, due 09/20/36(a) | | | 10,097,064 | | | 4,641,221 |
Credit Suisse First Boston Mortgage Securities Corp. | | | | | | |
1.135%, due 03/25/32 (144A)(a)(b) | | | 235,497 | | | 178,293 |
6.500%, due 04/25/33 | | | 202,163 | | | 189,182 |
6.000%, due 11/25/35 | | | 5,169,483 | | | 4,425,048 |
Credit Suisse Mortgage Capital Certificates | | | | | | |
5.658%, due 03/15/39(a) | | | 400,000 | | | 287,046 |
5.467%, due 09/15/39 | | | 22,300,000 | | | 15,669,124 |
See accompanying notes to financial statements
6
Met Investors Series Trust
PIMCO Total Return Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Asset-Backed Securities - continued |
Daimler Chrysler Auto Trust | | | | | | |
1.248%, due 07/08/11(a) | | $ | 7,443,736 | | $ | 7,448,666 |
1.798%, due 09/10/12(a) | | | 4,600,000 | | | 4,582,193 |
Deutsche Alt-A Securities, Inc.
0.404%, due 08/25/37(a) | | | 620,867 | | | 538,517 |
DSLA Mortgage Loan Trust
3.472%, due 07/19/44(a) | | | 1,745,608 | | | 964,199 |
First Horizon Alternative Mortgage Securities | | | | | | |
5.365%, due 08/25/35(a) | | | 596,601 | | | 453,996 |
4.386%, due 01/25/36 (144A)(a)(d) | | | 99,753,293 | | | 5,924,797 |
GMAC Mortgage Corp.
5.940%, due 07/01/13(c) | | | 17,716 | | | 17,224 |
GMAC Mortgage Corp. Loan Trust
5.500%, due 09/25/34 | | | 1,839,588 | | | 1,845,047 |
Green Tree Financial Corp.
6.220%, due 03/01/30 | | | 139,483 | | | 112,274 |
Greenpoint Mortgage Funding Trust | | | | | | |
0.534%, due 06/25/45(a) | | | 160,411 | | | 68,410 |
0.394%, due 01/25/47(a) | | | 292,089 | | | 221,847 |
Greenwich Capital Commercial Funding Corp. | | | | | | |
5.444%, due 03/10/39 | | | 9,800,000 | | | 7,837,488 |
4.799%, due 08/10/42 | | | 100,000 | | | 85,337 |
GS Mortgage Loan Trust
4.470%, due 09/25/35(a) | | | 233,678 | | | 196,778 |
GS Mortgage Securities Corp. II | | | | | | |
0.408%, due 03/06/20 (144A)(a)(b) | | | 5,512,243 | | | 4,729,076 |
5.805%, due 08/10/45(a) | | | 2,600,000 | | | 1,972,122 |
GSR Mortgage Loan Trust | | | | | | |
6.000%, due 03/25/32 | | | 1,868 | | | 1,860 |
4.972%, due 04/25/36(a) | | | 5,655,365 | | | 3,200,929 |
Harborview Mortgage Loan Trust | | | | | | |
0.533%, due 05/19/35(a) | | | 2,257,637 | | | 1,012,525 |
0.403%, due 01/19/38(a) | | | 113,512 | | | 104,934 |
0.503%, due 01/19/38(a) | | | 357,549 | | | 152,849 |
HFC Home Equity Loan Asset Backed Certificates
1.115%, due 11/20/36(a) | | | 885,884 | | | 830,235 |
Indymac ARM Trust | | | | | | |
3.708%, due 01/25/32(a) | | | 48,775 | | | 32,872 |
4.129%, due 01/25/32(a) | | | 1,673 | | | 1,088 |
Indymac Index Mortgage Loan Trust | | | | | | |
4.976%, due 12/25/34(a) | | | 389,828 | | | 295,660 |
0.404%, due 11/25/46(a) | | | 165,701 | | | 154,387 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Asset-Backed Securities - continued |
Indymac Residential Asset Backed Trust
0.394%, due 07/25/37(a) | | $ | 820,937 | | $ | 745,270 |
JPMorgan Chase Commercial Mortgage Securities | | | | | | |
5.420%, due 01/15/49 | | | 400,000 | | | 295,540 |
5.798%, due 06/15/49(a) | | | 100,000 | | | 85,432 |
5.882%, due 02/15/51(a) | | | 900,000 | | | 676,535 |
JPMorgan Mortgage Trust | | | | | | |
5.012%, due 02/25/35(a) | | | 2,499,666 | | | 2,187,402 |
4.773%, due 07/25/35(a) | | | 12,090,847 | | | 9,704,630 |
Lehman Brothers-UBS Commercial Mortgage Trust
5.866%, due 09/15/45(a) | | | 15,200,000 | | | 11,669,613 |
Master Alternative Loans Trust
0.714%, due 03/25/36(a) | | | 1,381,452 | | | 496,880 |
Master Asset Securitization Trust
4.500%, due 03/25/18 | | | 1,343,830 | | | 1,327,025 |
Merrill Lynch Commercial Mortgage Pass-Through Certificates
2.986%, due 07/09/09 (144A)(b) | | | 13,300,000 | | | 11,981,732 |
Merrill Lynch First Franklin Mortgage Loan Trust
0.374%, due 07/25/37(a) | | | 780,068 | | | 617,250 |
Merrill Lynch Mortgage Investments, Inc. | | | | | | |
1.314%, due 10/25/35(a) | | | 431,202 | | | 343,843 |
4.250%, due 10/25/35(a) | | | 1,755,277 | | | 1,405,356 |
0.564%, due 11/25/35(a) | | | 342,701 | | | 236,784 |
0.524%, due 02/25/36(a) | | | 2,152,285 | | | 1,162,767 |
Merrill Lynch Mortgage Investors Trust
0.384%, due 08/25/36(a) | | | 488,288 | | | 485,486 |
Merrill Lynch/Countrywide Commercial Mortgage Trust | | | | | | |
5.957%, due 08/12/49(a) | | | 11,800,000 | | | 8,184,347 |
5.485%, due 03/12/51 | | | 2,200,000 | | | 1,481,983 |
Mid-State Trust
7.791%, due 03/15/38 | | | 209,093 | | | 147,524 |
Morgan Stanley ABS Capital I | | | | | | |
0.380%, due 10/15/20 (144A)(a)(b) | | | 1,124,988 | | | 834,694 |
0.374%, due 05/25/37(a) | | | 4,032,851 | | | 3,002,219 |
Morgan Stanley Capital I | | | | | | |
5.881%, due 06/11/49(a) | | | 3,600,000 | | | 2,721,460 |
5.809%, due 12/12/49 | | | 200,000 | | | 152,954 |
Option One Mortgage Loan Trust | | | | | | |
0.634%, due 08/25/33(a) | | | 36,123 | | | 20,122 |
See accompanying notes to financial statements
7
Met Investors Series Trust
PIMCO Total Return Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Asset-Backed Securities - continued |
0.374%, due 07/25/37(a) | | $ | 1,366,430 | | $ | 1,146,995 |
Popular ABS Mortgage Pass-Through Trust
0.404%, due 06/25/47(a) | | | 2,667,583 | | | 2,093,201 |
Renaissance Home Equity Loan Trust
0.754%, due 08/25/33(a) | | | 306,638 | | | 148,264 |
Residential Accredit Loans, Inc. | | | | | | |
0.714%, due 03/25/33(a) | | | 1,444,045 | | | 1,265,258 |
6.000%, due 06/25/36 | | | 5,257,633 | | | 2,783,171 |
0.494%, due 06/25/46(a) | | | 3,215,354 | | | 1,239,523 |
Residential Asset Securities Corp.
0.424%, due 04/25/37(a) | | | 2,080,928 | | | 1,811,962 |
Residential Asset Securitization Trust
0.714%, due 05/25/33 -
01/25/46(a) | | | 4,340,975 | | | 2,461,427 |
Residential Funding Mortgage Securities I
0.664%, due 06/25/18(a) | | | 554,996 | | | 552,814 |
Sequoia Mortgage Trust
0.665%, due 07/20/33(a) | | | 756,321 | | | 607,813 |
SLC Student Loan Trust
0.863%, due 02/15/15(a) | | | 471,160 | | | 470,525 |
SLM Student Loan Trust | | | | | | |
1.142%, due 10/25/16 -
01/25/19(a) | | | 19,699,809 | | | 19,641,162 |
1.542%, due 01/25/17(a) | | | 3,000,000 | | | 2,935,220 |
1.132%, due 04/25/17(a) | | | 5,881,999 | | | 5,853,768 |
1.082%, due 07/25/17(a) | | | 1,254,540 | | | 1,253,782 |
1.222%, due 01/25/19(a) | | | 12,023,091 | | | 11,726,934 |
Small Business Administration Participation Certificates
6.220%, due 12/01/28 | | | 11,051,835 | | | 11,959,470 |
Soundview Home Equity Loan Trust
0.394%, due 06/25/37(a) | | | 142,576 | | | 114,139 |
Sovereign Commercial Mortgage Securities Trust
5.835%, due 07/22/30 (144A)(a)(b) | | | 1,400,000 | | | 1,234,454 |
Structured Adjustable Rate Mortgage Loan Trust | | | | | | |
5.334%, due 01/25/35(a) | | | 5,109,984 | | | 3,436,390 |
5.516%, due 08/25/35(a) | | | 402,134 | | | 262,037 |
Structured Asset Mortgage Investments, Inc. | | | | | | |
0.563%, due 07/19/35(a) | | | 2,512,110 | | | 1,593,021 |
0.544%, due 05/25/45(a) | | | 2,369,558 | | | 1,066,753 |
Structured Asset Securities Corp. | | | | | | |
5.000%, due 12/25/34 | | | 654,993 | | | 629,478 |
4.504%, due 10/25/35 (144A)(a)(b)(c) | | | 182,876 | | | 125,929 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Asset-Backed Securities - continued |
Wachovia Asset Securitization, Inc.
0.574%, due 06/25/33(a) | | $ | 53,866 | | $ | 18,222 |
Wachovia Bank Commercial Mortgage Trust | | | | | | |
0.409%, due 09/15/21 (144A)(a)(b) | | | 3,386,807 | | | 2,440,808 |
5.342%, due 12/15/43 | | | 16,700,000 | | | 11,030,747 |
5.509%, due 04/15/47 | | | 1,300,000 | | | 866,030 |
Washington Mutual, Inc. | | | | | | |
0.854%, due 12/25/27(a) | | | 3,856,908 | | | 2,885,525 |
2.877%, due 02/27/34(a) | | | 669,824 | | | 548,859 |
2.740%, due 06/25/42 - 08/25/42(a) | | | 657,056 | | | 458,451 |
Wells Fargo Mortgage Backed Securities Trust | | | | | | |
4.649%, due 09/25/33(a) | | | 3,773,151 | | | 3,256,751 |
4.950%, due 03/25/36 | | | 13,844,512 | | | 9,794,472 |
5.241%, due 04/25/36(a) | | | 11,000,936 | | | 8,680,810 |
5.775%, due 04/25/36(a) | | | 2,788,276 | | | 732,415 |
5.508%, due 08/25/36(a) | | | 5,152,260 | | | 3,858,064 |
| | | | | | |
Total Asset-Backed Securities
(Cost $527,059,670) | | | | | | 423,959,212 |
| | | | | | |
|
| Domestic Bonds & Debt Securities - 28.0% |
| Automobiles - 0.0% | | | | | | |
Daimler North America Holdings Corp.
7.200%, due 09/01/09 | | | 255,000 | | | 256,153 |
General Motors Corp.
8.375%, due 07/05/33(e) | | | 6,800,000 | | | 1,139,265 |
| | | | | | |
| | | | | | 1,395,418 |
| | | | | | |
| Building Products - 0.1% |
C10 Capital, Ltd.
6.722%, due 12/18/49 | | | 6,800,000 | | | 3,485,925 |
| | | | | | |
| Capital Markets - 3.0% | | | | | | |
Goldman Sachs Group, Inc. (The) | | | | | | |
1.187%, due 02/06/12(a) | | | 15,400,000 | | | 14,714,808 |
5.700%, due 09/01/12 | | | 55,000 | | | 57,615 |
6.250%, due 09/01/17 | | | 14,200,000 | | | 14,072,015 |
6.150%, due 04/01/18 | | | 1,800,000 | | | 1,755,353 |
6.750%, due 10/01/37 | | | 13,500,000 | | | 12,036,587 |
Lehman Brothers Holdings, Inc. | | | | | | |
2.851%, due 12/23/08(a)(f) | | | 12,500,000 | | | 1,906,250 |
5.625%, due 01/24/13(f) | | | 32,500,000 | | | 5,078,125 |
6.750%, due 12/28/17(f) | | | 14,800,000 | | | 1,480 |
6.875%, due 05/02/18(f) | | | 3,900,000 | | | 643,500 |
Merrill Lynch & Co., Inc. | | | | | | |
0.893%, due 09/09/09(a) | | | 4,300,000 | | | 4,298,727 |
1.292%, due 07/25/11(a) | | | 3,400,000 | | | 3,149,916 |
See accompanying notes to financial statements
8
Met Investors Series Trust
PIMCO Total Return Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Capital Markets - continued |
0.867%, due 06/05/12(a) | | $ | 11,800,000 | | $ | 10,512,714 |
6.050%, due 08/15/12 | | | 11,500,000 | | | 11,538,456 |
6.400%, due 08/28/17 | | | 3,100,000 | | | 2,748,491 |
6.875%, due 04/25/18 | | | 23,400,000 | | | 21,692,689 |
Morgan Stanley | | | | | | |
3.250%, due 12/01/11 | | | 7,700,000 | | | 7,992,485 |
0.550%, due 04/19/12(a) | | | 800,000 | | | 716,093 |
1.557%, due 10/18/16(a) | | | 3,900,000 | | | 3,159,842 |
5.950%, due 12/28/17 | | | 48,200,000 | | | 46,326,321 |
Morgan Stanley Dean Witter Capital
4.920%, due 03/12/35 | | | 495,000 | | | 467,706 |
Small Business Administration | | | | | | |
7.449%, due 08/01/10 | | | 136,208 | | | 140,919 |
6.353%, due 03/01/11 | | | 25,664 | | | 26,874 |
5.471%, due 03/10/18 | | | 4,205,215 | | | 4,307,269 |
5.500%, due 10/01/18 | | | 79,063 | | | 83,336 |
| | | | | | |
| | | | | | 167,427,571 |
| | | | | | |
| Chemicals - 0.6% | | | | | | |
Dow Chemical Co.
7.375%, due 11/01/29 | | | 185,000 | | | 168,553 |
ICI Wilmington, Inc.
5.625%, due 12/01/13 | | | 340,000 | | | 330,193 |
NGPL PipeCo LLC | | | | | | |
7.119%, due 12/15/17 (144A)(b) | | | 16,400,000 | | | 17,217,819 |
7.768%, due 12/15/37 (144A)(b) | | | 6,700,000 | | | 7,341,371 |
Rohm & Haas Co.
6.000%, due 09/15/17 | | | 8,500,000 | | | 7,611,427 |
| | | | | | |
| | | | | | 32,669,363 |
| | | | | | |
| Commercial & Professional Services - 0.1% |
C8 Capital SPV, Ltd.
6.640%, due 12/31/49 (144A)(a)(b) | | | 2,100,000 | | | 1,077,785 |
RR Donnelley & Sons Co.
4.950%, due 04/01/14 | | | 6,200,000 | | | 5,402,606 |
| | | | | | |
| | | | | | 6,480,391 |
| | | | | | |
| Commercial Banks - 6.0% |
ABN AMRO N.A. Holding Capital
6.523%, due 12/29/49 (144A)(a)(b) | | | 345,000 | | | 208,780 |
ANZ National International, Ltd.
6.200%, due 07/19/13 (144A)(b) | | | 8,000,000 | | | 8,248,688 |
Barclays Bank Plc | | | | | | |
5.450%, due 09/12/12 | | | 39,300,000 | | | 41,004,402 |
6.050%, due 12/04/17 (144A)(b) | | | 59,400,000 | | | 51,591,039 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Commercial Banks - continued |
10.179%, due 06/12/21 (144A)(a)(d) | | $ | 18,080,000 | | $ | 18,754,022 |
7.434%, due 09/29/49 (144A)(a)(b) | | | 6,700,000 | | | 4,495,184 |
Deutsche Bank AG London
6.000%, due 09/01/17 | | | 26,200,000 | | | 26,769,771 |
Fleet Boston Financial Corp.
7.375%, due 12/01/09 | | | 70,000 | | | 70,682 |
Fortis Bank Nederland Holding NV
3.000%, due 04/17/12 | | | 1,600,000 | | | 2,268,153 |
HSBC Capital Funding LP | | | | | | |
1.000%, due 12/29/49 (144A)(b) | | | 585,000 | | | 411,366 |
9.547%, due 12/31/49 (144A)(a)(b) | | | 350,000 | | | 326,463 |
ICICI Bank, Ltd.
1.679%, due 01/12/10 (144A)(a)(b) | | | 3,000,000 | | | 2,940,765 |
JPMorgan Chase Bank N.A. | | | | | | |
0.959%, due 06/13/16(a) | | | 5,300,000 | | | 4,327,869 |
6.000%, due 10/01/17 | | | 23,600,000 | | | 23,007,498 |
KeyBank N.A.
2.906%, due 06/02/10 (144A)(a)(b) | | | 11,300,000 | | | 10,973,317 |
LeasePlan Corp. NV
3.125%, due 02/10/12 | | | 7,700,000 | | | 10,950,051 |
Rabobank Nederland
11.000%, due 12/29/49 (144A)(a)(b) | | | 277,000 | | | 309,594 |
RBS Capital Trust II
6.425%, due 12/29/49(a) | | | 120,000 | | | 57,709 |
Royal Bank of Scotland Group Plc | | | | | | |
7.640%, due 03/31/49(a) | | | 14,500,000 | | | 5,878,938 |
6.990%, due 10/29/49 (144A)(a)(b) | | | 2,000,000 | | | 981,222 |
Royal Bank of Scotland Plc
1.320%, due 04/08/11 (144A)(a)(b) | | | 11,100,000 | | | 11,089,566 |
Societe Generale | | | | | | |
5.922%, due 04/29/49 (144A)(a)(b) | | | 13,200,000 | | | 8,195,220 |
8.875%, due 06/29/49 | | | 5,000,000 | | | 6,045,005 |
UBS AG
5.875%, due 12/20/17 | | | 21,700,000 | | | 20,241,152 |
USB Capital IX
6.189%, due 04/15/49(a) | | | 8,125,000 | | | 5,486,414 |
Wachovia Bank N.A.
0.959%, due 03/15/16(a) | | | 6,000,000 | | | 4,744,278 |
Wachovia Corp.
1.261%, due 10/15/11(a) | | | 14,900,000 | | | 14,160,394 |
See accompanying notes to financial statements
9
Met Investors Series Trust
PIMCO Total Return Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Commercial Banks - continued |
Wells Fargo Bank N.A.
7.550%, due 06/21/10 | | $ | 11,175,000 | | $ | 11,717,792 |
Wells Fargo Co.
7.980%, due 03/29/49(a) | | | 50,400,000 | | | 41,893,387 |
Westpac Capital Trust III
5.819%, due 12/29/49 (144A)(a)(b) | | | 80,000 | | | 64,540 |
Westpac Capital Trust IV
5.256%, due 12/29/49 (144A)(a)(b) | | | 165,000 | | | 127,785 |
| | | | | | |
| | | | | | 337,341,046 |
| | | | | | |
| Computers & Peripherals - 0.4% |
International Business Machines Corp.
5.700%, due 09/14/17 | | | 19,300,000 | | | 20,523,697 |
| | | | | | |
| Consumer Finance - 2.0% |
American Express Bank FSB S.A. | | | | | | |
5.500%, due 04/16/13 | | | 16,700,000 | | | 16,402,640 |
6.000%, due 09/13/17 | | | 34,000,000 | | | 31,062,468 |
American Express Centurion Bank
6.000%, due 09/13/17 | | | 34,000,000 | | | 31,062,468 |
Capital One Financial Corp.
6.750%, due 09/15/17 | | | 10,600,000 | | | 10,157,545 |
Ford Motor Credit Co. LLC | | | | | | |
7.250%, due 10/25/11 | | | 1,300,000 | | | 1,124,984 |
7.875%, due 06/15/10 | | | 700,000 | | | 665,050 |
9.750%, due 09/15/10 | | | 4,100,000 | | | 3,928,435 |
7.800%, due 06/01/12 | | | 800,000 | | | 688,761 |
General Motors Acceptance Corp. LLC | | | | | | |
7.250%, due 03/02/11 | | | 5,000,000 | | | 4,538,470 |
5.375%, due 06/06/11(e) | | | 1,000,000 | | | 1,219,739 |
7.000%, due 02/01/12 | | | 7,700,000 | | | 6,394,881 |
6.625%, due 05/15/12 | | | 10,300,000 | | | 8,391,091 |
| | | | | | |
| | | | | | 115,636,532 |
| | | | | | |
| Diversified Financial Services - 6.1% |
ANZ Capital Trust II
5.360%, due 12/29/49 (144A)(b) | | | 525,000 | | | 423,806 |
Bank of America Corp. | | | | | | |
2.375%, due 06/22/12 | | | 29,000,000 | | | 29,310,909 |
5.650%, due 05/01/18 | | | 17,800,000 | | | 15,754,940 |
Bear Stearns Cos. LLC (The) | | | | | | |
4.550%, due 06/23/10 | | | 12,100,000 | | | 12,351,716 |
6.400%, due 10/02/17 | | | 19,300,000 | | | 19,364,887 |
CIT Group, Inc. | | | | | | |
0.974%, due 08/17/09(a) | | | 2,000,000 | | | 1,943,816 |
4.250%, due 02/01/10 | | | 696,000 | | | 624,940 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Diversified Financial Services - continued |
5.400%, due 03/07/13 | | $ | 8,400,000 | | $ | 5,209,865 |
Citigroup Capital XVIII
6.829%, due 06/28/67(a) | | | 5,000,000 | | | 4,317,860 |
Citigroup Capital XXI
8.300%, due 12/21/57(a) | | | 35,900,000 | | | 28,059,296 |
Citigroup, Inc. | | | | | | |
5.625%, due 08/27/12 | | | 1,000,000 | | | 936,891 |
5.500%, due 04/11/13 | | | 17,900,000 | | | 16,790,612 |
6.125%, due 11/21/17 - 05/15/18 | | | 47,500,000 | | | 41,705,672 |
5.875%, due 05/29/37 | | | 7,000,000 | | | 5,485,928 |
8.400%, due 04/29/49(a) | | | 5,600,000 | | | 4,207,392 |
GATX Financial Corp.
5.800%, due 03/01/16 | | | 5,000,000 | | | 4,209,980 |
General Electric Capital Corp. | | | | | | |
3.000%, due 12/09/11 | | | 1,400,000 | | | 1,445,154 |
2.250%, due 03/12/12 | | | 37,700,000 | | | 38,058,301 |
6.750%, due 03/15/32 | | | 165,000 | | | 148,527 |
6.875%, due 01/10/39 | | | 6,500,000 | | | 5,867,992 |
6.500%, due 09/15/67 (144A)(a)(b)(g) | | | 11,900,000 | | | 12,233,937 |
6.375%, due 11/15/67(a) | | | 5,400,000 | | | 3,608,194 |
HSBC Finance Corp.
1.162%, due 10/21/09(a) | | | 11,600,000 | | | 11,566,917 |
International Lease Finance Corp.
4.375%, due 11/01/09 | | | 9,600,000 | | | 9,295,776 |
JPMorgan Chase & Co. | | | | | | |
2.200%, due 06/15/12 | | | 6,700,000 | | | 6,738,686 |
6.950%, due 08/10/12 | | | 8,200,000 | | | 8,918,435 |
6.000%, due 01/15/18 | | | 15,000,000 | | | 14,925,675 |
7.250%, due 02/01/18 | | | 5,000,000 | | | 5,278,365 |
7.900%, due 04/29/49(a) | | | 8,200,000 | | | 7,195,746 |
Pearson Dollar Finance Plc
5.700%, due 06/01/14 (144A)(b) | | | 13,500,000 | | | 13,366,984 |
Santander Perpetual S.A. Unipersonal
6.671%, due 10/29/49 (144A)(a)(b) | | | 7,400,000 | | | 5,483,992 |
SLM Corp.
1.116%, due 03/15/12(a) | | | 1,500,000 | | | 1,100,040 |
Teco Finance, Inc.
6.750%, due 05/01/15 | | | 4,400,000 | | | 4,243,897 |
Trans Capital Investment, Ltd.
8.700%, due 08/07/18 (144A)(b) | | | 2,800,000 | | | 2,699,130 |
| | | | | | |
| | | | | | 342,874,258 |
| | | | | | |
| Diversified Telecommunication Services - 0.7% |
AT&T, Inc.
6.300%, due 01/15/38 | | | 6,400,000 | | | 6,204,051 |
See accompanying notes to financial statements
10
Met Investors Series Trust
PIMCO Total Return Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Diversified Telecommunication Services - continued |
CenturyTel, Inc.
6.000%, due 04/01/17 | | $ | 5,000,000 | | $ | 4,519,275 |
Deutsche Telekom International Finance B.V.
8.750%, due 06/15/30 | | | 50,000 | | | 58,688 |
Embarq Corp.
7.995%, due 06/01/36 | | | 6,600,000 | | | 5,818,560 |
France Telecom S.A.
8.500%, due 03/01/31 | | | 165,000 | | | 212,507 |
Qwest Capital Funding, Inc.
7.250%, due 02/15/11 | | | 8,000,000 | | | 7,800,000 |
Qwest Corp.
8.875%, due 03/15/12 | | | 1,720,000 | | | 1,741,500 |
SBC Communications, Inc. | | | | | | |
4.125%, due 09/15/09 | | | 4,000,000 | | | 4,020,340 |
5.100%, due 09/15/14 | | | 380,000 | | | 395,188 |
5.625%, due 06/15/16 | | | 455,000 | | | 468,909 |
Sprint Capital Corp.
8.750%, due 03/15/32 | | | 6,900,000 | | | 5,589,000 |
Verizon Global Funding Corp.
7.375%, due 09/01/12 | | | 185,000 | | | 207,110 |
Verizon New York, Inc. | | | | | | |
6.875%, due 04/01/12 | | | 325,000 | | | 344,659 |
7.375%, due 04/01/32 | | | 155,000 | | | 151,423 |
Verizon Wireless Capital LLC
3.316%, due 05/20/11 (144A)(a)(b) | | | 3,900,000 | | | 3,971,132 |
| | | | | | |
| | | | | | 41,502,342 |
| | | | | | |
| Electric Utilities - 0.9% | | | | | | |
Arizona Public Service Co.
4.650%, due 05/15/15 | | | 165,000 | | | 152,515 |
Consumers Energy Co.
5.000%, due 02/15/12 | | | 2,500,000 | | | 2,542,818 |
Dominion Resources, Inc.
6.300%, due 03/15/33 | | | 210,000 | | | 210,284 |
DTE Energy Co.
6.375%, due 04/15/33 | | | 260,000 | | | 195,742 |
Electricite de France | | | | | | |
5.500%, due 01/26/14 (144A)(b) | | | 5,100,000 | | | 5,496,347 |
6.500%, due 01/26/19 (144A)(b) | | | 5,100,000 | | | 5,595,720 |
6.950%, due 01/26/39 (144A)(b) | | | 5,100,000 | | | 5,744,946 |
Enel Finance International S.A.
6.250%, due 09/15/17 (144A)(b) | | | 10,550,000 | | | 11,032,620 |
Nisource Finance Corp. | | | | | | |
6.150%, due 03/01/13 | | | 475,000 | | | 472,545 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| | |
| Electric Utilities - continued | | | | | | |
5.400%, due 07/15/14 | | $ | 10,000,000 | | $ | 9,472,370 |
5.250%, due 09/15/17 | | | 7,500,000 | | | 6,441,532 |
Pepco Holdings, Inc. | | | | | | |
6.450%, due 08/15/12 | | | 90,000 | | | 93,716 |
7.450%, due 08/15/32 | | | 180,000 | | | 161,188 |
Progress Energy, Inc. | | | | | | |
7.100%, due 03/01/11 | | | 1,600,000 | | | 1,702,357 |
6.850%, due 04/15/12 | | | 650,000 | | | 704,426 |
| | | | | | |
| | | | | | 50,019,126 |
| | | | | | |
| Energy Equipment & Services - 0.0% |
Transocean, Inc.
6.800%, due 03/15/38 | | | 1,000,000 | | | 1,073,104 |
| | | | | | |
| Food & Staples Retailing - 0.4% | | | | | | |
CVS Caremark Corp.
0.968%, due 06/01/10(a) | | | 17,200,000 | | | 17,082,662 |
Wal-Mart Stores, Inc.
5.800%, due 02/15/18 | | | 6,600,000 | | | 7,201,953 |
| | | | | | |
| | | | | | 24,284,615 |
| | | | | | |
| Food Products - 0.5% | | | | | | |
Kraft Foods, Inc. | | | | | | |
6.125%, due 02/01/18 | | | 23,500,000 | | | 24,337,587 |
6.875%, due 02/01/38 | | | 2,100,000 | | | 2,228,520 |
| | | | | | |
| | | | | | 26,566,107 |
| | | | | | |
| Health Care Equipment & Supplies - 0.2% |
Boston Scientific Corp.
6.000%, due 06/15/11 | | | 5,000,000 | | | 5,012,500 |
Covidien International Finance S.A.
6.000%, due 10/15/17 | | | 5,000,000 | | | 5,325,940 |
| | | | | | |
| | | | | | 10,338,440 |
| | | | | | |
| Health Care Providers & Services - 0.3% |
Prudential Holding LLC
8.695%, due 12/18/23 (144A)(b) | | | 150,000 | | | 143,815 |
Quest Diagnostics, Inc.
5.450%, due 11/01/15 | | | 5,000,000 | | | 4,852,460 |
UnitedHealth Group, Inc. | | | | | | |
6.000%, due 02/15/18 | | | 11,100,000 | | | 10,670,496 |
6.875%, due 02/15/38 | | | 2,200,000 | | | 2,042,379 |
| | | | | | |
| | | | | | 17,709,150 |
| | | | | | |
| Independent Power Producers & Energy Traders - 0.1% |
NRG Energy, Inc.
7.250%, due 02/01/14 | | | 5,500,000 | | | 5,348,750 |
PSEG Power LLC | | | | | | |
5.500%, due 12/01/15 | | | 420,000 | | | 417,830 |
8.625%, due 04/15/31 | | | 245,000 | | | 289,487 |
| | | | | | |
| | | | | | 6,056,067 |
| | | | | | |
See accompanying notes to financial statements
11
Met Investors Series Trust
PIMCO Total Return Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Insurance - 0.6% |
American General Finance Corp.
6.900%, due 12/15/17 | | $ | 4,000,000 | | $ | 2,168,780 |
American International Group, Inc.
5.850%, due 01/16/18 | | | 20,600,000 | | | 10,913,694 |
ASIF I
1.242%, due 07/26/10 | | | 10,000,000 | | | 8,317,600 |
CNA Financial Corp.
5.850%, due 12/15/14 | | | 5,000,000 | | | 4,019,260 |
ING Capital Funding Trust III
8.439%, due 12/31/49(a) | | | 200,000 | | | 126,037 |
Liberty Mutual Group, Inc.
5.750%, due 03/15/14 (144A)(b) | | | 5,750,000 | | | 4,558,468 |
Nationwide Financial Services, Inc. | | | | | | |
6.250%, due 11/15/11 | | | 55,000 | | | 55,686 |
5.900%, due 07/01/12 | | | 60,000 | | | 58,977 |
Principal Life Income Funding Trusts 5.300%, due 04/24/13 | | | 3,400,000 | | | 3,395,077 |
| | | | | | |
| | | | | | 33,613,579 |
| | | | | | |
| IT Services - 0.2% |
Western Union Co. (The)
5.930%, due 10/01/16 | | | 10,000,000 | | | 10,110,750 |
| | | | | | |
| Media - 0.7% |
British Sky Broadcasting Group Plc
6.100%, due 02/15/18 (144A)(b) | | | 15,000,000 | | | 15,002,805 |
Comcast Corp.
7.050%, due 03/15/33 | | | 75,000 | | | 80,055 |
Cox Communications, Inc.
4.625%, due 06/01/13 | | | 430,000 | | | 423,437 |
News America Holdings, Inc. | | | | | | |
8.250%, due 08/10/18 | | | 110,000 | | | 120,013 |
7.750%, due 01/20/24 | | | 25,000 | | | 24,112 |
Omnicom Group, Inc.
5.900%, due 04/15/16 | | | 5,000,000 | | | 5,015,295 |
Time Warner Cos., Inc. | | | | | | |
5.875%, due 11/15/16 | | | 6,500,000 | | | 6,415,253 |
9.150%, due 02/01/23 | | | 155,000 | | | 168,396 |
8.375%, due 03/15/23 | | | 260,000 | | | 287,283 |
7.625%, due 04/15/31 | | | 310,000 | | | 302,153 |
Viacom, Inc.
6.250%, due 04/30/16 | | | 15,000,000 | | | 14,797,605 |
| | | | | | |
| | | | | | 42,636,407 |
| | | | | | |
| Metals & Mining - 0.1% |
Vale Overseas, Ltd.
6.875%, due 11/21/36 | | | 8,200,000 | | | 7,806,441 |
| | | | | | |
| Multiline Retail - 0.1% |
Target Corp.
6.000%, due 01/15/18 | | | 5,000,000 | | | 5,309,990 |
| | | | | | |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Oil, Gas & Consumable Fuels - 0.8% |
Chesapeake Energy Corp. | | | | | | |
7.500%, due 06/15/14 | | $ | 500,000 | | $ | 476,250 |
7.000%, due 08/15/14 | | | 800,000 | | | 744,000 |
Duke Capital LLC | | | | | | |
6.250%, due 02/15/13 | | | 375,000 | | | 384,256 |
8.000%, due 10/01/19 | | | 55,000 | | | 58,158 |
El Paso Corp.
7.750%, due 01/15/32 | | | 2,715,000 | | | 2,223,642 |
Gaz Capital S.A. | | | | | | |
8.146%, due 04/11/18 (144A)(b) | | | 12,400,000 | | | 11,346,000 |
8.625%, due 04/28/34 | | | 23,300,000 | | | 22,921,375 |
Husky Energy, Inc.
6.150%, due 06/15/19 | | | 215,000 | | | 217,443 |
Kinder Morgan Energy Partners | | | | | | |
7.400%, due 03/15/31 | | | 225,000 | | | 220,099 |
7.750%, due 03/15/32 | | | 135,000 | | | 143,141 |
7.300%, due 08/15/33 | | | 90,000 | | | 86,689 |
Magellan Midstream Partners
5.650%, due 10/15/16 | | | 385,000 | | | 355,918 |
TransCanada Pipelines, Ltd.
7.625%, due 01/15/39 | | | 2,500,000 | | | 2,927,140 |
Transcontinental Gas Pipe Line Corp.
8.875%, due 07/15/12 | | | 35,000 | | | 38,509 |
Valero Energy Corp.
7.500%, due 04/15/32 | | | 225,000 | | | 215,861 |
Williams Cos., Inc. | | | | | | |
6.375%, due 10/01/10 (144A)(b) | | | 2,900,000 | | | 2,900,284 |
7.500%, due 01/15/31 | | | 800,000 | | | 705,748 |
| | | | | | |
| | | | | | 45,964,513 |
| | | | | | |
| Paper & Forest Products - 0.1% |
International Paper Co.
5.250%, due 04/01/16 | | | 6,500,000 | | | 5,542,297 |
| | | | | | |
| Pharmaceuticals - 2.1% | | | | | | |
GlaxoSmithKline Capital, Inc. | | | | | | |
1.545%, due 05/13/10(a) | | | 49,400,000 | | | 49,755,581 |
4.850%, due 05/15/13 | | | 49,400,000 | | | 51,719,923 |
Roche Holdings, Inc.
7.000%, due 03/01/39 (144A)(b) | | | 8,000,000 | | | 9,306,120 |
Wyeth | | | | | | |
5.500%, due 03/15/13 - 02/15/16 | | | 7,500,000 | | | 7,916,048 |
6.450%, due 02/01/24 | | | 160,000 | | | 172,668 |
| | | | | | |
| | | | | | 118,870,340 |
| | | | | | |
| Real Estate Investment Trusts (REITs) - 0.2% |
HCP, Inc.
6.700%, due 01/30/18 | | | 7,500,000 | | | 6,525,352 |
See accompanying notes to financial statements
12
Met Investors Series Trust
PIMCO Total Return Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Real Estate Investment Trusts (REITs) - continued |
Health Care Property Investors, Inc.
5.950%, due 09/15/11 | | $ | 4,100,000 | | $ | 4,014,798 |
| | | | | | |
| | | | | | 10,540,150 |
| | | | | | |
| Road & Rail - 0.3% |
Con-way, Inc.
7.250%, due 01/15/18 | | | 10,000,000 | | | 8,489,680 |
CSX Corp.
6.250%, due 03/15/18 | | | 10,000,000 | | | 10,102,280 |
Norfolk Southern Corp. | | | | | | |
5.590%, due 05/17/25 | | | 60,000 | | | 55,921 |
7.800%, due 05/15/27 | | | 7,000 | | | 7,502 |
5.640%, due 05/17/29 | | | 168,000 | | | 154,050 |
7.250%, due 02/15/31 | | | 65,000 | | | 71,161 |
Union Pacific Corp.
6.625%, due 02/01/29 | | | 50,000 | | | 51,621 |
| | | | | | |
| | | | | | 18,932,215 |
| | | | | | |
| Specialty Retail - 0.3% |
Home Depot, Inc.
5.400%, due 03/01/16 | | | 5,000,000 | | | 4,998,010 |
Limited Brands, Inc.
6.900%, due 07/15/17 | | | 15,000,000 | | | 12,998,685 |
| | | | | | |
| | | | | | 17,996,695 |
| | | | | | |
| Tobacco - 0.1% | | | | | | |
Philip Morris International, Inc.
6.375%, due 05/16/38 | | | 4,100,000 | | | 4,376,988 |
Reynolds American, Inc.
7.625%, due 06/01/16 | | | 2,400,000 | | | 2,410,382 |
| | | | | | |
| | | | | | 6,787,370 |
| | | | | | |
| Trading Companies & Distributors - 0.1% |
GATX Corp.
6.000%, due 02/15/18 | | | 5,000,000 | | | 4,262,830 |
| | | | | | |
| Wireless Telecommunication Services - 0.9% |
AT&T Wireless Services, Inc. | | | | | | |
7.875%, due 03/01/11 | | | 40,115,000 | | | 43,279,552 |
8.125%, due 05/01/12 | | | 5,000 | | | 5,601 |
8.750%, due 03/01/31 | | | 245,000 | | | 299,410 |
Cingular Wireless LLC
6.500%, due 12/15/11 | | | 700,000 | | | 755,604 |
Sprint Nextel Corp.
6.000%, due 12/01/16 | | | 11,250,000 | | | 9,253,125 |
| | | | | | |
| | | | | | 53,593,292 |
| | | | | | |
Total Domestic Bonds & Debt Securities
(Cost $1,731,155,135) | | | | | | 1,587,350,021 |
| | | | | | |
|
| Foreign Bonds & Debt Securities - 2.8% |
| Aruba Guilder - 0.0% |
UFJ Finance Aruba AEC
6.750%, due 07/15/13 | | | 220,000 | | | 227,997 |
| | | | | | |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Brazil - 2.0% |
Brazil Notas do Tesouro Nacional, Series F
10.000%, due 01/01/12 - 01/01/17(i) | | $ | 21,983,200 | | $ | 110,886,127 |
Federal Republic of Brazil
10.250%, due 01/10/28(i) | | | 7,100,000 | | | 3,522,005 |
| | | | | | |
| | | | | | 114,408,132 |
| | | | | | |
| Cayman Islands - 0.1% |
Hutchison Whampoa International, Ltd.
6.250%, due 01/24/14
(144A)(b) | | | 245,000 | | | 263,938 |
Mizuho Finance
5.790%, due 04/15/14
(144A)(b) | | | 315,000 | | | 324,849 |
Petroleum Export, Ltd.
5.265%, due 06/15/11
(144A)(b) | | | 2,537,646 | | | 2,445,855 |
| | | | | | |
| | | | | | 3,034,642 |
| | | | | | |
| Denmark - 0.5% | | | | | | |
Nykredit Realkredit A.S.
5.000%, due 10/01/38(a)(j) | | | 49,539,888 | | | 8,743,307 |
Realkredit Danmark A.S.
4.100%, due 01/01/38 - 10/01/38(a)(j) | | | 122,045,808 | | | 21,566,582 |
| | | | | | |
| | | | | | 30,309,889 |
| | | | | | |
| France - 0.0% | | | | | | |
AXA S.A.
8.600%, due 12/15/30 | | | 60,000 | | | 56,342 |
France Telecom S.A.
8.500%, due 03/01/11 | | | 400,000 | | | 432,783 |
| | | | | | |
| | | | | | 489,125 |
| | | | | | |
| Luxembourg - 0.0% | | | | | | |
Telecom Italia Capital S.A.
4.000%, due 01/15/10 | | | 510,000 | | | 512,511 |
| | | | | | |
| Netherlands - 0.0% | | | | | | |
Deutsche Telekom Finance
5.250%, due 07/22/13 | | | 425,000 | | | 436,926 |
| | | | | | |
| Norway - 0.0% |
Den Norske Bank
7.729%, due 06/29/49 (144A)(a)(b) | | | 115,000 | | | 92,039 |
| | | | | | |
| Panama - 0.1% | | | | | | |
Panama Government International Bond
9.375%, due 04/01/29 | | | 1,161,000 | | | 1,462,860 |
Republic of Panama
6.700%, due 01/26/36 | | | 1,150,000 | | | 1,121,250 |
| | | | | | |
| | | | | | 2,584,110 |
| | | | | | |
See accompanying notes to financial statements
13
Met Investors Series Trust
PIMCO Total Return Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| | |
| Russia - 0.0% | | | | | | |
Morgan Stanley (Gazprom)
9.625%, due 03/01/13 (144A)(b) | | $ | 130,000 | | $ | 133,250 |
| | | | | | |
| Singapore - 0.0% | | | | | | |
United Overseas Bank, Ltd.
5.375%, due 09/03/19 (144A)(a)(b) | | | 470,000 | | | 448,914 |
| | | | | | |
| South Africa - 0.0% | | | | | | |
South Africa Government International Bond
5.875%, due 05/30/22 | | | 700,000 | | | 649,687 |
| | | | | | |
| South Korea - 0.0% | | | | | | |
Korea Development Bank
1.317%, due 04/03/10(a) | | | 1,600,000 | | | 1,566,579 |
Korea First Bank, Ltd.
7.267%, due 03/03/34 (144A)(a)(d) | | | 240,000 | | | 217,869 |
Woori Bank Korea
5.750%, due 03/13/14 (144A)(a)(b) | | | 305,000 | | | 270,441 |
| | | | | | |
| | | | | | 2,054,889 |
| | | | | | |
| Sweden - 0.1% | | | | | | |
Skandinaviska Enskilda Banken
4.958%, due 03/29/49 (144A)(a)(b) | | | 415,000 | | | 218,075 |
Swedbank A.B.
3.625%, due 12/02/11 | | | 1,400,000 | | | 2,026,082 |
9.000%, due 12/29/49 (144A)(b) | | | 180,000 | | | 92,485 |
| | | | | | |
| | | | | | 2,336,642 |
| | | | | | |
| United Kingdom - 0.0% | | | | | | |
British Telecom Plc
8.625%, due 12/15/10 | | | 190,000 | | | 201,862 |
HBOS Capital Funding LP
6.071%, due 06/30/49
(144A)(a)(b) | | | 45,000 | | | 16,416 |
HBOS Plc
5.375%, due 12/29/49
(144A)(a)(b) | | | 285,000 | | | 137,848 |
| | | | | | |
| | | | | | 356,126 |
| | | | | | |
Total Foreign Bonds & Debt Securities
(Cost $159,480,829) | | | | | | 158,074,879 |
| | | | | | |
| U. S. Government & Agency Obligations - 93.7% |
Federal Home Loan Banks
3.375%, due 06/24/11 | | | 1,500,000 | | | 1,556,458 |
Federal Home Loan Mortgage Corp. | | | | | | |
7.000%, due 09/01/10 | | | 2,128 | | | 2,196 |
3.125%, due 10/25/10 | | | 3,200,000 | | | 3,454,134 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| U. S. Government & Agency Obligations - continued |
0.888%, due 02/01/11(a) | | $ | 31,100,000 | | $ | 31,056,056 |
6.500%, due 04/01/11 - 01/15/24 | | | 157,607 | | | 168,667 |
1.625%, due 04/26/11 | | | 23,500,000 | | | 23,689,527 |
6.000%, due 05/01/11 - 04/01/23 | | | 7,152,866 | | | 7,550,920 |
0.926%, due 05/04/11(a) | | | 406,919,000 | | | 407,963,948 |
1.125%, due 06/01/11 | | | 33,600,000 | | | 33,551,045 |
0.937%, due 08/05/11(a) | | | 670,500,000 | | | 670,773,953 |
5.500%, due 05/01/14 - 06/01/36 | | | 29,821,155 | | | 30,972,890 |
5.000%, due 09/15/16 - 01/01/37 | | | 79,984,191 | | | 81,297,040 |
1.875%, due 11/15/23(a) | | | 1,785,916 | | | 1,812,280 |
5.250%, due 01/01/29(a) | | | 1,366,946 | | | 1,384,142 |
4.333%, due 11/01/31(a) | | | 67,409 | | | 68,022 |
3.500%, due 07/15/32 | | | 266,184 | | | 265,054 |
5.488%, due 08/01/32(a) | | | 346,421 | | | 354,844 |
0.569%, due 07/15/34(a) | | | 404,962 | | | 396,628 |
4.445%, due 10/01/34(a) | | | 225,218 | | | 228,954 |
4.354%, due 11/01/34 -
02/01/35(a) | | | 826,191 | | | 844,710 |
4.373%, due 11/01/34(a) | | | 409,249 | | | 415,008 |
4.390%, due 11/01/34(a) | | | 119,845 | | | 122,193 |
4.484%, due 11/01/34(a) | | | 208,545 | | | 213,722 |
4.351%, due 01/01/35(a) | | | 253,189 | | | 262,635 |
4.400%, due 01/01/35(a) | | | 1,020,793 | | | 1,047,745 |
4.338%, due 02/01/35(a) | | | 314,619 | | | 325,476 |
4.425%, due 02/01/35(a) | | | 270,834 | | | 277,544 |
4.429%, due 02/01/35(a) | | | 251,144 | | | 259,411 |
4.500%, due 02/01/35(a) | | | 300,020 | | | 310,628 |
4.515%, due 02/01/35(a) | | | 129,121 | | | 133,250 |
5.131%, due 03/01/35(a) | | | 1,897,987 | | | 1,966,286 |
4.116%, due 06/01/35(a) | | | 5,735,715 | | | 5,777,261 |
4.330%, due 08/01/35(a) | | | 2,886,701 | | | 2,922,458 |
4.903%, due 09/01/35(a) | | | 3,568,474 | | | 3,670,710 |
5.294%, due 09/01/35(a) | | | 9,299,511 | | | 9,638,875 |
5.000%, due TBA(k) | | | 25,000,000 | | | 25,324,225 |
5.500%, due TBA(k) | | | 521,500,000 | | | 538,367,396 |
6.000%, due TBA(k) | | | 400,000 | | | 417,438 |
Federal National Mortgage Assoc. | | | | | | |
6.000%, due 09/01/16 - 03/01/39 | | | 616,357,046 | | | 645,418,758 |
5.500%, due 08/01/09 - 02/01/39 | | | 541,989,550 | | | 561,385,642 |
7.000%, due 04/01/11 - 05/01/11 | | | 9,463 | | | 9,785 |
3.375%, due 05/19/11 | | | 3,900,000 | | | 4,061,780 |
8.000%, due 11/01/13 - 10/01/25 | | | 16,221 | | | 17,479 |
See accompanying notes to financial statements
14
Met Investors Series Trust
PIMCO Total Return Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| U. S. Government & Agency Obligations - continued |
6.500%, due 12/01/13 - 10/01/17 | | $ | 676,854 | | $ | 718,487 |
5.000%, due 02/01/18 - 08/01/37 | | | 345,786,152 | | | 354,793,415 |
4.807%, due 10/09/19(h) | | | | | | |
3.615%, due 10/01/28(a) | | | 272,208 | | | 272,569 |
7.500%, due 09/01/30 | | | 2,521 | | | 2,753 |
7.004%, due 02/01/31(a) | | | 567,815 | | | 593,288 |
4.532%, due 09/01/31(a) | | | 154,532 | | | 156,405 |
0.718%, due 09/18/31(a) | | | 1,180,127 | | | 1,168,957 |
1.214%, due 04/25/32(a) | | | 499,424 | | | 507,053 |
5.474%, due 07/01/32(a) | | | 48,778 | | | 49,060 |
4.176%, due 09/01/32(a) | | | 544,760 | | | 560,026 |
5.163%, due 11/01/32(a) | | | 297,896 | | | 306,647 |
4.605%, due 03/01/33(a) | | | 16,731 | | | 17,329 |
4.666%, due 06/01/33 - 12/01/34(a) | | | 3,300,382 | | | 3,401,335 |
4.492%, due 07/01/33(a) | | | 141,992 | | | 143,638 |
4.364%, due 04/01/34(a) | | | 59,663 | | | 61,298 |
3.845%, due 05/01/34(a) | | | 2,366,210 | | | 2,428,308 |
4.845%, due 09/01/34(a) | | | 347,546 | | | 349,752 |
5.011%, due 09/01/34(a) | | | 5,361,166 | | | 5,575,136 |
4.736%, due 10/01/34(a) | | | 77,765 | | | 80,529 |
4.287%, due 11/01/34(a) | | | 10,585,415 | | | 10,703,211 |
4.553%, due 11/01/34(a) | | | 621,650 | | | 639,052 |
4.606%, due 11/01/34(a) | | | 27,424 | | | 28,247 |
4.542%, due 12/01/34(a) | | | 271,666 | | | 279,967 |
4.760%, due 12/01/34(a) | | | 9,114,719 | | | 9,323,574 |
4.336%, due 01/01/35(a) | | | 102,403 | | | 105,921 |
4.455%, due 01/01/35(a) | | | 353,813 | | | 365,263 |
4.480%, due 01/01/35(a) | | | 322,818 | | | 333,138 |
4.535%, due 01/01/35(a) | | | 389,657 | | | 402,791 |
4.826%, due 01/01/35(a) | | | 776,217 | | | 793,547 |
4.303%, due 02/01/35(a) | | | 188,092 | | | 194,542 |
4.427%, due 02/01/35(a) | | | 881,591 | | | 899,443 |
4.409%, due 03/01/35(a) | | | 353,860 | | | 366,280 |
4.688%, due 04/01/35(a) | | | 522,033 | | | 541,423 |
4.365%, due 05/01/35(a) | | | 438,032 | | | 453,394 |
4.749%, due 05/01/35(a) | | | 2,465,742 | | | 2,521,484 |
4.591%, due 05/25/35(a) | | | 6,314,078 | | | 6,306,670 |
4.250%, due 08/01/35(a) | | | 3,596,884 | | | 3,701,233 |
4.727%, due 08/01/35 - 09/01/35(a) | | | 12,161,625 | | | 12,385,862 |
4.702%, due 10/01/35(a) | | | 4,145,184 | | | 4,234,549 |
3.392%, due 11/01/35(a) | | | 1,394,487 | | | 1,416,535 |
4.683%, due 11/01/35(a) | | | 3,082,840 | | | 3,188,942 |
4.751%, due 11/01/35(a) | | | 1,837,519 | | | 1,907,326 |
5.397%, due 01/01/36(a) | | | 1,254,260 | | | 1,327,639 |
6.382%, due 08/01/36(a) | | | 4,174,664 | | | 4,435,652 |
4.647%, due 12/01/36(a) | | | 1,129,366 | | | 1,136,275 |
2.638%, due 08/01/41 - 10/01/44(a) | | | 5,397,467 | | | 5,352,285 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| U. S. Government & Agency Obligations - continued |
2.693%, due 09/01/41(a) | | $ | 2,562,386 | | $ | 2,545,967 |
5.000%, due TBA(k) | | | 300,000 | | | 305,484 |
5.500%, due TBA(k) | | | 90,000,000 | | | 100,137,368 |
6.000%, due TBA(k) | | | 1,270,000,000 | | | 1,327,348,120 |
FHLMC Structured Pass Through Securities | | | | | | |
2.838%, due 07/25/44(a) | | | 14,655,038 | | | 14,510,086 |
2.638%, due 10/25/44(a) | | | 2,788,268 | | | 2,744,857 |
2.639%, due 02/25/45(a) | | | 242,855 | | | 231,487 |
Government National Mortgage Assoc. | | | | | | |
6.000%, due 04/15/14 - 10/15/38 | | | 10,995,488 | | | 11,467,288 |
4.375%, due 02/20/22 - 02/20/27(a) | | | 147,318 | | | 150,456 |
5.375%, due 04/20/22 - 05/20/32(a) | | | 386,386 | | | 398,749 |
7.000%, due 10/15/23 | | | 38,604 | | | 41,964 |
7.500%, due 01/15/26 - 04/15/31 | | | 5,993,612 | | | 6,572,989 |
4.125%, due 01/20/26 - 11/20/30(a) | | | 275,791 | | | 280,249 |
4.625%, due 08/20/27 - 09/20/33(a) | | | 543,385 | | | 555,751 |
4.250%, due 02/20/28 - 01/20/30(a) | | | 159,657 | | | 162,304 |
5.875%, due 04/20/29(a) | | | 67,719 | | | 70,330 |
0.818%, due 02/16/30(a) | | | 40,622 | | | 40,550 |
0.618%, due 01/16/31(a) | | | 109,827 | | | 107,771 |
4.500%, due 10/20/31(a) | | | 7,693 | | | 7,770 |
3.750%, due 03/20/32(a) | | | 1,557 | | | 1,575 |
5.500%, due 04/20/32(a) | | | 19,088 | | | 19,785 |
4.000%, due 03/20/33(a) | | | 17,533 | | | 17,765 |
6.500%, due 06/15/37 - 02/15/39 | | | 78,483,055 | | | 83,435,620 |
U.S. Treasury Inflation Index Bond
2.625%, due 07/15/17 | | | 10,390,779 | | | 11,085,662 |
U.S. Treasury Inflation Index Note | | | | | | |
3.000%, due 07/15/12 | | | 15,535,159 | | | 16,476,978 |
0.875%, due 04/30/11 | | | 2,668,000 | | | 2,661,018 |
1.875%, due 07/15/13 | | | 26,817,483 | | | 27,538,203 |
2.000%, due 01/15/14 - 07/15/14 | | | 38,566,893 | | | 39,515,637 |
1.625%, due 01/15/15 | | | 88,998,599 | | | 88,692,622 |
2.500%, due 07/15/16 | | | 11,728,149 | | | 12,325,557 |
| | | | | | |
Total U.S. Government & Agency Obligations
(Cost $5,228,978,071) | | | | | | 5,298,208,595 |
| | | | | | |
| Loan Participation - 0.6% |
AES Corp.
1.000%, due 04/30/10 (144A)(b) | | | 1,633,334 | | | 1,470,000 |
See accompanying notes to financial statements
15
Met Investors Series Trust
PIMCO Total Return Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Loan Participation - continued |
Biomet | | | | | | |
3.608%, due 02/15/15 (144A)(a)(b) | | $ | 2,673,077 | | $ | 2,498,720 |
3.308%, due 03/25/15 (144A)(a)(d) | | | 109,423 | | | 102,286 |
3.310%, due 03/25/15 (144A)(a)(b) | | | 165,000 | | | 154,238 |
Chrysler Finco
4.320%, due 08/03/14(a)(b) | | | 13,755,000 | | | 12,769,220 |
Ford Motor Co.
1.000%, due 11/29/13 - 12/16/13 (144A)(b) | | | 6,816,671 | | | 4,914,820 |
Georgia Pacific Corp. | | | | | | |
2.310%, due 12/20/12 (144A)(a)(b) | | | 225,166 | | | 212,501 |
2.323%, due 12/20/12 (144A)(a)(b) | | | 763,197 | | | 720,267 |
2.650%, due 12/20/12 (144A)(a)(b) | | | 2,480,391 | | | 2,340,869 |
HCA, Inc.
2.848%, due 11/14/13 (144A)(a)(b) | | | 7,557,010 | | | 6,839,615 |
| | | | | | |
Total Loan Participation
(Cost $35,122,552) | | | | | | 32,022,536 |
| | | | | | |
| Convertible Preferred Stocks - 0.8% |
| Commercial Banks - 0.8% |
Wells Fargo & Co., Series L 7.500% | | | 53,950 | | | 42,349,132 |
| | | | | | |
| Insurance - 0.0% | | | | | | |
American International Group, Inc.
8.500%, due 08/01/11 | | | 168,900 | | | 1,607,928 |
| | | | | | |
Total Convertible Preferred Stocks
(Cost $52,682,154) | | | | | | 43,957,060 |
| | | | | | |
| Purchased Option - 0.3% |
IRO USD 2 Year 3.5%, Expires 08/03/09, Strike Price $3.50
(Cost $4,928,405) | | | 475,600,000 | | | 17,516,586 |
| | | | | | |
| Short-Term Investments - 1.2% |
| Repurchase Agreement - 1.0% | | | | | | |
State Street Bank & Trust Co., Repurchase Agreement, dated 06/30/09 at 0.010% to be repurchased at $55,720,015 on 07/01/09 collateralized by $56,555,000 FNMA at 1.722% due 05/10/11 with a value of $56,837,775. | | | 55,720,000 | | | 55,720,000 |
| | | | | | |
| | | | | | | |
Security
Description | | Par
Amount | | Value | |
| | | | | | | |
|
| U.S. Government & Agency Discount Notes - 0.2% | |
U.S. Treasury Bill | | | | | | | |
0.054%, due 07/02/09(h)(l) | | $ | 60,000 | | $ | 60,000 | |
0.097%, due 07/16/09(h)(l) | | | 50,000 | | | 49,998 | |
0.100%, due 07/23/09(h)(l) | | | 260,000 | | | 259,984 | |
0.120%, due 07/23/09(h)(l) | | | 9,718,000 | | | 9,717,287 | |
| | | | | | | |
| | | | | | 10,087,269 | |
| | | | | | | |
Total Short-Term Investments
(Cost $65,807,269) | | | | | | 65,807,269 | |
| | | | | | | |
| | |
TOTAL INVESTMENTS - 137.4%
(Cost $7,951,025,541) | | | | | | 7,768,652,194 | |
| | | | | | | |
| |
| Other Assets and Liabilities (net) - (37.4)% | | | (2,115,398,653 | ) |
| | | | | | | |
| | |
| NET ASSETS - 100.0% | | | | | $ | 5,653,253,541 | |
| | | | | | | |
Portfolio Footnotes:
| (a) | | Variable or floating rate security. The stated rate represents the rate at June 30, 2009. |
| (b) | | Securities that may be resold to “qualified institutional buyers” under Rule 144A or securities offered pursuant to Section 4(2) of the Securities Act of 1933, as amended. These securities have been determined to be liquid under the guidelines established by the Board of Trustees. These securities represent in the aggregate $312,962,044 of net assets. |
| (c) | | Security is valued in good faith at fair value by or under the direction of the Board of Trustees. |
| (d) | | Securities that may be resold to “qualified institutional buyers” under Rule 144A or securities offered pursuant to Section 4(2) of the Securities Act of 1933, as amended. These securities have been determined to be illiquid by the Portfolio’s adviser. These securities represent in the aggregate $25,743,103 of net assets. |
| (e) | | Par shown in Euro Currency. Value is shown in USD. |
| (f) | | Security is in default and/or issuer is in bankruptcy. |
| (g) | | Par shown in Pound Sterling. Value is shown in USD. |
| (h) | | Zero coupon bond - Interest rate represents current yield to maturity. |
| (i) | | Par shown in Brazilian Real. Value is shown in USD. |
| (j) | | Par shown in Danish Krone. Value is shown in USD. |
| (k) | | This security is traded on a “to-be-announced” basis. |
| (l) | | Security or a portion of the security was pledged to cover margin requirements for future contracts. At the period end, the value of the securities pledged amounted to $10,087,269. |
AMBAC - Ambac Indemnity Corporation
FGIC - Financial Guaranty Insurance Corporation
FHLMC - Federal Home Loan Mortgage Corporation
FSA - Financial Security Assurance, Inc.
See accompanying notes to financial statements
16
Met Investors Series Trust
PIMCO Total Return Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | | | | | | | | | | | | | |
| Written Call Options | | Counterparty | | Expiration | | Strike
Price | | Number of
Contracts | | | Premium | | | Value | |
OTC ECAL U.S. Dollar vs. Japanese Yen | | Credit Suisse First Boston Corp. | | 03/17/2010 | | $ | 104.00 | | (6,271,000 | ) | | $ | (330,011 | ) | | $ | (76,920 | ) |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| Written Put Options | | Counterparty | | Expiration | | Strike
Price | | Number of
Contracts | | | Premium | | | Value | |
IRO USD 2 Year Swaption | | Citibank | | 07/27/2009 | | $ | 2.00 | | (12,000,000 | ) | | $ | (48,600 | ) | | $ | (9,728 | ) |
CME EuroDollar Future | | Citigroup Global Markets, Inc. | | 09/14/2009 | | | 98.63 | | (138 | ) | | | (22,688 | ) | | | (6,900 | ) |
OTC EPUT U.S. Dollar vs. Japanese Yen | | Credit Suisse First Boston Corp. | | 03/17/2010 | | | 104.00 | | (6,271,000 | ) | | | (330,011 | ) | | | (601,571 | ) |
IRO 2 Years Swaption | | JPMorgan Securities, Inc. | | 07/27/2009 | | | 2.00 | | (5,500,000 | ) | | | (23,650 | ) | | | (4,459 | ) |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | $ | (424,949 | ) | | $ | (622,658 | ) |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Forward Sales Commitments | | Counterparty | | Interest Rate | | | Maturity | | Proceeds | | | Value | |
| | | | | |
Federal National Mortgage Assoc. | | Goldman Sachs & Co. | | 5.000 | % | | TBA | | $ | (4,061,875 | ) | | $ | (4,073,124 | ) |
| | | | | | | | | | | | | | | |
The following table summarizes the portfolio composition of the Portfolio’s holdings at June 30, 2009 based upon quality ratings issued by Standard & Poor’s. For securities not rated by Standard & Poor’s, the Moody’s rating is used.
| | | |
| Portfolio Composition by Credit Quality (Unaudited) | | Percent of
Portfolio | |
AAA/Government/Government Agency | | 75.31 | % |
AA | | 2.31 | |
A | | 11.29 | |
BBB | | 5.43 | |
BB | | 0.75 | |
B | | 0.12 | |
Other | | 4.79 | |
| | | |
Total: | | 100.00 | % |
| | | |
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1—quoted prices in active markets for identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Municipals | | $ | — | | $ | 141,756,036 | | $ | — | | $ | 141,756,036 |
Asset-Backed Securities | | | — | | | 417,286,655 | | | 6,672,557 | | | 423,959,212 |
Domestic Bonds & Debt Securities | | | | | | | | | | | | |
Automobiles | | | — | | | 1,395,418 | | | — | | | 1,395,418 |
Building Products | | | — | | | 3,485,925 | | | — | | | 3,485,925 |
Capital Markets | | | — | | | 167,427,571 | | | — | | | 167,427,571 |
Chemicals | | | — | | | 32,669,363 | | | — | | | 32,669,363 |
See accompanying notes to financial statements
17
Met Investors Series Trust
PIMCO Total Return Portfolio
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Commercial & Professional Services | | $ | — | | $ | 6,480,391 | | $ | — | | $ | 6,480,391 |
Commercial Banks | | | — | | | 337,341,046 | | | — | | | 337,341,046 |
Computers & Peripherals | | | — | | | 20,523,697 | | | — | | | 20,523,697 |
Consumer Finance | | | — | | | 115,636,532 | | | — | | | 115,636,532 |
Diversified Financial Services | | | — | | | 342,874,258 | | | — | | | 342,874,258 |
Diversified Telecommunication Services | | | — | | | 41,502,342 | | | — | | | 41,502,342 |
Electric Utilities | | | — | | | 50,019,126 | | | — | | | 50,019,126 |
Energy Equipment & Services | | | — | | | 1,073,104 | | | — | | | 1,073,104 |
Food & Staples Retailing | | | — | | | 24,284,615 | | | — | | | 24,284,615 |
Food Products | | | — | | | 26,566,107 | | | — | | | 26,566,107 |
Health Care Equipment & Supplies | | | — | | | 10,338,440 | | | — | | | 10,338,440 |
Health Care Providers & Services | | | — | | | 17,709,150 | | | — | | | 17,709,150 |
Independent Power Producers & Energy Traders | | | — | | | 6,056,067 | | | — | | | 6,056,067 |
Insurance | | | — | | | 33,613,579 | | | — | | | 33,613,579 |
IT Services | | | — | | | 10,110,750 | | | — | | | 10,110,750 |
Media | | | — | | | 42,636,407 | | | — | | | 42,636,407 |
Metals & Mining | | | — | | | 7,806,441 | | | — | | | 7,806,441 |
Multiline Retail | | | — | | | 5,309,990 | | | — | | | 5,309,990 |
Oil, Gas & Consumable Fuels | | | — | | | 45,964,513 | | | — | | | 45,964,513 |
Paper & Forest Products | | | — | | | 5,542,297 | | | — | | | 5,542,297 |
Pharmaceuticals | | | — | | | 118,870,340 | | | — | | | 118,870,340 |
Real Estate Investment Trusts (REITs) | | | — | | | 10,540,150 | | | — | | | 10,540,150 |
Road & Rail | | | — | | | 18,932,215 | | | — | | | 18,932,215 |
Specialty Retail | | | — | | | 17,996,695 | | | — | | | 17,996,695 |
Tobacco | | | — | | | 6,787,370 | | | — | | | 6,787,370 |
Trading Companies & Distributors | | | — | | | 4,262,830 | | | — | | | 4,262,830 |
Wireless Telecommunication Services | | | — | | | 53,593,292 | | | — | | | 53,593,292 |
Total Domestic Bonds & Debt Securities | | | — | | | 1,587,350,021 | | | — | | | 1,587,350,021 |
Foreign Bonds & Debt Securities | | | | | | | | | | | | |
Aruba Guilder | | | — | | | 227,997 | | | — | | | 227,997 |
Brazil | | | — | | | 114,408,132 | | | — | | | 114,408,132 |
Cayman Islands | | | — | | | 3,034,642 | | | — | | | 3,034,642 |
Denmark | | | — | | | 30,309,889 | | | — | | | 30,309,889 |
France | | | — | | | 489,125 | | | — | | | 489,125 |
Luxembourg | | | — | | | 512,511 | | | — | | | 512,511 |
Netherlands | | | — | | | 436,926 | | | — | | | 436,926 |
Norway | | | — | | | 92,039 | | | — | | | 92,039 |
Panama | | | — | | | 2,584,110 | | | — | | | 2,584,110 |
Russia | | | — | | | 133,250 | | | — | | | 133,250 |
Singapore | | | — | | | 448,914 | | | — | | | 448,914 |
South Africa | | | — | | | 649,687 | | | — | | | 649,687 |
South Korea | | | — | | | 2,054,889 | | | — | | | 2,054,889 |
See accompanying notes to financial statements
18
Met Investors Series Trust
PIMCO Total Return Portfolio
| | | | | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | | Significant
Other
Observable
Inputs
(Level 2) | | | Significant
Unobservable
Inputs
(Level 3) | | Total | |
Sweden | | $ | — | | | $ | 2,336,642 | | | $ | — | | $ | 2,336,642 | |
United Kingdom | | | — | | | | 356,126 | | | | — | | | 356,126 | |
Total Foreign Bonds & Debt Securities | | | — | | | | 158,074,879 | | | | — | | | 158,074,879 | |
U. S. Government & Agency Obligations | | | — | | | | 5,298,208,595 | | | | — | | | 5,298,208,595 | |
Loan Participation | | | — | | | | 32,022,536 | | | | — | | | 32,022,536 | |
Convertible Preferred Stocks | | | | | | | | | | | | | | | |
Commercial Banks | | | 42,349,132 | | | | — | | | | — | | | 42,349,132 | |
Insurance | | | 1,607,928 | | | | — | | | | — | | | 1,607,928 | |
Total Convertible Preferred Stocks | | | 43,957,060 | | | | — | | | | — | | | 43,957,060 | |
Purchased Option | | | — | | | | 17,516,586 | | | | — | | | 17,516,586 | |
Short-Term Investments | | | | | | | | | | | | | | | |
Repurchase Agreement | | | — | | | | 55,720,000 | | | | — | | | 55,720,000 | |
U.S. Government & Agency Discount Notes | | | — | | | | 10,087,269 | | | | — | | | 10,087,269 | |
Total Short-Term Investments | | | — | | | | 65,807,269 | | | | — | | | 65,807,269 | |
TOTAL INVESTMENTS | | $ | 43,957,060 | | | $ | 7,718,022,577 | | | $ | 6,672,557 | | $ | 7,768,652,194 | |
Forward Contracts | | | | | | | | | | | | | | | |
Forward Currency Contracts | | $ | — | | | $ | (10,928,010 | ) | | $ | — | | $ | (10,928,010 | ) |
Futures Contracts | | | | | | | | | | | | | | | |
Futures Contracts Long | | | 29,397,125 | | | | — | | | | — | | | 29,397,125 | |
Options | | | | | | | | | | | | | | | |
Options Written | | | (2,681 | ) | | | 58,063 | | | | — | | | 55,382 | |
TBA Sale Commitments | | | | | | | | | | | | | | | |
Federal Agency | | | — | | | | (11,249 | ) | | | — | | | (11,249 | ) |
Swaps | | | | | | | | | | | | | | | |
Swap Commitments | | | — | | | | 92,440,005 | | | | — | | | 92,440,005 | |
FAS 157 Level 3 Reconciliation Disclosure
Following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value:
Asset Valuation Inputs
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Investments in Securities | | Balance as of
December 31,
2008 | | Discounts | | Realized
Gain | | Change in
Unrealized
Depreciation | | | Net
Sales | | | Net Transfers
in to Level 3 | | Net Transfers
out of Level 3 | | | Balance as of
June 30,
2009 |
| Asset-Backed Securities | | $ | 7,031,934 | | $ | — | | $ | 2,675 | | $ | (77,697 | ) | | $ | (426,562 | ) | | $ | 142,207 | | $ | — | | | $ | 6,672,557 |
| Domestic Bonds & Debt Securities | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Insurance | | | 8,128,432 | | | 528,581 | | | — | | | (339,413 | ) | | | — | | | | — | | | (8,317,600 | ) | | | — |
| Total | | $ | 15,160,366 | | $ | 528,581 | | $ | 2,675 | | $ | (417,110 | ) | | $ | (426,562 | ) | | $ | 142,207 | | $ | (8,317,600 | ) | | $ | 6,672,557 |
See accompanying notes to financial statements
19
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| PIMCO Total Return Portfolio | | | |
| Assets | | | | |
Investments, at value (a) | | $ | 7,712,932,194 | |
Repurchase Agreement | | | 55,720,000 | |
Cash | | | 281,432 | |
Cash denominated in foreign currencies (b) | | | 10,801,694 | |
Receivable for investments sold | | | 249,495,674 | |
Receivable for Trust shares sold | | | 3,535,683 | |
Dividends receivable | | | 19,426 | |
Interest receivable | | | 40,431,075 | |
Swap interest receivable | | | 12,675,502 | |
Swaps premium paid | | | 82,534,228 | |
Unrealized appreciation on swap contracts | | | 97,275,641 | |
Unrealized appreciation on forward currency contracts | | | 1,108,081 | |
| | | | |
Total assets | | | 8,266,810,630 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 2,271,921,190 | |
Payable for cash collateral | | | 120,402,909 | |
Trust shares redeemed | | | 3,333,677 | |
Forward sales commitments, at value (c) | | | 4,073,124 | |
Variation margin on financial futures contracts | | | 1,019,936 | |
Unrealized depreciation on forward currency contracts | | | 12,036,091 | |
Unrealized depreciation on swap contracts | | | 4,835,636 | |
Outstanding written options (d) | | | 699,578 | |
Distribution and services fees—Class B | | | 444,963 | |
Distribution and services fees—Class E | | | 11,823 | |
Interest payable swap position | | | 4,071,706 | |
Swap premium received | | | 188,010,459 | |
Management fee | | | 2,192,310 | |
Administration fee | | | 33,475 | |
Custodian and accounting fees | | | 159,870 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 306,915 | |
| | | | |
Total liabilities | | | 2,613,557,089 | |
| | | | |
| Net Assets | | $ | 5,653,253,541 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 5,779,080,793 | |
Accumulated net realized loss | | | (157,957,435 | ) |
Unrealized depreciation on investments, futures contracts, written options contracts, swap contracts and foreign currency | | | (72,942,349 | ) |
Undistributed net investment income | | | 105,072,532 | |
| | | | |
Total | | $ | 5,653,253,541 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 3,349,079,184 | |
| | | | |
Class B | | | 2,206,565,046 | |
| | | | |
Class E | | | 97,609,311 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 301,418,744 | |
| | | | |
Class B | | | 200,792,870 | |
| | | | |
Class E | | | 8,842,393 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 11.11 | |
| | | | |
Class B | | | 10.99 | |
| | | | |
Class E | | | 11.04 | |
| | | | |
| | | | | |
(a) Investments at cost, excluding repurchase agreement | | $ | 7,895,305,541 | |
(b) Identified cost of foreign cash | | | 11,265,911 | |
(c) Proceeds of forward sales commitments | | | 124,494,571 | |
(d) Cost of written options | | | 754,960 | |
See accompanying notes to financial statements
20
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| PIMCO Total Return Portfolio | | | |
| Investment Income | | | | |
Dividends | | $ | 2,740,397 | |
Interest | | | 139,399,239 | |
| | | | |
Total investment income | | | 142,139,636 | |
| | | | |
| Expenses | | | | |
Management fee | | | 10,970,310 | |
Administration fees | | | 183,019 | |
Custodian and accounting fees | | | 377,641 | |
Distribution and services fees—Class B | | | 2,034,656 | |
Distribution and services fees—Class E | | | 67,030 | |
Audit and tax services | | | 92,730 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 161,821 | |
Insurance | | | 46,179 | |
Other | | | 9,356 | |
| | | | |
Total expenses | | | 13,969,175 | |
| | | | |
Net investment income | | | 128,170,461 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments, Futures Contracts, Written Options Contracts, Swap Contracts and Foreign Currency | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | 88,502,779 | |
Futures contracts | | | 130,784,401 | |
Written options contracts | | | (7,136,624 | ) |
Swap contracts | | | (220,208,734 | ) |
Foreign currency | | | (17,718,332 | ) |
| | | | |
Net realized loss on investments, futures contracts, written options contracts, swap contracts and foreign currency | | | (25,776,510 | ) |
| | | | |
Net change in unrealized appreciation (depreciation) on: | | | | |
Investments | | | 248,322,078 | |
Futures contracts | | | (125,003,111 | ) |
Written options contracts | | | 14,936,712 | |
Swap contracts | | | 197,899,018 | |
Foreign currency | | | (3,833,790 | ) |
| | | | |
Net change in unrealized appreciation on investments, futures contracts, written options contracts, swap contracts and foreign currency | | | 332,320,907 | |
| | | | |
Net realized and unrealized gain on investments, futures contracts, written options contracts, swap contracts and foreign currency | | | 306,544,397 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 434,714,858 | |
| | | | |
See accompanying notes to financial statements
21
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| PIMCO Total Return Portfolio | | | | | | |
| | |
Period Ended
June 30, 2009
(Unaudited) | | | Period Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 128,170,461 | | | $ | 226,403,879 | |
Net realized gain (loss) on investments, futures contracts, written options contracts, swaps contracts and foreign currency | | | (25,776,510 | ) | | | 235,524,297 | |
Net change in unrealized appreciation (depreciation) on investments, futures contracts, written options contracts, short sales, swaps contracts and foreign currency | | | 332,320,907 | | | | (476,297,416 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 434,714,858 | | | | (14,369,240 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | (218,957,294 | ) | | | (124,683,059 | ) |
Class B | | | (116,779,980 | ) | | | (50,014,488 | ) |
Class E | | | (7,161,135 | ) | | | (4,396,891 | ) |
From net realized gains | | | | | | | | |
Class A | | | (124,139,741 | ) | | | (75,855,925 | ) |
Class B | | | (68,114,643 | ) | | | (32,264,534 | ) |
Class E | | | (4,152,878 | ) | | | (2,792,962 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (539,305,671 | ) | | | (290,007,859 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 598,118,920 | | | | 868,182,897 | |
Class B | | | 847,194,604 | | | | 415,239,942 | |
Class E | | | 10,649,107 | | | | 20,105,801 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | 343,097,035 | | | | 200,538,984 | |
Class B | | | 184,894,623 | | | | 82,279,022 | |
Class E | | | 11,314,013 | | | | 7,189,853 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (213,275,118 | ) | | | (1,199,719,534 | ) |
Class B | | | (152,930,588 | ) | | | (338,571,089 | ) |
Class E | | | (9,987,148 | ) | | | (63,530,172 | ) |
| | | | | | | | |
Net increase (decrease) in net assets from capital share transactions | | | 1,619,075,448 | | | | (8,284,296 | ) |
| | | | | | | | |
| Net Increase (Decrease) in Net Assets | | | 1,514,484,635 | | | | (312,661,395 | ) |
Net assets at beginning of period | | | 4,138,768,906 | | | | 4,451,430,301 | |
| | | | | | | | |
Net assets at end of period | | $ | 5,653,253,541 | | | $ | 4,138,768,906 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 105,072,532 | | | $ | 319,800,480 | |
| | | | | | | | |
See accompanying notes to financial statements
22
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| PIMCO Total Return Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 11.60 | | | $ | 12.29 | | | $ | 11.80 | | | $ | 11.60 | | | $ | 11.40 | | | $ | 11.61 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.32 | | | | 0.59 | | | | 0.56 | | | | 0.49 | | | | 0.40 | | | | 0.20 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.69 | | | | (0.51 | ) | | | 0.35 | | | | 0.04 | | | | (0.12 | ) | | | 0.40 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 1.01 | | | | 0.08 | | | | 0.91 | | | | 0.53 | | | | 0.28 | | | | 0.60 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.96 | ) | | | (0.48 | ) | | | (0.42 | ) | | | (0.32 | ) | | | (0.01 | ) | | | (0.81 | ) |
Distributions from Net Realized Capital Gains | | | (0.54 | ) | | | (0.29 | ) | | | — | | | | (0.01 | ) | | | (0.07 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (1.50 | ) | | | (0.77 | ) | | | (0.42 | ) | | | (0.33 | ) | | | (0.08 | ) | | | (0.81 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 11.11 | | | $ | 11.60 | | | $ | 12.29 | | | $ | 11.80 | | | $ | 11.60 | | | $ | 11.40 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 9.43 | % | | | 0.64 | % | | | 7.85 | % | | | 4.80 | % | | | 2.46 | % | | | 5.25 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.52 | %* | | | 0.52 | % | | | 0.54 | % | | | 0.58 | % | | | 0.57 | % | | | 0.57 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.52 | %* | | | 0.52 | % | | | 0.54 | % | | | 0.58 | % | | | 0.57 | % | | | N/A | |
Ratio of Net Investment Income to Average Net Assets | | | 5.71 | %* | | | 5.00 | % | | | 4.74 | % | | | 4.28 | % | | | 3.42 | % | | | 1.69 | % |
Portfolio Turnover Rate | | | 288.5 | % | | | 800.2 | % | | | 943.9 | % | | | 161.2 | % | | | 344.2 | % | | | 416.0 | % |
Net Assets, End of Period (in millions) | | $ | 3,349.1 | | | $ | 2,696.4 | | | $ | 3,045.1 | | | $ | 1,445.1 | | | $ | 912.6 | | | $ | 578.0 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 11.47 | | | $ | 12.17 | | | $ | 11.69 | | | $ | 11.50 | | | $ | 11.32 | | | $ | 11.54 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.30 | | | | 0.55 | | | | 0.53 | | | | 0.46 | | | | 0.37 | | | | 0.19 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.69 | | | | (0.50 | ) | | | 0.34 | | | | 0.04 | | | | (0.12 | ) | | | 0.38 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.99 | | | | 0.05 | | | | 0.87 | | | | 0.50 | | | | 0.25 | | | | 0.57 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.93 | ) | | | (0.46 | ) | | | (0.39 | ) | | | (0.30 | ) | | | — | | | | (0.79 | ) |
Distributions from Net Realized Capital Gains | | | (0.54 | ) | | | (0.29 | ) | | | — | | | | (0.01 | ) | | | (0.07 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (1.47 | ) | | | (0.75 | ) | | | (0.39 | ) | | | (0.31 | ) | | | (0.07 | ) | | | (0.79 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 10.99 | | | $ | 11.47 | | | $ | 12.17 | | | $ | 11.69 | | | $ | 11.50 | | | $ | 11.32 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 9.28 | % | | | 0.41 | % | | | 7.56 | % | | | 4.52 | % | | | 2.25 | % | | | 4.98 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.77 | %* | | | 0.78 | % | | | 0.79 | % | | | 0.83 | % | | | 0.82 | % | | | 0.81 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.77 | %* | | | 0.78 | % | | | 0.79 | % | | | 0.83 | % | | | 0.82 | % | | | N/A | |
Ratio of Net Investment Income to Average Net Assets | | | 5.49 | %* | | | 4.77 | % | | | 4.51 | % | | | 4.01 | % | | | 3.13 | % | | | 1.66 | % |
Portfolio Turnover Rate | | | 288.5 | % | | | 800.2 | % | | | 943.9 | % | | | 161.2 | % | | | 344.2 | % | | | 416.0 | % |
Net Assets, End of Period (in millions) | | $ | 2,206.6 | | | $ | 1,353.6 | | | $ | 1,274.4 | | | $ | 1,219.1 | | | $ | 1,107.7 | | | $ | 1,028.5 | |
| (a) | | Per share amounts based on average shares outstanding during the period. |
See accompanying notes to financial statements
23
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| PIMCO Total Return Portfolio | | Class E | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 11.52 | | | $ | 12.21 | | | $ | 11.73 | | | $ | 11.53 | | | $ | 11.34 | | | $ | 11.56 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.31 | | | | 0.57 | | | | 0.54 | | | | 0.47 | | | | 0.39 | | | | 0.21 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.68 | | | | (0.51 | ) | | | 0.35 | | | | 0.05 | | | | (0.13 | ) | | | 0.37 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.99 | | | | 0.06 | | | | 0.89 | | | | 0.52 | | | | 0.26 | | | | 0.58 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.93 | ) | | | (0.46 | ) | | | (0.41 | ) | | | (0.31 | ) | | | — | | | | (0.80 | ) |
Distributions from Net Realized Capital Gains | | | (0.54 | ) | | | (0.29 | ) | | | — | | | | (0.01 | ) | | | (0.07 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (1.47 | ) | | | (0.75 | ) | | | (0.41 | ) | | | (0.32 | ) | | | (0.07 | ) | | | (0.80 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 11.04 | | | $ | 11.52 | | | $ | 12.21 | | | $ | 11.73 | | | $ | 11.53 | | | $ | 11.34 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 9.39 | % | | | 0.47 | % | | | 7.63 | % | | | 4.67 | % | | | 2.33 | % | | | 5.06 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.67 | %* | | | 0.67 | % | | | 0.69 | % | | | 0.72 | % | | | 0.72 | % | | | 0.71 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.67 | %* | | | 0.67 | % | | | 0.69 | % | | | 0.72 | % | | | 0.72 | % | | | N/A | |
Ratio of Net Investment Income to Average Net Assets | | | 5.56 | %* | | | 4.88 | % | | | 4.61 | % | | | 4.10 | % | | | 3.24 | % | | | 1.76 | % |
Portfolio Turnover Rate | | | 288.5 | % | | | 800.2 | % | | | 943.9 | % | | | 161.2 | % | | | 344.2 | % | | | 416.0 | % |
Net Assets, End of Period (in millions) | | $ | 97.6 | | | $ | 88.8 | | | $ | 132.0 | | | $ | 132.5 | | | $ | 146.6 | | | $ | 146.6 | |
| (a) | | Per share amounts based on average shares outstanding during the period. |
See accompanying notes to financial statements
24
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is PIMCO Total Return Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A, B and E Shares are currently offered by the Portfolio. Class C Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Financial futures contracts and options thereon, which are traded on exchanges, are valued at their closing prices as of the close of such exchanges. Effective September 4, 2007, exchange traded options are valued at the mean price and previously were valued at the last sale price. Options traded in the over the counter (“OTC”) market are valued at the last ask price (options written) or the last bid price (options purchased). Swap agreements and options thereon are valued based upon quoted fair valuations received daily by the Portfolio from a pricing service or counterparty. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
Short positions traded in the OTC market are valued at the last available ask price.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
25
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Financial Derivative Instruments - Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133, (“FAS 161” or the “Statement”) requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. The disclosure requirements of FAS 161 distinguish between derivatives which are accounted for as “hedges” under FAS 133 and those that do not qualify for such accounting. The Portfolio reflects derivatives at fair value and recognizes changes in fair value through the Statement of Operations, and as such do not qualify for FAS 133 hedge accounting treatment.
G. Futures Contracts - The Portfolio may buy and sell futures contracts (on recognized exchanges) as a hedge, to maintain exposure to the broad equity markets, manage exposure to the securities markets or to movements in interest rates, or to enhance returns. The Portfolio may be subject to equity price risk, interest rate risk, and foreign currency exchange rate risk in the normal course of pursuing its investment objectives. Futures contracts are agreements to buy or sell a security, or deliver a final cash settlement price in connection with an index, interest rate, currency, or other contracts not calling for physical delivery, for a set price in the future. The Portfolio must post an amount equal to a portion of the total market value of the futures contract as futures variation margin, which is returned when the Portfolio’s obligations under the contract have been satisfied. From time to time thereafter, the Portfolio may have to post variation margin to maintain this amount as the market value of the contract fluctuates. Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities.
H. Options Contracts - A purchased option contract gives the buyer the right, but not the obligation, to buy (call) or sell (put) an underlying instrument at a fixed exercise price during a specified period. These contracts are generally used by the Portfolio to provide the return of an index without purchasing all of the securities underlying the index or as a substitute for purchasing or selling specific securities.
Purchases of put and call options are recorded as investments, the value of which are marked-to-market daily. When a purchased option expires, the Portfolio will realize a loss equal to the premium paid. When the Portfolio enters into a closing sale transaction, the Portfolio will realize a gain or loss depending on whether the sales proceeds from the closing sale transaction are greater or less than the cost of the option. When the Portfolio exercises a put option, it will realize a gain or loss from the sale of the underlying security and the proceeds from such sale will be decreased by the premium originally paid. When the Portfolio exercises a call option, the cost of the security which the Portfolio purchases upon exercise will be increased by the premium originally paid.
The premium received for a written option is recorded as an asset and on equivalent liability. The liability is marked-to-market daily based on the option’s quoted market price. When an option expires or the Portfolio enters into a closing purchase transaction, the Portfolio realizes a gain (or loss if the cost of the closing purchase transaction exceeds the premium received when the option was sold) without regard to any unrealized gain or loss on the underlying security and the liability related to such option is eliminated. When a written call option is exercised, the Portfolio realizes a gain or loss from the sale of the underlying security and the proceeds from such sale are increased by the premium originally received. If a written put option is exercised, the amount of the premium originally received will reduce the cost of the underlying security purchased.
26
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
The risk associated with purchasing options is limited to the premium originally paid. The risk in writing a covered call option is that the Portfolio may forego the opportunity for profit if the market price of the underlying security increases and the option is exercised. The risk in writing a put option is that the Portfolio may incur a loss if the market price of the underlying security decreases and the option is exercised. The Portfolio, as a writer of an option, has no control over whether the underlying instrument may be sold (call) or purchased (put) and as a result bears the market risk of an unfavorable change in the price of the instrument underlying the written option. There is the risk the Portfolio may not be able to enter into a closing transaction because of an illiquid market. This loss can be greater than premium received. In addition, the Portfolio could be exposed to risks if the counterparties to the transactions are unable to meet the terms of the contracts.
I. Forward Foreign Currency Contracts - The Portfolio may enter into forward foreign currency contracts to hedge its portfolio holdings against future movements in certain foreign currency exchange rates. A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a set price. Forward currency contracts are valued at the forward rate and are marked-to-market daily. The change in market value is recorded by the Portfolio as an unrealized gain or loss. When the contract is closed, the Portfolio recognizes a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The use of forward foreign currency contracts does not eliminate fluctuations in the underlying prices of the securities of the Portfolio, but it does establish a rate of exchange that can be achieved in the future. Although forward foreign currency contracts to sell limit the risk of loss due to a decline in the value of the currency holdings, they also limit any potential gain that might result should the value of the currency increase. In addition, the Portfolio could be exposed to risks if the counterparties to the contracts are unable to meet the terms of the contracts.
J. Foreign Currency Translation - The books and records of the Portfolio are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars on a daily basis using prevailing exchange rates. Purchases and sales of securities are translated at the rates of exchange prevailing when such securities were acquired or sold. Income is translated at rates of exchange prevailing when interest is accrued or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in forward foreign currency contracts; sales of foreign currencies; currency gains or losses realized between the trade and settlement dates on securities transactions; and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Portfolio’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end; from changes in the exchange rates of foreign currency held; and from changes in the contract value of forward foreign currency contracts.
K. Short Sales - The Portfolio may enter into a “short sale” of securities in circumstances in which, at the time the short position is open, the Portfolio owns an equal amount of the securities sold short or owns preferred stocks or debt securities, convertible or exchangeable without payment of further consideration, into an equal number of securities sold short. This kind of short sale, which is referred to as one “against the box,” may be entered into by the Portfolio to, for example, lock in a sale price for a security the Portfolio does not wish to sell immediately.
The Portfolio may also make short sales of a security it does not own, in anticipation of a decline in the market value of that security. To complete such a transaction, the Portfolio must borrow the security to make delivery to the buyer. The Portfolio then is obligated to replace the security borrowed by purchasing it at market price at the time of replacement. The price at such time may be more or less than the price at which the security was sold by the Portfolio. Until the security is replaced, the Portfolio is required to pay to the lender any dividends or interest which accrue during the period of the loan. To borrow the security, the Portfolio also may be required to pay a premium, which would increase the cost of the security sold. The proceeds of the short sale will be retained by the broker, to the extent necessary to meet margin requirements, until the short position is closed out. Until the Portfolio replaces a borrowed security, the Portfolio will segregate with its custodian, or earmark, cash or other liquid assets at such a level that (i) the amount segregated, or earmarked, plus the amount deposited with the broker as collateral will equal the current value of the security sold short and (ii) the amount segregated plus the amount deposited with the broker as collateral will not be less than the market value of the security at the time it was sold short. The Portfolio will incur a loss as a result of the short sale if the price of the security increases between the date of the short sale and the date on which the Portfolio replaces the borrowed security. The Portfolio will realize a gain if the security declines in price between those dates. This result is the opposite of what one would expect from a cash purchase of a long position in a security. The amount of any gain will be decreased, and the amount of any loss increased, by the amount of any premium, dividends or interest the Portfolio may be required to pay in connection with a short sale. No more than one third of the Portfolio’s net assets will be, when added together: (i) deposited as collateral for the obligation to replace securities borrowed to effect short sales; and (ii) segregated in connection with short sales.
L. Swap Agreements - The Portfolio may enter into swap contracts. Swap contracts are derivatives agreements to exchange the return generated by one instrument for the return generated by another instrument. The payment streams are calculated by reference to a specified index and agreed upon notional amount. The term “specified index” includes, but is not limited to, currencies, fixed interest rates, prices and total return on
27
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
interest rate indices, fixed income indices, stock indices and commodity indices (as well as amounts derived from arithmetic operations on these indices). The currency swaps in which the Portfolio may enter will generally involve an agreement to pay interest streams in one currency based on a specified index in exchange for receiving interest streams denominated in another currency. Such swaps may involve initial and final exchanges that correspond to the agreed upon notional amount. A Portfolio will usually enter into swaps on a net basis, i.e., the two payment streams are netted out in a cash settlement on the payment date or dates specified in the instrument, with the Portfolio receiving or paying, as the case may be, only the net amount of the two payments. The Portfolio’s obligations under a swap agreement will be accrued daily (offset against any amounts owing to the Portfolio) and any accrued but unpaid net amounts owed to a swap counterparty will be covered by designating the segregation, either on its records or with the Trust’s custodian, of cash or other liquid assets, to avoid any potential leveraging of the Portfolio. The Portfolio may enter into OTC swap transactions with counterparties that are approved by the investment adviser in accordance with guidelines established by the Board. These guidelines provide for a minimum credit rating for each counterparty and various credit enhancement techniques (for example, collateralization of amounts due from counterparties) to limit exposure to counterparties that have lower credit ratings.
The swaps in which the Portfolio may engage may include instruments under which one party pays a single or periodic fixed amount(s) (or premium), and the other party pays periodic amounts based on the movement of a specified index. Swaps do not involve the delivery of securities, other underlying assets, or principal. Accordingly, the risk of loss with respect to swaps is limited to the net amount of payments the Portfolio is contractually obligated to make. If the other party to a swap defaults, the Portfolio’s risk of loss consists of the net amount of payments that the Portfolio contractually is entitled to receive. Currency swaps usually involve the delivery of the entire principal value of one designated currency in exchange for the other designated currency. Therefore, the entire principal value of a currency swap is subject to the risk that the other party to the swap will default on its contractual delivery obligations. If there is a default by the counterparty, the Portfolio may have contractual remedies pursuant to the agreements related to the transaction. The swap market has grown substantially in recent years with a large number of banks and investment banking firms acting both as principals and as agents utilizing standardized swap documentation. As a result, the swap market has become relatively liquid. Certain swap transactions involve more recent innovations for which standardized documentation has not yet been fully developed and, accordingly, they are less liquid than traditional swap transactions.
The use of swaps is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. If an investment adviser is incorrect in its forecasts of market values, interest rates, and currency exchange rates, the investment performance of the Portfolio would be less favorable than it would have been if this investment technique were not used.
The Portfolio may enter into interest rate swaps and the purchase or sale of related caps and floors. The Portfolio may enter into these transactions primarily to manage its exposure to interest rates, to protect against currency fluctuations, or to preserve a return or spread on a particular investment. The Portfolio is subject to interest rate risk exposure in the normal course of pursuing its investment objectives. Because the Portfolio holds fixed rate bonds, the value of these bonds may decrease if interest rates rise. To help hedge against this risk and to maintain its ability to generate income at prevailing market rates, the Portfolio may enter into interest rate swap contracts. Interest rate swaps are arrangements between two parties to exchange cash flows based on a notional principal amount, to manage the Portfolio’s exposure to interest rates. Interest rate swap contracts are marked-to-market daily based upon quotations from market makers and the change, if any, is recorded as unrealized gain or loss. Payments received or made are recorded as realized gains or loss. The Portfolio could be exposed to credit or market risk due to unfavorable changes in the fluctuation of interest rates or if the counterparty defaults on its obligation to perform. Risks may exceed amounts recognized on the Statement of Assets and Liabilities. A currency swap is an agreement to exchange cash flows on a notional amount of two or more currencies based on the relative value differential among them. An index swap is an agreement to swap cash flows on a notional amount based on changes in the values of the reference indices. The purchase of a cap entitles the purchaser, to the extent that a specific index exceeds a predetermined interest rate, to receive payments of interest on a notional principal amount from the party selling such cap. The purchase of a floor entitles the purchaser to receive payments on a notional principal amount from the party selling such floor to the extent that a specified index falls below a predetermined interest rate or amount. The Portfolio’s maximum risk of loss from counterparty credit risk is the discounted net value of the cash flows to be received from/paid to the counterparty over the contract’s remaining life, to the extent that amount is positive. This risk is mitigated by having a master netting arrangement between the Portfolio and the counterparty and by the posting of collateral by the counterparty to the Portfolio to cover the Portfolio’s exposure to the counterparty.
The Portfolio is subject to credit risk in the normal course of pursuing its investment objectives. The Portfolio may enter into credit default swaps to manage its exposure to the market or certain sectors of the market, to reduce its risk exposure to defaults of corporate and sovereign issuers, or to create exposure to corporate or sovereign issuers to which it is not otherwise exposed. As the seller in a credit default swap contract, the Portfolio would be required to pay the par (or other agreed upon) value of a referenced debt obligation to the counterparty in the event of a default by a third party, such as a U.S. or foreign corporate issuer, on the debt obligation. In return, the Portfolio would receive from the counterparty an upfront or periodic stream of payments over the term of the contract provided that no event of default has occurred. If no default occurs, the Portfolio would keep the stream of payments and would have no payment obligations. An upfront payment received by the Portfolio, as the protection seller, is recorded as a liability on the books. An upfront payment made by the Portfolio, as the protection buyer, is recorded as an asset on the books. As the seller, the Portfolio would be subject to investment exposure on the notional amount of the swap. The Portfolio may
28
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
also purchase credit default swap contracts in order to hedge against the risk of default of debt securities held in its portfolio, in which case the Portfolio would function as the counterparty referenced in the preceding paragraph. This would involve the risk that the investment may expire worthless and would only generate income in the event of an actual default by the issuer of the underlying obligation (as opposed to a credit downgrade or other indication of financial instability). It would also involve credit risk—the seller may fail to satisfy its payment obligations to the Portfolio in the event of a default. The Portfolio’s maximum risk of loss from counterparty risk, either as the protection seller or as the protection buyer, is the fair value of the contract. This risk is mitigated by having a master netting arrangement between the fund and the counterparty and by the posting of collateral by the counterparty to the Portfolio to cover the Portfolio’s exposure to the counterparty.
Implied credit spreads, represented in absolute terms, utilized in determining the market value of credit default swap agreements on corporate issues or sovereign issues of an emerging country as of period end are disclosed in the footnotes to the Schedules of Investments and serve as an indicator of the status of the payment/performance risk and represent the likelihood or risk of default for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to be made to enter into the agreement. For credit default swap agreements on asset-backed securities and credit indices, the quoted market prices and resulting values serve as the indicator of the current status of the payment/performance risk. Wider credit spreads represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement.
The maximum potential amount of future payments (undiscounted) that a Portfolio as a seller of protection could be required to make under a credit default swap agreement would be an amount equal to the notional amount of the agreement. Notional amounts of all credit default swap agreements outstanding as of June 30, 2009 for which a Portfolio is the seller of protection are disclosed in the notes to the Schedules of Investments. These potential amounts would be partially offset by any recovery values of the respective referenced obligations, upfront payments received upon entering into the agreement, or net amounts received from the settlement of buy protection credit default swap agreements entered into by a Portfolio for the same referenced entity or entities.
Swap agreements are marked to market daily. The change in value, if any, is recorded as unrealized gain or loss in the Statement of Operations. A liquidation payment received or made at the termination of the swap is recorded as realized gain or loss in the Statement of Operations. Net periodic payments are included as part of realized gain (loss) on the Statement of Operations.
At June 30, 2009, the Portfolio had following derivatives (not designated as hedging instruments under SFAS No.133), grouped into appropriate risk categories that illustrate how and why the Portfolio uses derivative instruments:
| | | | | | | | | | | | |
| | | Asset Derivatives | | | Liability Derivatives | |
Derivatives not accounted for as
hedging instruments under Statement 133 | | Balance Sheet Location | | Fair Value | | | Balance Sheet Location | | Fair Value | |
| | | | |
Interest Rate Contracts | | Unrealized appreciation
on Swap Contracts | | $ | 89,975,388 | | | Unrealized depreciation
on Swap Contracts | | $ | (1,186,378 | ) |
| | | | |
Foreign Exchange Contracts | | Unrealized appreciation
on Forward Currency
Contracts | | | 1,108,081 | | | Unrealized depreciation
on Forward Currency
Contracts | | | (12,036,091 | ) |
| | | | |
Credit Contracts | | Unrealized appreciation
on Swap Contracts | | | 7,300,253 | | | Unrealized depreciation
on Swap Contracts | | | (3,649,258 | ) |
| | | | |
Equity Contracts | | Variation margin on
Financial Future
Contracts | | | 29,397,125 | * | | Outstanding written
options | | | (699,578 | ) |
| | | | | | | | | | | | |
| | | | |
Total | | | | $ | 127,780,847 | | | | | $ | (17,571,305 | ) |
* Includes cumulative appreciation/depreciation of futures contracts as reported in Portfolio of Investments. Only the current day’s variation margin is reported within the Statement of Asset and Liabilities.
29
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
Transactions in derivative instruments during the six months ended June 30, 2009, were as follows:
| | | | | | | | | | | | | | | | | | | |
Derivatives not accounted for as hedging instruments under Statement 133 | | Interest Rate
Contracts | | | Foreign
Exchange
Contracts | | | Credit
Contracts | | Other
Contracts | | | Total | |
Location | | | | | |
| | | | | |
Statement of Operations—Realized Gain (Loss) | | | | | | | | | | | | | | | | | | | |
| | | | | |
Investments | | $ | (14,889,087 | ) | | $ | 6,464,495 | | | $ | — | | $ | (43,171 | ) | | $ | (8,467,763 | ) |
| | | | | |
Futures Contracts | | | 130,681,806 | | | | — | | | | — | | | — | | | | 130,681,806 | |
| | | | | |
Swap Contracts | | | (221,630,169 | ) | | | — | | | | 459,942 | | | — | | | | (221,170,227 | ) |
| | | | | |
Foreign Currency | | | — | | | | (4,415,737 | ) | | | — | | | — | | | | (4,415,737 | ) |
| | | | | |
Options Contracts | | | 410,325 | | | | (115,268 | ) | | | — | | | 1,036,622 | | | | 1,331,679 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | |
Total | | $ | (105,427,125 | ) | | $ | 1,933,490 | | | $ | 459,942 | | $ | 993,451 | | | $ | (102,040,242 | ) |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Location | | Interest Rate
Contracts | | | Foreign
Exchange
Contracts | | | Credit
Contracts | | | Other
Contracts | | | Total | |
| | | | | |
| Statement of Operations—Change in Unrealized Gain (Loss) | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Investments | | $ | 15,536,999 | | | $ | (10,175,409 | ) | | $ | — | | | $ | — | | | $ | 5,361,590 | |
| | | | | |
Futures Contracts | | | (125,003,111 | ) | | | — | | | | — | | | | — | | | | (125,003,111 | ) |
| | | | | |
Swap Contracts | | | 320,329,109 | | | | — | | | | (30,204,715 | ) | | | — | | | | 290,124,394 | |
| | | | | |
Foreign Currency | | | — | | | | (4,415,737 | ) | | | — | | | | — | | | | (4,415,737 | ) |
| | | | | |
Options Contracts | | | 58,063 | | | | 698,803 | | | | — | | | | (36,222 | ) | | | 720,644 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total | | $ | 210,921,060 | | | $ | (13,892,343 | ) | | $ | (30,204,715 | ) | | $ | (36,222 | ) | | $ | 166,787,780 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Number of Contracts, Notional Amounts or Shares/Units* | | Interest Rate
Contracts Risk | | | Credit
Contracts Risk | | Other
Contracts Risk | | | Total | |
| | | | |
Options Written(2) | | $ | (17,500,000 | ) | | $ | — | | $ | (345,000 | ) | | $ | (17,845,000 | ) |
| | | | |
Swaptions(1) | | | 475,600,000 | | | | — | | | — | | | | 475,600,000 | |
| | | | |
Swaps Contracts(2) | | | 1,804,300,000 | | | | 263,142,190 | | | — | | | | 2,067,442,190 | |
| | | | |
Futures Contracts(1) | | | 2,260,250,000 | | | | — | | | — | | | | 2,260,250,000 | |
| (1) | | Amount(s) represent(s) number of contracts or number of Shares/Units. |
| (2) | | Amount(s) represent(s) notional amounts. |
* Calculated based on number of contracts or notional amounts as of the prior fiscal year-end and each subsequent fiscal quarter-end.
M. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
N. Forward Commitments, When-Issued and Delayed Delivery Securities - The Portfolio may purchase securities on a when-issued or delayed delivery basis and may purchase or sell securities on a forward commitment basis. Settlement of such transactions normally occurs within a month or more after the purchase or sale commitment is made. The Portfolio may purchase securities under such conditions only with the intention of actually acquiring them, but may enter into a separate agreement to sell the securities before the settlement date. Since the value of
30
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
securities purchased may fluctuate prior to settlement, the Portfolio may be required to pay more at settlement than the security is worth. In addition, the purchaser is not entitled to any of the interest earned prior to settlement. Upon making a commitment to purchase a security on a when-issued, delayed delivery or forward commitment basis, the Portfolio will hold liquid assets in a segregated account at the Portfolio’s custodian bank worth at least the equivalent of the amount due. The liquid assets will be monitored on a daily basis and adjusted as necessary to maintain the necessary value.
O. Mortgage Dollar Rolls - The Portfolio may enter into dollar rolls in which the Portfolio sells mortgage-backed securities for delivery in the current month and simultaneously contracts to repurchase substantially similar (same type, coupon and maturity) securities to settle on a specified future date. During the roll period, the Portfolio foregoes principal and interest paid on the securities. The Portfolio is compensated by a fee paid by the counterparty, often in the form of a drop in the repurchase price of the securities. Dollar rolls are accounted for as purchase and sales transactions.
A Portfolio that enters into mortgage dollar rolls is subject to the risk that the market value of the securities the Portfolio is obligated to repurchase under the agreement may decline below the repurchase price. In the event the buyer of securities under a mortgage dollar roll files for bankruptcy or becomes insolvent, the Portfolio’s use of proceeds from the dollar roll may be restricted pending a determination by the other party, or its trustee or receiver, whether to enforce the Portfolio’s obligation to repurchase the securities.
P. Loan Participations - The Portfolio may invest in loans arranged through private negotiation between one or more financial institutions. The Portfolio’s investment in any such loan may be in the form of a participation in or an assignment of the loan. In connection with purchasing participations, the Portfolio generally will have no right to enforce compliance by the borrower with the terms of the loan agreement relating to the loan, nor any rights of set-off against the borrower and the Portfolio may not benefit directly from any collateral supporting the loan in which it has purchased the participation.
Q. Mortgage Related and Other Asset Backed Securities - The Portfolio may invest in mortgage related or other asset-backed securities. These securities may include mortgage pass-through securities, collateralized mortgaged obligations (“CMOs”), commercial mortgage-backed securities, mortgage dollar rolls, CMO residuals, stripped mortgage backed securities (“SMBS”) and other securities that directly or indirectly represent a participation in, or are secured by a payable from, mortgage loans on real property or other receivables. The value of some mortgage or asset-backed securities may be particularly sensitive to changes in prevailing interest rates. Early repayment of principal on some mortgage-related securities may expose the Portfolio to a lower rate of return upon reinvestment of principal. The value of these securities may fluctuate in response to the market’s perception of the creditworthiness of the issuers. Additionally, although mortgages and mortgage-related securities are generally supported by some form of government or private guarantee and/or insurance, there is no assurance that private guarantors or insurers will meet their obligations.
One type of SMBS has one class receiving all of the interest from the mortgage assets (the interest-only or “IO” class), while the other class will receive all of the principal (the principal-only or “PO” class). Payments received for the IOs are included in interest income on the Statement of Operations of the Portfolio. Because principal will not be received at the maturity of an IO, adjustments are made to the book value on the security on a daily basis until maturity. These adjustments are included in interest income on the Statement of Operations of the Portfolio. Payments received for POs are treated as reductions to the cost and par value of the securities. Details of mortgage related and other asset-backed securities held at year end are included in the Portfolio’s Portfolio of Investments.
The Portfolio may invest a significant portion of its assets in securities of issuers that hold mortgage and asset backed securities and direct investments in securities backed by commercial and residential mortgage loans and other financial assets. The value and related income of these securities are sensitive to changes in economic conditions, including delinquencies and/or defaults, and may be negatively impacted by increased volatility of market prices and periods of illiquidity.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with Pacific Investment Management Company LLC (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
31
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $10,970,310 | | 0.50 | % | | First $ | 1.2 Billion |
| | |
| | 0.475 | % | | Over $ | 1.2 Billion |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A, Class B and Class E Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B and Class E distribution plans provide that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%, respectively, of the average net assets of the Portfolio attributable to its Class B and Class E Shares in respect to activities primarily intended to result in the sale of Class B and Class E Shares. However, under the Class B and Class E distribution agreements, payments to the Distributor for activities pursuant to the Class B and Class E distribution plans are currently limited to payments at an annual rate equal to 0.25% and 0.15% of average daily net assets of the Portfolio attributable to its Class B and Class E Shares, respectively.
Under terms of the Class B and Class E distribution plans and distribution agreements the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B and Class E Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
(Decrease)
in Shares
Outstanding | | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 232,484,113 | | 54,583,736 | | 32,675,908 | | (18,325,013 | ) | | 68,934,631 | | | 301,418,744 |
12/31/2008 | | 247,711,510 | | 72,688,916 | | 17,067,148 | | (104,983,461 | ) | | (15,227,397 | ) | | 232,484,113 |
| | | | | | |
Class B | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 117,977,980 | | 78,634,251 | | 17,795,441 | | (13,614,802 | ) | | 82,814,890 | | | 200,792,870 |
12/31/2008 | | 104,704,093 | | 35,414,389 | | 7,062,577 | | (29,203,079 | ) | | 13,273,887 | | | 117,977,980 |
| | | | | | |
Class E | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 7,708,946 | | 922,252 | | 1,084,756 | | (873,561 | ) | | 1,133,447 | | | 8,842,393 |
12/31/2008 | | 10,806,922 | | 1,660,572 | | 615,043 | | (5,373,591 | ) | | (3,097,976 | ) | | 7,708,946 |
32
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $20,706,575,715 | | $ | 323,694,154 | | $ | 20,414,227,679 | | $ | 289,273,320 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $7,951,025,541 | | $ | 132,441,418 | | $ | (314,814,765 | ) | | $ | (182,373,347 | ) |
6. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $ | 260,480,023 | | $ | 105,984,520 | | $ | 29,527,836 | | $ | — | | $ | 290,007,859 | | $ | 105,984,520 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards | | Total | |
| | | | |
| $ | 451,343,993 | | $ | 91,728,216 | | $ | (564,308,649 | ) | | $ | — | | $ | (21,236,440 | ) |
7. Futures Contracts
The futures contracts outstanding as of June 30, 2009 and the description and unrealized appreciation or depreciation were as follows:
| | | | | | | | | | | | | |
Description | | Counterparty | | Expiration Date | | Number of
Contracts | | Notional Value | | Unrealized
Appreciation/
(Depreciation) | |
| | | | | |
Euribor Futures | | Citigroup Global Markets, Inc. | | December 2009—Long | | 145 | | $ | 50,220,237 | | $ | 131,385 | |
| | | | | |
Euribor Futures | | Citigroup Global Markets, Inc. | | March 2010—Long | | 232 | | | 80,254,799 | | | 319,971 | |
| | | | | |
EuroDollar Futures | | JPMorgan Securities, Inc.
Merrill Lynch, Pierce, Fenner & Smith, Inc. | | December 2010—Long | | 1,742 | | | 425,461,725 | | | (1,328,013 | ) |
| | | | | |
EuroDollar Futures | | JPMorgan Securities, Inc.
Merrill Lynch, Pierce, Fenner & Smith, Inc. | | December 2009—Long | | 1,128 | | | 279,447,900 | | | 423,725 | |
| | | | | |
EuroDollar Futures | | Merrill Lynch, Pierce, Fenner & Smith, Inc. | | September 2009—Long | | 215 | | | 53,389,875 | | | 59,125 | |
| | | | | |
EuroDollar Futures | | JPMorgan Securities, Inc.
Merrill Lynch, Pierce, Fenner & Smith, Inc. | | June 2010—Long | | 1,461 | | | 359,606,888 | | | 674,969 | |
| | | | | |
EuroDollar Futures | | JPMorgan Securities, Inc.
Merrill Lynch, Pierce, Fenner & Smith, Inc. | | September 2010—Long | | 116 | | | 28,443,200 | | | 294,074 | |
| | | | | |
EuroDollar Futures | | JPMorgan Securities, Inc.
Merrill Lynch, Pierce, Fenner & Smith, Inc. | | March 2010—Long | | 3,305 | | | 816,541,563 | | | 21,162,992 | |
| | | | | |
Sterling Futures | | Citigroup Global Markets, Inc. | | September 2009—Long | | 870 | | | 176,879,297 | | | 7,906,619 | |
| | | | | |
Sterling Futures | | Citigroup Global Markets, Inc. | | March 2010—Long | | 58 | | | 11,729,940 | | | 42,932 | |
| | | | | |
Sterling Futures | | Citigroup Global Markets, Inc. | | June 2010—Long | | 131 | | | 26,361,504 | | | (14,372 | ) |
33
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
7. Futures Contracts - continued
| | | | | | | | | | | | | |
Description | | Counterparty | | Expiration Date | | Number of
Contracts | | Notional Value | | Unrealized
Appreciation/
(Depreciation) | |
| | | | | |
Sterling Futures | | Citigroup Global Markets, Inc. | | December 2010—Long | | 131 | | $ | 26,089,458 | | $ | (112,676 | ) |
| | | | | |
Sterling Futures | | Citigroup Global Markets, Inc. | | September 2010—Long | | 131 | | | 26,226,827 | | | (67,544 | ) |
| | | | | |
Sterling Futures | | Citigroup Global Markets, Inc. | | March 2011—Long | | 73 | | | 14,478,361 | | | (96,062 | ) |
| | | | | | | | | | | | | |
| | | | | |
| | | | | | | | | | | $ | 29,397,125 | |
| | | | | | | | | | | | | |
8. Forward Foreign Currency Contracts
Forward Foreign Currency Contracts to Buy:
| | | | | | | | | | | | | | |
Settlement Date | | Counterparty | | Contracts to Buy | | Value at
June 30, 2009 | | In Exchange for U.S. $ | | Net Unrealized
Appreciation/
(Depreciation) | |
| | | | | |
07/23/2009 | | Goldman Sachs & Co. | | 15,479,000 AUD | | $ | 12,447,266 | | $ | 12,163,739 | | $ | 283,527 | |
| | | | | |
08/04/2009 | | HSBC Bank Plc | | 5,917,854 BRL | | | 2,992,796 | | | 2,765,999 | | | 226,797 | |
| | | | | |
08/04/2009 | | HSBC Bank Plc | | 6,194,719 BRL | | | 3,132,812 | | | 3,017,398 | | | 115,414 | |
| | | | | |
08/04/2009 | | JPMorgan Securities, Inc. | | 8,949,000 CAD | | | 7,698,727 | | | 8,171,782 | | | (473,055 | ) |
| | | | | |
07/15/2009 | | Deutsche Bank Securities, Inc. | | 33,709,521 CNY | | | 4,935,120 | | | 5,219,000 | | | (283,880 | ) |
| | | | | |
07/15/2009 | | JPMorgan Securities, Inc. | | 17,214,360 CNY | | | 2,520,206 | | | 2,672,000 | | | (151,794 | ) |
| | | | | |
07/15/2009 | | Deutsche Bank Securities, Inc. | | 37,745,400 CNY | | | 5,525,978 | | | 5,852,000 | | | (326,022 | ) |
| | | | | |
07/15/2009 | | JPMorgan Securities, Inc. | | 13,475,275 CNY | | | 1,972,799 | | | 2,090,000 | | | (117,201 | ) |
| | | | | |
07/15/2009 | | Deutsche Bank Securities, Inc. | | 12,935,148 CNY | | | 1,893,723 | | | 2,012,000 | | | (118,277 | ) |
| | | | | |
07/15/2009 | | Barclays Capital, Inc. | | 19,403,024 CNY | | | 2,840,629 | | | 3,018,000 | | | (177,371 | ) |
| | | | | |
07/15/2009 | | Barclays Capital, Inc. | | 3,587,662 CNY | | | 525,239 | | | 559,000 | | | (33,761 | ) |
| | | | | |
07/15/2009 | | Deutsche Bank Securities, Inc. | | 12,941,072 CNY | | | 1,894,591 | | | 2,017,000 | | | (122,409 | ) |
| | | | | |
07/15/2009 | | JPMorgan Securities, Inc. | | 9,291,568 CNY | | | 1,360,298 | | | 1,441,000 | | | (80,702 | ) |
| | | | | |
07/15/2009 | | HSBC Bank Plc | | 36,889,980 CNY | | | 5,400,743 | | | 5,650,000 | | | (249,257 | ) |
| | | | | |
07/15/2009 | | Deutsche Bank Securities, Inc. | | 30,272,550 CNY | | | 4,431,943 | | | 4,620,000 | | | (188,057 | ) |
| | | | | |
07/15/2009 | | Barclays Capital, Inc. | | 14,117,760 CNY | | | 2,066,859 | | | 2,160,000 | | | (93,141 | ) |
| | | | | |
07/15/2009 | | HSBC Bank Plc | | 3,586,544 CNY | | | 525,075 | | | 559,000 | | | (33,925 | ) |
| | | | | |
09/08/2009 | | HSBC Bank Plc | | 8,368,200 CNY | | | 1,225,993 | | | 1,200,000 | | | 25,993 | |
| | | | | |
09/08/2009 | | Deutsche Bank Securities, Inc. | | 8,344,800 CNY | | | 1,222,565 | | | 1,200,000 | | | 22,565 | |
| | | | | |
09/08/2009 | | HSBC Bank Plc | | 8,272,800 CNY | | | 1,212,016 | | | 1,200,000 | | | 12,016 | |
| | | | | |
09/08/2009 | | Barclays Capital, Inc. | | 8,214,570 CNY | | | 1,203,485 | | | 1,190,000 | | | 13,485 | |
| | | | | |
09/08/2009 | | JPMorgan Securities, Inc. | | 6,764,940 CNY | | | 991,105 | | | 980,000 | | | 11,105 | |
| | | | | |
09/08/2009 | | Deutsche Bank Securities, Inc. | | 12,342,050 CNY | | | 1,808,186 | | | 1,790,000 | | | 18,186 | |
| | | | | |
09/08/2009 | | Deutsche Bank Securities, Inc. | | 16,592,575 CNY | | | 2,430,915 | | | 2,390,000 | | | 40,915 | |
| | | | | |
09/08/2009 | | Citibank | | 8,259,790 CNY | | | 1,210,110 | | | 1,190,000 | | | 20,110 | |
| | | | | |
09/08/2009 | | Barclays Capital, Inc. | | 4,496,871 CNY | | | 658,819 | | | 647,404 | | | 11,415 | |
| | | | | |
03/29/2010 | | JPMorgan Securities, Inc. | | 20,340,840 CNY | | | 2,998,136 | | | 3,009,000 | | | (10,864 | ) |
| | | | | |
03/29/2010 | | JPMorgan Securities, Inc. | | 6,643,230 CNY | | | 979,178 | | | 982,000 | | | (2,822 | ) |
34
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
8. Forward Foreign Currency Contracts - continued
| | | | | | | | | | | | | | |
Settlement Date | | Counterparty | | Contracts to Buy | | Value at
June 30, 2009 | | In Exchange for U.S. $ | | Net Unrealized
Appreciation/
(Depreciation) | |
| | | | | |
03/29/2010 | | JPMorgan Securities, Inc. | | 10,174,560 CNY | | $ | 1,499,678 | | $ | 1,504,000 | | $ | (4,322 | ) |
| | | | | |
03/29/2010 | | JPMorgan Securities, Inc. | | 3,321,615 CNY | | | 489,589 | | | 491,000 | | | (1,411 | ) |
| | | | | |
03/29/2010 | | Barclays Capital, Inc. | | 6,631,446 CNY | | | 977,441 | | | 982,000 | | | (4,559 | ) |
| | | | | |
03/29/2010 | | HSBC Bank Plc | | 3,988,884 CNY | | | 587,941 | | | 589,200 | | | (1,259 | ) |
| | | | | |
03/29/2010 | | HSBC Bank Plc | | 2,658,071 CNY | | | 391,787 | | | 392,800 | | | (1,013 | ) |
| | | | | |
07/02/2009 | | Royal Bank of Scotland Plc | | 11,028,000 DKK | | | 2,076,211 | | | 2,105,255 | | | (29,044 | ) |
| | | | | |
10/01/2009 | | Royal Bank of Scotland Plc | | 11,028,000 DKK | | | 2,073,415 | | | 2,074,200 | | | (785 | ) |
| | | | | |
07/27/2009 | | Barclays Capital, Inc. | | 366,000 EUR | | | 513,135 | | | 510,702 | | | 2,433 | |
| | | | | |
07/02/2009 | | Royal Bank of Scotland Plc | | 852,000 GBP | | | 1,401,454 | | | 1,336,008 | | | 65,446 | |
| | | | | |
07/02/2009 | | Barclays Capital, Inc. | | 189,000 GBP | | | 310,886 | | | 307,490 | | | 3,396 | |
| | | | | |
07/02/2009 | | JPMorgan Securities, Inc. | | 249,385,000 JPY | | | 2,586,176 | | | 2,588,310 | | | (2,134 | ) |
| | | | | |
07/22/2009 | | Royal Bank of Scotland Plc | | 249,385,000 JPY | | | 2,586,791 | | | 2,597,760 | | | (10,969 | ) |
| | | | | |
07/30/2009 | | HSBC Bank Plc | | 3,225,472 SGD | | | 2,226,804 | | | 2,230,000 | | | (3,196 | ) |
| | | | | | | | | | | | | | |
| | | | | |
| | | | | | | | | | | | $ | (1,648,427 | ) |
| | | | | | | | | | | | | | |
Forward Foreign Currency Contracts to Sell:
| | | | | | | | | | | | | | |
Settlement Date | | Counterparty | | Contracts to Deliver | | Value at
June 30, 2009 | | In Exchange for U.S. $ | | Net Unrealized
Appreciation/
(Depreciation) | |
| | | | | |
08/04/2009 | | HSBC Bank Plc | | 157,942,835 BRL | | $ | 79,875,340 | | $ | 74,695,122 | | $ | (5,180,218 | ) |
| | | | | |
07/15/2009 | | HSBC Bank Plc | | 4,220,629 CNY | | | 617,906 | | | 583,000 | | | (34,906 | ) |
| | | | | |
07/15/2009 | | Barclays Capital, Inc. | | 12,665,208 CNY | | | 1,854,204 | | | 1,752,000 | | | (102,204 | ) |
| | | | | |
07/15/2009 | | Deutsche Bank Securities, Inc. | | 4,213,341 CNY | | | 616,839 | | | 583,000 | | | (33,839 | ) |
| | | | | |
07/15/2009 | | Citibank | | 4,182,624 CNY | | | 612,342 | | | 576,000 | | | (36,342 | ) |
| | | | | |
07/15/2009 | | JPMorgan Securities, Inc. | | 2,219,638 CNY | | | 324,958 | | | 305,000 | | | (19,958 | ) |
| | | | | |
07/15/2009 | | JPMorgan Securities, Inc. | | 3,418,780 CNY | | | 500,514 | | | 470,000 | | | (30,514 | ) |
| | | | | |
07/15/2009 | | JPMorgan Securities, Inc. | | 4,436,835 CNY | | | 649,559 | | | 610,000 | | | (39,559 | ) |
| | | | | |
07/15/2009 | | JPMorgan Securities, Inc. | | 3,438,000 CNY | | | 503,328 | | | 487,487 | | | (15,841 | ) |
| | | | | |
07/15/2009 | | HSBC Bank Plc | | 5,731,000 CNY | | | 839,027 | | | 812,620 | | | (26,407 | ) |
| | | | | |
07/15/2009 | | JPMorgan Securities, Inc. | | 5,712,600 CNY | | | 836,333 | | | 810,011 | | | (26,322 | ) |
| | | | | |
07/15/2009 | | JPMorgan Securities, Inc. | | 5,712,700 CNY | | | 836,347 | | | 810,025 | | | (26,322 | ) |
| | | | | |
07/15/2009 | | Citibank | | 22,899,500 CNY | | | 3,352,518 | | | 3,250,000 | | | (102,518 | ) |
| | | | | |
07/15/2009 | | Barclays Capital, Inc. | | 11,456,250 CNY | | | 1,677,211 | | | 1,625,000 | | | (52,211 | ) |
| | | | | |
07/15/2009 | | Deutsche Bank Securities, Inc. | | 66,949,306 CNY | | | 9,801,470 | | | 9,533,000 | | | (268,470 | ) |
| | | | | |
07/15/2009 | | HSBC Bank Plc | | 14,235,975 CNY | | | 2,084,166 | | | 2,041,000 | | | (43,166 | ) |
| | | | | |
07/15/2009 | | Deutsche Bank Securities, Inc. | | 24,723,022 CNY | | | 3,553,604 | | | 3,482,000 | | | (71,604 | ) |
| | | | | |
07/15/2009 | | JPMorgan Securities, Inc. | | 13,966,000 CNY | | | 2,044,641 | | | 2,000,000 | | | (44,641 | ) |
| | | | | |
07/15/2009 | | Deutsche Bank Securities, Inc. | | 11,031,560 CNY | | | 1,615,035 | | | 1,580,000 | | | (35,035 | ) |
35
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
8. Forward Foreign Currency Contracts - continued
| | | | | | | | | | | | | | |
Settlement Date | | Counterparty | | Contracts to Deliver | | Value at
June 30, 2009 | | In Exchange for U.S. $ | | Net Unrealized
Appreciation/
(Depreciation) | |
| | | | | |
07/15/2009 | | Citibank | | 11,015,702 CNY | | $ | 1,612,714 | | $ | 1,578,000 | | $ | (34,714 | ) |
| | | | | |
07/15/2009 | | HSBC Bank Plc | | 5,893,500 CNY | | | 862,817 | | | 845,189 | | | (17,628 | ) |
| | | | | |
07/15/2009 | | Citibank | | 7,497,695 CNY | | | 1,097,673 | | | 1,076,791 | | | (20,882 | ) |
| | | | | |
09/08/2009 | | HSBC Bank Plc | | 7,886,250 CNY | | | 1,155,384 | | | 1,125,000 | | | (30,384 | ) |
| | | | | |
09/08/2009 | | JPMorgan Securities, Inc. | | 5,937,651 CNY | | | 869,902 | | | 846,000 | | | (23,902 | ) |
| | | | | |
09/08/2009 | | JPMorgan Securities, Inc. | | 5,779,125 CNY | | | 846,677 | | | 825,000 | | | (21,677 | ) |
| | | | | |
09/08/2009 | | Barclays Capital, Inc. | | 6,839,625 CNY | | | 1,002,047 | | | 975,000 | | | (27,047 | ) |
| | | | | |
09/08/2009 | | Citibank | | 8,917,239 CNY | | | 1,306,431 | | | 1,275,714 | | | (30,717 | ) |
| | | | | |
09/08/2009 | | Barclays Capital, Inc. | | 16,861,687 CNY | | | 2,470,341 | | | 2,412,258 | | | (58,083 | ) |
| | | | | |
09/08/2009 | | Barclays Capital, Inc. | | 2,751,000 CNY | | | 403,038 | | | 393,000 | | | (10,038 | ) |
| | | | | |
09/08/2009 | | Barclays Capital, Inc. | | 7,337,755 CNY | | | 1,075,026 | | | 1,049,000 | | | (26,026 | ) |
| | | | | |
09/08/2009 | | Citibank | | 19,346,263 CNY | | | 2,834,347 | | | 2,769,132 | | | (65,215 | ) |
| | | | | |
07/27/2009 | | Goldman Sachs & Co. | | 741,000 EUR | | | 1,038,887 | | | 1,038,812 | | | (75 | ) |
| | | | | |
07/02/2009 | | Citibank | | 29,077,000 GBP | | | 47,828,733 | | | 44,988,661 | | | (2,840,072 | ) |
| | | | | |
07/02/2009 | | Goldman Sachs & Co. | | 468,000 GBP | | | 769,813 | | | 751,079 | | | (18,734 | ) |
| | | | | |
07/02/2009 | | Barclays Capital, Inc. | | 189,000 GBP | | | 310,886 | | | 307,669 | | | (3,217 | ) |
| | | | | |
08/06/2009 | | JPMorgan Securities, Inc. | | 28,693,000 GBP | | | 47,195,399 | | | 47,430,677 | | | 235,278 | |
| | | | | |
07/30/2009 | | Barclays Capital, Inc. | | 3,225,472 SGD | | | 2,226,804 | | | 2,130,431 | | | (96,373 | ) |
| | | | | | | | | | | | | | |
| | | | | |
| | | | | | | | | | | | $ | (9,279,583 | ) |
| | | | | | | | | | | | | | |
AUD - Australian Dollar
BRL - Brazilian Real
CAD - Canadian Dollar
CNY - China Yuan Renminbi
DKK - Danish Krone
EUR - Euro Dollar
GBP - Great Britain Pound
JPY - Japanese Yen
SGD - Singapore Dollar
9. Options
During the period ended June 30, 2009 the following options contracts were written:
| | | | | | | |
| | | Number of
contracts | | | Premium | |
| | |
Options outstanding at December 31, 2008 | | 228,401,247 | | | $ | 6,504,697 | |
| | |
Options written | | 280,501,468 | | | | 1,306,002 | |
| | |
Options bought back | | (215,858,000 | ) | | | (5,437,292 | ) |
| | |
Options closed and expired | | (263,002,577 | ) | | | (1,618,447 | ) |
| | |
Options exercised | | — | | | | — | |
| | | | | | | |
| | |
Options outstanding at June 30, 2009 | | 30,042,138 | | | $ | 754,960 | |
| | | | | | | |
36
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
10. Swap Agreements
Open interest rate swap agreements at June 30, 2009 were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | |
Pay/Receive
Floating Rate | | Floating Rate Index | | Fixed Rate | | | Maturity Date | | Counterparty | | Notional Amount | | Market Value | | | Upfront
Premium
Paid/(Received) | | | Unrealized
Appreciation/
(Depreciation) | |
Receive | | 3-Month USD-LIBOR | | 4.000 | % | | 12/17/2010 | | Bank of America Securities LLC | | USD | | 1,190,600,000 | | $ | 49,023,717 | | | $ | 8,821,168 | | | $ | 40,202,549 | |
| | | | | | | | | |
Receive | | 3-Month USD-LIBOR | | 4.000 | % | | 12/17/2013 | | Citibank | | USD | | 405,100,000 | | | 20,826,304 | | | | (4,660,100 | ) | | | 25,486,404 | |
| | | | | | | | | |
Receive | | 3-Month USD-LIBOR | | 4.000 | % | | 12/17/2013 | | Morgan Stanley & Co., Inc. | | USD | | 77,100,000 | | | 3,963,733 | | | | (759,499 | ) | | | 4,723,232 | |
| | | | | | | | | |
Pay | | 3-Month USD-LIBOR | | 3.500 | % | | 6/24/2016 | | JPMorgan Securities, Inc. | | USD | | 14,000,000 | | | 79,010 | | | | — | | | | 79,010 | |
| | | | | | | | | |
Pay | | 3-Month USD-LIBOR | | 3.500 | % | | 6/24/2016 | | Deutsche Bank Securities, Inc. | | USD | | 47,000,000 | | | 265,246 | | | | — | | | | 265,246 | |
| | | | | | | | | |
Pay | | 3-Month USD-LIBOR | | 3.500 | % | | 6/24/2016 | | Goldman Sachs & Co. | | USD | | 70,500,000 | | | 397,870 | | | | — | | | | 397,870 | |
| | | | | | | | | |
Receive | | 6-Month AUD-BBR-BBSW | | 7.000 | % | | 9/15/2009 | | Citibank | | AUD | | 90,600,000 | | | 558,431 | | | | (176,291 | ) | | | 734,722 | |
| | | | | | | | | |
Pay | | AUD-BBR-BBSW | | 4.500 | % | | 6/15/2011 | | Morgan Stanley & Co., Inc. | | AUD | | 303,100,000 | | | (896,470 | ) | | | 289,908 | | | | (1,186,378 | ) |
| | | | | | | | | |
Receive | | BRL-PTAX (BRL09) | | 12.670 | % | | 1/4/2010 | | Merrill Lynch, Pierce, Fenner & Smith, Inc. | | BRL | | 50,600,000 | | | 651,902 | | | | — | | | | 651,902 | |
| | | | | | | | | |
Pay | | BRL-PTAX (BRL09) | | 10.115 | % | | 1/2/2012 | | Morgan Stanley & Co., Inc. | | BRL | | 295,300,000 | | | (6,493,458 | ) | | | (7,355,900 | ) | | | 862,442 | |
| | | | | | | | | |
Pay | | BRL-PTAX (BRL09) | | 12.540 | % | | 1/2/2012 | | Merrill Lynch, Pierce, Fenner & Smith, Inc. | | BRL | | 80,800,000 | | | 1,257,779 | | | | (443,165 | ) | | | 1,700,944 | |
| | | | | | | | | |
Pay | | BRL-PTAX (BRL09) | | 12.540 | % | | 1/4/2010 | | Morgan Stanley & Co., Inc. | | BRL | | 251,200,000 | | | 3,236,317 | | | | 195,963 | | | | 3,040,354 | |
| | | | | | | | | |
Pay | | BRL-PTAX (BRL09) | | 12.540 | % | | 1/2/2012 | | Morgan Stanley & Co., Inc. | | BRL | | 90,500,000 | | | 1,408,774 | | | | (503,219 | ) | | | 1,911,993 | |
| | | | | | | | | |
Receive | | [(FRCPxtob End Index/FRCPxtob Start Index) - 1]* Notional | | 1.958 | % | | 3/15/2012 | | JPMorgan Securities, Inc. | | EUR | | 10,400,000 | | | 204,290 | | | | 4,462 | | | | 199,828 | |
| | | | | | | | | |
Receive | | [(FRCPxtob End Index/FRCPxtob Start Index) - 1]* Notional | | 1.958 | % | | 4/10/2012 | | JPMorgan Securities, Inc. | | EUR | | 1,700,000 | | | 28,902 | | | | 881 | | | | 28,021 | |
| | | | | | | | | |
Receive | | 6-Month GBP-LIBOR | | 6.000 | % | | 9/18/2009 | | Morgan Stanley & Co., Inc. | | GBP | | 346,000,000 | | | 4,940,867 | | | | (1,333,420 | ) | | | 6,274,287 | |
| | | | | | | | | |
Receive | | 6-Month GBP-LIBOR | | 5.100 | % | | 9/15/2013 | | Morgan Stanley & Co., Inc. | | GBP | | 11,100,000 | | | 1,152,330 | | | | (14,411 | ) | | | 1,166,741 | |
| | | | | | | | | |
Receive | | 6-Month GBP-LIBOR | | 5.250 | % | | 3/18/2014 | | Goldman Sachs & Co., Inc. | | GBP | | 6,300,000 | | | 733,527 | | | | (4,895 | ) | | | 738,422 | |
| | | | | | | | | |
Receive | | 6-Month GBP-LIBOR | | 5.250 | % | | 3/18/2014 | | Goldman Sachs & Co., Inc. | | GBP | | 2,600,000 | | | 302,725 | | | | (507 | ) | | | 303,232 | |
| | | | | | | | | |
Receive | | 6-Month GBP-LIBOR | | 5.000 | % | | 6/15/2016 | | Merrill Lynch, Pierce, Fenner & Smith, Inc. | | GBP | | 16,200,000 | | | 1,694,902 | | | | 486,712 | | | | 1,208,190 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | | | | | | | $ | 83,336,698 | | | $ | (5,452,313 | ) | | $ | 88,789,011 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Open credit default swap agreements buy protection at June 30, 2009 were as follows:
Credit Default Swaps on Corporate and Sovereign Issuers - Buy Protection(1)
| | | | | | | | | | | | | | | | | | | | | | | | |
Reference Obligation | | Fixed Deal
(Pay) Rate | | | Maturity
Date | | Counterparty | | Implied Credit
Spread at June 30,
2009(2) | | | Notional
Amount(3) | | Market Value | | | Upfront Premium
Paid/(Received) | | Unrealized
Appreciation/
(Depreciation) | |
Boston Scientific Corp.
6.000%, due 06/15/2011 | | (0.510 | %) | | 6/20/2011 | | Merrill Lynch, Pierce, Fenner & Smith, Inc. | | 1.145 | % | | $ | 5,000,000 | | $ | 61,434 | | | $ | — | | $ | 61,434 | |
| | | | | | | | |
CAN Financial Corp.
5.850%, due 12/15/2014 | | (0.630 | %) | | 12/20/2014 | | Bank of America Securities LLC | | 2.907 | % | | | 5,000,000 | | | 517,566 | | | | — | | | 517,566 | |
| | | | | | | | |
CenturyTel, Inc.
6.000%, due 04/01/2017 | | (0.595 | %) | | 6/20/2017 | | Bank of America Securities LLC | | 0.827 | % | | | 5,000,000 | | | 79,248 | | | | — | | | 79,248 | |
| | | | | | | | |
Con-Way, Inc.
7.250%, due 01/15/2018 | | (1.834 | %) | | 3/20/2018 | | Bank of America Securities LLC | | 2.032 | % | | | 10,000,000 | | | 131,812 | | | | — | | | 131,812 | |
| | | | | | | | |
Kraft Foods, Inc.
6.125%, due 02/01/2018 | | (1.834 | %) | | 3/20/2018 | | Citibank | | 0.538 | % | | | 5,000,000 | | | (241,726 | ) | | | — | | | (241,726 | ) |
| | | | | | | | |
Covidien, Ltd.
6.000%, due 10/15/2017 | | (0.500 | %) | | 12/20/2017 | | Bank of America Securities LLC | | 0.542 | % | | | 5,000,000 | | | 15,277 | | | | — | | | 15,277 | |
| | | | | | | | |
CSX Corp.
6.125%, due 03/15/2018 | | (1.650 | %) | | 3/20/2018 | | Goldman Sachs & Co. | | 0.802 | % | | | 10,000,000 | | | (624,492 | ) | | | — | | | (624,492 | ) |
37
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
10. Swap Agreements - continued
| | | | | | | | | | | | | | | | | | | | | | | | |
Reference Obligation | | Fixed Deal
(Pay) Rate | | | Maturity
Date | | Counterparty | | Implied Credit
Spread at June 30,
2009(2) | | | Notional
Amount(3) | | Market Value | | | Upfront Premium
Paid/(Received) | | Unrealized
Appreciation/
(Depreciation) | |
Health Care Property
Investors, Inc.
5.950%, due 09/15/2011 | | (0.460 | %) | | 9/20/2011 | | JPMorgan Securities, Inc. | | 3.650 | % | | $ | 4,200,000 | | $ | 278,180 | | | $ | — | | $ | 278,180 | |
| | | | | | | | |
Health Care Property
Investors, Inc.
6.700%, due 01/30/2018 | | (1.227 | %) | | 3/20/2018 | | Bank of America Securities LLC | | 3.352 | % | | | 7,500,000 | | | 977,951 | | | �� | — | | | 977,951 | |
| | | | | | | | |
Liberty Mutual Group, Inc.
5.750%, due 03/15/2014 | | (0.680 | %) | | 3/20/2014 | | Bank of America Securities LLC | | 3.654 | % | | | 5,750,000 | | | 674,974 | | | | — | | | 674,974 | |
| | | | | | | | |
Limited Brands, Inc.
6.900%, due 07/15/2017 | | (2.290 | %) | | 9/20/2017 | | Bank of America Securities LLC | | 2.411 | % | | | 10,000,000 | | | 75,414 | | | | — | | | 75,414 | |
| | | | | | | | |
Limited Brands, Inc.
6.900%, due 07/15/2017 | | (3.113 | %) | | 9/20/2017 | | Morgan Stanley & Co., Inc. | | 2.411 | % | | | 5,000,000 | | | (220,674 | ) | | | — | | | (220,674 | ) |
| | | | | | | | |
NiSource Finance Corp.
5.250%, due 09/15/2017 | | (1.170 | %) | | 9/20/2017 | | Citibank | | 2.340 | % | | | 7,500,000 | | | 561,029 | | | | — | | | 561,029 | |
| | | | | | | | |
NiSource Finance Corp.
5.400%, due 07/15/2014 | | (0.650 | %) | | 9/20/2014 | | Morgan Stanley & Co., Inc. | | 2.340 | % | | | 10,000,000 | | | 769,401 | | | | — | | | 769,401 | |
| | | | | | | | |
Omnicom Group, Inc.
5.900%, due 04/15/2016 | | (0.940 | %) | | 6/20/2016 | | Citibank | | 0.798 | % | | | 5,000,000 | | | (43,699 | ) | | | — | | | (43,699 | ) |
| | | | | | | | |
Pearson Dollar Financial Plc
5.700%, due 06/01/2014 | | (0.760 | %) | | 6/20/2014 | | Morgan Stanley & Co., Inc. | | 0.499 | % | | | 8,500,000 | | | (103,900 | ) | | | — | | | (103,900 | ) |
| | | | | | | | |
Pearson Dollar Financial Plc
5.700%, due 06/01/2014 | | (0.830 | %) | | 6/20/2014 | | JPMorgan Securities, Inc. | | 0.499 | % | | | 5,000,000 | | | (77,489 | ) | | | — | | | (77,489 | ) |
| | | | | | | | |
Progress Energy, Inc.
7.100%, due 03/01/2011 | | (0.100 | %) | | 3/20/2011 | | Merrill Lynch, Pierce, Fenner & Smith, Inc. | | 0.426 | % | | | 1,600,000 | | | 8,983 | | | | — | | | 8,983 | |
| | | | | | | | |
Quest Diagnostic, Inc.
5.450%, due 11/01/2015 | | (0.660 | %) | | 12/20/2015 | | Bank of America Securities LLC | | 0.620 | % | | | 5,000,000 | | | (11,899 | ) | | | — | | | (11,899 | ) |
| | | | | | | | |
R.R. Donnelley & Sons Co.
4.950%, due 04/01/2014 | | (1.030 | %) | | 6/20/2014 | | Bank of America Securities LLC | | 3.504 | % | | | 6,200,000 | | | 638,146 | | | | — | | | 638,146 | |
| | | | | | | | |
Rohm & Haas Holdings
6.000%, due 09/15/2017 | | (0.423 | %) | | 9/20/2017 | | Bank of America Securities LLC | | 0.754 | % | | | 8,500,000 | | | 196,901 | | | | — | | | 196,901 | |
| | | | | | | | |
Sprint Nextel Corp.
6.000%, due 12/01/2016 | | (0.966 | %) | | 12/20/2016 | | Bank of America Securities LLC | | 3.479 | % | | | 11,250,000 | | | 1,575,488 | | | | — | | | 1,575,488 | |
| | | | | | | | |
Target Corp.
6.000%, due 01/15/2018 | | (1.200 | %) | | 3/20/2018 | | Morgan Stanley & Co., Inc. | | 0.600 | % | | | 5,000,000 | | | (223,646 | ) | | | — | | | (223,646 | ) |
| | | | | | | | |
Viacom, Inc.
6.250%, due 04/30/2016 | | (0.970 | %) | | 6/20/2016 | | Morgan Stanley & Co., Inc. | | 1.499 | % | | | 10,000,000 | | | 374,734 | | | | — | | | 374,734 | |
| | | | | | | | |
Viacom, Inc.
6.250%, due 04/30/2016 | | (1.930 | %) | | 6/20/2016 | | Bank of America Securities LLC | | 1.499 | % | | | 5,000,000 | | | (94,554 | ) | | | — | | | (94,554 | ) |
| | | | | | | | |
Western Union Company (The)
5.930%, due 10/01/2016 | | (0.795 | %) | | 12/20/2016 | | Bank of America Securities LLC | | 0.635 | % | | | 10,000,000 | | | (105,602 | ) | | | — | | | (105,602 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
| | | | | | | | | | | | | | | $ | 5,188,857 | | | $ | — | | $ | 5,188,857 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Credit Default Swaps on Corporate and Sovereign Issues - Sell Protection(4)
| | | | | | | | | | | | | | | | | | | | | | | | | |
Reference Obligation | | Fixed Deal
Receive Rate | | | Maturity
Date | | Counterparty | | Implied Credit
Spread at June 30,
2009(2) | | | Notional
Amount(3) | | Market Value | | | Upfront Premium
Paid/(Received) | | | Unrealized
Appreciation/
(Depreciation) | |
American International Group, Inc.
6.250%, due 05/01/2036 | | 5.000 | % | | 12/20/2013 | | Merrill Lynch, Pierce, Fenner & Smith, Inc. | | 14.290 | % | | $ | 5,000,000 | | $ | (1,303,148 | ) | | $ | (450,000 | ) | | $ | (853,148 | ) |
| | | | | | | | |
Ford Motor Credit Co.
7.000%, due 10/01/2013 | | 3.800 | % | | 9/20/2010 | | Merrill Lynch, Pierce, Fenner & Smith, Inc. | | 10.410 | % | | | 500,000 | | | (37,539 | ) | | | — | | | | (37,539 | ) |
| | | | | | | | |
General Electric Capital Corp
5.625%, due 10/01/2013 | | 4.000 | % | | 12/20/2013 | | Citibank | | 4.175 | % | | | 3,600,000 | | | (29,626 | ) | | | — | | | | (29,626 | ) |
38
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
10. Swap Agreements - continued
| | | | | | | | | | | | | | | | | | | | | | | | | |
Reference Obligation | | Fixed Deal
Receive Rate | | | Maturity
Date | | Counterparty | | Implied Credit
Spread at June 30,
2009(2) | | | Notional
Amount(3) | | Market Value | | | Upfront Premium
Paid/(Received) | | | Unrealized
Appreciation/
(Depreciation) | |
General Electric Capital Corp.
5.625%, due 10/01/2013 | | 4.000 | % | | 12/20/2013 | | Citibank | | 4.175 | % | | $ | 20,800,000 | | $ | (171,174 | ) | | $ | — | | | $ | (171,174 | ) |
| | | | | | | | |
General Electric Capital Corp.
5.625%, due 10/01/2013 | | 6.950 | % | | 3/20/2013 | | Citibank | | 4.224 | % | | | 375,000 | | | 32,257 | | | | — | | | | 32,257 | |
| | | | | | | | |
General Electric Capital Corp.
5.625%, due 10/01/2013 | | 4.850 | % | | 12/20/2013 | | Citibank | | 4.175 | % | | | 9,100,000 | | | 212,706 | | | | — | | | | 212,706 | |
| | | | | | | | |
General Electric Capital Corp.
5.625%, due 10/01/2013 | | 4.325 | % | | 12/20/2013 | | Citibank | | 4.175 | % | | | 10,200,000 | | | 39,314 | | | | — | | | | 39,314 | |
| | | | | | | | |
General Electric Capital Corp.
5.625%, due 10/01/2013 | | 4.200 | % | | 12/20/2013 | | Citibank | | 4.175 | % | | | 21,900,000 | | | (17,373 | ) | | | — | | | | (17,373 | ) |
| | | | | | | | |
General Electric Capital Corp.
5.625%, due 10/01/2013 | | 4.875 | % | | 12/20/2013 | | Citibank | | 4.175 | % | | | 3,100,000 | | | 75,342 | | | | — | | | | 75,342 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | $ | (1,199,241 | ) | | $ | (450,000 | ) | | $ | (749,241 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Credit Default Swaps on Credit Indices - Sell Protection(4)
| | | | | | | | | | | | | | | | | | | | | |
Reference Obligation | | Fixed Deal
(Pay) Rate | | | Maturity
Date | | Counterparty | | Notional
Amount(3) | | Market Value | | | Upfront Premium
Paid/(Received) | | Unrealized
Appreciation/
(Depreciation) | |
CDX.NA.HY.9 | | 6.370 | % | | 12/20/2012 | | Merrill Lynch, Pierce, Fenner & Smith, Inc. | | $ | 4,400,000 | | $ | (769,305 | ) | | $ | — | | $ | (769,305 | ) |
| | | | | | | |
CDX.NA.IG.9 | | 0.550 | % | | 12/20/2017 | | JPMorgan Securities, Inc. | | | 1,944,569 | | | 4,096 | | | | — | | | 4,096 | |
| | | | | | | |
CDX.NA.IG.10 | | 0.463 | % | | 6/20/2013 | | Goldman Sachs & Co. | | | 6,222,621 | | | (23,413 | ) | | | — | | | (23,413 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| | | | | | | | | | | | $ | (788,622 | ) | | $ | — | | $ | (788,622 | ) |
| | | | | | | | | | | | | | | | | | | | | |
AUD - Australian Dollar
BRL - Brazilian Real
EUR - Euro Dollar
GBP - British Pound
USD - United States Dollar
| (1) | | If the Portfolio is a buyer of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Portfolio will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and deliver the referenced obligation or underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index. |
| (2) | | Implied credit spreads, represented in absolute terms, utilized in determining the market value of credit default swap agreements on corporate issues or sovereign issues of an emerging country as of period end serve as an indicator of the current status of the payment/performance risk and represent the likelihood or risk of default for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to be made to enter into the agreement. Wider credit spreads represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement. A credit spread identified as “Defaulted” indicates a credit event has occurred for the referenced entity or obligation. |
| (3) | | The maximum potential amount of future undiscounted payments that the Portfolio could be required to make under a credit default swap contract would be the notional amount of the contract. These potential amounts would be partially offset by any recovery values of the referenced debt obligation or net amounts received from the settlement purchased protection credit default swap contracts entered into by the Portfolio for the same referenced debt obligation. |
| (4) | | If the Portfolio is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Portfolio will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index. |
11. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
39
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
12. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
13. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
14. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
40
| | |
| Pioneer Fund Portfolio | | For the period ended 6/30/09 |
| Managed by Pioneer Investment Management, Inc. | | |
Portfolio Manager Commentary
Performance
During the six-month period ended June 30, 2009, the Portfolio had a return of 1.49% for its Class A Shares versus 3.16% for its benchmark, the S&P 500® Index. During the period since its inception on April 28, 2009, through June 30, 2009, the Class B Shares had a return of 7.75%, versus 7.71% for its benchmark, the S&P 500® Index.
Market Environment/Conditions
The 2008 bear market in global credit and stock markets carried over into the first two months of 2009. A rally that lasted from early March until mid-June meant that the S&P 500® Index ended the first half of the year with a modestly positive return—just over 3%—that reveals nothing about the severity of either the January-February decline or the strength of the March-June rally.
Over the full six-month period, information technology was the S&P 500’s strongest sector, returning 25%. Materials (+14%) and consumer discretionary (+9%) were also relatively strong. The index’s weakest sectors were Industrials (-6%), telecom services (-4%) and financials (-3%).
There has been a dramatic performance divergence this year between dividend-paying stocks and stocks that don’t pay a dividend. Standard and Poor’s reports that S&P 500® stocks which don’t pay dividends (a group which includes more than a few companies which eliminated their dividends due to financial distress) produced a weighted first-half return of 24%, while the S&P 500’s dividend paying stocks produced a weighted first-half return of -2%.
Portfolio Review/Current Positioning
First-half 2009 returns benefited from good stock selection in the consumer discretionary, consumer staples, health care, industrials, and materials sectors, but results in the financials and information Technology sectors pulled down overall portfolio performance.
The two largest individual contributors to first-half returns were both mining companies: Rio Tinto returned 89% and Freeport-McMoRan Copper & Gold returned 105%. Mining exposure had been a significant drag on fourth-quarter returns, but we had maintained our exposure, believing that the market had over-reacted and that demand for metals would not collapse. That view was vindicated in the first half of 2009.
Notable individual contributors in other sectors included auto parts supplier BorgWarner, publisher McGraw-Hill, retailers Nordstrom and Walgreen, drug company Schering-Plough, and truckmaker PACCAR.
The largest drag on index-relative returns was stock selection in financials, where a defensive strategy that had added value in the down market became a drag as troubled bank stocks made a V-shaped bottom. Property/casualty insurer Chubb, for example, a bear market stalwart, declined in the first half of 2009 as investors rotated into riskier stocks. The government’s support of the financial sector has been dramatic, but it has been hard to factor the possibility that “the cavalry might ride to the rescue” into our traditional securities analysis,
which focuses on the business strengths of companies and their self-sustaining financial characteristics. As a result, and despite some success stories, our trading activity detracted from returns in the sector, as we reduced exposure to several risky names only a few months before the market bottomed, and so did not participate in their recovery.
A second important drag on benchmark-relative returns was the combination of an Information Technology underweight and underperformance within the sector. The underweight is, in part, a result of our value bias, although we have been building exposure as we find attractive names. The largest contributors to below-benchmark returns in the sector were lack of exposure to Google and (for most of the first half of 2009), Apple.
We continued to emphasize well-managed companies with strong balance sheets, little need of government assistance to survive until the recovery comes, and the potential to generate strong profit growth when the economy does recover.
While we generally keep sector weights within five percentage points of their weights in the S&P 500® to ensure that bottom-up security selection is the dominant driver of long-term performance, our over- and under-weights do reflect broader views on economic and market trends and valuations. Relative to the S&P 500®, the most overweighted sectors at June 30 were industrials (where the emphasis is on railroads and machinery, and where we are still finding many fundamentally attractive companies at attractive valuations) and consumer staples (where the emphasis remains on food producers and retailers resistant to an extended economic downturn). Relative to the S&P 500®, information technology was the most underweighted sector at June 30, though we continue to build exposure as we find attractive names. We continued to have modestly below-index exposure to the financials, utilities, telecom services, and energy sectors, reflecting a continuing quality bias in the first case and limited perceived earnings growth prospects in the latter three cases.
John A. Carey, Executive Vice President and Portfolio Manager
Walter Hunnewell, Jr., Vice President and Assistant Portfolio Manager
Pioneer Investment Management, Inc.
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the
1
| | |
| Pioneer Fund Portfolio | | For the period ended 6/30/09 |
| Managed by Pioneer Investment Management, Inc. | | |
Portfolio Manager Commentary (continued)
Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
Chevron Corp. | | 3.49% |
Reed Elsevier N.V. (ADR) | | 2.41% |
Becton, Dickinson & Co. | | 2.34% |
Norfolk Southern Corp. | | 2.29% |
Hewlett-Packard Co. | | 2.19% |
Colgate-Palmolive Co. | | 2.09% |
PACCAR, Inc. | | 2.05% |
Chubb Corp. (The) | | 1.99% |
Target Corp. | | 1.89% |
Walgreen Co. | | 1.79% |
Portfolio Composition (% of portfolio market value)
As of 6/30/09
2
| | |
| Pioneer Fund Portfolio | | For the period ended 6/30/09 |
| Managed by Pioneer Investment Management, Inc. | | |
Portfolio Manager Commentary (continued)
Pioneer Fund Portfolio managed by
Pioneer Investment Management, Inc. vs. S&P 500® Index1
Growth Based on $10,000+
| | | | | | | | | | | | | | |
| | | | | Average Annual Return/Cumulative Return2 (for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | 3 Year | | 5 Year | | 10 Year | | Since
Inception3 |
| — | | Pioneer Fund Portfolio—Class A | | 1.49% | | -24.35% | | -7.38% | | -0.82% | | -2.53% | | — |
| | Class B | | — | | — | | — | | — | | — | | 7.75% |
| - - | | S&P 500® Index1 | | 3.16% | | -26.21% | | -8.22% | | -2.24% | | -2.22% | | — |
+The chart reflects the performance of Class A shares of the Portfolio. The performance of Class A shares will differ from that of the other class of shares because of the difference in expenses paid by policyholders investing in the different share classes.
1The S&P 500® Index is an unmanaged index consisting of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value weighted index (stock price times number of shares outstanding), with each stock’s weight in the Index proportionate to its market value.
2“Average Annual Return” is calculated including reinvestment of all income dividends and capital gains distributions for Class A. “Cumulative Return” is calculated for Class B, including reinvestment of all income dividends and capital gain distributions.
3Inception of Class A shares is 02/04/1994. Inception of Class B shares is 04/28/2009.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Index does not include fees or expenses and is not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| Pioneer Fund Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.72% | | $ | 1,000.00 | | $ | 1,014.90 | | $ | 3.60 |
Hypothetical | | 0.72% | | | 1,000.00 | | | 1,021.22 | | | 3.61 |
| | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class B** | | | | | | | | | | | |
Actual | | 0.89% | | $ | 1,000.00 | | $ | 1,000.00 | | $ | 1.56 |
Hypothetical | | 0.89% | | | 1,000.00 | | | 1,007.21 | | | 1.57 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period (Class A)/to reflect the two month period (Class B)).
** Class Inception April 28, 2009.
4
Met Investors Series Trust
Pioneer Fund Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Common Stocks - 99.0% |
| Aerospace & Defense - 2.5% |
General Dynamics Corp.(a) | | 125,539 | | $ | 6,953,605 |
Honeywell International, Inc. | | 37,479 | | | 1,176,841 |
United Technologies Corp. | | 127,925 | | | 6,646,983 |
| | | | | |
| | | 14,777,429 |
| | | | | |
| Auto Components - 2.3% |
BorgWarner, Inc.(a) | | 90,341 | | | 3,085,145 |
Johnson Controls, Inc.(a) | | 474,620 | | | 10,308,747 |
| | | | | |
| | | 13,393,892 |
| | | | | |
| Automobiles - 0.6% |
Ford Motor Co.*(a) | | 576,133 | | | 3,497,127 |
| | | | | |
| Beverages - 2.4% |
Coca-Cola Co. | | 123,031 | | | 5,904,258 |
PepsiCo, Inc. | | 146,816 | | | 8,069,007 |
| | | | | |
| | | 13,973,265 |
| | | | | |
| Capital Markets - 4.9% |
Bank of New York Mellon Corp.(a) | | 101,000 | | | 2,960,310 |
Franklin Resources, Inc.(a) | | 92,660 | | | 6,672,447 |
Morgan Stanley(a) | | 177,511 | | | 5,060,839 |
State Street Corp. | | 129,292 | | | 6,102,582 |
T. Rowe Price Group, Inc.(a) | | 192,036 | | | 8,002,140 |
| | | | | |
| | | 28,798,318 |
| | | | | |
| Chemicals - 3.2% |
Air Products & Chemicals, Inc. | | 62,397 | | | 4,030,222 |
E.I. du Pont de Nemours & Co. | | 133,282 | | | 3,414,685 |
Ecolab, Inc.(a) | | 97,033 | | | 3,783,317 |
Monsanto Co. | | 64,709 | | | 4,810,467 |
Praxair, Inc.(a) | | 37,571 | | | 2,670,171 |
| | | | | |
| | | 18,708,862 |
| | | | | |
| Commercial Banks - 2.1% |
PNC Financial Services Group, Inc.(a) | | 85,063 | | | 3,301,295 |
U.S. Bancorp(a) | | 224,064 | | | 4,015,227 |
Wells Fargo & Co.(a) | | 156,909 | | | 3,806,612 |
Zions Bancorporation(a) | | 116,196 | | | 1,343,226 |
| | | | | |
| | | 12,466,360 |
| | | | | |
| Communications Equipment - 1.9% |
Cisco Systems, Inc.* | | 220,180 | | | 4,104,155 |
Lumenis Ltd.(c) | | 520 | | | 0 |
Nokia Oyj (ADR)(a) | | 482,506 | | | 7,034,938 |
| | | | | |
| | | 11,139,093 |
| | | | | |
| Computers & Peripherals - 3.4% |
Apple, Inc.* | | 4,200 | | | 598,206 |
EMC Corp.*(a) | | 170,978 | | | 2,239,812 |
Hewlett-Packard Co.(a) | | 329,652 | | | 12,741,050 |
International Business Machines Corp. | | 38,635 | | | 4,034,266 |
| | | | | |
| | | 19,613,334 |
| | | | | |
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Diversified Financial Services - 1.4% |
CME Group, Inc.(a) | | 12,877 | | $ | 4,006,164 |
JPMorgan Chase & Co.(a) | | 117,575 | | | 4,010,483 |
| | | | | |
| | | 8,016,647 |
| | | | | |
| Diversified Telecommunication Services - 0.8% |
Verizon Communications, Inc.(a) | | 123,981 | | | 3,809,936 |
Windstream Corp.(a) | | 102,878 | | | 860,060 |
| | | | | |
| | | 4,669,996 |
| | | | | |
| Electric Utilities - 1.6% |
FirstEnergy Corp.(a) | | 66,232 | | | 2,566,490 |
PPL Corp. | | 73,391 | | | 2,418,967 |
Southern Co. | | 147,435 | | | 4,594,075 |
| | | | | |
| | | 9,579,532 |
| | | | | |
| Electrical Equipment - 1.2% |
Emerson Electric Co. | | 135,575 | | | 4,392,630 |
Rockwell Automation, Inc.(a) | | 79,889 | | | 2,566,035 |
| | | | | |
| | | 6,958,665 |
| | | | | |
| Energy Equipment & Services - 1.1% |
Schlumberger, Ltd.(a) | | 117,037 | | | 6,332,872 |
| Food & Staples Retailing - 3.5% | | | | | |
CVS Caremark Corp. | | 143,723 | | | 4,580,452 |
Sysco Corp. | | 214,782 | | | 4,828,300 |
Wal-Mart Stores, Inc. | | 13,100 | | | 634,564 |
Walgreen Co.(a) | | 354,568 | | | 10,424,299 |
| | | | | |
| | | 20,467,615 |
| | | | | |
| Food Products - 6.9% |
Campbell Soup Co.(a) | | 139,366 | | | 4,100,148 |
General Mills, Inc.(a) | | 117,825 | | | 6,600,556 |
H.J. Heinz Co.(a) | | 186,747 | | | 6,666,868 |
Hershey Co. (The)(a) | | 235,875 | | | 8,491,500 |
Kellogg Co.(a) | | 82,073 | | | 3,822,140 |
Kraft Foods, Inc. - Class A(a) | | 301,284 | | | 7,634,536 |
Nestle S.A. | | 73,752 | | | 2,782,717 |
| | | | | |
| | | 40,098,465 |
| | | | | |
| Health Care Equipment & Supplies - 8.5% |
Alcon, Inc. | | 52,861 | | | 6,138,219 |
Baxter International, Inc. | | 79,794 | | | 4,225,890 |
Becton, Dickinson & Co. | | 191,454 | | | 13,652,585 |
C.R. Bard, Inc.(a) | | 116,508 | | | 8,674,021 |
Covidien Plc | | 38,500 | | | 1,441,440 |
Medtronic, Inc. | | 100,773 | | | 3,515,970 |
St. Jude Medical, Inc.*(a) | | 188,988 | | | 7,767,407 |
Stryker Corp.(a) | | 95,777 | | | 3,806,178 |
| | | | | |
| | | 49,221,710 |
| | | | | |
| Hotels, Restaurants & Leisure - 0.2% |
McDonald’s Corp. | | 13,200 | | | 758,868 |
Yum! Brands, Inc. | | 19,100 | | | 636,794 |
| | | | | |
| | | 1,395,662 |
| | | | | |
See accompanying notes to financial statements
5
Met Investors Series Trust
Pioneer Fund Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Household Products - 2.5% |
Clorox Co. (The)(a) | | 37,666 | | $ | 2,102,893 |
Colgate-Palmolive Co.(a) | | 172,048 | | | 12,170,675 |
| | | | | |
| | | 14,273,568 |
| | | | | |
| Industrial Conglomerates - 0.8% |
3M Co. | | 78,248 | | | 4,702,705 |
| | | | | |
| Insurance - 2.5% |
Chubb Corp. (The)(a) | | 290,647 | | | 11,591,003 |
Travelers Cos., Inc. (The) | | 78,633 | | | 3,227,098 |
| | | | | |
| | | 14,818,101 |
| | | | | |
| IT Services - 1.8% |
Automatic Data Processing, Inc. | | 141,979 | | | 5,031,736 |
DST Systems, Inc.*(a) | | 71,112 | | | 2,627,588 |
Fiserv, Inc.* | | 67,063 | | | 3,064,779 |
| | | | | |
| | | 10,724,103 |
| | | | | |
| Machinery - 4.7% |
Caterpillar, Inc.(a) | | 129,225 | | | 4,269,594 |
Deere & Co.(a) | | 192,471 | | | 7,689,216 |
Illinois Tool Works, Inc.(a) | | 41,158 | | | 1,536,840 |
PACCAR, Inc.(a) | | 367,676 | | | 11,953,147 |
Parker Hannifin Corp.(a) | | 45,769 | | | 1,966,236 |
| | | | | |
| | | 27,415,033 |
| | | | | |
| Media - 4.4% |
McGraw-Hill Cos., Inc. (The)(a) | | 280,077 | | | 8,433,119 |
Reed Elsevier N.V. (ADR)(a) | | 635,627 | | | 14,002,863 |
Walt Disney Co. (The)(a) | | 135,007 | | | 3,149,713 |
| | | | | |
| | | 25,585,695 |
| | | | | |
| Metals & Mining - 3.7% |
Alcoa, Inc.(a) | | 391,958 | | | 4,048,926 |
BHP Billiton, Ltd. (ADR)(a) | | 53,831 | | | 2,946,171 |
Freeport-McMoRan Copper & Gold, Inc.(a) | | 92,758 | | | 4,648,103 |
Rio Tinto Plc (ADR)(a) | | 62,048 | | | 10,167,806 |
| | | | | |
| | | 21,811,006 |
| | | | | |
| Multi-Utilities - 0.5% |
Public Service Enterprise Group, Inc. | | 91,297 | | | 2,979,021 |
| | | | | |
| Multiline Retail - 2.4% |
Nordstrom, Inc.(a) | | 145,009 | | | 2,884,229 |
Target Corp.(a) | | 278,498 | | | 10,992,316 |
| | | | | |
| | | 13,876,545 |
| | | | | |
| Office Electronics - 1.3% |
Canon, Inc. (ADR) | | 228,116 | | | 7,420,613 |
| | | | | |
| Oil, Gas & Consumable Fuels - 9.2% |
Apache Corp. | | 135,632 | | | 9,785,849 |
Chevron Corp. | | 306,824 | | | 20,327,090 |
ConocoPhillips | | 121,800 | | | 5,122,908 |
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| |
| Oil & Gas Consumable Fuels - continued | | | |
Exxon Mobil Corp. | | 122,139 | | $ | 8,538,737 |
Marathon Oil Corp.(a) | | 185,072 | | | 5,576,219 |
Royal Dutch Shell Plc (ADR) | | 82,935 | | | 4,162,508 |
| | | | | |
| | | 53,513,311 |
| | | | | |
| Personal Products - 0.4% |
Estee Lauder Cos., Inc. (The) - Class A(a) | | 68,837 | | | 2,248,905 |
| | | | | |
| Pharmaceuticals - 5.3% |
Abbott Laboratories | | 194,213 | | | 9,135,779 |
Eli Lilly & Co.(a) | | 103,326 | | | 3,579,213 |
Johnson & Johnson | | 78,031 | | | 4,432,161 |
Merck & Co., Inc.(a) | | 99,574 | | | 2,784,089 |
Pfizer, Inc.(a) | | 162,533 | | | 2,437,995 |
Teva Pharmaceutical Industries, Ltd. (ADR)(a) | | 167,534 | | | 8,266,128 |
| | | | | |
| | | 30,635,365 |
| | | | | |
| Road & Rail - 4.6% |
Burlington Northern Santa Fe Corp.(a) | | 92,544 | | | 6,805,686 |
Canadian National Railway Co. | | 150,558 | | | 6,467,971 |
Norfolk Southern Corp.(a) | | 354,485 | | | 13,353,450 |
| | | | | |
| | | 26,627,107 |
| | | | | |
| Semiconductors & Semiconductor Equipment - 2.7% |
Applied Materials, Inc.(a) | | 301,592 | | | 3,308,464 |
Intel Corp.(a) | | 375,584 | | | 6,215,915 |
Texas Instruments, Inc.(a) | | 293,475 | | | 6,251,018 |
| | | | | |
| | | | | 15,775,397 |
| | | | | |
| Software - 1.4% | | | | | |
Adobe Systems, Inc.* | | 150,409 | | | 4,256,575 |
Macrovision Solutions Corp.*(a) | | 224 | | | 4,885 |
Microsoft Corp. | | 157,047 | | | 3,733,007 |
| | | | | |
| | | | | 7,994,467 |
| | | | | |
| Specialty Retail - 1.5% | | | | | |
Lowe’s Cos., Inc. | | 283,956 | | | 5,511,586 |
Staples, Inc.(a) | | 152,666 | | | 3,079,273 |
| | | | | |
| | | | | 8,590,859 |
| | | | | |
| Textiles, Apparel & Luxury Goods - 0.8% | | | |
Coach, Inc. | | 169,382 | | | 4,552,988 |
| | | | | |
Total Common Stocks
(Cost $562,418,591) | | | | | 576,653,633 |
| | | | | |
| Short-Term Investments - 30.1% | | | | | |
| Mutual Funds - 28.6% | | | | | |
State Street Navigator Securities Lending Trust Prime Portfolio(b) | | 166,509,097 | | | 166,509,097 |
See accompanying notes to financial statements
6
Met Investors Series Trust
Pioneer Fund Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | | |
Security
Description | | Par
Amount | | Value | |
| | | | | | | |
| | |
| Repurchase Agreement - 1.5% | | | | | | | |
State Street Bank & Trust Co., Repurchase Agreement, dated 06/30/09 at 0.010% to be repurchased at $8,623,002 on 07/01/09 collateralized by $8,755,000 FNMA at 1.722% due 05/10/11 with a value of $8,798,775 | | $ | 8,623,000 | | $ | 8,623,000 | |
| | | | | | | |
| | |
Total Short-Term Investments
(Cost $175,132,097) | | | | | | 175,132,097 | |
| | | | | | | |
| | |
TOTAL INVESTMENTS - 129.1%
(Cost $737,550,688) | | | | | | 751,785,730 | |
| | | | | | | |
| |
| Other Assets and Liabilities (net) - (29.1)% | | | (169,560,430 | ) |
| | | | | | | |
| | |
| NET ASSETS - 100.0% | | | | | $ | 582,225,300 | |
| | | | | | | |
Portfolio Footnotes:
| * | | Non-income producing security. |
| (a) | | All or a portion of security is on loan. |
| (b) | | Represents investment of collateral received from securities lending transactions. |
| (c) | | Security valued at fair value as determined in good faith by or under the direction of the Board of Trustees. |
ADR - American Depositary Receipt
FNMA - Federal National Mortgage Association
See accompanying notes to financial statements
7
Met Investors Series Trust
Pioneer Fund Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
| Level 1—quoted | | prices in active markets for identical securities |
| Level 2—other | | significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.) |
| Level 3—significant | | unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments) |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Common Stocks | | | | | | | | | | | | |
Aerospace & Defense | | $ | 14,777,429 | | $ | — | | $ | — | | $ | 14,777,429 |
Auto Components | | | 13,393,892 | | | — | | | — | | | 13,393,892 |
Automobiles | | | 3,497,127 | | | — | | | — | | | 3,497,127 |
Beverages | | | 13,973,265 | | | — | | | — | | | 13,973,265 |
Capital Markets | | | 28,798,318 | | | — | | | — | | | 28,798,318 |
Chemicals | | | 18,708,862 | | | — | | | — | | | 18,708,862 |
Commercial Banks | | | 12,466,360 | | | — | | | — | | | 12,466,360 |
Communications Equipment | | | 11,139,093 | | | — | | | — | | | 11,139,093 |
Computers & Peripherals | | | 19,613,334 | | | — | | | — | | | 19,613,334 |
Diversified Financial Services | | | 8,016,647 | | | — | | | — | | | 8,016,647 |
Diversified Telecommunication Services | | | 4,669,996 | | | — | | | — | | | 4,669,996 |
Electric Utilities | | | 9,579,532 | | | — | | | — | | | 9,579,532 |
Electrical Equipment | | | 6,958,665 | | | — | | | — | | | 6,958,665 |
Energy Equipment & Services | | | 6,332,872 | | | — | | | — | | | 6,332,872 |
Food & Staples Retailing | | | 20,467,615 | | | — | | | — | | | 20,467,615 |
Food Products | | | 37,315,748 | | | 2,782,717 | | | — | | | 40,098,465 |
Health Care Equipment & Supplies | | | 49,221,710 | | | — | | | — | | | 49,221,710 |
Hotels, Restaurants & Leisure | | | 1,395,662 | | | — | | | — | | | 1,395,662 |
Household Products | | | 14,273,568 | | | — | | | — | | | 14,273,568 |
Industrial Conglomerates | | | 4,702,705 | | | — | | | — | | | 4,702,705 |
Insurance | | | 14,818,101 | | | — | | | — | | | 14,818,101 |
IT Services | | | 10,724,103 | | | — | | | — | | | 10,724,103 |
Machinery | | | 27,415,033 | | | — | | | — | | | 27,415,033 |
Media | | | 25,585,695 | | | — | | | — | | | 25,585,695 |
Metals & Mining | | | 21,811,006 | | | — | | | — | | | 21,811,006 |
Multi-Utilities | | | 2,979,021 | | | — | | | — | | | 2,979,021 |
Multiline Retail | | | 13,876,545 | | | — | | | — | | | 13,876,545 |
Office Electronics | | | 7,420,613 | | | — | | | — | | | 7,420,613 |
Oil, Gas & Consumable Fuels | | | 53,513,311 | | | — | | | — | | | 53,513,311 |
Personal Products | | | 2,248,905 | | | — | | | — | | | 2,248,905 |
Pharmaceuticals | | | 30,635,365 | | | — | | | — | | | 30,635,365 |
Road & Rail | | | 26,627,107 | | | — | | | — | | | 26,627,107 |
Semiconductors & Semiconductor Equipment | | | 15,775,397 | | | — | | | — | | | 15,775,397 |
Software | | | 7,994,467 | | | — | | | — | | | 7,994,467 |
Specialty Retail | | | 8,590,859 | | | — | | | — | | | 8,590,859 |
Textiles, Apparel & Luxury Goods | | | 4,552,988 | | | — | | | — | | | 4,552,988 |
Total Common Stocks | | | 573,870,916 | | | 2,782,717 | | | — | | | 576,653,633 |
Short-Term Investments | | | | | | | | | | | | |
Mutual Funds | | | 166,509,097 | | | — | | | — | | | 166,509,097 |
Repurchase Agreement | | | — | | | 8,623,000 | | | — | | | 8,623,000 |
Total Short-Term Investments | | | 166,509,097 | | | 8,623,000 | | | — | | | 175,132,097 |
TOTAL INVESTMENTS | | $ | 740,380,013 | | $ | 11,405,717 | | $ | — | | $ | 751,785,730 |
See accompanying notes to financial statements
8
Met Investors Series Trust
Pioneer Fund Portfolio
FAS 157 Level 3 Reconciliation Disclosure
Following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value:
Asset Valuation Inputs
| | | | | | | | | | | | | |
| Investments in Securities | | Balance as of
December 31,
2008 | | Realized Loss | | | Net Purchases | | Balance as of
June 30,
2009 |
| Common Stocks | | | | | | | | | | | | | |
Communications Equipment | | $ | — | | $ | (832 | ) | | $ | 832 | | $ | — |
| Total | | $ | — | | $ | (832 | ) | | $ | 832 | | $ | — |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| Pioneer Fund Portfolio | | | |
| Assets | | | | |
Investments, at value (a)(b) | | $ | 743,162,730 | |
Repurchase Agreement | | | 8,623,000 | |
Cash | | | 989 | |
Receivable for Trust shares sold | | | 261,149 | |
Dividends receivable | | | 996,284 | |
Interest receivable | | | 2 | |
| | | | |
Total assets | | | 753,044,154 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 3,704,832 | |
Trust shares redeemed | | | 243,460 | |
Distribution and services fees—Class B | | | 4,497 | |
Collateral for securities on loan | | | 166,509,097 | |
Management fee | | | 316,435 | |
Administration fee | | | 3,515 | |
Custodian and accounting fees | | | 336 | |
Deferred trustee fee | | | 5,020 | |
Accrued expenses | | | 31,662 | |
| | | | |
Total liabilities | | | 170,818,854 | |
| | | | |
| Net Assets | | $ | 582,225,300 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 570,871,860 | |
Accumulated net realized loss | | | (62,141,546 | ) |
Unrealized appreciation on investments and foreign currency | | | 71,453,290 | |
Undistributed net investment income | | | 2,041,696 | |
| | | | |
Total | | $ | 582,225,300 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 565,244,938 | |
| | | | |
Class B | | | 16,980,362 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 56,164,934 | |
| | | | |
Class B | | | 1,696,328 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 10.06 | |
| | | | |
Class B | | | 10.01 | |
| | | | |
| | | | | |
(a) Investments at cost, excluding repurchase agreement | | $ | 728,927,688 | |
(b) Includes cash collateral for securities loaned of | | | 166,509,097 | |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| Pioneer Fund Portfolio | | | |
| Investment Income | | | | |
Dividends (1) | | $ | 3,076,340 | |
Interest (2) | | | 9,112 | |
| | | | |
Total investment income | | | 3,085,452 | |
| | | | |
| Expenses | | | | |
Management fee | | | 704,102 | |
Administration fees | | | 9,602 | |
Custodian and accounting fees | | | 9,858 | |
Distribution and services fees—Class B | | | 6,915 | |
Audit and tax services | | | 21,305 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 2,933 | |
Other | | | 19,496 | |
| | | | |
Total expenses | | | 800,644 | |
Less management fee waiver | | | (19,959 | ) |
Less expenses reimbursed by the Manager | | | (17,596 | ) |
Less broker commission recapture | | | (169 | ) |
| | | | |
Net expenses | | | 762,920 | |
| | | | |
Net investment income | | | 2,322,532 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments, Futures Contracts and Foreign Currency | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | (51,030,484 | ) |
Futures contracts | | | 11,127 | |
Foreign currency | | | (1,649 | ) |
| | | | |
Net realized loss on investments, futures contracts and foreign currency | | | (51,021,006 | ) |
| | | | |
Net change in unrealized appreciation (depreciation) on: | | | | |
Investments | | | 74,201,781 | |
Foreign currency | | | (1,144 | ) |
| | | | |
Net change in unrealized depreciation on investments and foreign currency | | | 74,200,637 | |
| | | | |
Net realized and unrealized loss on investments, futures contracts and foreign currency | | | 23,179,631 | |
| | | | |
| Net Decrease in Net Assets from Operations | | $ | 25,502,163 | |
| | | | |
| | | | | |
(1) Dividend income is net of foreign withholding taxes of: | | $ | 62,151 | |
(2) Interest income includes securities lending net income of: | | | 8,733 | |
See accompanying notes to financial statements
11
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| Pioneer Fund Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 2,322,532 | | | $ | 672,053 | |
Net realized loss on investments, futures contracts and foreign currency | | | (51,021,006 | ) | | | (1,297,823 | ) |
Net change in unrealized appreciation (depreciation) on investments and foreign currency | | | 74,200,637 | | | | (15,524,138 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 25,502,163 | | | | (16,149,908 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | (956,248 | ) | | | (433,431 | ) |
Class B | | | — | | | | — | |
From net realized gains | | | | | | | | |
Class A | | | — | | | | — | |
Class B | | | — | | | | — | |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (956,248 | ) | | | (433,431 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 302,535,811 | | | | 20,035,026 | |
Class B | | | 561,018 | | | | — | |
Net asset value of shares issued through acquisition | | | | | | | | |
Class A | | | 207,564,877 | | | | — | |
Class B | | | 52,705,210 | | | | — | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | 956,248 | | | | 433,431 | |
Class B | | | — | | | | — | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (9,578,856 | ) | | | (10,061,232 | ) |
Class B | | | (36,974,500 | ) | | | — | |
| | | | | | | | |
Net increase in net assets from capital share transactions | | | 517,769,808 | | | | 10,407,225 | |
| | | | | | | | |
| Net Increase (Decrease) in Net Assets | | | 542,315,723 | | | | (6,176,114 | ) |
Net assets at beginning of period | | | 39,909,577 | | | | 46,085,691 | |
| | | | | | | | |
Net assets at end of period | | $ | 582,225,300 | | | $ | 39,909,577 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 2,041,696 | | | $ | 675,412 | |
| | | | | | | | |
See accompanying notes to financial statements
12
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Pioneer Fund Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004++ | |
| Net Asset Value, Beginning of Period | | $ | 10.13 | | | $ | 15.23 | | | $ | 14.63 | | | $ | 12.75 | | | $ | 12.03 | | | $ | 10.92 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.11 | | | | 0.21 | | | | 0.15 | | | | 0.13 | | | | 0.13 | | | | 0.11 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.02 | | | | (5.17 | ) | | | 0.58 | | | | 1.89 | | | | 0.59 | | | | 1.11 | (a) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.13 | | | | (4.96 | ) | | | 0.73 | | | | 2.02 | | | | 0.72 | | | | 1.22 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.20 | ) | | | (0.14 | ) | | | (0.13 | ) | | | (0.14 | ) | | | — | | | | (0.11 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.20 | ) | | | (0.14 | ) | | | (0.13 | ) | | | (0.14 | ) | | | — | | | | (0.11 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 10.06 | | | $ | 10.13 | | | $ | 15.23 | | | $ | 14.63 | | | $ | 12.75 | | | $ | 12.03 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 1.49 | % | | | (32.84 | )% | | | 5.01 | % | | | 15.92 | % | | | 5.99 | % | | | 11.13 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.72 | %* | | | 0.96 | % | | | 0.97 | % | | | 1.09 | % | | | 1.01 | % | | | 0.99 | %(b) |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.76 | %* | | | 1.04 | % | | | 0.99 | % | | | 1.22 | % | | | 1.01 | % | | | 1.12 | % |
Ratio of Net Investment Income to Average Net Assets | | | 2.22 | %* | | | 1.61 | % | | | 0.95 | % | | | 0.98 | % | | | 1.03 | % | | | 0.98 | % |
Portfolio Turnover Rate | | | 74.5 | % | | | 14.3 | % | | | 18.2 | % | | | 28.5 | % | | | 16.0 | % | | | 19.0 | % |
Net Assets, End of Period (in millions) | | | $565.2 | | | | $39.9 | | | | $46.1 | | | $ | 43.7 | | | $ | 46.0 | | | $ | 33.0 | |
| | | | |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009(c)
(Unaudited) | |
| | |
| Net Asset Value, Beginning of Period | | $ | 9.29 | |
| | | | |
| Income (Loss) from Investment Operations | | | | |
Net Investment Income(a) | | | 0.04 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.68 | |
| | | | |
Total from Investment Operations | | | 0.72 | |
| | | | |
| Less Distributions | | | | |
Dividends from Net Investment Income | | | — | |
Distributions from Net Realized Capital Gains | | | — | |
| | | | |
Total Distributions | | | — | |
| | | | |
| Net Asset Value, End of Period | | $ | 10.01 | |
| | | | |
| Total Return | | | 7.75 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.89 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.91 | %* |
Ratio of Net Investment Income to Average Net Assets | | | 1.93 | %* |
Portfolio Turnover Rate | | | 74.5 | % |
Net Assets, End of Period (in millions) | | $ | 17.0 | |
| ++ | | Audited by other auditors Independent Registered Public Accounting Firm. |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | The investment manager waived a portion of its management fee for the period. |
| (c) | | Commencement of operations - 04/28/2009 |
See accompanying notes to financial statements
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is Pioneer Fund Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A and B Shares are currently offered by the Portfolio. Class C and E Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | | | | | | | |
Expiring
12/31/2010 | | Expiring
12/31/2011 | | Expiring
12/31/2016 | | Total |
| | | |
| $8,376,227 | | $ | 1,284,282 | | $ | 1,182,765 | | $ | 10,843,274 |
On May 1, 2006, the Pioneer Fund Portfolio, a series of The Travelers Series Trust, was reorganized into the Pioneer Fund Portfolio, a series of Met Investors Series Trust. The Portfolio acquired capital losses of $13,217,771, which are subject to an annual limitation of $1,630,787.
The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
G. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
H. Directed Brokerage Agreement - The Trust has entered into a directed brokerage arrangement with State Street Global Markets (“SSGM”). Under this arrangement, the Portfolio directs certain trades to SSGM in return for a recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to the Portfolio are shown separately as an expense reduction on the Statement of Operations of the Portfolio.
I. Financial Derivative Instruments - Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133, (“FAS 161” or the “Statement”) requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. The disclosure requirements of FAS 161 distinguish between derivatives which are accounted for as “hedges” under FAS 133 and those that do not qualify for such accounting. The Portfolio reflects derivatives at fair value and recognizes changes in fair value through the Statement of Operations, and as such do not qualify for FAS 133 hedge accounting treatment.
J. Futures Contracts - The Portfolio may buy and sell futures contracts (on recognized exchanges) as a hedge, to maintain exposure to the broad equity markets, manage exposure to the securities markets or to movements in interest rates or to enhance return. The Portfolio may be subject to equity price risk, interest rate risk, and foreign currency exchange rate risk in the normal course of pursuing its investment objectives. Futures contracts are agreements to buy or sell a security, or deliver a final cash settlement price in connection with an index, interest rate, currency, or other contracts not calling for physical delivery, for a set price in the future. The Portfolio must post an amount equal to a portion of the total market value of the futures contract as futures variation margin, which is returned when the Portfolio’s obligations under the contract have been satisfied. From time to time thereafter, the Portfolio may have to post variation margin to maintain this amount as the market value of the contract fluctuates. Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities. During the period ended June 30, 2009, the Portfolio entered into Equity Index Futures which were subject to equity price risk. At June 30, 2009, the Portfolio did not have any open futures contracts. For the period ended June 30, 2009, the Portfolio had realized gains in the amount of $11,127 which is located in Net realized gain (loss) on Futures Contracts in the Statement of Operations.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with Pioneer Investment Management, Inc. (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $704,102 | | 0.70 | % | | First $200 Million |
| | |
| | 0.65 | % | | $200 Million to $500 Million |
| | |
| | 0.60 | % | | $500 Million to $2 Billion |
| | |
| | 0.55 | % | | Over $2 Billion |
Prior to May 1, 2009, the management fee for the Portfolio was 75 basis points for the first $250 Million, 70 basis points for the next $250 Million, 67.5 basis points for the next $500 Million, 65 basis points for the next $1 Billion and 60 basis points for assets over $2 Billion. The management fee earned for the period January 1, 2009 through April 30, 2009 was $97,632.
Effective May 1, 2009, the Adviser has agreed to reduce the advisory fee it charges to the Manager for managing the Portfolio. This fee change will reduce the advisory fee charged on the Portfolio’s average daily net assets less than or equal to $2 billion. In connection with this change in the advisory fee, the Manager has voluntarily agreed, under certain circumstances, to waive a portion of the management fee chargeable to the Portfolio.
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Manager has entered into an expense limitation agreement with the Trust (“Expense Limitation Agreement”) in the interest of limiting expenses of the Portfolio of the Trust. The Expense Limitation Agreement shall continue in effect with respect to the Portfolio until April 30, 2010. Pursuant to that Expense Limitation Agreement, the Manager has agreed to waive or limit its fees and to assume other expenses so that the total annual operating expenses of the Portfolio other than interest, taxes, brokerage commissions, other expenditures which are capitalized in
16
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
accordance with accounting principles generally accepted in the United States of America, and other extraordinary expenses not incurred in the ordinary course of the Portfolio’s business, but including amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act, are limited to the following expense ratios as a percentage of the Portfolio’s average daily net assets:
| | | | | | | | | | | | | | |
Maximum Expense Ratio under current
Expense Limitation Agreement | | Expenses Deferred in |
| | | | | 2006 | | 2007 | | 2008 | | 2009 |
| | | Subject to repayment
until December 31, |
Class A | | Class B | | 2011 | | 2012 | | 2013 | | 2014 |
| | | | | |
| 1.00% | | 1.25% | | $ | 56,750 | | $ | 9,250 | | $ | 34,901 | | $ | 17,596 |
If in any year in which the Management Agreement is still in effect, the estimated aggregate portfolio operating expenses of the Portfolio for the fiscal year are less than the Maximum Expense Ratios for that year, subject to approval by the Trust’s Board, the Manager shall be entitled to reimbursement by the Portfolio to the extent that the charge does not cause the expenses in such subsequent year to exceed the Maximum Expense Ratios as stated above. The Portfolio is not obligated to repay any expense paid by the Manager more than five years after the end of the fiscal year in which such expense was incurred.
The amount waived and expenses reimbursed for the period ended June 30, 2009 are shown as a management fee waiver and expenses reimbursed in the Statement of Operations of the Portfolio.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A and Class B Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B distribution plan provides that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% of the average net assets of the Portfolio attributable to its Class B Shares in respect to activities primarily intended to result in the sale of Class B Shares. However, under the Class B distribution agreement, payments to the Distributor for activities pursuant to the Class B distribution plan are currently limited to payments at an annual rate equal to 0.25% of average daily net assets of the Portfolio attributable to its Class B Shares.
Under terms of the Class B distribution plan and distribution agreement, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Shares Issued
in Connection
with Acquisition | | Reinvestments | | Redemptions | | | Net Increase
in Shares
Outstanding | | Ending
Shares |
| | | | | | | |
Class A | | | | | | | | | | | | | | | |
| | | | | | | |
6/30/2009 | | 3,941,206 | | 31,587,556 | | 21,509,366 | | 102,933 | | (976,127 | ) | | 52,223,728 | | 56,164,934 |
12/31/2008 | | 3,025,438 | | 1,673,928 | | — | | 29,626 | | (787,786 | ) | | 915,768 | | 3,941,206 |
| | | | | | | |
Class B | | | | | | | | | | | | | | | |
| | | | | | | |
4/28/2009 - 6/30/2009 | | — | | 55,974 | | 5,490,140 | | — | | (3,849,786 | ) | | 1,696,328 | | 1,696,328 |
17
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 341,525,463 | | $ | — | | $ | 163,307,845 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation |
| | | |
| $737,550,688 | | $ | 28,838,151 | | $ | (14,603,109 | ) | | $ | 14,235,042 |
6. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $ | 433,431 | | $ | 406,776 | | $ | — | | $ | — | | $ | 433,431 | | $ | 406,776 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards | | | Total | |
| | | | |
| $ | 675,412 | | $ | — | | $ | (3,024,613 | ) | | $ | (10,843,274 | ) | | $ | (13,192,475 | ) |
7. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
8. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
9. Acquisitions
As of close of business on May 1, 2009, Pioneer Fund Portfolio (“Pioneer”) acquired all the net assets of Capital Guardian U.S. Equity Fund (“Capital Guardian”), a series of Metropolitan Series Fund, Inc., pursuant to a plan of reorganization approved by the Capital Guardian shareholders on April 30, 2009. The acquisition was accomplished by a tax-free exchange of 29,960,087 Class A of Pioneer (valued at $207,564,877) in exchange for 33,157,940 Class A shares of Capital Guardian outstanding on May 1, 2009, and 108 Class B shares of Pioneer (valued at $1,033) in exchange for 8,440,147 Class B shares of Capital Guardian outstanding on May 1, 2009. Capital Guardian Class A net assets
18
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
9. Acquisitions - continued
at that date ($207,564,877), including $39,174,538 of unrealized depreciation, were combined with those of Pioneer Class A, and Capital Guardian Class B net assets at that date ($52,705,210), including $18,044,835 of unrealized depreciation, were combined with those of Pioneer Class B. The aggregate Class A and Class B net assets of Pioneer immediately before the acquisition were $288,986,630 and $1,033, respectively. The aggregate Class A and Class B net assets of Capital Guardian immediately before the acquisition were $207,564,877 and $52,705,210, respectively. The aggregate Class A and Class B net assets of Pioneer immediately after the acquisition were $496,551,507 and $52,706,243, respectively.
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
19
| | |
| Pioneer Strategic Income Portfolio | | For the period ended 6/30/09 |
| Managed by Pioneer Investment Management, Inc. | | |
Portfolio Manager Commentary
Performance
During the period ended June 30, 2009, the Portfolio had a return of 16.43%, and 16.21% for Class A and E Shares, respectively, versus 3.35% for its benchmark, the Barclays Capital U.S. Universal Index.
Market Environment/Conditions
The second quarter of 2009 dominated first half results, as risk-seeking took hold and corporate credit markets posted record returns, effectively reversing most of the losses of the fourth quarter of 2008. Confidence in the economic recovery increased, driven by improving personal income, retail sales and durable goods orders, declining job losses, as evidenced in non-farm payroll data, improving commodity prices (oil rose 50% from $45 to $70), and the bottoming in the housing market, as indicated in housing starts. That confidence carried over into the financial markets, which witnessed renewed appetite for risk. The most important market developments in the first half were the decision by the Federal Reserve to increase support for securitized markets, particularly the mortgage markets, through the increased commitment to purchase agency Mortgage-Backed Securities (“MBS”) and treasuries, as well as the benign resolution in May of the bank stress tests announced in late February. Financials led large rallies in both debt and equity markets in April and May, in response to stronger than expected earnings reports and the successful outcome of the stress tests.
Treasuries sold off dramatically over the period because risky assets rallied; secondarily concerns increased about money supply growth and treasury issuance to fund the record U.S. deficit. The 10 year and 30 year treasury lost (-8.7%) and (-23.3%), respectively, as yields rose approximately 125 basis points (“bps”) and 160 bps to 3.52% and 4.31% at the end of June. The rally in financials was reflected in the decline of 3 month London Interbank Offered Rate (“LIBOR”) from 1.42% to 0.59%. Corporate credit led all other markets, with investment grade corporates up by 8.3% (13.1% on an excess return basis) and high yield up 29.4%, as investors flocked to once in a lifetime valuations. Within investment grade, utilities and industrials led returns, at 13.0% (19.2% in excess returns) and 9.5% (14.9% in excess returns), respectively. After selling off to all-time wides in March, financials caught the rally as earnings and positive stress test results buoyed the sector; financials ended the half with 5.7% returns (9.4% in excess returns). Low quality led returns, with BBBs returning 14.1%, vs. single As at 5.8% and AAs at 1.7%. Investment grade spreads were almost halved during the period, declining from 604 bps to 331 bps. While high yield returns had been strong in the first quarter, up over 6%, they soared in the second quarter, increasing 23.2%. CCCs took the lead in the market, posting 41% returns for the second quarter and the half, vs. BBs at 25% and Bs at 27% for the half. Overall, high yield spreads tightened from 1812 bps to 1055 bps. Bank loans and convertibles, which had sold off more than high yield in the fourth quarter, rallied back more strongly than high yield in 2009; bank loans returned 34.6% and high yield convertibles rose 40.7%.
Away from the corporate sector, most of the structured security market gained as well, on support from the Federal Reserve Bank and U.S. Treasury’s increased agency mortgage and new treasury purchase programs, as well as the new Term Asset-Backed Securities Loan
Facility (“TALF”) and Public-Private Investment Program (“PPIP”) programs. Agency mortgages rallied on the announcement that the Federal Reserve would increase its agency MBS purchases to $1.25 trillion, and, in an unprecedented move, that it would purchase up to $300 million of treasuries to help lower mortgage rates. Agency MBS rose 2.91% for the half (2.97% in excess returns), as spread declined to low levels of 36 bps. Credit cards, auto loans, and Collateralized Mortgage-Backed Securities (“CMBS”) rallied dramatically, upon their inclusion in the TALF and PPIP programs, with CMBS up 10%, and cards and autos up approximately 20%. One of the few markets other than treasuries that lost value over the period were non-agency mortgages and residential Asset-Backed Securities (“ABS”). Plagued by the continued decline in home prices, as well as uncertainty surrounding government homeowner refinancing/restructuring, the floating rate residential ABS market lost -17% year to date.
The dollar fell sharply against most currencies, as oil and other commodities’ prices rose. The dollar fell 18% vs. the Brazilian Real, 15% vs. the Australian dollar, 14% vs. the British pound, and 0.70% vs. the Euro. The dollar appreciated 5.7% vs. the Yen.
Portfolio Review/Current Positioning
Outperformance was primarily attributable to asset allocation, particularly to the approximate 33% overweight to high yield corporates, which contributed approximately 820 bps (including 83 bps from bank loans). The overweight to all corporates, and security selection primarily within financials and industrials, further lifted performance by approximately 55 bps. The 17% underweight to agency MBS contributed approximately 160 bps and the underweight to treasury and government-related issues added another 125 bps. The slightly short duration and yield curve positioning helped performance by approximately 45 bps. Within the non-agency structured securities allocations, the MBS and ABS portfolios contributed on balance approximately 10 bps; the underweight to CMBS cost -12 bps, but was offset by security selection which contributed 15 bps. The small non-USD currency allocation contributed approximately 26 bps to performance. Securities contributing to performance included Goldman Sachs, Vedanta Resources, Glencore, Univision, and Inverness Medical. Securities detracting from performance included a Goldman Sachs RMBS issue, DCP Midstream, Arantes, Kingsway and a Countrywide residential ABS issue.
We are positioning our portfolios with relatively neutral duration and a yield curve steepener. We continue to find value in the corporate markets, including lower quality investment grade, high yield, and bank loans, all of which are still trading wide to long-term historic averages. We will continue to use agency MBS as a funding source to invest opportunistically in credit.
Kenneth J. Taubes,
Portfolio Manager
Pioneer Investment Management, Inc.
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and
1
| | |
| Pioneer Strategic Income Portfolio | | For the period ended 6/30/09 |
| Managed by Pioneer Investment Management, Inc. | | |
Portfolio Manager Commentary (continued)
information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
U.S. Treasury Note (3.125%, due 05/15/19) | | 2.35% |
U.S. Treasury Note (3.250%, due 05/31/16) | | 1.95% |
Federal National Mortgage Assoc. (6.000%, due 07/01/38) | | 1.51% |
France Government Bond OAT (3.750%, due 04/25/17) | | 1.27% |
U.S. Treasury Bond (4.500%, due 05/15/38) | | 1.09% |
U.S. Treasury STRIPS (4.510%, due 11/15/12) | | 1.06% |
Federal Home Loan Mortgage Corp. (4.500%, due 04/01/22) | | 0.92% |
U.S. Treasury Inflation Index Note (2.500% due 07/15/16) | | 0.87% |
Federal National Mortgage Assoc. (5.000% due 07/01/23) | | 0.86% |
Japanese Government CPI Linked Bond (1.100% due 12/10/16) | | 0.73% |
Portfolio Composition (% of portfolio market value)
As of 6/30/09
2
| | |
| Pioneer Strategic Income Portfolio | | For the period ended 6/30/09 |
| Managed by Pioneer Investment Management, Inc. | | |
Portfolio Manager Commentary (continued)
Pioneer Strategic Income Portfolio managed by
Pioneer Investment Management, Inc. vs. Barclays Capital U.S. Universal Index1
Growth Based on $10,000+
| | | | | | | | | | | | | | |
| | | | | Average Annual Return2 (for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | 3 Year | | 5 Year | | 10 Year | | Since
Inception3 |
| — | | Pioneer Strategic Income Portfolio—Class A | | 16.43% | | 2.14% | | 5.21% | | 6.13% | | 6.07% | | — |
| | Class E | | 16.21% | | 1.92% | | — | | — | | — | | 1.63% |
| - - | | Barclays Capital U.S. Universal Index1 | | 3.35% | | 4.93% | | 5.92% | | 4.95% | | 6.01% | | — |
+The chart reflects the performance of Class A shares of the Portfolio. The performance of Class A shares will differ from that of the other class of shares because of the difference in expenses paid by policyholders investing in the different share classes.
1The Barclays Capital U.S. Universal Index represents the union of the U.S. Aggregate Bond Index, the U.S. High Yield Corporate index, the Investment Grade 144A index, the Eurodollar Index, the U.S. Emerging markets index and the non-ERISA portion of the Commercial Mortgage Backed Securities Index.
2“Average Annual Return” is calculated including reinvestment of all income dividends and capital gains distributions.
3Inception of Class A shares is 6/16/94. Inception of the Class E shares is 4/28/08.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administrative charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Index does not include fees or expenses and is not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| Pioneer Strategic Income Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.69% | | $ | 1,000.00 | | $ | 1,164.30 | | $ | 3.70 |
Hypothetical | | 0.69% | | | 1,000.00 | | | 1,021.37 | | | 3.46 |
| | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class E | | | | | | | | | | | |
Actual | | 0.82% | | $ | 1,000.00 | | $ | 1,162.10 | | $ | 4.40 |
Hypothetical | | 0.82% | | | 1,000.00 | | | 1,020.73 | | | 4.11 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
4
Met Investors Series Trust
Pioneer Strategic Income Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| | |
| Municipals - 0.9% | | | | | | |
California State University Revenue,
Systemwide - Series A
5.000%, due 11/01/39 | | $ | 1,502,000 | | $ | 1,389,605 |
Charlotte Special Facilities Revenue, Refunding Charlotte/Douglas International Airport
5.600%, due 07/01/27 | | | 1,000,000 | | | 600,240 |
Connecticut State Health & Educational, Facility Authority Revenue,
Yale University - Series Z-1
5.000%, due 07/01/42 | | | 1,451,000 | | | 1,474,927 |
New Jersey Economic Development Authority, Special Facilities Revenue, Continental Airlines, Inc., Project
6.250%, due 09/15/29 | | | 463,000 | | | 357,668 |
7.000%, due 11/15/30(a) | | | 117,000 | | | 97,407 |
Wisconsin State General Reserve
5.750%, due 05/01/33 | | | 134,000 | | | 137,938 |
| | | | | | |
Total Municipals
(Cost $3,967,866) | | | | | | 4,057,785 |
| | | | | | |
| | |
| Asset-Backed Securities - 7.2% | | | | | | |
ACE Securities Corp.
0.914%, due 12/25/34(a) | | | 578,893 | | | 300,222 |
Aegis Asset Backed Securities Trust
2.789%, due 01/25/34(a) | | | 150,000 | | | 75,215 |
Alfa Diversified Payment Rights Finance Co.
2.529%, due 12/15/11 (144A)(a)(b) | | | 735,000 | | | 628,425 |
American Tower Trust
5.957%, due 04/15/37 (144A)(b) | | | 517,000 | | | 441,510 |
Ameriquest Mortgage Securities, Inc.
5.864%, due 10/25/33(a) | | | 25,000 | | | 5,671 |
Asset Backed Securities Corp. Home Equity
0.754%, due 04/25/35(a) | | | 177,000 | | | 147,376 |
Carrington Mortgage Loan Trust
0.714%, due 09/25/35(a) | | | 323,208 | | | 251,079 |
0.414%, due 10/25/36(a) | | | 770,000 | | | 482,722 |
Chase Commercial Mortgage Securities Corp. - Series 2000-1
8.195%, due 04/15/32(a)(c) | | | 393,000 | | | 378,403 |
Chase Mortgage Finance Corp.
5.500%, due 05/25/37 | | | 1,470,174 | | | 1,173,072 |
Citigroup Mortgage Loan Trust, Inc.
0.464%, due 08/25/36(a) | | | 575,802 | | | 370,142 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| |
| Asset-Backed Securities - continued | | | |
Conseco Finance Securitizations Corp.
6.910%, due 05/01/33 | | $ | 3,710 | | $ | 2,912 |
7.360%, due 09/01/33 | | | 2,677 | | | 2,220 |
6.681%, due 12/01/33 | | | 128,181 | | | 109,539 |
Continental Airlines, Inc.
8.499%, due 05/01/11 | | | 114,856 | | | 86,142 |
Countrywide Alternative Loan Trust
0.664%, due 09/25/35(a) | | | 396,795 | | | 180,972 |
0.644%, due 10/25/35(a) | | | 600,589 | | | 259,097 |
Countrywide Asset-Backed Certificates
0.734%, due 08/25/35(a) | | | 1,198,121 | | | 1,115,418 |
0.824%, due 11/25/35(a) | | | 1,065,000 | | | 852,828 |
0.494%, due 07/25/36(a) | | | 635,502 | | | 425,180 |
Countrywide Home Loan Mortgage Pass Through Trust
5.046%, due 09/25/33(a) | | | 24,381 | | | 21,987 |
Credit Suisse First Boston Mortgage Securities Corp. | | | | | | |
6.122%, due 04/15/37 (144A)(d) | | | 70,000 | | | 38,539 |
1.464%, due 09/25/34(a) | | | 223,034 | | | 29,274 |
Crown Castle Towers LLC -
Series 2005-1A
4.878%, due 06/15/35 (144A)(b) | | | 235,000 | | | 227,950 |
CW Capital Cobalt, Ltd. -
Series 2006-C1
5.174%, due 08/15/48 | | | 375,000 | | | 347,291 |
Dominos Pizza Master Issuer LLC
7.629%, due 04/25/37 (144A)(b) | | | 1,602,000 | | | 886,697 |
Downey Savings & Loan Association Mortgage Loan Trust
0.683%, due 10/19/45(a) | | | 579,791 | | | 193,259 |
FBR Securitization Trust
0.604%, due 09/25/35(a) | | | 858,932 | | | 743,065 |
0.664%, due 10/25/35(a) | | | 257,000 | | | 136,925 |
First Franklin Mortgage Loan Asset Backed Certificates -
Series 2005-FF5 | | | | | | |
0.854%, due 09/25/34(a) | | | 70,193 | | | 54,561 |
0.764%, due 03/25/35(a) | | | 333,000 | | | 218,161 |
First Franklin Mortgage Loan Asset Backed Certificates - Series 2006-FF4
0.504%, due 03/25/36(a) | | | 27,528 | | | 17,698 |
Fremont Home Loan Trust
0.424%, due 02/25/36(a) | | | 213,643 | | | 197,808 |
See accompanying notes to financial statements
5
Met Investors Series Trust
Pioneer Strategic Income Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| |
| Asset-Backed Securities - continued | | | |
Gazprom International S.A.
7.201%, due 02/01/20 (144A)(b) | | $ | 1,077,014 | | $ | 1,031,241 |
Global Signal Trust
6.376%, due 12/15/14
(144A)(b) | | | 445,000 | | | 431,893 |
Global Tower Partners Acquisition Partners LLC - Series 2007-1A
7.874%, due 05/15/37
(144A)(b) | | | 240,000 | | | 209,813 |
Green Tree Financial Corp.
7.860%, due 03/01/30 | | | 151,053 | | | 101,623 |
Greenpoint Manufactured Housing
8.450%, due 06/20/31 | | | 188,508 | | | 123,450 |
GSAMP Trust | | | | | | |
0.744%, due 03/25/35(a) | | | 376,910 | | | 350,304 |
0.574%, due 11/25/35(a) | | | 244,053 | | | 224,114 |
0.734%, due 11/25/35(a) | | | 1,650,000 | | | 808,883 |
0.384%, due 01/25/37(a) | | | 182,270 | | | 170,686 |
0.444%, due 01/25/37(a) | | | 330,000 | | | 225,215 |
Home Equity Asset Trust
0.594%, due 12/25/35(a) | | | 400,649 | | | 285,855 |
Impac CMB Trust | | | | | | |
0.954%, due 09/25/34(a) | | | 172,959 | | | 106,444 |
0.714%, due 10/25/35(a) | | | 438,612 | | | 312,230 |
Impac Secured Assets Corp.
0.664%, due 05/25/36(a) | | | 649,098 | | | 442,036 |
Indymac Index Mortgage Loan Trust
0.914%, due 04/25/34(a) | | | 53,054 | | | 35,200 |
JPMorgan Alternative Loan Trust
6.000%, due 03/25/36 | | | 982,227 | | | 713,497 |
JPMorgan Mortgage Trust
6.000%, due 09/25/34 | | | 1,404,150 | | | 1,258,290 |
Lehman XS Trust
0.664%, due 12/25/35(a)(f) | | | 948,342 | | | 238,568 |
LNR CDO, Ltd.
3.065%, due 07/24/37
(144A)(a)(b) | | | 215,000 | | | 43,000 |
Luminent Mortgage Trust
0.574%, due 07/25/36(a) | | | 908,998 | | | 126,967 |
Madison Avenue Manufactured Housing Contract Trust
3.564%, due 03/25/32(a) | | | 250,000 | | | 119,163 |
MASTER Alternative Loans Trust
6.000%, due 07/25/34 | | | 1,726,294 | | | 1,461,309 |
MASTER Asset Backed Securities Trust
5.564%, due 12/25/32(a) | | | 13,521 | | | 2,516 |
MASTER Asset Securitization Trust
5.500%, due 11/25/33 | | | 478,863 | | | 433,094 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| |
| Asset-Backed Securities - continued | | | |
Merrill Lynch Mortgage Investors Trust
0.474%, due 03/25/37(a) | | $ | 605,000 | | $ | 191,831 |
Morgan Stanley Capital, Inc. | | | | | | |
0.724%, due 03/25/35(a) | | | 23,691 | | | 23,112 |
0.414%, due 08/25/36(a) | | | 318,538 | | | 289,965 |
0.374%, due 12/25/36(a) | | | 578,616 | | | 515,881 |
Option One Mortgage Loan Trust
0.404%, due 05/25/37(a) | | | 159,462 | | | 144,540 |
PF Export Receivables Master Trust
6.436%, due 06/01/15
(144A)(b) | | | 566,957 | | | 569,715 |
Power Contract Financing III LLC
2.186%, due 02/05/10
(144A)(b) | | | 1,200,000 | | | 1,125,000 |
Power Receivables Finance LLC
6.290%, due 01/01/12
(144A)(b) | | | 581,835 | | | 573,911 |
Residential Asset Mortgage Products, Inc.
0.514%, due 03/25/36(a) | | | 407,189 | | | 268,446 |
Residential Asset Securities Corp. | | | | | | |
0.754%, due 08/25/35(a) | | | 517,000 | | | 412,134 |
0.564%, due 01/25/36(a) | | | 103,975 | | | 88,238 |
Residential Funding Mortgage Securities I
5.500%, due 11/25/35 | | | 920,062 | | | 804,896 |
Sasco Net Interest Margin Trust
0.000%, due 05/27/33 (144A)(d)(k) | | | 47,105 | | | 15 |
SBA CMBS Trust
6.904%, due 11/15/36
(144A)(b) | | | 494,000 | | | 434,720 |
Structured Asset Mortgage Investments, Inc.
0.624%, due 09/25/45(a) | | | 332,230 | | | 150,819 |
Structured Asset Securities Corp. -
Series 2007-BC4
0.564%, due 11/25/37(a) | | | 536,483 | | | 452,225 |
Tengizchevroil Finance Co. SARL
6.124%, due 11/15/14
(144A)(b) | | | 1,705,423 | | | 1,543,407 |
TIAA Commercial Real Estate Securitization
6.840%, due 05/22/37
(144A)(d) | | | 100,000 | | | 20,000 |
Timberstar Trust | | | | | | |
5.668%, due 10/15/36 (144A)(b) | | | 540,000 | | | 467,944 |
See accompanying notes to financial statements
6
Met Investors Series Trust
Pioneer Strategic Income Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| |
| Asset-Backed Securities - continued | | | |
7.530%, due 10/15/36 (144A)(b) | | $ | 1,549,000 | | $ | 1,099,790 |
WaMu Mortgage Pass Through Certificates
4.500%, due 09/25/18 | | | 99,540 | | | 96,120 |
0.703%, due 10/25/44(a) | | | 204,551 | | | 115,376 |
0.544%, due 04/25/45(a) | | | 1,071,687 | | | 550,946 |
0.794%, due 07/25/45(a) | | | 242,335 | | | 61,439 |
Wells Fargo Home Equity Trust -
Series 2005-3
0.664%, due 11/25/35(a) | | | 517,139 | | | 459,746 |
Wells Fargo Mortgage Backed Securities Trust
5.000%, due 11/25/20- 03/25/21 | | | 2,178,388 | | | 2,032,180 |
| | | | | | |
Total Asset-Backed Securities
(Cost $38,152,577) | | | | | | 32,149,146 |
| | | | | | |
|
| Domestic Bonds & Debt Securities - 54.2% |
| Aerospace & Defense - 0.9% |
Aeroflex, Inc.
11.750%, due 02/15/15 | | | 567,000 | | | 405,405 |
BE Aerospace, Inc.
8.500%, due 07/01/18(e) | | | 1,585,000 | | | 1,497,825 |
DigitalGlobe, Inc.
10.500%, due 05/01/14 (144A)(b) | | | 530,000 | | | 551,200 |
Esterline Technologies Corp.
7.750%, due 06/15/13 | | | 1,267,000 | | | 1,235,325 |
L-3 Communications Corp.
6.125%, due 01/15/14 | | | 400,000 | | | 374,000 |
| | | | | | |
| | | | | | 4,063,755 |
| | | | | | |
| Airlines - 0.1% |
Continental Airlines, Inc., Series 971B
7.461%, due 04/01/13 | | | 135,827 | | | 101,870 |
Delta Air Lines, Inc.
7.779%, due 01/02/12 | | | 602,740 | | | 554,521 |
| | | | | | |
| | | | | | 656,391 |
| | | | | | |
| Auto Components - 0.8% |
Allison Transmission, Inc.
11.000%, due 11/01/15 (144A)(b)(e) | | | 799,000 | | | 635,205 |
Cooper-Standard Automotive, Inc.
7.000%, due 12/15/12 | | | 1,159,000 | | | 231,800 |
Goodyear Tire & Rubber Co. (The)
10.500%, due 05/15/16(e) | | | 235,000 | | | 238,525 |
Lear Corp.
8.750%, due 12/01/16(f) | | | 2,192,000 | | | 586,360 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| |
| Auto Components - continued | | | |
Tenneco, Inc.
8.625%, due 11/15/14(e) | | $ | 1,272,000 | | $ | 922,200 |
TRW Automotive, Inc.
7.250%, due 03/15/17 (144A)(b) | | | 1,694,000 | | | 1,177,330 |
| | | | | | |
| | | | | | 3,791,420 |
| | | | | | |
| Automobiles - 0.1% |
Fhu-Jin, Ltd., Series B
4.916%, due 08/10/11 (144A)(a)(b) | | | 250,000 | | | 239,225 |
| | | | | | |
| Beverages - 0.9% |
Anheuser-Busch InBev Worldwide, Inc.
7.750%, due 01/15/19 (144A)(b) | | | 1,254,000 | | | 1,373,785 |
Argentine Beverages Financial
7.375%, due 03/22/12 (144A)(b) | | | 199,200 | | | 201,192 |
Companhia de Bebidas das Americas | | | | | | |
8.750%, due 09/15/13 | | | 747,000 | | | 855,315 |
10.500%, due 12/15/11(e) | | | 54,000 | | | 62,370 |
Constellation Brands, Inc.
8.375%, due 12/15/14(e) | | | 1,434,000 | | | 1,444,755 |
| | | | | | |
| | | | | | 3,937,417 |
| | | | | | |
| Biotechnology - 0.4% |
Biogen Idec, Inc.
6.000%, due 03/01/13 | | | 1,887,000 | | | 1,932,605 |
| | | | | | |
| Building Products - 0.0% |
Ainsworth Lumber Co., Ltd.
11.000%, due 07/29/15 (144A)(b) | | | 182,598 | | | 81,256 |
| | | | | | |
| Capital Markets - 0.3% |
Janus Capital Group, Inc. | | | | | | |
6.500%, due 06/15/12(e)(g) | | | 990,000 | | | 915,068 |
6.950%, due 06/15/17(g) | | | 500,000 | | | 437,277 |
| | | | | | |
| | | | | | 1,352,345 |
| | | | | | |
| Chemicals - 1.1% |
Agrium, Inc.
6.750%, due 01/15/19 | | | 2,117,000 | | | 2,095,618 |
Basell Finance Co. B.V.
8.100%, due 03/15/27 (144A)(b) | | | 382,000 | | | 166,170 |
Cytec Industries, Inc.
8.950%, due 07/01/17 | | | 380,000 | | | 378,944 |
Georgia Gulf Corp.
9.500%, due 10/15/14 (144A)(b) | | | 1,436,000 | | | 437,980 |
See accompanying notes to financial statements
7
Met Investors Series Trust
Pioneer Strategic Income Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| |
| Chemicals - continued | | | |
Ineos Group Holdings Plc
7.875%, due 02/15/16 (144A)(b)(n) | | $ | 850,000 | | $ | 375,385 |
Kronos International, Inc.
6.500%, due 04/15/13(n) | | | 955,000 | | | 542,258 |
Lyondell Chemical Worldwide Inc.
9.800%, due 02/01/20(f) | | | 33,000 | | | 10,560 |
Nell AF SARL
8.375%, due 08/15/15 (144A)(b)(n) | | | 430,000 | | | 28,636 |
Qtel International Finance, Ltd.
6.500%, due 06/10/14 (144A)(b)(e) | | | 1,030,000 | | | 1,049,086 |
| | | | | | |
| | | | | | 5,084,637 |
| | | | | | |
| Commercial & Professional Services - 1.1% |
Aleris International, Inc.
9.000%, due 12/15/14(f)(h) | | | 419,000 | | | 6,809 |
C8 Capital SPV, Ltd.
6.640%, due 12/31/49 (144A)(b) | | | 780,000 | | | 400,320 |
Clean Harbors, Inc.
11.250%, due 07/15/12 | | | 63,000 | | | 63,079 |
GC Impsat Holdings I Plc
9.875%, due 02/15/17 (144A)(b)(e) | | | 1,231,000 | | | 1,064,815 |
Intergen N.V.
9.000%, due 06/30/17 (144A)(b) | | | 1,686,000 | | | 1,605,915 |
Juniper Generation LLC
6.790%, due 12/31/14 (144A)(b) | | | 94,614 | | | 85,929 |
Rural/Metro Corp.
9.875%, due 03/15/15 | | | 1,675,000 | | | 1,484,468 |
Sheridan Group, Inc. (The)
10.250%, due 08/15/11 | | | 221,000 | | | 133,705 |
| | | | | | |
| | | | | | 4,845,040 |
| | | | | | |
| Commercial Banks - 5.4% |
American Express Bank FSB S.A.
5.500%, due 04/16/13(e) | | | 550,000 | | | 540,207 |
ATF Bank
9.250%, due 04/12/12 (144A)(b) | | | 562,000 | | | 460,840 |
ATF Capital B.V.
9.250%, due 02/21/14 (144A)(b) | | | 625,000 | | | 443,750 |
Banco Macro S.A.
10.750%, due 06/07/12 | | | 500,000 | | | 252,500 |
BNP Paribas
1.267%, due 04/27/17(a) | | | 1,550,000 | | | 1,344,017 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| |
| Commercial Banks - continued | | | |
CoBank AB
7.875%, due 04/16/18 (144A)(b) | | $ | 385,000 | | $ | 369,332 |
Export-Import Bank of Korea (The)
8.125%, due 01/21/14(e) | | | 1,690,000 | | | 1,851,689 |
Goldman Sachs Capital II
5.793%, due 12/29/49 | | | 5,300,000 | | | 3,231,993 |
Industrial Bank of Korea
7.125%, due 04/23/14 (144A)(b)(e) | | | 720,000 | | | 743,931 |
Kazkommerts International B.V.
8.000%, due 11/03/15 (144A)(b) | | | 640,000 | | | 412,800 |
Keycorp
6.500%, due 05/14/13(e) | | | 865,000 | | | 862,543 |
Korea Development Bank
5.300%, due 01/17/13(e) | | | 510,000 | | | 504,220 |
Mellon Funding Corp.
5.500%, due 11/15/18 | | | 812,000 | | | 769,057 |
Mid-State Trust
7.540%, due 02/15/36 | | | 55,860 | | | 22,358 |
PNC Bank NA
6.000%, due 12/07/17 | | | 665,000 | | | 616,602 |
PNC Financial Services Group, Inc.
8.250%, due 05/29/49 | | | 2,749,000 | | | 2,308,390 |
Realkredit Danmark A/S
7.000%, due 04/01/32(n) | | | 8,000 | | | 1,570 |
Residential Reinsurance 2007, Ltd.
10.918%, due 06/07/10
(144A)(a)(b) | | | 375,000 | | | 358,225 |
Russian Standard Finance S.A.
7.500%, due 10/07/10 (144A)(b) | | | 565,000 | | | 477,425 |
Shingle Springs Tribal Gaming Authority
9.375%, due 06/15/15 (144A)(b) | | | 1,675,000 | | | 1,013,375 |
Sovereign Bank
8.750%, due 05/30/18 | | | 930,000 | | | 916,047 |
State Street Capital Trust III
8.250%, due 03/15/42 | | | 3,070,000 | | | 2,595,194 |
Turanalem Finance B.V.
8.500%, due 02/10/15 (144A)(b) | | | 775,000 | | | 178,250 |
USB Capital IX
6.189%, due 04/15/49 | | | 750,000 | | | 506,438 |
Wachovia Bank N.A.
6.000%, due 11/15/17 | | | 1,215,000 | | | 1,226,496 |
Wachovia Corp.
5.750%, due 06/15/17(e) | | | 1,139,000 | | | 1,125,459 |
See accompanying notes to financial statements
8
Met Investors Series Trust
Pioneer Strategic Income Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| |
| Commercial Banks - continued | | | |
Zions Bancorporation | | | | | | |
6.000%, due 09/15/15 | | $ | 577,000 | | $ | 413,046 |
5.500%, due 11/16/15 | | | 373,000 | | | 268,817 |
| | | | | | |
| | | | | | 23,814,571 |
| | | | | | |
| Communications Equipment - 0.2% |
MasTec, Inc.
7.625%, due 02/01/17 | | | 1,147,000 | | | 999,324 |
| | | | | | |
| Computers & Peripherals - 0.5% |
Seagate Technology International
10.000%, due 05/01/14 (144A)(b) | | | 564,000 | | | 595,020 |
SunGard Data Systems, Inc.
10.250%, due 08/15/15(e) | | | 1,607,000 | | | 1,492,501 |
| | | | | | |
| | | | | | 2,087,521 |
| | | | | | |
| Construction & Engineering - 0.3% |
Dycom Industries, Inc.
8.125%, due 10/15/15 | | | 1,037,000 | | | 876,265 |
Esco Corp.
4.504%, due 12/15/13 (144A)(a)(b) | | | 325,000 | | | 255,531 |
| | | | | | |
| | | | | | 1,131,796 |
| | | | | | |
| Construction Materials - 0.3% |
C10 Capital SPV, Ltd.
6.722%, due 12/01/49 (144A)(b) | | | 1,128,000 | | | 578,265 |
U.S. Concrete, Inc.
8.375%, due 04/01/14 | | | 920,000 | | | 607,200 |
| | | | | | |
| | | | | | 1,185,465 |
| | | | | | |
| Consumer Finance - 0.8% |
Capital One Bank USA N.A.
8.800%, due 07/15/19 | | | 1,510,000 | | | 1,545,209 |
Capital One Financial Corp.
7.375%, due 05/23/14 | | | 375,000 | | | 387,086 |
Ford Motor Credit Co. LLC
5.700%, due 01/15/10 | | | 987,000 | | | 952,721 |
SLM Corp.
4.000%, due 07/25/14(a) | | | 989,000 | | | 743,876 |
| | | | | | |
| | | | | | 3,628,892 |
| | | | | | |
| Containers & Packaging - 0.5% |
AEP Industries, Inc.
7.875%, due 03/15/13 | | | 452,000 | | | 410,755 |
Consol Glass, Ltd.
7.625%, due 04/15/14 (144A)(b)(n) | | | 600,000 | | | 639,312 |
Graphic Packaging International, Inc.
9.500%, due 08/15/13(e) | | | 1,157,000 | | | 1,110,720 |
| | | | | | |
| | | | | | 2,160,787 |
| | | | | | |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| |
| Distributors - 0.3% | | | |
ACE Hardware Corp.
9.125%, due 06/01/16 (144A)(b) | | $ | 400,000 | | $ | 395,000 |
NSG Holdings LLC
7.750%, due 12/15/25 (144A)(b) | | | 1,165,000 | | | 937,825 |
| | | | | | |
| | | | | | 1,332,825 |
| | | | | | |
| Diversified Financial Services - 4.8% |
American Honda Finance Corp.
6.700%, due 10/01/13 (144A)(b)(e) | | | 1,995,000 | | | 2,013,841 |
CIT Group, Inc.
7.625%, due 11/30/12 | | | 1,306,000 | | | 894,880 |
Glencore Funding LLC
6.000%, due 04/15/14 (144A)(b) | | | 2,474,000 | | | 2,045,318 |
Green Valley, Ltd.
5.045%, due 01/10/11 (144A)(a)(b)(n) | | | 250,000 | | | 337,128 |
Hughes Network Systems LLC/HNS Finance Corp.
9.500%, due 04/15/14(e) | | | 1,224,000 | | | 1,199,520 |
International Lease Finance Corp. | | | | | | |
6.375%, due 03/25/13 | | | 864,000 | | | 657,850 |
6.625%, due 11/15/13 | | | 278,000 | | | 214,168 |
JPMorgan Chase & Co., Series 1
7.900%, due 04/29/49 | | | 3,268,000 | | | 2,867,768 |
Leucadia National Corp.
7.125%, due 03/15/17(e) | | | 590,000 | | | 482,325 |
Merrill Lynch & Co., Inc.
5.450%, due 02/05/13 | | | 1,097,000 | | | 1,068,560 |
Morgan Stanley
6.625%, due 04/01/18 | | | 2,054,000 | | | 2,051,001 |
NCO Group, Inc.
5.758%, due 11/15/13(a) | | | 2,314,000 | | | 1,504,100 |
Prudential Financial, Inc. | | | | | | |
5.150%, due 01/15/13 | | | 1,300,000 | | | 1,262,578 |
6.200%, due 01/15/15 | | | 215,000 | | | 210,424 |
TNK-BP Finance S.A. | | | | | | |
7.500%, due 07/18/16 (144A)(b) | | | 1,090,000 | | | 934,675 |
6.625%, due 03/20/17 (144A)(b) | | | 375,000 | | | 298,125 |
7.875%, due 03/13/18 (144A)(b) | | | 350,000 | | | 290,500 |
Tyco International Finance S.A.
8.500%, due 01/15/19 | | | 677,000 | | | 751,892 |
VIP Finance Ireland, Ltd. for OJSC Vimpel Communications
9.125%, due 04/30/18 (144A)(b) | | | 1,720,000 | | | 1,466,300 |
See accompanying notes to financial statements
9
Met Investors Series Trust
Pioneer Strategic Income Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Diversified Financial Services -continued |
Wells Fargo Capital XV
9.750%, due 09/26/44(e) | | $ | 617,000 | | $ | 597,452 |
| | | | | | |
| | | | | | 21,148,405 |
| | | | | | |
| Diversified Telecommunication Services - 3.1% |
Anixter, Inc.
5.950%, due 03/01/15 | | | 1,372,000 | | | 1,138,760 |
COLO.COM, Inc.
13.875%, due 03/15/10 (144A)(d)(f)(i) | | | 181,449 | | | 0 |
Digicel, Ltd.
9.250%, due 09/01/12 (144A)(b) | | | 1,501,000 | | | 1,463,475 |
Embarq Corp.
7.082%, due 06/01/16 | | | 972,000 | | | 950,520 |
Frontier Communications Corp.
8.250%, due 05/01/14 | | | 782,000 | | | 742,900 |
Intelsat (Bermuda), Ltd.
11.500%, due 02/04/17 (144A)(b)(h) | | | 1,750,000 | | | 1,373,750 |
Intelsat Jackson Holdings, Ltd.
11.500%, due 06/15/16 (144A)(b) | | | 560,000 | | | 551,600 |
Intelsat Subsidiary Holding Co., Ltd.
8.500%, due 01/15/13 | | | 301,000 | | | 290,465 |
Mystic Re. II Ltd. 2007
10.668%, due 06/07/11 (144A)(a)(b) | | | 400,000 | | | 372,462 |
Mystic Re. II Ltd. 2009
12.668%, due 03/20/12 (144A)(a)(b) | | | 250,000 | | | 251,237 |
Nordic Telephone Co. Holdings
6.884%, due 05/01/16 (144A)(a)(b)(n) | | | 930,000 | | | 1,219,109 |
PAETEC Holding Corp. | | | | | | |
9.500%, due 07/15/15(e) | | | 1,632,000 | | | 1,423,920 |
8.875%, due 06/30/17 (144A)(b) | | | 500,000 | | | 486,250 |
Pegasus Communications Corp.
9.750%, due 12/01/06(f)(i) | | | 8,696 | | | 0 |
Qwest Corp.
8.875%, due 03/15/12 | | | 475,000 | | | 480,937 |
True Move Co., Ltd. | | | | | | |
10.750%, due 12/16/13 (144A)(b) | | | 1,525,000 | | | 1,174,250 |
10.375%, due 08/01/14 (144A)(b) | | | 385,000 | | | 290,675 |
Windstream Corp.
8.625%, due 08/01/16 | | | 1,560,000 | | | 1,501,500 |
| | | | | | |
| | | | | | 13,711,810 |
| | | | | | |
| Education - 0.4% | | | | | | |
Board of Trustees of The Leland Stanford Junior University (The)
4.750%, due 05/01/19 | | | 950,000 | | | 959,229 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| | |
| Education - continued | | | | | | |
President & Fellows of Harvard College
3.700%, due 04/01/13 | | $ | 807,000 | | $ | 814,194 |
| | | | | | |
| | | | | | 1,773,423 |
| | | | | | |
| | |
| Electric Utilities - 2.0% | | | | | | |
CenterPoint Energy Houston Electric LLC
7.000%, due 03/01/14 | | | 557,000 | | | 601,896 |
Duke Energy Corp.
6.300%, due 02/01/14 | | | 500,000 | | | 540,357 |
FPL Energy American Wind LLC
6.639%, due 06/20/23
(144A)(b) | | | 479,920 | | | 460,573 |
FPL Energy Wind Funding LLC
6.876%, due 06/27/17
(144A)(b) | | | 568,675 | | | 517,494 |
Israel Electric Corp., Ltd. | | | | | | |
7.250%, due 01/15/19 (144A)(b) | | | 845,000 | | | 836,079 |
9.375%, due 01/28/20 (144A)(b) | | | 410,000 | | | 460,383 |
New York State Electric & Gas Corp.
6.150%, due 12/15/17
(144A)(b) | | | 950,000 | | | 925,847 |
Panoche Energy Center LLC
6.885%, due 07/31/29
(144A)(b) | | | 900,000 | | | 835,665 |
Public Service Co. of New Mexico
7.950%, due 05/15/18 | | | 425,000 | | | 413,249 |
Rede Empresas de Energia Electrica S.A.
11.125%, due 04/02/49
(144A)(d) | | | 164,000 | | | 78,981 |
Tenaska Alabama Partners LP
7.000%, due 06/30/21
(144A)(b) | | | 731,897 | | | 633,793 |
Texas Competitive Electric Holdings Co. LLC
10.250%, due 11/01/15(e) | | | 1,797,000 | | | 1,127,618 |
West Penn Power Co.
5.950%, due 12/15/17
(144A)(b) | | | 1,197,000 | | | 1,068,921 |
Western Energy, Inc.
7.125%, due 08/01/09 | | | 110,000 | | | 110,507 |
White Pine Hydro Portfolio LLC
7.260%, due 07/20/15 (144A)(b) | | | 515,000 | | | 447,803 |
| | | | | | |
| | | | | | 9,059,166 |
| | | | | | |
See accompanying notes to financial statements
10
Met Investors Series Trust
Pioneer Strategic Income Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| | |
| Electrical Equipment - 0.7% | | | | | | |
Baldor Electric Co.
8.625%, due 02/15/17(e) | | $ | 1,984,000 | | $ | 1,845,120 |
Belden, Inc.
7.000%, due 03/15/17 | | | 1,465,000 | | | 1,303,850 |
Legrand S.A.
8.500%, due 02/15/25 | | | 20,000 | | | 17,260 |
| | | | | | |
| | | | | | 3,166,230 |
| | | | | | |
| Energy Equipment & Services - 1.5% | | | |
Complete Production Services, Inc.
8.000%, due 12/15/16 | | | 1,375,000 | | | 1,182,500 |
Oceanografia S.A. de C.V.
11.250%, due 07/15/15
(144A)(b) | | | 1,456,000 | | | 793,520 |
Plains All American Pipeline
6.125%, due 01/15/17 | | | 1,467,000 | | | 1,416,634 |
Sevan Marine ASA | | | | | | |
8.310%, due 10/24/12 (144A)(a)(b)(o) | | | 1,500,000 | | | 174,711 |
4.430%, due 05/14/13 (144A)(a)(b) | | | 600,000 | | | 468,000 |
Spectra Energy Capital LLC
6.200%, due 04/15/18 | | | 1,109,000 | | | 1,090,901 |
Weatherford International, Ltd.
9.625%, due 03/01/19(e) | | | 1,209,000 | | | 1,424,602 |
| | | | | | |
| | | | | | 6,550,868 |
| | | | | | |
| Food Products - 0.8% | | | | | | |
Arantes International, Ltd.
10.250%, due 06/19/13
(144A)(b)(f) | | | 685,000 | | | 27,400 |
Bertin, Ltd.
10.250%, due 10/05/16
(144A)(b) | | | 200,000 | | | 166,000 |
Cargill, Inc.
5.200%, due 01/22/13 (144A)(b) | | | 1,200,000 | | | 1,215,164 |
Cosan Finance, Ltd.
7.000%, due 02/01/17
(144A)(b) | | | 590,000 | | | 522,150 |
Independencia International, Ltd.
9.875%, due 05/15/15
(144A)(b)(f) | | | 530,000 | | | 66,250 |
Industrias Metalurgicas Pescarmona S.A.
11.250%, due 10/22/14
(144A)(b) | | | 897,000 | | | 578,565 |
Minerva Overseas, Ltd.
9.500%, due 02/01/17
(144A)(b) | | | 575,000 | | | 326,313 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| | |
| Food Products - continued | | | | | | |
Phibro Animal Health Corp.
10.000%, due 08/01/13
(144A)(b) | | $ | 687,000 | | $ | 607,995 |
| | | | | | |
| | | | | | 3,509,837 |
| | | | | | |
| Gas Utilities - 0.8% | | | | | | |
NGPL PipeCo LLC
6.514%, due 12/15/12
(144A)(b) | | | 1,284,000 | | | 1,346,910 |
Questar Pipeline Co.
5.830%, due 02/01/18 | | | 1,441,000 | | | 1,498,311 |
Transportadora de Gas del Sur S.A.
7.875%, due 05/14/17
(144A)(b) | | | 1,274,000 | | | 936,390 |
| | | | | | |
| | | | | | 3,781,611 |
| | | | | | |
| Health Care Equipment & Supplies - 0.4% | | | |
Biomet, Inc.
10.375%, due 10/15/17(h) | | | 1,734,000 | | | 1,686,315 |
| | | | | | |
| Health Care Providers & Services - 1.0% | | | |
DASA Finance Corp.
8.750%, due 05/29/18
(144A)(b) | | | 400,000 | | | 395,520 |
HCA, Inc. | | | | | | |
7.190%, due 11/15/15 | | | 10,000 | | | 7,731 |
8.360%, due 04/15/24 | | | 50,000 | | | 33,260 |
7.690%, due 06/15/25 | | | 50,000 | | | 30,955 |
9.125%, due 11/15/14 | | | 495,000 | | | 491,288 |
9.625%, due 11/15/16(h) | | | 1,960,000 | | | 1,945,300 |
8.500%, due 04/15/19 (144A)(b) | | | 417,000 | | | 410,745 |
UnitedHealth Group, Inc.
4.875%, due 02/15/13 | | | 1,050,000 | | | 1,062,199 |
| | | | | | |
| | | | | | 4,376,998 |
| | | | | | |
| Homebuilders - 0.4% | | | | | | |
Beazer Homes USA, Inc.
8.625%, due 05/15/11 | | | 85,000 | | | 58,225 |
Meritage Homes Corp.
6.250%, due 03/15/15 | | | 1,593,000 | | | 1,258,470 |
Urbi Desarrollos Urbanos S.A. de C.V.
8.500%, due 04/19/16 (144A)(b) | | | 545,000 | | | 470,063 |
| | | | | | |
| | | | | | 1,786,758 |
| | | | | | |
| Hotels, Restaurants & Leisure - 1.7% | | | |
Codere Finance Luxembourg S.A.
8.250%, due 06/15/15 (144A)(b)(n) | | | 1,682,000 | | | 1,485,643 |
See accompanying notes to financial statements
11
Met Investors Series Trust
Pioneer Strategic Income Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| |
| Hotels, Restaurants & Leisure - continued | | | |
FireKeepers Development Authority
13.875%, due 05/01/15
(144A)(b) | | $ | 570,000 | | $ | 528,675 |
Lottomatica SpA
8.250%, due 03/31/66 (144A)(b)(n) | | | 1,957,000 | | | 2,194,970 |
Mashantucket Pequot Tribe
8.500%, due 11/15/15 (144A)(b) | | | 1,670,000 | | | 843,350 |
Peermont Global Proprietary, Ltd.
7.750%, due 04/30/14 (144A)(b)(n) | | | 620,000 | | | 634,545 |
Scientific Games Corp.
6.250%, due 12/15/12 | | | 890,000 | | | 853,288 |
7.875%, due 06/15/16 (144A)(b) | | | 435,000 | | | 415,425 |
Scientific Games International, Inc.
9.250%, due 06/15/19 (144A)(b) | | | 480,000 | | | 482,400 |
Station Casinos, Inc.
6.625%, due 03/15/18(d) | | | 695,000 | | | 17,375 |
| | | | | | |
| | | | | | 7,455,671 |
| | | | | | |
| Household Durables - 0.3% | | | | | | |
K. Hovnanian Enterprises, Inc.
7.750%, due 05/15/13(e) | | | 30,000 | | | 13,650 |
Whirlpool Corp.
5.500%, due 03/01/13(e) | | | 1,422,000 | | | 1,351,443 |
| | | | | | |
| | | | | | 1,365,093 |
| | | | | | |
| Household Products - 0.6% | | | | | | |
Central Garden and Pet Co.
9.125%, due 02/01/13 | | | 867,000 | | | 833,404 |
Yankee Acquisition Corp. | | | | | | |
8.500%, due 02/15/15 | | | 502,000 | | | 425,445 |
9.750%, due 02/15/17(e) | | | 1,684,000 | | | 1,321,940 |
| | | | | | |
| | | | | | 2,580,789 |
| | | | | | |
| Independent Power Producers & Energy Traders - 0.2% |
Ormat Funding Corp.
8.250%, due 12/30/20 | | | 1,190,647 | | | 952,518 |
| | | | | | |
| Industrial - Diversified - 0.0% | | | | | | |
LyondellBasell Industries AF SCA
8.375%, due 08/15/15 (144A)(b)(f) | | | 145,000 | | | 6,163 |
| | | | | | |
| Industrial Conglomerates - 0.2% | | | | | | |
Tyco Electronics Group S.A.
6.550%, due 10/01/17 | | | 1,135,000 | | | 1,032,082 |
| | | | | | |
| Insurance - 2.7% | | | | | | |
American General Finance Corp.
6.900%, due 12/15/17 | | | 1,522,000 | | | 825,221 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| | |
| Insurance - continued | | | | | | |
Atlas Reinsurance Plc
11.358%, due 01/10/11
(144A)(a)(b)(n) | | $ | 250,000 | | $ | 331,222 |
Blue Fin, Ltd.
5.557%, due 04/10/12 (144A)(a)(b) | | | 250,000 | | | 215,813 |
Caelus Re, Ltd.
6.918%, due 06/07/11 (144A)(a)(b) | | | 250,000 | | | 228,317 |
Conseco, Inc.
9.500%, due 10/15/06 (144A)(d)(i) | | | 40,000 | | | 0 |
DB Master Finance LLC
8.285%, due 06/20/31 (144A)(b) | | | 1,751,000 | | | 1,459,770 |
GlobeCat, Ltd.
9.845%, due 01/02/13 (144A)(a)(b) | | | 550,000 | | | 434,830 |
Hanover Insurance Group, Inc.
7.625%, due 10/15/25 | | | 2,016,000 | | | 1,697,075 |
HUB International Holdings, Inc.
10.250%, due 06/15/15 (144A)(b) | | | 167,000 | | | 123,789 |
Kingsway America, Inc.
7.500%, due 02/01/14 | | | 1,221,000 | | | 561,660 |
Liberty Mutual Group
7.300%, due 06/15/14 (144A)(b) | | | 394,000 | | | 330,328 |
Liberty Mutual Group, Inc. | | | | | | |
7.000%, due 03/15/37 (144A)(b) | | | 2,032,000 | | | 1,167,668 |
10.750%, due 06/15/58 (144A)(b) | | | 818,000 | | | 589,946 |
Lincoln National Corp.
8.750%, due 07/01/19 | | | 730,000 | | | 737,399 |
MBIA Insurance Corp.
14.000%, due 01/15/33 (144A)(b) | | | 1,272,000 | | | 483,659 |
Muteki, Ltd.
5.283%, due 05/24/11 (144A)(a)(b) | | | 460,000 | | | 438,081 |
Platinum Underwriters Finance, Inc.
7.500%, due 06/01/17 | | | 2,214,000 | | | 1,891,788 |
Residential Reinsurance 2008, Ltd.
7.418%, due 06/06/11 (144A)(a)(b) | | | 300,000 | | | 277,335 |
USI Holdings Corp.
4.758%, due 11/15/14 (144A)(a)(b) | | | 467,000 | | | 305,885 |
See accompanying notes to financial statements
12
Met Investors Series Trust
Pioneer Strategic Income Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| | |
| Insurance - continued | | | | | | |
Willow Re, Ltd.
8.369%, due 06/16/10 (144A)(b)(f) | | $ | 250,000 | | $ | 131,250 |
| | | | | | |
| | | | | | 12,231,036 |
| | | | | | |
| Internet & Catalog Retail - 0.7% | | | | | | |
Expedia, Inc.
8.500%, due 07/01/16 (144A)(b) | | | 1,165,000 | | | 1,124,225 |
Ticketmaster
10.750%, due 07/28/16 (144A)(b) | | | 2,192,000 | | | 1,961,840 |
| | | | | | |
| | | | | | 3,086,065 |
| | | | | | |
| Internet Software & Services - 0.3% | | | |
Terremark Worldwide Inc.
12.000%, due 06/15/17 (144A)(b) | | | 1,380,000 | | | 1,331,700 |
| | | | | | |
| Machinery - 1.2% | | | | | | |
American Railcar Industries, Inc.
7.500%, due 03/01/14 | | | 1,679,000 | | | 1,473,322 |
Commercial Vehicle Group, Inc.
8.000%, due 07/01/13 | | | 557,000 | | | 320,275 |
Cummins, Inc.
6.750%, due 02/15/27 | | | 393,000 | | | 308,770 |
Gardner Denver, Inc.
8.000%, due 05/01/13 | | | 500,000 | | | 477,500 |
Greenbrier Co., Inc. (The)
8.375%, due 05/15/15 | | | 1,801,000 | | | 1,017,565 |
Mueller Water Products, Inc.
7.375%, due 06/01/17 | | | 1,471,000 | | | 1,092,218 |
Titan International, Inc.
8.000%, due 01/15/12 | | | 753,000 | | | 685,230 |
| | | | | | |
| | | | | | 5,374,880 |
| | | | | | |
| Manufacturing - 0.3% | | | | | | |
Ingersoll-Rand Global Holding Co., Ltd.
9.500%, due 04/15/14 | | | 910,000 | | | 997,491 |
Park - Ohio Industries, Inc.
8.375%, due 11/15/14 | | | 662,000 | | | 327,690 |
| | | | | | |
| | | | | | 1,325,181 |
| | | | | | |
| Marine - 0.2% | | | | | | |
CMA CGM S.A.
7.250%, due 02/01/13 (144A)(b) | | | 395,000 | | | 174,021 |
Kiowa Power Partners LLC
5.737%, due 03/30/21 (144A)(b) | | | 900,000 | | | 718,286 |
| | | | | | |
| | | | | | 892,307 |
| | | | | | |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| | |
| Media - 0.9% | | | | | | |
CanWest Media, Inc.
8.000%, due 09/15/12 | | $ | 879 | | $ | 264 |
Grupo Televisa S.A.
6.000%, due 05/15/18 | | | 1,080,000 | | | 1,023,637 |
Kabel Deutschland GmbH
10.625%, due 07/01/14(e) | | | 1,167,000 | | | 1,209,304 |
Lamar Media Corp.
7.250%, due 01/01/13(e) | | | 80,000 | | | 76,500 |
Time Warner Cable, Inc. | | | | | | |
8.750%, due 02/14/19 | | | 198,000 | | | 231,046 |
8.250%, due 04/01/19 | | | 313,000 | | | 355,744 |
Univision Communications, Inc.
9.750%, due 03/15/15 (144A)(b)(h) | | | 1,857,000 | | | 1,090,987 |
| | | | | | |
| | | | | | 3,987,482 |
| | | | | | |
| Metals & Mining - 3.6% | | | | | | |
Algoma Acquisition Corp.
9.875%, due 06/15/15 (144A)(b) | | | 1,415,000 | | | 799,475 |
Allegheny Technologies, Inc.
9.375%, due 06/01/19(e) | | | 1,295,000 | | | 1,374,549 |
ALROSA Finance S.A.
8.875%, due 11/17/14 (144A)(b) | | | 770,000 | | | 662,200 |
Anglo American Capital Plc
9.375%, due 04/08/14 (144A)(b) | | | 845,000 | | | 918,764 |
ArcelorMittal
6.125%, due 06/01/18 | | | 1,500,000 | | | 1,314,659 |
Asia Aluminum Holdings, Ltd.
8.000%, due 12/23/11 (144A)(b)(f) | | | 992,000 | | | 145,080 |
CII Carbon LLC
11.125%, due 11/15/15 (144A)(b) | | | 1,115,000 | | | 809,769 |
Commercial Metals Co.
7.350%, due 08/15/18 | | | 505,000 | | | 460,433 |
Evraz Group S.A. | | | | | | |
8.875%, due 04/24/13 (144A)(b) | | | 775,000 | | | 639,375 |
9.500%, due 04/24/18 (144A)(b) | | | 500,000 | | | 388,750 |
FMG Finance Property, Ltd.
10.625%, due 09/01/16 (144A)(b) | | | 255,000 | | | 246,075 |
Freeport-McMoRan Copper & Gold, Inc. | | | | | | |
8.375%, due 04/01/17 | | | 270,000 | | | 272,408 |
4.995%, due 04/01/15(a) | | | 1,304,000 | | | 1,222,239 |
See accompanying notes to financial statements
13
Met Investors Series Trust
Pioneer Strategic Income Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| | |
| Metals & Mining - continued | | | | | | |
Noranda Aluminium Acquisition Corp.
5.413%, due 05/15/15(a)(h) | | $ | 428,404 | | $ | 238,300 |
Novelis, Inc.
7.250%, due 02/15/15 | | | 494,000 | | | 377,910 |
POSCO
8.750%, due 03/26/14 (144A)(b) | | | 1,400,000 | | | 1,549,240 |
Rio Tinto Finance USA, Ltd.
8.950%, due 05/01/14 | | | 1,189,000 | | | 1,321,271 |
Teck Resources, Ltd.
10.250%, due 05/15/16 (144A)(b) | | | 1,330,000 | | | 1,409,800 |
Vedanta Resources Plc
9.500%, due 07/18/18 (144A)(b) | | | 2,365,000 | | | 1,974,775 |
| | | | | | |
| | | | | | 16,125,072 |
| | | | | | |
| Office Electronics - 0.1% | | | | | | |
Xerox Corp.
7.125%, due 06/15/10 | | | 245,000 | | | 253,020 |
| | | | | | |
| Oil, Gas & Consumable Fuels - 4.7% | | | |
Buckeye Partners L.P.
6.050%, due 01/15/18 | | | 505,000 | | | 459,621 |
Canadian Natural Resources, Ltd.
5.900%, due 02/01/18 | | | 717,000 | | | 733,602 |
Chesapeake Energy Corp.
9.500%, due 02/15/15(e) | | | 275,000 | | | 278,437 |
Copano Energy LLC
8.125%, due 03/01/16(e) | | | 1,020,000 | | | 963,900 |
DCP Midstream LLC
9.750%, due 03/15/19 (144A)(b) | | | 1,267,000 | | | 1,416,843 |
DDI Holdings A.S.
9.300%, due 01/19/12 - 04/26/12
(144A)(b) | | | 1,441,711 | | | 1,034,132 |
Denbury Resources, Inc.
9.750%, due 03/01/16(e) | | | 213,000 | | | 219,923 |
Enterprise Products Operating LLP
8.375%, due 08/01/66 | | | 1,059,000 | | | 853,552 |
Gaz Capital S.A.
8.146%, due 04/11/18 (144A)(b) | | | 190,000 | | | 173,850 |
Harvest Operations Corp.
7.875%, due 10/15/11 | | | 604,000 | | | 510,380 |
Hilcorp Energy I LP/Hilcorp Finance Co.
7.750%, due 11/01/15 (144A)(b) | | | 770,000 | | | 654,500 |
Kinder Morgan Energy Partners LP
5.950%, due 02/15/18 | | | 1,559,000 | | | 1,528,609 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| |
| Oil, Gas & Consumable Fuels - continued | | | |
MarkWest Energy Partners LP/MarkWest Energy Finance Corp.
8.750%, due 04/15/18 | | $ | 750,000 | | $ | 652,500 |
Massey Energy Co.
6.875%, due 12/15/13(e) | | | 2,414,000 | | | 2,220,880 |
Nakilat, Inc. | | | | | | |
6.067%, due 12/31/33 (144A)(b) | | | 520,000 | | | 413,302 |
6.267%, due 12/31/33 (144A)(b) | | | 1,370,000 | | | 1,083,060 |
Parallel Petroleum Corp.
10.250%, due 08/01/14 | | | 579,000 | | | 419,775 |
Petrohawk Energy Corp. | | | | | | |
9.125%, due 07/15/13 | | | 589,000 | | | 589,000 |
10.500%, due 08/01/14 (144A)(b) | | | 435,000 | | | 446,962 |
Quicksilver Resources, Inc.
7.125%, due 04/01/16(e) | | | 1,017,000 | | | 798,345 |
SandRidge Energy, Inc. | | | | | | |
4.222%, due 04/01/14(a) | | | 700,000 | | | 550,568 |
8.625%, due 04/01/15(h) | | | 1,444,000 | | | 1,310,430 |
8.000%, due 06/01/18 (144A)(b) | | | 602,000 | | | 517,720 |
Seven Seas Petroleum, Inc.
12.500%, due 05/15/05(f)(i) | | | 60,000 | | | 0 |
Southern Union Co.
7.200%, due 11/01/66 | | | 1,287,000 | | | 881,595 |
Stone Energy Corp.
8.250%, due 12/15/11(e) | | | 80,000 | | | 66,000 |
TransCanada PipeLines, Ltd.
7.125%, due 01/15/19 | | | 557,000 | | | 629,758 |
Valero Energy Corp.
9.375%, due 03/15/19(e) | | | 1,230,000 | | | 1,403,284 |
XTO Energy, Inc.
6.250%, due 04/15/13 | | | 30,000 | | | 31,816 |
| | | | | | |
| | | | | | 20,842,344 |
| | | | | | |
| Paper & Forest Products - 0.9% |
Ceva Group Plc | | | | | | |
3.100%, due 11/04/13 | | | 129,782 | | | 92,794 |
10.000%, due 09/01/14 (144A)(b) | | | 775,000 | | | 530,875 |
8.500%, due 12/01/14 (144A)(b)(n) | | | 930,000 | | | 547,621 |
Graham Packaging Co., Inc.
8.500%, due 10/15/12(e) | | | 2,078,000 | | | 2,015,660 |
Louisiana-Pacific Corp.
8.875%, due 08/15/10 | | | 10,000 | | | 9,900 |
See accompanying notes to financial statements
14
Met Investors Series Trust
Pioneer Strategic Income Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Paper & Forest Products - continued |
Sino-Forest Corp.
9.125%, due 08/17/11
(144A)(b) | | $ | 750,000 | | $ | 753,750 |
| | | | | | |
| | | | | | 3,950,600 |
| | | | | | |
| Pharmaceuticals - 0.5% |
Angiotech Pharmaceuticals, Inc.
7.750%, due 04/01/14 | | | 345,000 | | | 208,725 |
Talecris Biotherapeutics Holdings Corp.
4.233%, due 12/06/13(a) | | | 1,590,600 | | | 1,452,751 |
Warner Chilcott Corp.
8.750%, due 02/01/15 | | | 543,000 | | | 543,000 |
| | | | | | |
| | | | | | 2,204,476 |
| | | | | | |
| Real Estate Investment Trusts (REITs) - 0.6% |
Health Care REIT, Inc.
6.200%, due 06/01/16 | | | 535,000 | | | 464,177 |
Trustreet Properties, Inc.
7.500%, due 04/01/15 | | | 1,622,000 | | | 1,667,517 |
Ventas Realty LP/Ventas Capital Corp.
7.125%, due 06/01/15 | | | 390,000 | | | 378,300 |
| | | | | | |
| | | | | | 2,509,994 |
| | | | | | |
| Real Estate Management & Development - 0.7% |
Alto Palermo S.A.
11.000%, due 06/11/12
(144A)(b) | | | 161,518 | | | 78,336 |
Forest City Enterprises, Inc.
7.625%, due 06/01/15 | | | 1,811,000 | | | 1,149,985 |
WEA Finance LLC | | | | | | |
7.500%, due 06/02/14 (144A)(b) | | | 315,000 | | | 316,388 |
7.125%, due 04/15/18 (144A)(b) | | | 1,651,000 | | | 1,534,770 |
| | | | | | |
| | | | | | 3,079,479 |
| | | | | | |
| Road & Rail - 0.8% |
Burlington Northern Santa Fe Corp.
5.750%, due 03/15/18 | | | 744,000 | | | 762,586 |
Kansas City Southern de Mexico S.A. de C.V. | | | | | | |
7.625%, due 12/01/13 | | | 605,000 | | | 523,325 |
7.375%, due 06/01/14 | | | 1,000,000 | | | 845,000 |
Kansas City Southern Railway
8.000%, due 06/01/15 | | | 1,175,000 | | | 1,098,625 |
Union Pacific Corp.
7.875%, due 01/15/19 | | | 368,000 | | | 421,967 |
| | | | | | |
| | | | | | 3,651,503 |
| | | | | | |
| Semiconductors & Semiconductor Equipment - 0.0% |
Kla-Tencor Corp.
6.900%, due 05/01/18 | | | 154,000 | | | 138,677 |
| | | | | | |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Software - 0.3% |
First Data Corp.
9.875%, due 09/24/15(e) | | $ | 2,013,000 | | $ | 1,439,295 |
| | | | | | |
| Specialty Retail - 0.6% |
Brown Shoe Co., Inc.
8.750%, due 05/01/12 | | | 649,000 | | | 593,835 |
Edcon Proprietary, Ltd.
4.527%, due 06/15/14
(144A)(a)(b)(n) | | | 760,000 | | | 623,329 |
Inergy LP/Inergy Finance Corp.
8.250%, due 03/01/16 | | | 419,000 | | | 401,193 |
Sally Holdings LLC/ Sally Capital, Inc. | | | | | | |
9.250%, due 11/15/14 | | | 405,000 | | | 405,000 |
10.500%, due 11/15/16(e) | | | 500,000 | | | 497,500 |
| | | | | | |
| | | | | | 2,520,857 |
| | | | | | |
| Textiles, Apparel & Luxury Goods - 0.0% |
INVISTA, Inc.
9.250%, due 05/01/12 (144A)(b) | | | 145,000 | | | 137,388 |
| | | | | | |
| Tobacco - 0.7% |
Alliance One International, Inc. | | | | | | |
8.500%, due 05/15/12 | | | 375,000 | | | 372,188 |
11.000%, due 05/15/12 | | | 642,000 | | | 674,100 |
10.000%, due 07/15/16 (144A)(b) | | | 2,215,000 | | | 2,109,787 |
| | | | | | |
| | | | | | 3,156,075 |
| | | | | | |
| Trading Companies & Distributors - 0.4% |
GATX Corp.
6.000%, due 02/15/18 | | | 1,896,000 | | | 1,616,465 |
| | | | | | |
| Transportation - 0.1% |
Stena A.B.
6.125%, due 02/01/17 (144A)(b)(n) | | | 580,000 | | | 601,738 |
| | | | | | |
| Utilities - 0.5% |
Coso Geothermal Power Holdings
7.000%, due 07/15/26 (144A)(b) | | | 1,955,267 | | | 1,678,831 |
PNM Resources, Inc.
9.250%, due 05/15/15 | | | 527,000 | | | 490,769 |
| | | | | | |
| | | | | | 2,169,600 |
| | | | | | |
| Wireless Telecommunication Services - 0.5% |
MetroPCS Wireless, Inc.
9.250%, due 11/01/14 (144A)(b) | | | 815,000 | | | 810,925 |
Telesat Canada/Telesat LLC
12.500%, due 11/01/17 (144A)(b) | | | 1,220,000 | | | 1,207,800 |
| | | | | | |
| | | | | | 2,018,725 |
| | | | | | |
Total Domestic Bonds & Debt Securities
(Cost $260,634,656) | | | | | | 240,912,968 |
| | | | | | |
See accompanying notes to financial statements
15
Met Investors Series Trust
Pioneer Strategic Income Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| U. S. Government & Agency Obligations - 19.6% |
Federal Home Loan Mortgage Corp. | | | | | | |
7.331%, due 01/15/17(a)(c) | | $ | 98,229 | | $ | 5,483 |
4.500%, due 04/01/20-04/01/22 | | | 5,619,522 | | | 5,756,190 |
0.000%, due 06/15/30(j) | | | 21,367 | | | 18,267 |
6.000%, due 12/01/31(c) | | | 195,516 | | | 35,166 |
5.500%, due 03/15/32(c) | | | 172,909 | | | 15,626 |
7.681%, due 03/15/32(a)(c) | | | 110,812 | | | 12,032 |
5.000%, due 12/01/21-04/01/39 | | | 5,372,004 | | | 5,495,105 |
6.000%, due 06/01/17-06/01/35 | | | 396,606 | | | 415,906 |
5.000%, due 08/15/35 | | | 648,350 | | | 657,762 |
5.500%, due 10/01/16 | | | 16,902 | | | 17,818 |
STRIPS 0.000%, 06/01/31(j) | | | 22,460 | | | 19,309 |
Federal National Mortgage Assoc. | | | | | | |
5.000%, due 03/25/17(c) | | | 217,295 | | | 10,492 |
7.386%, due 03/25/18(a)(c) | | | 244,478 | | | 25,920 |
4.500%, due 11/01/18-07/01/35 | | | 3,242,726 | | | 3,303,622 |
5.500%, due 03/01/18-05/01/34 | | | 829,396 | | | 865,541 |
5.000%, due 02/01/20-06/01/35 | | | 9,121,497 | | | 9,463,425 |
0.000%, due 09/17/29(j) | | | 11,170 | | | 9,899 |
7.500%, due 01/01/30-01/25/42 | | | 320,512 | | | 349,060 |
7.000%, due 09/01/29-12/25/41 | | | 3,867 | | | 4,155 |
6.000%, due 01/01/32- 04/25/33(c) | | | 233,148 | | | 39,515 |
6.786%, due 01/25/32(a)(c) | | | 341,798 | | | 22,562 |
7.786%, due 03/25/32(a)(c) | | | 106,535 | | | 11,885 |
7.686%, due 09/25/32-10/25/32(a)(c) | | | 94,905 | | | 10,254 |
6.686%, due 02/25/33(a)(c) | | | 614,230 | | | 46,306 |
4.000%, due 07/01/18 | | | 926,345 | | | 950,806 |
6.500%, due 07/01/31-10/01/37 | | | 1,480,578 | | | 1,579,206 |
6.000%, due 12/01/31-07/01/38 | | | 7,057,733 | | | 7,386,276 |
STRIPS
5.500%, 01/01/33(c) | | | 320,558 | | | 50,113 |
Government National Mortgage Assoc. | | | | | | |
5.000%, due 10/15/18-04/15/35 | | | 357,744 | | | 370,091 |
5.500%, due 08/15/19-11/15/35 | | | 4,748,964 | | | 4,940,767 |
6.000%, due 05/15/17-08/15/34 | | | 504,023 | | | 528,903 |
6.500%, due 03/15/29-11/15/32 | | | 38,516 | | | 41,483 |
4.500%, due 09/15/33-10/15/35 | | | 4,911,506 | | | 4,933,471 |
7.000%, due 05/15/23-03/15/31 | | | 6,491 | | | 7,062 |
U.S. Treasury Bond | | | | | | |
6.250%, due 08/15/23(e) | | | 87,000 | | | 106,004 |
8.750%, due 05/15/17(e) | | | 144,000 | | | 197,235 |
5.000%, due 05/15/37(e) | | | 289,000 | | | 321,693 |
4.500%, due 05/15/38(e) | | | 4,704,000 | | | 4,857,619 |
U.S. Treasury Inflation Index Bond
2.375%, due 01/15/17(e) | | | 3,172 | | | 3,314 |
U.S. Treasury Inflation Index Note
2.500%, due 07/15/16(e) | | | 3,695,335 | | | 3,883,568 |
U.S. Treasury Note | | | | | | |
4.250%, due 08/15/13 | | | 1,100,000 | | | 1,189,634 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| U. S. Government & Agency Obligations - continued |
3.250%, due 05/31/16(e) | | $ | 8,650,000 | | $ | 8,690,551 |
3.875%, due 05/15/18 | | | 100,000 | | | 103,070 |
2.750%, due 02/15/19(e) | | | 2,750,000 | | | 2,576,401 |
3.125%, due 05/15/19(e) | | | 10,820,000 | | | 10,468,382 |
4.375%, due 02/15/38(e) | | | 1,727,000 | | | 1,744,541 |
U.S. Treasury STRIPS | | | | | | |
0.000%, due 05/15/13(k) | | | 1,000,000 | | | 917,957 |
4.510%, due 11/15/12(k) | | | 5,000,000 | | | 4,702,165 |
| | | | | | |
Total U.S. Government & Agency Obligations
(Cost $85,059,170) | | | | | | 87,161,613 |
| | | | | | |
| |
| Foreign Bonds & Debt Securities - 5.4% | | | |
| Australia - 0.0% | | | | | | |
Queensland Treasury Corp.
6.000%, due 08/14/13 | | | 138,000 | | | 112,990 |
| | | | | | |
| Brazil - 0.2% | | | | | | |
Banco Nacional de Desenvolvimento Economico e Social
8.000%, due 04/28/10(n) | | | 910,000,000 | | | 680,982 |
| | | | | | |
| Canada - 1.0% | | | | | | |
Canadian Government Bond
4.250%, due 06/01/18(p) | | | 1,485,000 | | | 1,380,145 |
Government of Canada
5.500%, due 06/01/10(p) | | | 330,000 | | | 296,759 |
Province of Ontario
5.500%, due 04/23/13(q) | | | 3,356,000 | | | 2,632,709 |
| | | | | | |
| | | | | | 4,309,613 |
| | | | | | |
| Colombia - 0.1% | | | | | | |
Republic of Colombia
9.750%, due 04/09/11 | | | 568,366 | | | 610,993 |
| | | | | | |
| France - 1.3% | | | | | | |
France Government Bond OAT
3.750%, due 04/25/17(n) | | | 3,937,000 | | | 5,647,580 |
| | | | | | |
| Japan - 0.7% | | | | | | |
Japanese Government CPI Linked Bond
1.100%, due 12/10/16(r) | | | 354,560,500 | | | 3,247,451 |
| | | | | | |
| Mexico - 0.0% | | | | | | |
United Mexican States
7.500%, due 01/14/12 | | | 84,000 | | | 93,156 |
| | | | | | |
| Netherlands - 0.0% | | | | | | |
Kingdom of the Netherlands
5.000%, due 07/15/12(n) | | | 130,000 | | | 197,811 |
| | | | | | |
| Norway - 0.7% | | | | | | |
Government of Norway | | | | | | |
6.000%, due 05/16/11(o) | | | 10,343,000 | | | 1,724,926 |
5.000%, due 05/15/15(o) | | | 7,150,000 | | | 1,191,350 |
| | | | | | |
| | | | | | 2,916,276 |
| | | | | | |
See accompanying notes to financial statements
16
Met Investors Series Trust
Pioneer Strategic Income Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| | |
| Peru - 0.1% | | | | | | |
Republic of Peru
7.125%, due 03/30/19 | | $ | 433,000 | | $ | 465,475 |
| | | | | | |
| Russia - 0.3% | | | | | | |
Russian Federation | | | | | | |
8.250%, due 03/31/10 (144A)(b) | | | 13,336 | | | 13,756 |
7.500%, due 03/31/30 (144A)(b) | | | 1,149,600 | | | 1,136,667 |
| | | | | | |
| | | | | | 1,150,423 |
| | | | | | |
| Sweden - 1.0% | | | | | | |
Kingdom of Sweden | | | | | | |
5.250%, due 03/15/11(s) | | | 16,545,000 | | | 2,287,472 |
5.500%, due 10/08/12(s) | | | 14,715,000 | | | 2,107,276 |
| | | | | | |
| | | | | | 4,394,748 |
| | | | | | |
Total Foreign Bonds & Debt Securities
(Cost $22,223,936) | | | | | | 23,827,498 |
| | | | | | |
| | |
| Convertible Bonds - 5.0% | | | | | | |
| Capital Markets - 0.2% | | | | | | |
Affiliated Managers Group, Inc.
3.950%, due 08/15/38 (144A)(b) | | | 1,029,000 | | | 884,940 |
| | | | | | |
| Commercial Banks - 0.1% | | | | | | |
National City Corp.
4.000%, due 02/01/11 | | | 549,000 | | | 542,138 |
| | | | | | |
| Diversified Telecommunication Services - 0.2% | | | |
Qwest Communications International, Inc.
3.500%, due 11/15/25 | | | 808,000 | | | 799,920 |
| | | | | | |
| Electrical Equipment - 0.4% | | | | | | |
General Cable Corp.
1.000%, due 10/15/12 | | | 2,097,000 | | | 1,656,630 |
| | | | | | |
| Electronic Equipment, Instruments & Components - 0.5% |
Anixter International, Inc.
1.000%, due 02/15/13 | | | 1,410,000 | | | 1,168,537 |
L-1 Identity Solutions, Inc.
3.750%, due 05/15/27 | | | 1,619,000 | | | 1,287,105 |
| | | | | | |
| | | | | | 2,455,642 |
| | | | | | |
| Energy Equipment & Services - 0.6% | | | |
Transocean, Ltd. | | | | | | |
1.625%, due 12/15/37 | | | 607,000 | | | 576,650 |
Series B
1.500%, due 12/15/37 | | | 2,276,000 | | | 2,096,765 |
| | | | | | |
| | | | | | 2,673,415 |
| | | | | | |
| Health Care Equipment & Supplies - 0.2% | | | |
Hologic, Inc.
2.000%/0.000% , due 12/15/37(l) | | | 1,000,000 | | | 715,000 |
| | | | | | |
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
| |
| Health Care Providers & Services - 0.4% | | | |
LifePoint Hospitals, Inc.
3.500%, due 05/15/14 | | $ | 302,000 | | $ | 243,865 |
Omnicare, Inc.
3.250%, due 12/15/35 | | | 1,906,000 | | | 1,329,435 |
| | | | | | |
| | | | | | 1,573,300 |
| | | | | | |
| Hotels, Restaurants & Leisure - 0.2% | | | |
Scientific Games Corp.
10.500%, due 12/01/24(g) | | | 1,027,000 | | | 1,000,041 |
| | | | | | |
| Internet Software & Services - 0.0% | | | |
Cybernet Internet Services International, Inc.
13.000%, due 08/15/09 (144A)(d)(f)(i) | | | 440,000 | | | 0 |
| | | | | | |
| Machinery - 0.0% | | | | | | |
Greenbrier Co., Inc. (The)
2.375%, due 05/15/26 | | | 132,000 | | | 72,105 |
| | | | | | |
| Marine - 0.3% | | | | | | |
Horizon Lines, Inc.
4.250%, due 08/15/12 | | | 1,949,000 | | | 1,376,481 |
| | | | | | |
| Oil, Gas & Consumable Fuels - 0.6% | | | |
Chesapeake Energy Corp.
2.500%, due 05/15/37 | | | 990,000 | | | 705,375 |
Massey Energy Co.
3.250%, due 08/01/15 | | | 3,264,000 | | | 2,170,560 |
| | | | | | |
| | | | | | 2,875,935 |
| | | | | | |
| Paper & Forest Products - 0.1% |
Sino-Forest Corp.
5.000%, due 08/01/13
(144A)(b) | | | 500,000 | | | 415,000 |
| | | | | | |
| Pharmaceuticals - 0.2% |
Mylan, Inc.
1.250%, due 03/15/12(e) | | | 914,000 | | | 796,323 |
| | | | | | |
| Telecommunication Services-Diversified - 0.2% |
GCI, Inc.
7.250%, due 02/15/14 | | | 1,090,000 | | | 1,000,075 |
| | | | | | |
| Trading Companies & Distributors - 0.3% |
WESCO International, Inc.
1.750%, due 11/15/26 | | | 1,389,000 | | | 1,158,079 |
| | | | | | |
| Wireless Telecommunication Services - 0.5% |
NII Holdings, Inc.
3.125%, due 06/15/12 | | | 3,083,000 | | | 2,385,471 |
| | | | | | |
Total Convertible Bonds
(Cost $20,535,423) | | | | | | 22,380,495 |
| | | | | | |
| Loan Participation - 4.1% |
Accuride Corp.
8.000%, due 01/31/12(a) | | | 750,000 | | | 600,938 |
Aeroflex
3.875%, due 08/15/14(a) | | | 868,129 | | | 698,844 |
See accompanying notes to financial statements
17
Met Investors Series Trust
Pioneer Strategic Income Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Par
Amount | | Value |
| | | | | | |
|
| Loan Participation - continued |
Algoma Steel, Inc.
2.810%, due 06/20/14(a) | | $ | 953,977 | | $ | 775,106 |
Alliant Holdings I Inc.
3.600%, due 08/21/14(a) | | | 245,625 | | | 218,606 |
AmWINS Group, Inc.
3.160%, due 06/11/13(a) | | | 637,739 | | | 403,370 |
Calpine Corp.
3.475%, due 03/31/14(a) | | | 1,254,850 | | | 1,115,122 |
Centennial Cellular Operating
2.598%, due 02/09/11(a) | | | 321,140 | | | 319,987 |
Ceva Group Plc
3.310%, due 11/04/13(a) | | | 388,358 | | | 277,676 |
Charter Communications
9.250%, due 03/06/14(a) | | | 276,500 | | | 272,629 |
Flextronics International, Ltd. | | | | | | |
6.500%, due 05/15/13 | | | 385,000 | | | 372,488 |
2.759%, due 10/01/14(a) | | | 296,066 | | | 247,955 |
3.457%, due 10/01/14(a) | | | 1,030,309 | | | 862,884 |
Freescale Semiconductor, Inc.
12.500%, due 12/15/14 | | | 335,454 | | | 292,684 |
Fresenius Medical Care AG & Co.
6.750%, due 08/22/14(a) | | | 129,004 | | | 129,907 |
Fresenius Se
6.750%, due 08/20/14(a) | | | 69,496 | | | 69,982 |
Goodyear Tire & Rubber Co.
2.070%, due 04/30/14 | | | 750,000 | | | 637,969 |
H3C Holdings, Ltd.
4.794%, due 09/28/12(a) | | | 683,300 | | | 570,556 |
Hudson Products Holdings
8.000%, due 08/24/15 | | | 769,187 | | | 699,961 |
Ineos U.S. Finance | | | | | | |
7.501%, due 12/16/13(a) | | | 117,685 | | | 87,146 |
8.001%, due 12/14/14(a) | | | 117,672 | | | 87,254 |
Intelsat Jackson Holdings, Ltd.
3.304%, due 02/01/14(a) | | | 450,000 | | | 377,438 |
Jarden Corp.
3.098%, due 01/24/12(a) | | | 405,834 | | | 393,095 |
Kansas City Railway
2.850%, due 04/28/13(a) | | | 161,019 | | | 146,527 |
Knology, Inc.
2.570%, due 04/30/12(a) | | | 811,157 | | | 746,264 |
L 1 Identity Solutions, Inc.
6.750%, due 07/29/13(a) | | | 367,675 | | | 366,296 |
Life Techonolgies Corp.
5.250%, due 06/11/16(a) | | | 436,700 | | | 439,425 |
New World Gaming Partners | | | | | | |
3.708%, due 06/28/14(a) | | | 240,762 | | | 151,198 |
3.095%, due 07/16/14(a) | | | 1,188,724 | | | 746,518 |
Niagra
5.680%, due 06/29/14(a) | | | 439,495 | | | 241,722 |
| | | | | | |
Security
Description | | Shares/Par
Amount | | Value |
| | | | | | |
|
| Loan Participation - continued |
NRG Energy, Inc. | | | | | | |
0.498%, due 02/01/13(a) | | $ | 105,747 | | $ | 99,798 |
1.945%, due 02/01/13(a) | | | 197,139 | | | 186,050 |
Scitor Corp.
4.560%, due 09/28/14(a) | | | 298,876 | | | 261,517 |
Stratos Global Corp.
3.098%, due 02/13/12(a) | | | 1,174,242 | | | 1,136,080 |
Sun Healthcare Bank | | | | | | |
1.299%, due 04/12/14(a) | | | 120,690 | | | 108,017 |
3.793%, due 04/12/14(a) | | | 576,182 | | | 515,683 |
SunGuard Data Systems, Inc.
6.750%, due 02/28/14(a) | | | 297,750 | | | 297,537 |
Synagro Technologies, Inc.
2.350%, due 04/02/14(a) | | | 246,231 | | | 199,447 |
Telesat Canada
3.310%, due 10/23/14(a) | | | 1,646,660 | | | 1,538,260 |
URS Corp.
2.998%, due 05/01/13(a) | | | 278,766 | | | 277,372 |
USI Holdings Corp.
3.350%, due 04/30/14(a) | | | 343,000 | | | 257,823 |
Wrigley Jr. Co.
6.500%, due 07/25/14(a) | | | 780,000 | | | 784,388 |
| | | | | | |
Total Loan Participation
(Cost $20,369,872) | | | | | | 18,011,519 |
| | | | | | |
|
| Common Stocks - 0.1% |
| Airlines - 0.0% | | | | | | |
Delta Air Lines, Inc.*(e) | | | 2,000 | | | 11,580 |
UAL Corp. (144A)*(d)(e) | | | 542 | | | 1,729 |
| | | | | | |
| | | | | | 13,309 |
| | | | | | |
| Building Products - 0.0% |
Ainsworth Lumber Co., Ltd.*(b) | | | 54,081 | | | 53,495 |
Owens Corning, Inc.*(e) | | | 2,967 | | | 37,918 |
| | | | | | |
| | | | | | 91,413 |
| | | | | | |
| Chemicals - 0.0% | | | | | | |
Sterling Chemicals, Inc.* | | | 35 | | | 210 |
| | | | | | |
| Commercial & Professional Services - 0.0% |
Comdisco Holding Co., Inc.* | | | 83 | | | 589 |
Loewen Group, Inc. (144A)(d)(i) | | | 20,000 | | | 2 |
| | | | | | |
| | | | | | 591 |
| | | | | | |
| Diversified Financial Services - 0.0% |
Leucadia National Corp.* | | | 26 | | | 548 |
Outsourcing Solutions, Inc. (144A)(d)(i) | | | 270 | | | 1,147 |
| | | | | | |
| | | | | | 1,695 |
| | | | | | |
| Diversified Telecommunication Services - 0.0% |
Cincinnati Bell, Inc.*(e) | | | 35 | | | 99 |
See accompanying notes to financial statements
18
Met Investors Series Trust
Pioneer Strategic Income Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Diversified Telecommunication Services - continued |
Ionex Communications, Inc. (144A)(d)(i) | | 175 | | $ | 0 |
| | | | | |
| | | | | 99 |
| | | | | |
| Food Products - 0.0% |
Smithfield Foods, Inc.*(e) | | 2,165 | | | 30,245 |
| | | | | |
| Insurance - 0.0% |
Conseco, Inc.* | | 5,666 | | | 13,429 |
| | | | | |
| Media - 0.0% |
Knology, Inc.*(e) | | 99 | | | 854 |
| | | | | |
| Textiles, Apparel & Luxury Goods - 0.0% |
Polymer Group, Inc. - Class A* | | 136 | | | 986 |
| | | | | |
| Wireless Telecommunication Services - 0.1% |
American Tower Corp. -
Class A*(e) | | 1,973 | | | 62,209 |
iPCS, Inc.* | | 5,531 | | | 82,744 |
USA Mobility, Inc.(e) | | 4 | | | 51 |
| | | | | |
| | | | | 145,004 |
| | | | | |
Total Common Stocks
(Cost $894,593) | | | | | 297,835 |
| | | | | |
|
| Preferred Stock - 0.0% |
| Internet Software & Services - 0.0% |
PTV, Inc., Series A
10.000%, due 01/10/23
(Cost - $0) | | 1 | | | 0 |
| | | | | |
|
| Convertible Preferred Stocks - 0.6% |
| Diversified Financial Services - 0.5% |
Bank of America Corp. 7.250% | | 2,785 | | | 2,328,343 |
| | | | | |
| Metals & Mining - 0.1% | | | | | |
Freeport-McMoRan Copper & Gold, Inc.
6.750%, due 05/01/10(e) | | 6,100 | | | 484,523 |
LTV Corp.
8.250% (144A)(d)(f)(i)* | | 7,000 | | | 0 |
| | | | | |
| | | | | 484,523 |
| | | | | |
Total Convertible Preferred Stocks
(Cost $2,776,405) | | | | | 2,812,866 |
| | | | | |
| | |
| Warrants - 0.0% | | | | | |
| Airlines - 0.0% | | | | | |
KMC Telecom Holdings, Inc.,
expires 1/31/08 (144A)*(d)(i) | | 250 | | | 0 |
| | | | | |
| Building Products - 0.0% | | | | | |
Dayton Superior Corp.,
expires 6/15/09 (144A)*(i) | | 210 | | | 0 |
| | | | | |
| | | | | | | |
Security
Description | | Shares/Par
Amount | | Value | |
| | | | | | | |
| | |
| Chemicals - 0.0% | | | | | | | |
Solutia, Inc.,
expire 7/15/09 (144A)*(d)(i) | | | 18 | | $ | 0 | |
| | | | | | | |
| Foreign Government - 0.0% | | | | | | | |
Republic of Venezuela,
expires 4/15/20 (144A)*(d) | | | 1,700 | | | 32,300 | |
| | | | | | | |
| Life Sciences Tools & Services - 0.0% | |
Mediq, Inc.,
expires 6/1/09 (144A) *(d)(i) | | | 110 | | | 0 | |
| | | | | | | |
| Media - 0.0% | | | | | | | |
MDP Acquisitions Plc,
expires 10/01/13 (144A)*(b) | | | 42 | | | 1,199 | |
Sirius XM Radio, Inc.
expires 3/15/10 (144A)*(b)(i) | | | 100 | | | 6,451 | |
| | | | | | | |
| | | | | | 7,650 | |
| | | | | | | |
| Telecommunication Services - Diversified - 0.0% | |
COLO.COM, Inc.,
expires 3/15/10 (144A)*(d)(i) | | | 220 | | | 0 | |
| | | | | | | |
Total Warrants
(Cost $45,746) | | | | | | 39,950 | |
| | | | | | | |
| Escrowed Shares - 0.0% | | | | | | | |
Vlasic Foods International, Inc.
0.000%, due 01/01/49 (144A)(d)(i)
(Cost - $0) | | | 190,660 | | | 6,903 | |
| | | | | | | |
| | |
| Short-Term Investments - 4.5% | | | | | | | |
| Mutual Funds - 3.2% | | | | | | | |
State Street Navigator Securities Lending Trust Prime Portfolio(m) | | | 14,379,706 | | | 14,379,706 | |
| | | | | | | |
| Repurchase Agreement - 1.3% | | | | | | | |
State Street Bank & Trust Co.,
Repurchase Agreement, dated 06/30/09 at 0.010% to be repurchased at $5,639,002 on 07/01/09 collateralized by $5,580,000 FHLMC at
2.875% due 11/23/10 with a value of $5,754,375. | | $ | 5,639,000 | | | 5,639,000 | |
| | | | | | | |
Total Short-Term Investments
(Cost $20,018,706) | | | | | | 20,018,706 | |
| | | | | | | |
| | |
TOTAL INVESTMENTS - 101.6%
(Cost $474,678,950) | | | | | | 451,677,284 | |
| | | | | | | |
| |
| Other Assets and Liabilities (net) - (1.6)% | | | (6,899,168 | ) |
| | | | | | | |
| | |
| NET ASSETS - 100.0% | | | | | $ | 444,778,116 | |
| | | | | | | |
See accompanying notes to financial statements
19
Met Investors Series Trust
Pioneer Strategic Income Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
Portfolio Footnotes:
| * | | Non-income producing security. |
| (a) | | Variable or floating rate security. The stated rate represents the rate at June 30, 2009. |
| (b) | | Securities that may be resold to “qualified institutional buyers” under Rule 144A or securities offered pursuant to Section 4(2) of the Securities Act of 1933, as amended. These securities have been determined to be liquid under the guidelines established by the Board of Trustees. These securities represent in the aggregate $104,672,651 of net assets. |
| (c) | | Interest only security. |
| (d) | | Securities that may be resold to “qualified institutional buyers” under Rule 144A or securities offered pursuant to Section 4(2) of the Securities Act of 1933, as amended. These securities have been determined to be illiquid by the Portfolio’s adviser. These securities represent in the aggregate $179,615 of net assets. |
| (e) | | All or a portion of security is on loan. |
| (f) | | Security is in default and/or issuer is in bankruptcy. |
| (g) | | Security is a “step-up” bond where coupon increases or steps up at a predetermined date. Rates shown are current coupon and next coupon rate when security steps up. |
| (h) | | Payment-in-kind security for which part of the income earned may be paid as additional principal. |
| (i) | | Security valued at fair value as determined in good faith by or under the direction of the Board of Trustees. |
| (j) | | Principal only security. |
| (k) | | Zero coupon bond - Interest rate represents current yield to maturity. |
| (l) | | Security is a “step-down” bond where the coupon decreases or steps down at a predetermined date. Rates shown are current coupon and next coupon rate when a security steps down. |
| (m) | | Represents investment of collateral received from securities lending transactions. |
| (n) | | Par shown in Euro Currency. Value is shown in USD. |
| (o) | | Par shown in Norwegian Krone. Value is shown in USD. |
| (p) | | Par shown in Canadian Dollar. Value is shown in USD. |
| (q) | | Par shown in Australian Dollar. Value is shown in USD. |
| (r) | | Par shown in Japanese Yen. Value is shown in USD. |
| (s) | | Par shown in Swedish Krona. Value is shown in USD. |
FHLMC - Federal Home Loan Mortgage Corporation
MBIA - Municipal Bond Insurance Association
See accompanying notes to financial statements
20
The following table summarizes the credit composition of the portfolio holdings of the Pioneer Strategic Income Portfolio at June 30, 2009, based upon quality ratings issued by Standard & Poor’s. For securities not rated by Standard & Poor’s, the equivalent Moody’s rating is used.
| | | |
| Portfolio Composition by Credit Quality (Unaudited) | | Percent of
Portfolio | |
AAA/Government/Government Agency | | 27.50 | % |
AA | | 3.59 | |
A | | 6.01 | |
BBB | | 18.76 | |
BB | | 15.11 | |
B | | 15.48 | |
Below B | | 7.08 | |
Equities/Other | | 6.47 | |
| | | |
Total: | | 100.00 | % |
| | | |
Met Investors Series Trust
Pioneer Strategic Income Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1—quoted prices in active markets for identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Municipals | | | | | | | | | | | | |
California | | $ | — | | $ | 1,389,605 | | $ | — | | $ | 1,389,605 |
Connecticut | | | — | | | 1,474,927 | | | — | | | 1,474,927 |
New Jersey | | | — | | | 455,075 | | | — | | | 455,075 |
North Carolina | | | — | | | 600,240 | | | — | | | 600,240 |
Wisconsin | | | — | | | 137,938 | | | — | | | 137,938 |
Total Municipals | | | — | | | 4,057,785 | | | — | | | 4,057,785 |
Asset-Backed Securities | | | — | | | 32,149,131 | | | 15 | | | 32,149,146 |
Domestic Bonds & Debt Securities | | | | | | | | | | | | |
Aerospace & Defense | | | — | | | 4,063,755 | | | — | | | 4,063,755 |
Airlines | | | — | | | 656,391 | | | — | | | 656,391 |
Auto Components | | | — | | | 3,791,420 | | | — | | | 3,791,420 |
Automobiles | | | — | | | 239,225 | | | — | | | 239,225 |
Beverages | | | — | | | 3,937,417 | | | — | | | 3,937,417 |
Biotechnology | | | — | | | 1,932,605 | | | — | | | 1,932,605 |
Building Products | | | — | | | 81,256 | | | — | | | 81,256 |
Capital Markets | | | — | | | 1,352,345 | | | — | | | 1,352,345 |
Chemicals | | | — | | | 5,084,637 | | | — | | | 5,084,637 |
Commercial & Professional Services | | | — | | | 5,260,465 | | | — | | | 5,260,465 |
Commercial Banks | | | — | | | 23,814,571 | | | — | | | 23,814,571 |
Communications Equipment | | | — | | | 999,324 | | | — | | | 999,324 |
Computers & Peripherals | | | — | | | 2,087,521 | | | — | | | 2,087,521 |
Construction & Engineering | | | — | | | 1,131,796 | | | — | | | 1,131,796 |
Construction Materials | | | — | | | 1,185,465 | | | — | | | 1,185,465 |
Consumer Finance | | | — | | | 3,628,892 | | | — | | | 3,628,892 |
Containers & Packaging | | | — | | | 2,160,787 | | | — | | | 2,160,787 |
Distributors | | | — | | | 1,332,825 | | | — | | | 1,332,825 |
Diversified Financial Services | | | — | | | 21,148,405 | | | — | | | 21,148,405 |
Diversified Telecommunication Services | | | 251,237 | | | 13,460,573 | | | — | | | 13,711,810 |
Education | | | — | | | 1,773,423 | | | — | | | 1,773,423 |
Electric Utilities | | | — | | | 9,059,166 | | | — | | | 9,059,166 |
Electrical Equipment | | | — | | | 3,166,230 | | | — | | | 3,166,230 |
Energy Equipment & Services | | | — | | | 6,550,868 | | | — | | | 6,550,868 |
See accompanying notes to financial statements
21
Met Investors Series Trust
Pioneer Strategic Income Portfolio
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Food Products | | $ | — | | $ | 3,509,837 | | $ | — | | $ | 3,509,837 |
Gas Utilities | | | — | | | 3,781,611 | | | — | | | 3,781,611 |
Health Care Equipment & Supplies | | | — | | | 1,686,315 | | | — | | | 1,686,315 |
Health Care Providers & Services | | | — | | | 4,376,998 | | | — | | | 4,376,998 |
Homebuilders | | | — | | | 1,786,758 | | | — | | | 1,786,758 |
Hotels, Restaurants & Leisure | | | — | | | 7,040,246 | | | — | | | 7,040,246 |
Household Durables | | | — | | | 1,365,093 | | | — | | | 1,365,093 |
Household Products | | | — | | | 2,580,789 | | | — | | | 2,580,789 |
Independent Power Producers & Energy Traders | | | — | | | 952,518 | | | — | | | 952,518 |
Industrial—Diversified | | | — | | | 6,163 | | | — | | | 6,163 |
Industrial Conglomerates | | | — | | | 1,032,082 | | | — | | | 1,032,082 |
Insurance | | | — | | | 12,231,036 | | | — | | | 12,231,036 |
Internet & Catalog Retail | | | — | | | 3,086,065 | | | — | | | 3,086,065 |
Internet Software & Services | | | — | | | 1,331,700 | | | — | | | 1,331,700 |
Machinery | | | — | | | 5,374,880 | | | — | | | 5,374,880 |
Manufacturing | | | — | | | 1,325,181 | | | — | | | 1,325,181 |
Marine | | | — | | | 892,307 | | | — | | | 892,307 |
Media | | | — | | | 3,987,482 | | | — | | | 3,987,482 |
Metals & Mining | | | — | | | 16,125,072 | | | — | | | 16,125,072 |
Office Electronics | | | — | | | 253,020 | | | — | | | 253,020 |
Oil, Gas & Consumable Fuels | | | — | | | 20,842,344 | | | — | | | 20,842,344 |
Paper & Forest Products | | | — | | | 3,950,600 | | | — | | | 3,950,600 |
Pharmaceuticals | | | — | | | 2,204,476 | | | — | | | 2,204,476 |
Real Estate Investment Trusts (REITs) | | | — | | | 2,509,994 | | | — | | | 2,509,994 |
Real Estate Management & Development | | | — | | | 3,079,479 | | | — | | | 3,079,479 |
Road & Rail | | | — | | | 3,651,503 | | | — | | | 3,651,503 |
Semiconductors & Semiconductor Equipment | | | — | | | 138,677 | | | — | | | 138,677 |
Software | | | — | | | 1,439,295 | | | — | | | 1,439,295 |
Specialty Retail | | | — | | | 2,520,857 | | | — | | | 2,520,857 |
Textiles, Apparel & Luxury Goods | | | — | | | 137,388 | | | — | | | 137,388 |
Tobacco | | | — | | | 3,156,075 | | | — | | | 3,156,075 |
Trading Companies & Distributors | | | — | | | 1,616,465 | | | — | | | 1,616,465 |
Transportation | | | — | | | 601,738 | | | — | | | 601,738 |
Utilities | | | — | | | 2,169,600 | | | — | | | 2,169,600 |
Wireless Telecommunication Services | | | — | | | 2,018,725 | | | — | | | 2,018,725 |
Total Domestic Bonds & Debt Securities | | | 251,237 | | | 240,661,731 | | | — | | | 240,912,968 |
U. S. Government & Agency Obligations | | | — | | | 87,161,613 | | | — | | | 87,161,613 |
Foreign Bonds & Debt Securities | | | | | | | | | | | | |
Australia | | | — | | | 112,990 | | | — | | | 112,990 |
Brazil | | | — | | | 680,982 | | | — | | | 680,982 |
Canada | | | — | | | 4,309,613 | | | — | | | 4,309,613 |
Colombia | | | — | | | 610,993 | | | — | | | 610,993 |
France | | | — | | | 5,647,580 | | | — | | | 5,647,580 |
See accompanying notes to financial statements
22
Met Investors Series Trust
Pioneer Strategic Income Portfolio
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Japan | | $ | — | | $ | 3,247,451 | | $ | — | | $ | 3,247,451 |
Mexico | | | — | | | 93,156 | | | — | | | 93,156 |
Netherlands | | | — | | | 197,811 | | | — | | | 197,811 |
Norway | | | — | | | 2,916,276 | | | — | | | 2,916,276 |
Peru | | | — | | | 465,475 | | | — | | | 465,475 |
Russia | | | — | | | 1,150,423 | | | — | | | 1,150,423 |
Sweden | | | — | | | 4,394,748 | | | — | | | 4,394,748 |
Total Foreign Bonds & Debt Securities | | | — | | | 23,827,498 | | | — | | | 23,827,498 |
Convertible Bonds | | | | | | | | | | | | |
Capital Markets | | | — | | | 884,940 | | | — | | | 884,940 |
Commercial Banks | | | — | | | 542,138 | | | — | | | 542,138 |
Diversified Telecommunication Services | | | — | | | 799,920 | | | — | | | 799,920 |
Electrical Equipment | | | — | | | 1,656,630 | | | — | | | 1,656,630 |
Electronic Equipment, Instruments & Components | | | — | | | 2,455,642 | | | — | | | 2,455,642 |
Energy Equipment & Services | | | — | | | 2,673,415 | | | — | | | 2,673,415 |
Health Care Equipment & Supplies | | | — | | | 715,000 | | | — | | | 715,000 |
Health Care Providers & Services | | | — | | | 1,573,300 | | | — | | | 1,573,300 |
Hotels, Restaurants & Leisure | | | — | | | 1,000,041 | | | — | | | 1,000,041 |
Machinery | | | — | | | 72,105 | | | — | | | 72,105 |
Marine | | | — | | | 1,376,481 | | | — | | | 1,376,481 |
Oil, Gas & Consumable Fuels | | | — | | | 2,875,935 | | | — | | | 2,875,935 |
Paper & Forest Products | | | — | | | 415,000 | | | — | | | 415,000 |
Pharmaceuticals | | | — | | | 796,323 | | | — | | | 796,323 |
Telecommunication Services—Diversified | | | — | | | 1,000,075 | | | — | | | 1,000,075 |
Trading Companies & Distributors | | | — | | | 1,158,079 | | | — | | | 1,158,079 |
Wireless Telecommunication Services | | | — | | | 2,385,471 | | | — | | | 2,385,471 |
Total Convertible Bonds | | | — | | | 22,380,495 | | | — | | | 22,380,495 |
Loan Participation | | | — | | | 18,011,519 | | | — | | | 18,011,519 |
Common Stocks | | | | | | | | | | | | |
Airlines | | | 13,309 | | | — | | | — | | | 13,309 |
Building Products | | | 37,918 | | | — | | | — | | | 37,918 |
Chemicals | | | 210 | | | — | | | — | | | 210 |
Commercial & Professional Services | | | 589 | | | — | | | 2 | | | 591 |
Diversified Financial Services | | | 548 | | | — | | | 1,147 | | | 1,695 |
Diversified Telecommunication Services | | | 99 | | | — | | | — | | | 99 |
Food Products | | | 30,245 | | | — | | | — | | | 30,245 |
Insurance | | | 13,429 | | | — | | | — | | | 13,429 |
Media | | | 854 | | | — | | | — | | | 854 |
Paper & Forest Products | | | 53,495 | | | — | | | — | | | 53,495 |
Textiles, Apparel & Luxury Goods | | | 986 | | | — | | | — | | | 986 |
Wireless Telecommunication Services | | | 145,004 | | | — | | | — | | | 145,004 |
Total Common Stocks | | | 296,686 | | | — | | | 1,149 | | | 297,835 |
See accompanying notes to financial statements
23
Met Investors Series Trust
Pioneer Strategic Income Portfolio
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Convertible Preferred Stocks | | | | | | | | | | | | |
Diversified Financial Services | | $ | 2,328,343 | | $ | — | | $ | — | | $ | 2,328,343 |
Metals & Mining | | | 484,523 | | | — | | | — | | | 484,523 |
Total Convertible Preferred Stocks | | | 2,812,866 | | | — | | | — | | | 2,812,866 |
Warrants | | | | | | | | | | | | |
Foreign Government | | | — | | | 32,300 | | | — | | | 32,300 |
Media | | | — | | | 1,199 | | | 6,451 | | | 7,650 |
Total Warrants | | | — | | | 33,499 | | | 6,451 | | | 39,950 |
Escrowed Shares | | | — | | | — | | | 6,902 | | | 6,903 |
Short-Term Investments | | | | | | | | | | | | |
Mutual Funds | | | 14,379,706 | | | — | | | — | | | 14,379,706 |
Repurchase Agreement | | | — | | | 5,639,000 | | | — | | | 5,639,000 |
Total Short-Term Investments | | | 14,379,706 | | | 5,639,000 | | | — | | | 20,018,706 |
TOTAL INVESTMENTS | | $ | 17,740,495 | | $ | 433,922,271 | | $ | 14,517 | | $ | 451,677,284 |
Forward Contracts | | | | | | | | | | | | |
Forward Currency Contracts | | $ | — | | $ | 65,924 | | $ | — | | $ | 65,924 |
FAS 157 Level 3 Reconciliation Disclosure
Following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value:
Asset Valuation Inputs
| | | | | | | | | | | | | | | | | | |
| Investments in Securities | | Balance as of
December 31,
2008 | | Premiums | | | Realized
Loss | | | Change in
Unrealized
Appreciation/
(Depreciation) | | | Balance as of
June 30,
2009 |
| Asset-Backed Securities | | $ | 15 | | $ | — | | | $ | — | | | $ | — | | | $ | 15 |
| Common Stocks | | | | | | | | | | | | | | | | | | |
Commercial & Professional Services | | | 2 | | | — | | | | — | | | | 1 | | | | 3 |
Diversified Financial Services | | | 1,146 | | | — | | | | — | | | | — | | | | 1,146 |
Food Products | | | 878 | | | — | | | | (514 | ) | | | (364 | ) | | | — |
Metals & Mining | | | — | | | — | | | | (7,570 | ) | | | 7,570 | | | | — |
| Convertible Bonds | | | | | | | | | | | | | | | | | | |
Internet Software & Services | | | — | | | (2,381 | ) | | | — | | | | 2,381 | | | | — |
| Escrowed Shares | | | 6,902 | | | — | | | | — | | | | — | | | | 6,902 |
| Preferred Stocks | | | | | | | | | | | | | | | | | | |
Internet Software & Services | | | 1 | | | — | | | | — | | | | (1 | ) | | | — |
| Warrants | | | | | | | | | | | | | | | | | | |
Media | | | 6,451 | | | — | | | | — | | | | — | | | | 6,451 |
| Total | | $ | 15,395 | | ($ | 2,381 | ) | | ($ | 8,084 | ) | | $ | 9,587 | | | $ | 14,517 |
See accompanying notes to financial statements
24
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| Pioneer Strategic Income Portfolio | | | |
| Assets | | | | |
Investments, at value (a)(b) | | $ | 446,038,284 | |
Repurchase Agreement | | | 5,639,000 | |
Cash | | | 153,435 | |
Cash denominated in foreign currencies (c) | | | 3,501,274 | |
Receivable for investments sold | | | 3,279,505 | |
Receivable for Trust shares sold | | | 428,202 | |
Dividends receivable | | | 50,478 | |
Interest receivable | | | 6,716,359 | |
Unrealized appreciation on forward currency contracts | | | 66,597 | |
| | | | |
Total assets | | | 465,873,134 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 6,219,742 | |
Trust shares redeemed | | | 114,767 | |
Unrealized depreciation on forward currency contracts | | | 673 | |
Distribution and services fees—Class E | | | 7,069 | |
Collateral for securities on loan | | | 14,379,706 | |
Management fee | | | 215,474 | |
Administration fee | | | 2,654 | |
Custodian and accounting fees | | | 17,349 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 134,157 | |
| | | | |
Total liabilities | | | 21,095,018 | |
| | | | |
| Net Assets | | $ | 444,778,116 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 469,708,573 | |
Accumulated net realized loss | | | (15,650,628 | ) |
Unrealized depreciation on investments and foreign currency | | | (23,015,310 | ) |
Undistributed net investment income | | | 13,735,481 | |
| | | | |
Total | | $ | 444,778,116 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 386,495,949 | |
| | | | |
Class E | | | 58,282,167 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 42,203,940 | |
| | | | |
Class E | | | 6,383,061 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 9.16 | |
| | | | |
Class E | | | 9.13 | |
| | | | |
| | | | | |
(a) Investments at cost, excluding repurchase agreement | | $ | 469,039,950 | |
(b) Includes cash collateral for securities loaned of | | | 14,379,706 | |
(c) Cost of cash denominated in foreign currencies | | | 3,596,673 | |
See accompanying notes to financial statements
25
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| Pioneer Strategic Income Portfolio | | | |
| Investment Income | | | | |
Dividends (1) | | $ | 118,482 | |
Interest (2) | | | 15,123,937 | |
| | | | |
Total investment income | | | 15,242,419 | |
| | | | |
| Expenses | | | | |
Management fee | | | 1,071,911 | |
Administration fees | | | 15,971 | |
Custodian and accounting fees | | | 48,816 | |
Distribution and services fees—Class E | | | 16,563 | |
Audit and tax services | | | 46,470 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 10,771 | |
Other | | | 3,257 | |
| | | | |
Net expenses | | | 1,240,192 | |
| | | | |
Net investment income | | | 14,002,227 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | (1,908,230 | ) |
Foreign currency | | | 123,754 | |
| | | | |
Net realized loss on investments and foreign currency | | | (1,784,476 | ) |
| | | | |
Net change in unrealized appreciation (depreciation) on: | | | | |
Investments | | | 45,300,636 | |
Foreign currency | | | (727 | ) |
| | | | |
Net change in unrealized appreciation on investments and foreign currency | | | 45,299,909 | |
| | | | |
Net realized and unrealized gain on investments and foreign currency | | | 43,515,433 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 57,517,660 | |
| | | | |
| | | | | |
(1) Dividend income is net of foreign withholding taxes of: | | $ | 2,187 | |
(2) Interest income includes securities lending net income of: | | | 68,022 | |
See accompanying notes to financial statements
26
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| Pioneer Strategic Income Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 14,002,227 | | | $ | 24,078,937 | |
Net realized gain (loss) on investments and foreign currency | | | (1,784,476 | ) | | | 6,641,643 | |
Net change in unrealized appreciation (depreciation) on investments and foreign currency | | | 45,299,909 | | | | (71,751,361 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 57,517,660 | | | | (41,030,781 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | (19,725,388 | ) | | | (23,170,014 | ) |
Class E | | | (416,674 | ) | | | — | |
From net realized gains | | | | | | | | |
Class A | | | — | | | | — | |
Class E | | | — | | | | — | |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (20,142,062 | ) | | | (23,170,014 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 52,997,251 | | | | 124,197,446 | |
Class E | | | 50,187,313 | | | | 9,704,659 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | 19,725,388 | | | | 23,170,014 | |
Class E | | | 416,674 | | | | — | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (36,091,226 | ) | | | (94,826,569 | ) |
Class E | | | (3,762,517 | ) | | | (1,788,874 | ) |
| | | | | | | | |
Net increase in net assets from capital share transactions | | | 83,472,883 | | | | 60,456,676 | |
| | | | | | | | |
| Net Increase (Decrease) in Net Assets | | | 120,848,481 | | | | (3,744,119 | ) |
Net assets at beginning of period | | | 323,929,635 | | | | 327,673,754 | |
| | | | | | | | |
Net assets at end of period | | $ | 444,778,116 | | | $ | 323,929,635 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 13,735,481 | | | $ | 19,875,316 | |
| | | | | | | | |
See accompanying notes to financial statements
27
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| Selected Per Share Data for the Year or Period Ended: | |
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| Pioneer Strategic Income Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years
Ended
December 31, | | | Period Ended
December 31,
2006(c) | | | For the Years Ended
October 31, | |
| | | 2008 | | | 2007 | | | | 2006 | | | 2005 | | | 2004++ | |
| Net Asset Value, Beginning of Period | | $ | 8.37 | | | $ | 10.02 | | | $ | 9.46 | | | $ | 9.81 | | | $ | 9.56 | | | $ | 9.73 | | | $ | 9.53 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.34 | | | | 0.64 | | | | 0.51 | | | | 0.07 | | | | 0.49 | | | | 0.53 | | | | 0.57 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.97 | | | | (1.63 | ) | | | 0.12 | | | | 0.04 | | | | 0.15 | | | | (0.04 | ) | | | 0.48 | (a) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 1.31 | | | | (0.99 | ) | | | 0.63 | | | | 0.11 | | | | 0.64 | | | | 0.49 | | | | 1.05 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.52 | ) | | | (0.66 | ) | | | (0.07 | ) | | | (0.46 | ) | | | (0.39 | ) | | | (0.66 | ) | | | (0.85 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.52 | ) | | | (0.66 | ) | | | (0.07 | ) | | | (0.46 | ) | | | (0.39 | ) | | | (0.66 | ) | | | (0.85 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 9.16 | | | $ | 8.37 | | | $ | 10.02 | | | $ | 9.46 | | | $ | 9.81 | | | $ | 9.56 | | | $ | 9.73 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 16.43 | % | | | (10.74 | )% | | | 6.65 | % | | | 1.10 | % | | | 6.95 | % | | | 5.17 | % | | | 11.66 | % |
Ratio of Expenses to Average Net Assets | | | 0.69 | %* | | | 0.67 | % | | | 0.76 | % | | | 0.85 | %* | | | 0.88 | % | | | 0.86 | % | | | 0.90 | %(b) |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.69 | %* | | | 0.67 | % | | | 0.76 | % | | | 0.85 | %* | | | 0.88 | % | | | N/A | | | | N/A | |
Ratio of Net investment Income to Average Net Assets | | | 7.84 | %* | | | 6.77 | % | | | 5.28 | % | | | 4.56 | %* | | | 5.13 | % | | | 5.58 | % | | | 6.19 | % |
Portfolio Turnover Rate | | | 17.9 | % | | | 45.4 | % | | | 44.5 | % | | | 6.4 | % | | | 33.0 | % | | | 37.0 | % | | | 56.0 | % |
Net Assets, End of Period (in millions) | | $ | 386.5 | | | $ | 317.1 | | | $ | 327.7 | | | $ | 253.8 | | | $ | 243 | | | $ | 186 | | | $ | 107 | |
| (a) | | Per share amount based on average shares outstanding during the period. |
| (b) | | The investment manager waived a portion of its management fee for the period. |
| (c) | | Fiscal Year End changed on November 1, 2006 from October 31 to December 31. |
| ++ | | Audited by other auditors Independent Registered Public Accounting Firm. |
See accompanying notes to financial statements
28
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | |
| | |
| Selected Per Share Data for the Period Ended: | | | | | | |
| | |
| | | | | | | |
| Pioneer Strategic Income Portfolio | | Class E | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Period
Ended
December 31,
2008(b) | |
| | |
| Net Asset Value, Beginning of Period | | $ | 8.34 | | | $ | 9.51 | |
| | | | | | | | |
| Income Gain (Loss) from Investment Operations | | | | | | | | |
Net Investment Income(a) | | | 0.34 | | | | 0.43 | |
Net Realized/Unrealized Gain (Loss) on Investment | | | 0.96 | | | | (1.60 | ) |
| | | | | | | | |
Total from Investment Operations | | | 1.30 | | | | (1.17 | ) |
| | | | | | | | |
| Less Distributions | | | | | | | | |
Dividends from Net Investment Income | | | (0.51 | ) | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | — | |
| | | | | | | | |
Total Distributions | | | (0.51 | ) | | | — | |
| | | | | | | | |
| Net Asset Value, End of Period | | $ | 9.13 | | | $ | 8.34 | |
| | | | | | | | |
| Total Return | | | 16.21 | % | | | (12.30 | )% |
Ratio of Expenses to Average Net Assets | | | 0.82 | %* | | | 0.84 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursements and Rebates | | | 0.82 | %* | | | 0.84 | %* |
Ratio of Net Investment Loss to Average Net Assets | | | 7.73 | %* | | | 6.97 | %* |
Portfolio Turnover Rate | | | 17.9 | % | | | 45.4 | % |
Net Assets, End of Period (in millions) | | $ | 58.3 | | | $ | 6.9 | |
| (a) | | Per share amount based on average shares outstanding during the period. |
| (b) | | Commencement of operations—04/28/08. |
See accompanying notes to financial statements
29
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is Pioneer Strategic Income Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A and E Shares are currently offered by the Portfolio. Class B and C Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
30
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | | | | | |
Expiring
12/31/2009 | | Expiring
12/31/2010 | | Total |
| | |
| $ | 11,398,536 | | $ | 2,263,562 | | $ | 13,662,098 |
On May 1, 2006, Pioneer Strategic Income Portfolio, a series of The Travelers Series Trust, was reorganized into the Portfolio, a series of the Trust. The Portfolio acquired capital losses of $28,401,723, which are subject to an annual limitation of $6,843,272.
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
G. Financial Derivative Instruments - Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133, (“FAS 161” or the “Statement”) requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. The disclosure requirements of FAS 161 distinguish between derivatives which are accounted for as “hedges” under FAS 133 and those that do not qualify for such accounting. The Portfolio reflects derivatives at fair value and recognizes changes in fair value through the Statement of Operations, and as such do not qualify for FAS 133 hedge accounting treatment.
H. Forward Foreign Currency Contracts - The Portfolio may enter into forward foreign currency contracts to hedge its portfolio holdings against future movements in certain foreign currency exchange rates. A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a set price. Forward currency contracts are valued at the forward rate and are marked-to-market daily. The change in market value is recorded by the Portfolio as an unrealized gain or loss. When the contract is closed, the Portfolio recognizes a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.
31
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
The use of forward foreign currency contracts does not eliminate fluctuations in the underlying prices of the securities of the Portfolio, but it does establish a rate of exchange that can be achieved in the future. Although forward foreign currency contracts to sell limit the risk of loss due to a decline in the value of the currency holdings, they also limit any potential gain that might result should the value of the currency increase. In addition, the Portfolio could be exposed to risks if the counterparties to the contracts are unable to meet the terms of the contracts.
At June 30, 2009, the Portfolio had following derivatives (not designated as hedging instruments under SFAS No.133), grouped into appropriate risk categories that illustrate how and why the Portfolio uses derivative instruments:
| | | | | | | | | | | |
| | | Asset Derivatives | | Liability Derivatives | |
Derivatives not accounted for as hedging instruments under
Statement 133 | | Balance Sheet Location | | Fair Value | | Balance Sheet Location | | Fair Value | |
| | | | |
Foreign Exchange Contracts | | Unrealized appreciation on
forward currency contracts | | $ | 66,597 | | Unrealized depreciation on
foreign currency contracts | | $ | (673 | ) |
| | | | | | | | | | | |
| | | | |
Total | | | | $ | 66,597 | | | | $ | (673 | ) |
| | | | | | | | | | | |
Transactions in derivative instruments during the six months ended June 30, 2009, were as follows:
| | | |
Derivatives not accounted for as hedging instruments under Statement 133 |
Location | | Foreign
Exchange
Contracts |
| Statement of Operations—Change in Unrealized Gain (Loss) | | |
| |
Foreign Currency—net | | $ | 65,924 |
| | | |
| |
Total | | $ | 65,924 |
| | | |
I. Foreign Currency Translation - The books and records of the Portfolio are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars on a daily basis using prevailing exchange rates. Purchases and sales of securities are translated at the rates of exchange prevailing when such securities were acquired or sold. Income is translated at rates of exchange prevailing when interest is accrued or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in forward foreign currency contracts; sales of foreign currencies; currency gains or losses realized between the trade and settlement dates on securities transactions; and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Portfolio’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end; from changes in the exchange rates of foreign currency held; and from changes in the contract value of forward foreign currency contracts.
J. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
32
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
K. Forward Commitments, When-Issued and Delayed Delivery Securities - The Portfolio may purchase securities on a when-issued or delayed delivery basis and may purchase or sell securities on a forward commitment basis. Settlement of such transactions normally occurs within a month or more after the purchase or sale commitment is made. The Portfolio may purchase securities under such conditions only with the intention of actually acquiring them, but may enter into a separate agreement to sell the securities before the settlement date. Since the value of securities purchased may fluctuate prior to settlement, the Portfolio may be required to pay more at settlement than the security is worth. In addition, the purchaser is not entitled to any of the interest earned prior to settlement. Upon making a commitment to purchase a security on a when-issued, delayed delivery or forward commitment basis, the Portfolio will hold liquid assets in a segregated account at the Portfolio’s custodian bank worth at least the equivalent of the amount due. The liquid assets will be monitored on a daily basis and adjusted as necessary to maintain the necessary value.
L. Stripped Securities - The Portfolio may invest in “stripped securities,” a term used collectively for certain structured fixed income securities. Stripped securities can be principal only securities (“POs”), which are debt obligations that have been stripped of unmatured interest coupons or interest only securities (“IOs”), which are unmatured interest coupons that have been stripped from debt obligations. Stripped securities do not make periodic payments of interest prior to maturity. As is the case with all securities, the market value of stripped securities will fluctuate in response to changes in economic conditions, interest rates and the market’s perception of the securities. However, fluctuations in response to interest rates may be greater in stripped securities than for debt obligations of comparable maturities that currently pay interest. The amount of fluctuation increases with a longer period of maturity.
The yield to maturity on IOs is sensitive to the rate of principal repayments (including prepayments) on the related underlying debt obligation and principal payments may have a material effect on yield to maturity. If the underlying debt obligation experiences greater than anticipated prepayments of principal, the Portfolio may not fully recoup the initial investment in IOs.
M. Loan Participations - The Portfolio may invest in loans arranged through private negotiation between one or more financial institutions. The Portfolio’s investment in any such loan may be in the form of a participation in or an assignment of the loan. In connection with purchasing participations, the Portfolio generally will have no right to enforce compliance by the borrower with the terms of the loan agreement relating to the loan, nor any rights of set-off against the borrower and the Portfolio may not benefit directly from any collateral supporting the loan in which it has purchased the participation.
The Portfolio will assume the credit risk of both the borrower and the lender that is selling the participation. In the event of the insolvency of the lender selling the participation, the Portfolio may be treated as a general creditor of the lender and may not benefit from any set-off between the lender and the borrower.
N. Mortgage Related and Other Asset Backed Securities - The Portfolio may invest in mortgage related or other asset-backed securities. These securities may include mortgage pass-through securities, collateralized mortgaged obligations (“CMOs”), commercial mortgage-backed securities, mortgage dollar rolls, CMO residuals, stripped mortgage backed securities (“SMBS”) and other securities that directly or indirectly represent a participation in, or are secured by a payable from, mortgage loans on real property or other receivables. The value of some mortgage or asset-backed securities may be particularly sensitive to changes in prevailing interest rates. Early repayment of principal on some mortgage-related securities may expose the Portfolio to a lower rate of return upon reinvestment of principal. The value of these securities may fluctuate in response to the market’s perception of the creditworthiness of the issuers. Additionally, although mortgages and mortgage-related securities are generally supported by some form of government or private guarantee and/or insurance, there is no assurance that private guarantors or insurers will meet their obligations.
One type of SMBS has one class receiving all of the interest from the mortgage assets (the interest-only or “IO” class), while the other class will receive all of the principal (the principal-only or “PO” class). Payments received for the IOs are included in interest income on the Statement of Operations of the Portfolio. Because principal will not be received at the maturity of an IO, adjustments are made to the book value on the security on a daily basis until maturity. These adjustments are included in interest income on the Statement of Operations of the Portfolio. Payments received for POs are treated as reductions to the cost and par value of the securities. Details of mortgage related and other asset-backed securities held at year end are included in the Portfolio’s Portfolio of Investments.
The Portfolio may invest a significant portion of its assets in securities of issuers that hold mortgage and asset backed securities and direct investments in securities backed by commercial and residential mortgage loans and other financial assets. The value and related income of these securities are sensitive to changes in economic conditions, including delinquencies and/or defaults, and may be negatively impacted by increased volatility of market prices and periods of illiquidity.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with Pioneer Investment Management, Inc. (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
33
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $ | 1,071,911 | | 0.60 | % | | First $500 Million |
| | |
| | | 0.55 | % | | $500 Million to $1 Billion |
| | |
| | | 0.53 | % | | Over $1 Billion |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A and Class B Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B distribution plan provides that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% of the average net assets of the Portfolio attributable to its Class B Shares in respect to activities primarily intended to result in the sale of Class B Shares. However, under the Class B distribution agreement, payments to the Distributor for activities pursuant to the Class B distribution plan are currently limited to payments at an annual rate equal to 0.25% of average daily net assets of the Portfolio attributable to its Class B Shares.
Under terms of the Class B distribution plan and distribution agreement, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
in Shares
Outstanding | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 37,895,904 | | 6,124,147 | | 2,382,293 | | (4,198,404 | ) | | 4,308,036 | | 42,203,940 |
12/31/2008 | | 32,708,363 | | 13,117,395 | | 2,433,825 | | (10,363,679 | ) | | 5,187,541 | | 37,895,904 |
| | | | | | |
Class E | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 822,648 | | 5,937,246 | | 50,445 | | (427,278 | ) | | 5,560,413 | | 6,383,061 |
04/28/2008-12/31/2008 | | — | | 1,024,045 | | — | | (201,397 | ) | | 822,648 | | 822,648 |
34
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $29,820,587 | | $ | 77,235,481 | | $ | 44,174,829 | | $ | 18,839,417 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $474,678,950 | | $ | 16,838,068 | | $ | (39,839,734 | ) | | $ | (23,001,666 | ) |
6. Securities Lending
As of June 30, 2009, the Portfolio had loaned securities which were collateralized by short-term investments. The value of securities on loan and the value of the related collateral were as follows:
| | | | | | | | | |
Value of
Securities | | Value of
Cash
Collateral | | Value of
Non-Cash
Collateral* | | Total
Collateral |
| | | |
| $14,090,373 | | $ | 14,379,706 | | $ | — | | $ | 14,379,706 |
* The Portfolio cannot repledge or resell this collateral. The non-cash collateral is typically comprised of government securities and/or bank letters of credit.
7. Distributions to Shareholders
The tax character of distributions paid for the years or periods ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $ | 23,170,014 | | $ | 1,894,886 | | $ | — | | $ | — | | $ | 23,170,014 | | $ | 1,894,886 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards | | | Total | |
| | | | |
| $20,142,038 | | $ | — | | $ | (68,785,995 | ) | | $ | (13,662,098 | ) | | $ | (62,306,055 | ) |
35
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
8. Forward Foreign Currency Contracts
Forward Foreign Currency Contracts to Sell:
| | | | | | | | | | | | | | | |
Settlement Date | | Counterparty | | Contracts to Deliver | | | Value at
June 30, 2009 | | In Exchange for U.S. $ | | Net Unrealized
Appreciation/
(Depreciation) | |
| | | | | |
07/15/2009 | | Brown Brothers Harriman & Co. | | 1,485,000 | AUD | | $ | 1,194,859 | | $ | 1,216,842 | | $ | 21,983 | |
| | | | | |
07/06/2009 | | UBS Securities LLC | | 4,500,000 | EUR | | | 6,309,004 | | | 6,353,618 | | | 44,614 | |
| | | | | |
07/08/2009 | | Brown Brothers Harriman & Co. | | 252,500,000 | JPY | | | 2,618,667 | | | 2,617,994 | | | (673 | ) |
| | | | | | | | | | | | | | | |
| | | | | |
| | | | | | | | | | | | | $ | 65,924 | |
| | | | | | | | | | | | | | | |
AUD - Australian Dollar
EUR - Euro Dollar
JPY - Japanese Yen
9. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
10. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
11. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
12. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
36
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
37
| | |
| Rainier Large Cap Equity Portfolio | | For the period ended 6/30/09 |
| Managed by Rainier Investment Management, Inc. | | |
Portfolio Manager Commentary
Performance
During the period ended June 30, 2009, the Portfolio had a return of 3.53% and 3.29% for Class A and B Shares, respectively, versus 4.32% and 11.53% for its benchmarks, the Russell 1000® Index and the Russell 1000® Growth Index, respectively.
Market Environment/Conditions
The U.S. equity market tested twelve year lows in the first quarter. Stocks succumbed to renewed fears of tighter credit and a collapsing economy, driving major market indices down to levels not seen since 1997. A rise in unemployment above 8% and a contraction in gross domestic product of over 6% joined with more bad news from the auto industry and “creeping de facto nationalization” of major financial institutions to infect investor sentiment. Market volatility continued at elevated levels, with the stock market plunging from January through early March, and then rebounding sharply in the final weeks of the quarter.
Prior to the quarter, investors had record levels of cash in money market assets due to the paralysis of the credit market and the collapse of the capital markets. Then the equity markets vaulted off of multi-year lows established on or about March 9, rallying through the end of the second quarter. Investors began to note the opportunity cost of sitting on cash, with little or no appreciation potential, and were encouraged as quarterly earnings reports looked far better than feared. Expectations for future corporate earnings were positive more often than not, as Wall Street took note of how nimble corporate America had become in managing costs in the downturn.
Portfolio Review/Current Positioning
The first quarter was tough for absolute equity performance, but the Portfolio held more value and exceeded the performance of the Russell 1000® Index. This strong performance was fairly broad-based across sectors, most notably in financials, materials and health care followed by energy, technology and consumer discretionary. Only producer durables and transportation lagged in the quarter. In the financial sector, we minimized exposure to credit and real estate risk. Our relative performance in this very tough sector was good in the quarter, as it has been over the last year. In addition to some of the debacles we have sidestepped (notably Citigroup), good performance came from trust bank Northern Trust and processors Visa and MasterCard. All three were up for the quarter. Materials and energy rebounded from overly depressed levels with four holdings up 14 to 20%: Mosaic (fertilizers), Monsanto (genetic seeds), Praxair (industrial gases), and Crown Holdings (food and beverage cans). These benefitted from a combination of earnings reports that were either very good or better than feared. Disappointments from the producer durables sector included defense contractor Raytheon.
In the second quarter, we achieved a double-digit return but lagged the Russell 1000® Index. The financial sector proved challenging in this quarter. Over the past several years, we have outperformed the index averages by avoiding companies that went bankrupt or that incurred billions of dollars of losses due to subprime loans or toxic investments.
In the recent quarter, however, the prices of many of these depressed shares ratcheted upward, as credit began to ease and simply surviving became less of an issue. The financial sector accounted for about half of our underperformance in the quarter, due mainly to avoidance of owning the shares of these distressed companies. Utilities and energy shares provided the best relative contribution in the period. In energy, we de-emphasized large integrated oil companies, all of which underperformed the market in the quarter, in favor of independents and service companies such as Southwestern Energy Co. and Weatherford International Ltd. which meaningfully outperformed the market.
During the six month period, due to better than anticipated earnings reports, the top-performing stock within our energy sector holdings was deep-water driller Transocean Ltd. continued to outperform due to better than anticipated earnings reports. Global utility company AES Corp., which participates in both regulated businesses and independent power generation in emerging countries, far outperformed the average utility stock. In the financial sector, we maintained our emphasis on companies with strong financial footing such as Wells Fargo & Co., which provided good returns in the first half of the year. Although some stocks in this sector had poor relative performance, like State Street Corp. and JP Morgan Chase & Co., we believe these companies have the capacity to improve competitive positioning coming out of the recession.
The recent volatile and unsettled market environment has created navigational challenges for investors. Historically there have been two environments that have been particularly difficult for our strategies, both involving transitory periods in which “speculative” securities are bid up dramatically. The first environment was best exemplified by the “dot-com” boom of the late 1990’s. In the early stages of the period investors were willing to pay almost anything for new speculative technologies. Our relative performance turned up meaningfully in subsequent years as the bubble was burst. We have just come through the second kind of speculative environment in the second quarter of this year—one in which low quality, financially distressed companies rallied dramatically. To illustrate, Russell 1000® companies with top quartile return-on-equity had an average stock return of 12.5% in the quarter, while the lower three quartiles posted stock returns between 14.5% and 28.5%. Companies with no earnings, loads of debt and relatively illiquid shares performed far better than attractively valued shares of companies with high returns on capital, predictable earnings growth and rock-solid balance sheets and cash flow. The latter characteristics have been the hallmark of our philosophy since inception, and could be a formula for good returns in more “normal” times.
Team Managed
Daniel M. Brewer, CFA
Mark W. Broughton, CFA
Stacie L. Cowell, CFA
Mark H. Dawson, CFA
Andrea L. Durbin, CFA
James R. Margard, CFA
Peter M. Musser, CFA
Rainier Investment Management, Inc.
1
| | |
| Rainier Large Cap Equity Portfolio | | For the period ended 6/30/09 |
| Managed by Rainier Investment Management, Inc. | | |
Portfolio Manager Commentary (continued)
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
Transocean, Ltd. | | 2.79% |
Apple, Inc. | | 2.54% |
Total S.A. (ADR) | | 2.45% |
Chevron Corp. | | 2.44% |
Devon Energy Corp. | | 2.43% |
JPMorgan Chase & Co. | | 2.36% |
PepsiCo, Inc. | | 2.16% |
CVS Caremark Corp. | | 2.08% |
Gilead Sciences, Inc. | | 2.03% |
Google, Inc.—Class A | | 2.02% |
Portfolio Composition (% of portfolio market value)
As of 6/30/09
2
| | |
| Rainier Large Cap Equity Portfolio | | For the period ended 6/30/09 |
| Managed by Rainier Investment Management, Inc. | | |
Portfolio Manager Commentary (continued)
Rainier Large Cap Equity Portfolio managed by
Rainier Investment Management, Inc. vs. Russell 1000® Index1 and Russell 1000® Growth Index2
Growth Based on $10,000+
| | | | | | | | |
| | | | | Average Annual Return3 (for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | Since
Inception4 |
| — | | Rainier Large Cap Equity Portfolio—Class A Class B | | 3.53%
3.29% | | -33.99%
-34.19% | | -26.11%
-26.30% |
| - - | | Russell 1000® Index1 | | 4.32% | | -26.69% | | -25.02% |
| — | | Russell 1000® Growth Index2 | | 11.53% | | -24.50% | | -22.17% |
+The chart reflects the performance of Class A shares of the Portfolio. The performance of Class A shares will differ from that of the other class of shares because of the difference in expenses paid by policyholders investing in the different share classes.
1The Russell 1000® Index is an unmanaged measure of the 1,000 largest companies in the Russell 3000® Index, which represents approximately 90% of the investible U.S. equity market.
2The Russell 1000® Growth Index is an unmanaged measure of the performance of the largest capitalized U.S. companies, within Russell 1000 companies, that have higher price-to-book ratios and higher forecasted growth values.
3“Average Annual Return” is calculated including reinvestment of all income dividends and capital gains distributions.
4Inception of Class A and Class B shares is 11/1/07. Index returns are based on an inception date of 11/1/07.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Indexes do not include fees or expenses and are not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| Rainier Large Cap Equity Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.71% | | $ | 1,000.00 | | $ | 1,035.30 | | $ | 3.58 |
Hypothetical | | 0.71% | | | 1,000.00 | | | 1,021.27 | | | 3.56 |
| | | | | | | | | | | |
| | | | |
Class B | | | | | | | | | | | |
Actual | | 0.96% | | $ | 1,000.00 | | $ | 1,032.90 | | $ | 4.84 |
Hypothetical | | 0.96% | | | 1,000.00 | | | 1,020.03 | | | 4.81 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
4
Met Investors Series Trust
Rainier Large Cap Equity Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value
|
| | | | | |
| | | | | |
| | |
| Common Stocks - 96.2% | | | | | |
| Aerospace & Defense - 4.5% | | | | | |
Boeing Co. (The)(a) | | 58,405 | | $ | 2,482,213 |
ITT Corp.(a) | | 116,035 | | | 5,163,557 |
Precision Castparts Corp. | | 127,030 | | | 9,277,001 |
Raytheon Co.(a) | | 174,365 | | | 7,747,037 |
United Technologies Corp. | | 160,195 | | | 8,323,732 |
| | | | | |
| | | | | 32,993,540 |
| | | | | |
| Air Freight & Logistics - 1.6% | | | | | |
Expeditors International of Washington, Inc.(a) | | 177,190 | | | 5,907,514 |
FedEx Corp. | | 106,685 | | | 5,933,820 |
| | | | | |
| | | | | 11,841,334 |
| | | | | |
| Airlines - 0.6% | | | | | |
Delta Air Lines, Inc.*(a) | | 766,790 | | | 4,439,714 |
| | | | | |
| Beverages - 2.2% | | | | | |
PepsiCo, Inc. | | 287,765 | | | 15,815,564 |
| | | | | |
| Biotechnology - 3.6% | | | | | |
Celgene Corp.* | | 117,140 | | | 5,603,978 |
Cephalon, Inc.*(a) | | 57,105 | | | 3,234,998 |
Genzyme Corp.* | | 50,585 | | | 2,816,067 |
Gilead Sciences, Inc.*(a) | | 317,250 | | | 14,859,990 |
| | | | | |
| | | | | 26,515,033 |
| | | | | |
| Capital Markets - 4.9% | | | | | |
Charles Schwab Corp. (The) | | 498,020 | | | 8,735,271 |
Invesco, Ltd. | | 402,060 | | | 7,164,709 |
Morgan Stanley(a) | | 181,655 | | | 5,178,984 |
Northern Trust Corp.(a) | | 158,725 | | | 8,520,358 |
State Street Corp.(a) | | 126,590 | | | 5,975,048 |
| | | | | |
| | | | | 35,574,370 |
| | | | | |
| Chemicals - 1.6% | | | | | |
Monsanto Co.(a) | | 81,565 | | | 6,063,542 |
Praxair, Inc. | | 84,005 | | | 5,970,235 |
| | | | | |
| | | | | 12,033,777 |
| | | | | |
| Commercial & Professional Services - 1.9% | | | |
Iron Mountain, Inc.*(a) | | 214,840 | | | 6,176,650 |
Republic Services, Inc.(a) | | 302,310 | | | 7,379,387 |
| | | | | |
| | | | | 13,556,037 |
| | | | | |
| Commercial Banks - 0.9% | | | | | |
Wells Fargo & Co.(a) | | 258,015 | | | 6,259,444 |
| | | | | |
| Communications Equipment - 3.8% | | | | | |
Cisco Systems, Inc.* | | 605,270 | | | 11,282,233 |
Juniper Networks, Inc.*(a) | | 179,580 | | | 4,238,088 |
QUALCOMM, Inc. | | 271,430 | | | 12,268,636 |
| | | | | |
| | | | | 27,788,957 |
| | | | | |
| | | | | |
Security
Description | | Shares | | Value
|
| | | | | |
| | |
| Computers & Peripherals - 5.1% | | | | | |
Apple, Inc.* | | 130,795 | | $ | 18,629,132 |
EMC Corp.* | | 694,195 | | | 9,093,955 |
Hewlett-Packard Co. | | 255,290 | | | 9,866,958 |
| | | | | |
| | | | | 37,590,045 |
| | | | | |
| Construction & Engineering - 0.4% | | | | | |
Foster Wheeler AG*(a) | | 112,230 | | | 2,665,463 |
| | | | | |
| | | | | |
| Containers & Packaging - 0.8% | | | | | |
Crown Holdings, Inc.* | | 234,990 | | | 5,672,659 |
| | | | | |
| Diversified Financial Services - 2.4% | | | | | |
JPMorgan Chase & Co. | | 506,695 | | | 17,283,366 |
| | | | | |
| Electric Utilities - 1.0% | | | | | |
Allegheny Energy, Inc.(a) | | 101,725 | | | 2,609,246 |
Entergy Corp. | | 27,710 | | | 2,148,079 |
FPL Group, Inc.(a) | | 49,940 | | | 2,839,589 |
| | | | | |
| | | | | 7,596,914 |
| | | | | |
| Electrical Equipment - 0.9% | | | | | |
ABB, Ltd. (ADR) | | 432,855 | | | 6,830,452 |
| | | | | |
| Electronic Equipment, Instruments & Components - 0.4% |
Trimble Navigation, Ltd.*(a) | | 164,490 | | | 3,228,939 |
| | | | | |
| Energy Equipment & Services - 4.2% | | | | | |
Transocean, Ltd.*(a) | | 275,594 | | | 20,473,878 |
Weatherford International, Ltd.*(a) | | 544,510 | | | 10,650,616 |
| | | | | |
| | | | | 31,124,494 |
| | | | | |
| Food & Staples Retailing - 4.4% | | | | | |
CVS Caremark Corp. | | 478,225 | | | 15,241,031 |
Kroger Co. (The) | | 175,070 | | | 3,860,293 |
Wal-Mart Stores, Inc.(a) | | 267,295 | | | 12,947,770 |
| | | | | |
| | | | | 32,049,094 |
| | | | | |
| Food Products - 0.7% | | | | | |
J.M. Smucker Co. (The)(a) | | 111,750 | | | 5,437,755 |
| | | | | |
| Health Care Equipment & Supplies - 2.6% | | | |
Baxter International, Inc. | | 188,675 | | | 9,992,228 |
Hologic, Inc.*(a) | | 202,230 | | | 2,877,733 |
St. Jude Medical, Inc.*(a) | | 142,700 | | | 5,864,970 |
| | | | | |
| | | | | 18,734,931 |
| | | | | |
| Health Care Providers & Services - 1.8% | | | |
Aetna, Inc.(a) | | 145,110 | | | 3,635,006 |
Express Scripts, Inc.* | | 141,655 | | | 9,738,781 |
| | | | | |
| | | | | 13,373,787 |
| | | | | |
| Hotels, Restaurants & Leisure - 3.7% | | | | | |
Carnival Corp.(a) | | 270,250 | | | 6,964,343 |
Darden Restaurants, Inc.(a) | | 200,430 | | | 6,610,181 |
McDonald’s Corp. | | 174,100 | | | 10,009,009 |
Starbucks Corp.*(a) | | 277,680 | | | 3,856,975 |
| | | | | |
| | | | | 27,440,508 |
| | | | | |
See accompanying notes to financial statements
5
Met Investors Series Trust
Rainier Large Cap Equity Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares/Par
Amount | | Value |
| | | | | |
| | |
| Household Products - 1.5% | | | | | |
Colgate-Palmolive Co.(a) | | 116,110 | | $ | 8,213,621 |
Procter & Gamble Co. (The) | | 51,180 | | | 2,615,298 |
| | | | | |
| | | | | 10,828,919 |
| | | | | |
| Independent Power Producers & Energy Traders - 1.4% |
AES Corp.*(a) | | 873,550 | | | 10,141,916 |
| | | | | |
| Industrial Conglomerates - 1.2% | | | | | |
3M Co. | | 143,230 | | | 8,608,123 |
| | | | | |
| Insurance - 1.6% | | | | | |
ACE, Ltd. | | 263,180 | | | 11,640,451 |
| | | | | |
| Internet Software & Services - 2.0% | | | | | |
Google, Inc. - Class A*(a) | | 35,175 | | | 14,829,428 |
| | | | | |
| IT Services - 1.4% | | | | | |
Paychex, Inc.(a) | | 56,020 | | | 1,411,704 |
Visa, Inc. - Class A(a) | | 140,794 | | | 8,765,834 |
| | | | | |
| | | | | 10,177,538 |
| | | | | |
| Life Sciences Tools & Services - 0.5% | | | | | |
Qiagen N.V.*(a) | | 190,710 | | | 3,545,299 |
| | | | | |
| Media - 0.6% | | | | | |
DIRECTV Group, Inc. (The)*(a) | | 179,535 | | | 4,436,310 |
| | | | | |
| Metals & Mining - 0.9% | | | | | |
Freeport-McMoRan Copper & Gold, Inc.(a) | | 130,050 | | | 6,516,806 |
| | | | | |
| Multi-Utilities - 0.5% | | | | | |
Xcel Energy, Inc.(a) | | 195,145 | | | 3,592,619 |
| | | | | |
| Multiline Retail - 1.3% | | | | | |
Kohl’s Corp.*(a) | | 223,160 | | | 9,540,090 |
| | | | | |
| Oil, Gas & Consumable Fuels - 8.6% | | | | | |
Chevron Corp. | | 269,765 | | | 17,871,931 |
CONSOL Energy, Inc.(a) | | 104,535 | | | 3,550,009 |
Devon Energy Corp.(a) | | 326,635 | | | 17,801,607 |
Southwestern Energy Co.*(a) | | 156,620 | | | 6,084,687 |
Total S.A. (ADR) | | 331,365 | | | 17,969,924 |
| | | | | |
| | | | | 63,278,158 |
| | | | | |
| Personal Products - 0.9% | | | | | |
Avon Products, Inc.(a) | | 263,965 | | | 6,805,018 |
| | | | | |
| Pharmaceuticals - 4.1% | | | | | |
Abbott Laboratories | | 309,240 | | | 14,546,650 |
Allergan, Inc.(a) | | 141,605 | | | 6,737,566 |
Teva Pharmaceutical Industries, Ltd. (ADR)(a) | | 172,125 | | | 8,492,647 |
| | | | | |
| | | | | 29,776,863 |
| | | | | |
| Professional Services - 0.2% | | | | | |
FTI Consulting, Inc.* | | 27,500 | | | 1,394,800 |
| | | | | |
| Real Estate Investment Trusts (REITs) - 1.8% | | | |
Annaly Mortgage Management, Inc.(a) | | 493,545 | | | 7,472,271 |
Boston Properties, Inc.(a) | | 119,960 | | | 5,722,092 |
| | | | | |
| | | | | 13,194,363 |
| | | | | |
| | | | | | |
Security
Description | | Shares/Par
Amount | | Value |
| | | | | | |
|
| Semiconductors & Semiconductor Equipment - 3.7% |
Broadcom Corp. - Class A*(a) | | | 380,675 | | $ | 9,436,933 |
Intel Corp. | | | 616,920 | | | 10,210,026 |
Intersil Corp. - Class A(a) | | | 182,860 | | | 2,298,550 |
Taiwan Semiconductor Manufacturing Co., Ltd. (ADR) | | | 570,130 | | | 5,364,924 |
| | | | | | |
| | | | | | 27,310,433 |
| | | | | | |
| Software - 3.6% | | | | | | |
Check Point Software Technologies, Ltd.*(a) | | | 231,920 | | | 5,443,162 |
Microsoft Corp. | | | 333,215 | | | 7,920,521 |
Oracle Corp. | | | 602,615 | | | 12,908,013 |
| | | | | | |
| | | | | | 26,271,696 |
| | | | | | |
| Specialty Retail - 3.6% | | | | | | |
Best Buy Co., Inc.(a) | | | 291,810 | | | 9,772,717 |
GameStop Corp. - Class A*(a) | | | 154,680 | | | 3,404,507 |
Gap, Inc. (The)(a) | | | 244,870 | | | 4,015,868 |
Lowe’s Cos., Inc. | | | 463,135 | | | 8,989,450 |
| | | | | | |
| | | | | | 26,182,542 |
| | | | | | |
| Textiles, Apparel & Luxury Goods - 2.0% | | | |
Coach, Inc.(a) | | | 143,560 | | | 3,858,893 |
NIKE, Inc. - Class B | | | 212,505 | | | 11,003,509 |
| | | | | | |
| | | | | | 14,862,402 |
| | | | | | |
| Wireless Telecommunication Services - 0.8% | | | |
American Tower Corp. - Class A*(a) | | | 195,970 | | | 6,178,934 |
| | | | | | |
Total Common Stocks
(Cost $738,816,366) | | | | | | 704,958,885 |
| | | | | | |
| | |
| Short-Term Investments - 29.2% | | | | | | |
| Mutual Funds - 25.4% | | | | | | |
State Street Navigator Securities Lending Prime Portfolio(b) | | | 186,135,387 | | | 186,135,387 |
| | | | | | |
| Repurchase Agreement - 3.8% | | | | | | |
State Street Bank & Trust Co., Repurchase Agreement, dated 06/30/09 at 0.010% to be repurchased at $471,177 on 07/01/09 collateralized by $480,000 FHLMC at 0.657% due 04/01/11 with a value of $480,600. | | $ | 471,177 | | | 471,177 |
State Street Bank & Trust Co., Repurchase Agreement, dated 06/30/09 at 0.010% to be repurchased at $27,396,901 on 07/01/09 collateralized by $25,965,000 FNMA at 6.25% due 02/01/11 with a value of $27,944,831. | | | 27,396,893 | | | 27,396,893 |
See accompanying notes to financial statements
6
Met Investors Series Trust
Rainier Large Cap Equity Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | | |
Security
Description | | Par
Amount | | Value | |
| | | | | | | |
| | |
| Repurchase Agreement - continued | | | | | | | |
State Street Bank & Trust Co., Repurchase Agreement, dated 06/30/09 at 0.010% to be repurchased at $12,930 on 07/01/09 collateralized by $15,000 FNMA at 5.25% due 08/01/12 with a value of $15,863. | | $ | 12,930 | | $ | 12,930 | |
| | | | | | | |
Total Short-Term Investments
(Cost $214,016,387) | | | | | | 214,016,387 | |
| | | | | | | |
| | |
TOTAL INVESTMENTS - 125.4%
(Cost $952,832,753) | | | | | | 918,975,272 | |
| | | | | | | |
| |
| Other Assets and Liabilities (net) - (25.4)% | | | (186,144,602 | ) |
| | | | | | | |
| | |
| NET ASSETS - 100.0% | | | | | $ | 732,830,670 | |
| | | | | | | |
Portfolio Footnotes:
| * | | Non-income producing security |
| (a) | | All or a portion of security is on loan. |
| (b) | | Represents investment of collateral received from securities lending transactions. |
ADR - American Depositary Receipt
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
See accompanying notes to financial statements
7
Met Investors Series Trust
Rainier Large Cap Equity Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1—quoted prices in active markets for identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Common Stocks | | | | | | | | | | | | |
Aerospace & Defense | | $ | 32,993,540 | | $ | — | | $ | — | | $ | 32,993,540 |
Air Freight & Logistics | | | 11,841,334 | | | — | | | — | | | 11,841,334 |
Airlines | | | 4,439,714 | | | — | | | — | | | 4,439,714 |
Beverages | | | 15,815,564 | | | — | | | — | | | 15,815,564 |
Biotechnology | | | 26,515,033 | | | — | | | — | | | 26,515,033 |
Capital Markets | | | 35,574,370 | | | — | | | — | | | 35,574,370 |
Chemicals | | | 12,033,777 | | | — | | | — | | | 12,033,777 |
Commercial & Professional Services | | | 13,556,037 | | | — | | | — | | | 13,556,037 |
Commercial Banks | | | 6,259,444 | | | — | | | — | | | 6,259,444 |
Communications Equipment | | | 27,788,957 | | | — | | | — | | | 27,788,957 |
Computers & Peripherals | | | 37,590,045 | | | — | | | — | | | 37,590,045 |
Construction & Engineering | | | 2,665,463 | | | — | | | — | | | 2,665,463 |
Containers & Packaging | | | 5,672,659 | | | — | | | — | | | 5,672,659 |
Diversified Financial Services | | | 17,283,366 | | | — | | | — | | | 17,283,366 |
Electric Utilities | | | 7,596,914 | | | — | | | — | | | 7,596,914 |
Electrical Equipment | | | 6,830,452 | | | — | | | — | | | 6,830,452 |
Electronic Equipment, Instruments & Components | | | 3,228,939 | | | — | | | — | | | 3,228,939 |
Energy Equipment & Services | | | 31,124,494 | | | — | | | — | | | 31,124,494 |
Food & Staples Retailing | | | 32,049,094 | | | — | | | — | | | 32,049,094 |
Food Products | | | 5,437,755 | | | — | | | — | | | 5,437,755 |
Health Care Equipment & Supplies | | | 18,734,931 | | | — | | | — | | | 18,734,931 |
Health Care Providers & Services | | | 13,373,787 | | | — | | | — | | | 13,373,787 |
Hotels, Restaurants & Leisure | | | 27,440,508 | | | — | | | — | | | 27,440,508 |
Household Products | | | 10,828,919 | | | — | | | — | | | 10,828,919 |
Independent Power Producers & Energy Traders | | | 10,141,916 | | | — | | | — | | | 10,141,916 |
Industrial Conglomerates | | | 8,608,123 | | | — | | | — | | | 8,608,123 |
Insurance | | | 11,640,451 | | | — | | | — | | | 11,640,451 |
Internet Software & Services | | | 14,829,428 | | | — | | | — | | | 14,829,428 |
IT Services | | | 10,177,538 | | | — | | | — | | | 10,177,538 |
Life Sciences Tools & Services | | | 3,545,299 | | | — | | | — | | | 3,545,299 |
Media | | | 4,436,310 | | | — | | | — | | | 4,436,310 |
Metals & Mining | | | 6,516,806 | | | — | | | — | | | 6,516,806 |
See accompanying notes to financial statements
8
Met Investors Series Trust
Rainier Large Cap Equity Portfolio
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Multi-Utilities | | $ | 3,592,619 | | $ | — | | $ | — | | $ | 3,592,619 |
Multiline Retail | | | 9,540,090 | | | — | | | — | | | 9,540,090 |
Oil, Gas & Consumable Fuels | | | 63,278,158 | | | — | | | — | | | 63,278,158 |
Personal Products | | | 6,805,018 | | | — | | | — | | | 6,805,018 |
Pharmaceuticals | | | 29,776,863 | | | — | | | — | | | 29,776,863 |
Professional Services | | | 1,394,800 | | | — | | | — | | | 1,394,800 |
Real Estate Investment Trusts (REITs) | | | 13,194,363 | | | — | | | — | | | 13,194,363 |
Semiconductors & Semiconductor Equipment | | | 27,310,433 | | | — | | | — | | | 27,310,433 |
Software | | | 26,271,696 | | | — | | | — | | | 26,271,696 |
Specialty Retail | | | 26,182,542 | | | — | | | — | | | 26,182,542 |
Textiles, Apparel & Luxury Goods | | | 14,862,402 | | | — | | | — | | | 14,862,402 |
Wireless Telecommunication Services | | | 6,178,934 | | | — | | | — | | | 6,178,934 |
Total Common Stocks | | | 704,958,885 | | | — | | | — | | | 704,958,885 |
Short-Term Investments | | | | | | | | | | | | |
Mutual Funds | | | — | | | 186,135,387 | | | — | | | 186,135,387 |
Repurchase Agreement | | | — | | | 27,881,000 | | | — | | | 27,881,000 |
Total Short-Term Investments | | | — | | | 214,016,387 | | | — | | | 214,016,387 |
TOTAL INVESTMENTS | | $ | 704,958,885 | | $ | 214,016,387 | | $ | — | | $ | 918,975,272 |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| Rainier Large Cap Equity Portfolio | | | |
| Assets | | | | |
Investments, at value(a)(b) | | $ | 891,094,272 | |
Repurchase Agreement | | | 27,881,000 | |
Cash | | | 684 | |
Cash denominated in foreign currencies(c) | | | 797 | |
Receivable for investments sold | | | 5,842,374 | |
Receivable for Trust shares sold | | | 37,210 | |
Dividends receivable | | | 760,622 | |
Interest receivable | | | 8 | |
| | | | |
Total assets | | | 925,616,967 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 6,104,255 | |
Trust shares redeemed | | | 68,896 | |
Distribution and services fees—Class B | | | 6,672 | |
Collateral for securities on loan | | | 186,135,387 | |
Management fee | | | 403,347 | |
Administration fee | | | 4,366 | |
Custodian and accounting fees | | | 12,588 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 47,359 | |
| | | | |
Total liabilities | | | 192,786,297 | |
| | | | |
| Net Assets | | $ | 732,830,670 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 1,040,853,318 | |
Accumulated net realized loss | | | (277,100,398 | ) |
Unrealized depreciation on investments and foreign currency | | | (33,857,425 | ) |
Undistributed net investment income | | | 2,935,175 | |
| | | | |
Total | | $ | 732,830,670 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 700,084,071 | |
| | | | |
Class B | | | 32,746,599 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 118,481,846 | |
| | | | |
Class B | | | 5,551,182 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 5.91 | |
| | | | |
Class B | | | 5.90 | |
| | | | |
| | | | | |
(a) Investments at cost, excluding repurchase agreements | | $ | 924,951,753 | |
(b) Includes cash collateral for securities loaned of | | | 186,135,387 | |
(c) Cost of cash denominated in foreign currencies | | | 741 | |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| Rainier Large Cap Equity Portfolio | | | |
| Investment Income | | | | |
Dividends(1) | | $ | 5,051,156 | |
Interest | | | 1,204 | |
| | | | |
Total investment income | | | 5,052,360 | |
| | | | |
| Expenses | | | | |
Management fee | | | 1,959,231 | |
Administration fees | | | 24,990 | |
Custodian and accounting fees | | | 27,827 | |
Distribution and services fees—Class B | | | 38,367 | |
Audit and tax services | | | 26,588 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 20,834 | |
Insurance | | | 6,065 | |
Other | | | 1,768 | |
| | | | |
Total expenses | | | 2,132,103 | |
Less broker commission recapture | | | (14,998 | ) |
| | | | |
Net expenses | | | 2,117,105 | |
| | | | |
Net investment income | | | 2,935,255 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | (128,448,073 | ) |
Foreign currency | | | 741 | |
| | | | |
Net realized loss on investments and foreign currency | | | (128,447,332 | ) |
| | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 150,386,456 | |
Foreign currency | | | 56 | |
| | | | |
Net change in unrealized appreciation on investments and foreign currency | | | 150,386,512 | |
| | | | |
Net realized and unrealized gain on investments and foreign currency | | | 21,939,180 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 24,874,435 | |
| | | | |
| | | | | |
(1) Dividend income is net of foreign withholding taxes of: | | $ | 108,536 | |
See accompanying notes to financial statements
11
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| Rainier Large Cap Equity Portfolio | | | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 2,935,255 | | | $ | 5,860,530 | |
Net realized loss on investments and foreign currency | | | (128,447,332 | ) | | | (148,189,784 | ) |
Net change in unrealized appreciation (depreciation) on investments and foreign currency | | | 150,386,512 | | | | (208,993,104 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 24,874,435 | | | | (351,322,358 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | (5,489,645 | ) | | | — | |
Class B | | | (279,563 | ) | | | — | |
From net realized gains | | | | | | | | |
Class A | | | — | | | | (7,949,019 | ) |
Class B | | | — | | | | (361,248 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (5,769,208 | ) | | | (8,310,267 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 168,356,294 | | | | 163,589,836 | |
Class B | | | 10,533,738 | | | | 53,968,138 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | 5,489,645 | | | | 7,949,019 | |
Class B | | | 279,563 | | | | 361,248 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (11,754,594 | ) | | | (80,669,877 | ) |
Class B | | | (9,476,825 | ) | | | (15,071,702 | ) |
| | | | | | | | |
Net increase in net assets from capital share transactions | | | 163,427,821 | | | | 130,126,662 | |
| | | | | | | | |
| Net Increase (Decrease) in Net Assets | | | 182,533,048 | | | | (229,505,963 | ) |
Net assets at beginning of period | | | 550,297,622 | | | | 779,803,585 | |
| | | | | | | | |
Net assets at end of period | | $ | 732,830,670 | | | $ | 550,297,622 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 2,935,175 | | | $ | 5,769,128 | |
| | | | | | | | |
See accompanying notes to financial statements
12
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | |
| | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | |
| | | |
| | | | | | | | | | |
| Rainier Large Cap Equity Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Year
Ended
December 31,
2008 | | | For the Period
Ended
December 31,
2007(b) | |
| Net Asset Value, Beginning of Period | | $ | 5.77 | | | $ | 10.00 | | | $ | 10.00 | |
| | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.03 | | | | 0.07 | | | | 0.01 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.17 | | | | (4.20 | ) | | | 0.00 | + |
| | | | | | | | | | | | |
Total from Investment Operations | | | 0.20 | | | | (4.13 | ) | | | 0.01 | |
| | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.06 | ) | | | — | | | | (0.01 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (0.10 | ) | | | — | |
| | | | | | | | | | | | |
Total Distributions | | | (0.06 | ) | | | (0.10 | ) | | | (0.01 | ) |
| | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 5.91 | | | $ | 5.77 | | | $ | 10.00 | |
| | | | | | | | | | | | |
| Total Return | | | 3.53 | % | | | (41.70 | )% | | | 0.09 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.71 | %* | | | 0.69 | % | | | 0.75 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.71 | %* | | | 0.70 | % | | | 0.75 | %* |
Ratio of Net Investment Income to Average Net Assets | | | 1.02 | %* | | | 0.85 | % | | | 0.71 | %* |
Portfolio Turnover Rate | | | 52.0 | % | | | 97.5 | % | | | 11.2 | % |
Net Assets, End of Period (in millions) | | $ | 700.1 | | | $ | 519.8 | | | $ | 771.8 | |
| |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Year
Ended
December 31,
2008 | | | For the Period
Ended
December 31,
2007(b) | |
| | | | |
| Net Asset Value, Beginning of Period | | $ | 5.76 | | | $ | 10.00 | | | $ | 10.00 | |
| | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.02 | | | | 0.05 | | | | 0.00 | + |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.17 | | | | (4.19 | ) | | | 0.01 | |
| | | | | | | | | | | | |
Total from Investment Operations | | | 0.19 | | | | (4.14 | ) | | | 0.01 | |
| | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.05 | ) | | | — | | | | (0.01 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (0.10 | ) | | | — | |
| | | | | | | | | | | | |
Total Distributions | | | (0.05 | ) | | | (0.10 | ) | | | (0.01 | ) |
| | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 5.90 | | | $ | 5.76 | | | $ | 10.00 | |
| | | | | | | | | | | | |
| Total Return | | | 3.29 | % | | | (41.80 | )% | | | 0.07 | % |
Ratio of Expenses to Average Net Assets | | | 0.96 | %* | | | 0.94 | % | | | 1.02 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.97 | %* | | | 0.96 | % | | | 1.04 | %* |
Ratio of Net Investment Income to Average Net Assets | | | 0.73 | %* | | | 0.63 | % | | | 0.27 | %* |
Portfolio Turnover Rate | | | 52.0 | % | | | 97.5 | % | | | 11.2 | % |
Net Assets, End of Period (in millions) | | $ | 32.7 | | | $ | 30.5 | | | $ | 8.0 | |
| + | | Rounds to less than $0.005 per share. |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—11/01/2007. |
See accompanying notes to financial statements
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is Rainier Large Cap Equity Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A and B Shares are currently offered by the Portfolio. Class C and E Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2007 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | | |
Expiring
12/31/2016 | | Total |
| |
| $ | 71,840,517 | | $ | 71,840,517 |
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
G. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
H. Foreign Currency Translation - The books and records of the Portfolio are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars on a daily basis using prevailing exchange rates. Purchases and sales of securities are translated at the rates of exchange prevailing when such securities were acquired or sold. Income is translated at rates of exchange prevailing when interest is accrued or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in forward foreign currency contracts; sales of foreign currencies; currency gains or losses realized between the trade and settlement dates on securities transactions; and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Portfolio’s books and the U.S. dollar equivalent of the amounts actually received
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end; from changes in the exchange rates of foreign currency held; and from changes in the contract value of forward foreign currency contracts.
I. Directed Brokerage Agreement - The Trust has entered into a directed brokerage arrangement with State Street Global Markets (“SSGM”). Under this arrangement, the Portfolio directs certain trades to SSGM in return for a recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to the Portfolio are shown separately as an expense reduction on the Statement of Operations of the Portfolio.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with Rainier Investment Management, Inc. (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $1,959,231 | | 0.700 | % | | First $150 Million |
| | |
| | 0.675 | % | | $150 Million to $300 Million |
| | |
| | 0.650 | % | | $300 Million to $1 Billion |
| | |
| | 0.600 | % | | Over $1 Billion |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Manager has entered into an expense limitation agreement with the Trust (“Expense Limitation Agreement”) in the interest of limiting expenses of the Portfolio of the Trust. The Expense Limitation Agreement for the Portfolio shall continue in effect with respect to the Portfolio until April 30, 2010. Pursuant to that Expense Limitation Agreement, the Manager has agreed to waive or limit its fees and to assume other expenses so that the total annual operating expenses of the Portfolio other than interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with accounting principles generally accepted in the United States of America, and other extraordinary expenses not incurred in the ordinary course of the Portfolio’s business, but including amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act, are limited to the following expense ratios as a percentage of the Portfolio’s average daily net assets:
| | | |
Maximum Expense Ratio under current Expense Limitation Agreement | |
|
|
Class A | | Class B | |
| |
| 0.80% | | 1.05 | % |
If in any year in which the Management Agreement is still in effect, the estimated aggregate portfolio operating expenses of the Portfolio for the fiscal year are less than the Maximum Expense Ratios for that year, subject to approval by the Trust’s Board, the Manager shall be entitled to reimbursement by the Portfolio to the extent that the charge does not cause the expenses in such subsequent year to exceed the Maximum Expense Ratios as stated above. The Portfolio is not obligated to repay any expense paid by the Manager more than five years after the end of the fiscal year in which such expense was incurred.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A and Class B Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B distribution plan provides that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% of the average net assets
16
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
of the Portfolio attributable to its Class B Shares in respect to activities primarily intended to result in the sale of Class B Shares. However, under the Class B distribution agreement, payments to the Distributor for activities pursuant to the Class B distribution plan are currently limited to payments at an annual rate equal to 0.25% of average daily net assets of the Portfolio attributable to its Class B Shares.
Under terms of the Class B distribution plan and distribution agreement, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
in Shares
Outstanding | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 90,059,806 | | 29,656,229 | | 992,702 | | (2,226,891 | ) | | 28,422,040 | | 118,481,846 |
12/31/2008 | | 77,195,659 | | 21,338,091 | | 834,105 | | (9,308,049 | ) | | 12,864,147 | | 90,059,806 |
| | | | | | |
Class B | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 5,299,051 | | 1,894,088 | | 50,554 | | (1,692,511 | ) | | 252,131 | | 5,551,182 |
12/31/2008 | | 797,181 | | 6,316,922 | | 37,946 | | (1,852,998 | ) | | 4,501,870 | | 5,299,051 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 452,760,789 | | $ | — | | $ | 301,621,815 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $952,832,753 | | $ | 25,960,555 | | $ | (59,818,036 | ) | | $ | (33,857,481 | ) |
6. Securities Lending
As of June 30, 2009, the Portfolio had loaned securities which were collateralized by short-term investments. The value of securities on loan and the value of the related collateral were as follows:
| | | | | | | | | |
Value of
Securities | | Value of
Cash
Collateral | | Value of
Non-Cash
Collateral* | | Total
Collateral |
| | | |
| $181,755,367 | | $ | 186,135,387 | | $ | — | | $ | 186,135,387 |
* The Portfolio cannot repledge or resell this collateral. The non-cash collateral is typically comprised of government securities and/or bank letters of credit.
17
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
7. Distributions to Shareholders
The tax character of distributions paid for the period ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $ | 4,088,246 | | $ | 711,232 | | $ | 4,222,021 | | $ | — | | $ | 8,310,267 | | $ | 711,232 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net Unrealized
Depreciation | | | Loss Carryforwards
and Post October
Loss Deferrals | | | Total | |
| | | | |
| $ | 5,769,128 | | $ | — | | $ | (200,029,926 | ) | | $ | (132,867,077 | ) | | $ | (327,127,875 | ) |
8. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
9. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
18
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
19
| | |
| RCM Technology Portfolio | | For the period ended 6/30/09 |
| Managed by RCM Capital Management LLC | | |
Portfolio Manager Commentary
Performance
During the period ended June 30, 2009, the RCM Technology Portfolio had a return of 24.58%, 24.36%, and 24.58% for Class A, B and E Shares, respectively, versus 16.36%, 26.23% and 3.16% for its benchmarks, the NASDAQ Composite Index, the S&P North America Technology Sector Index™ and the S&P 500® Index.
Market Environment/Conditions
The rally in technology stocks began as the stock market rallied on passage of the stimulus bill and the aggressive actions by the Fed to bring down interest rates for consumer and corporate borrowers. As technology companies reported first quarter results, the rally in technology stocks gained momentum, as most companies beat expectations for earnings by showing tight cost control. These earnings results were achieved despite weak sales as a result of the global recession. We believe this demonstrates technology companies are improving their reaction times to economic events since the last recession in 2001-2002, and also that many of their business models are becoming more resilient as the amount of recurring revenue from maintenance, services, and subscription revenues has increased.
Portfolio Review/Current Positioning
We continued to hold several mid-cap stocks that we think will either appreciate in response to improving fundamentals or will be acquired because of their attractive valuations and strategic value. We also continue to focus on companies that can save customers money as the economy improves.
Nintendo, Comcast, and Research In Motion detracted from relative returns during the first half of the year. Nintendo stock declined on slowing Wii sales and a lack of new products. We exited the position in the Portfolio during the first half of the year. While shares of Research In Motion (“RIM”) took a hit during 2008 when the company entered the highly competitive consumer smartphone market, the company proved that it could garner non-enterprise revenue for its flagship Blackberry product. RIM stock has soared since the beginning of the year and the Portfolio’s underweight in the name held back relative returns.
The Portfolio’s position in stocks such as Data Domain, Riverbed Technology, and ON Semiconductor contributed to positive relative returns during the first half of the year. Data Domain appreciated sharply since May when it became subject to a takeover battle between EMC and Network Appliance. Data Domain is the leader in de-duplication capability, which is a vital cost containment issue for enterprises. Riverbed Technology stock has also posted strong returns since the beginning of the year as the company’s Steelhead WAN optimization products have proven successful in expanding the efficiency of virtualization as processing moves into a cloud-based structure.
Huachen Chen,
CFA, Co-Portfolio Manager
Walter C. Price, Jr.,
CFA, Co-Portfolio Manager
RCM Capital Management, Inc
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
Microsoft Corp. | | 8.08% |
Apple, Inc. | | 5.98% |
Hewlett-Packard Co. | | 5.82% |
QUALCOMM, Inc. | | 4.74% |
Google, Inc.—Class A | | 4.57% |
Cisco Systems, Inc. | | 4.33% |
Oracle Corp. | | 4.31% |
Data Domain, Inc. | | 3.59% |
Riverbed Technology, Inc. | | 2.65% |
Amazon.com, Inc. | | 2.56% |
1
| | |
| RCM Technology Portfolio | | For the period ended 6/30/09 |
| Managed by RCM Capital Management LLC | | |
Portfolio Manager Commentary (continued)
Portfolio Composition (% of portfolio market value)
As of 6/30/09
2
| | |
| RCM Technology Portfolio | | For the period ended 6/30/09 |
| Managed by RCM Capital Management LLC | | |
Portfolio Manager Commentary (continued)
RCM Technology Portfolio managed by
RCM Capital Management LLC vs. NASDAQ Composite Index1, S&P North American Technology Sector Index™2 and S&P 500® Index3
Growth Based on $10,000+
| | | | | | | | | | | | |
| | | | | Average Annual Return4
(for the period ended 6/30/09) |
| | | | | 6 Months | | 1 year | | 3 Year | | 5 Year | | Since
Inception5 |
| | RCM Technology Portfolio—Class A | | 24.58% | | -18.75% | | 0.82% | | 0.81% | | -5.76% |
| — | | Class B | | 24.36% | | -19.17% | | 0.58% | | 0.54% | | -8.23% |
| | Class E | | 24.58% | | -19.01% | | 0.67% | | 0.64% | | -0.86% |
| - - | | NASDAQ Composite Index1 | | 16.36% | | -19.97% | | -5.47% | | -2.17% | | -3.49% |
| - - | | S&P North American Technology Sector Index™2 | | 26.23% | | -18.57% | | -1.29% | | -1.02% | | -5.43% |
| — | | S&P 500® Index3 | | 3.16% | | -26.21% | | -8.22% | | -2.24% | | -2.37% |
+The chart reflects the performance of Class B shares of the Portfolio. The performance of Class B shares will differ from that of the other classes because of the difference in expenses paid by policyholders investing in the different share classes.
1The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on NASDAQ.
2The S&P North American Technology Sector Index™ is an unmanaged index providing investors with a suite of equity benchmarks for U.S. traded technology-related securities.
3The S&P 500® Index is an unmanaged index consisting of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value weighted index (stock price times number of shares outstanding), with each stock’s weight in the Index proportionate to its market value.
4“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
5Inception of the Class A shares is 5/1/01. Inception of the Class B shares is 2/12/01. Inception of the Class E shares is 11/1/01. Index returns are based on an inception date of 2/12/2001.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Indexes do not include fees or expenses and are not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | |
| RCM Technology Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.97% | | $ | 1,000.00 | | $ | 1,245.80 | | $ | 5.40 |
Hypothetical | | 0.97% | | | 1,000.00 | | | 1,019.98 | | | 4.86 |
| | | | | | | | | | | |
| | | | |
Class B | | | | | | | | | | | |
Actual | | 1.22% | | $ | 1,000.00 | | $ | 1,243.60 | | $ | 6.79 |
Hypothetical | | 1.22% | | | 1,000.00 | | | 1,018.74 | | | 6.11 |
| | | | | | | | | | | |
| | | | |
Class E | | | | | | | | | | | |
Actual | | 1.12% | | $ | 1,000.00 | | $ | 1,245.80 | | $ | 6.24 |
Hypothetical | | 1.12% | | | 1,000.00 | | | 1,019.24 | | | 5.61 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
4
Met Investors Series Trust
RCM Technology Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | |
| Common Stocks - 92.6% | | | | | |
| Auto Components - 0.3% | | | | | |
Johnson Controls, Inc.(a) | | 24,125 | | $ | 523,995 |
| | | | | |
| Chemicals - 1.5% | | | | | |
Monsanto Co. | | 34,795 | | | 2,586,660 |
| | | | | |
| Communications Equipment - 15.0% | | | |
Cisco Systems, Inc.* | | 401,025 | | | 7,475,106 |
F5 Networks, Inc.*(a) | | 60,930 | | | 2,107,569 |
Juniper Networks, Inc.*(a) | | 14,745 | | | 347,982 |
Motorola, Inc. | | 145,510 | | | 964,731 |
QUALCOMM, Inc. | | 181,185 | | | 8,189,562 |
Research In Motion, Ltd.* | | 30,686 | | | 2,180,240 |
Riverbed Technology, Inc.*(a) | | 197,265 | | | 4,574,576 |
| | | | | |
| | | | | 25,839,766 |
| | | | | |
| Computers & Peripherals - 21.1% | | | |
Apple, Inc.* | | 72,575 | | | 10,336,857 |
Data Domain, Inc.* | | 186,170 | | | 6,208,769 |
Dell, Inc.*(a) | | 244,895 | | | 3,362,408 |
Hewlett-Packard Co. | | 260,175 | | | 10,055,764 |
International Business Machines Corp. | | 32,615 | | | 3,405,658 |
NetApp, Inc.* | | 48,040 | | | 947,349 |
SanDisk Corp.* | | 148,950 | | | 2,188,076 |
| | | | | |
| | | | | 36,504,881 |
| | | | | |
| Construction & Engineering - 0.4% | | | | | |
Quanta Services, Inc.* | | 26,095 | | | 603,577 |
| | | | | |
| Diversified Telecommunication Services - 0.4% | | | |
China Telecom Corp., Ltd. (ADR)(a) | | 13,470 | | | 670,267 |
| | | | | |
| Electrical Equipment - 2.5% | | | | | |
ABB, Ltd.* | | 17,889 | | | 281,504 |
ABB, Ltd. (ADR) | | 74,480 | | | 1,175,294 |
First Solar, Inc.* | | 17,955 | | | 2,910,865 |
| | | | | |
| | | | | 4,367,663 |
| | | | | |
| Electronic Equipment, Instruments & Components - 1.3% |
Amphenol Corp. - Class A | | 72,857 | | | 2,305,196 |
| | | | | |
| Internet & Catalog Retail - 2.6% | | | | | |
Amazon.com, Inc.* | | 52,915 | | | 4,426,869 |
| | | | | |
| Internet Software & Services - 12.3% | | | |
Baidu.com (ADR)* | | 7,860 | | | 2,366,567 |
Equinix, Inc.*(a) | | 35,410 | | | 2,575,723 |
Google, Inc. - Class A* | | 18,715 | | | 7,890,057 |
Netease.com, Inc. (ADR)*(a) | | 73,625 | | | 2,590,128 |
Tencent Holdings, Ltd. | | 228,500 | | | 2,650,181 |
Yahoo!, Inc.*(a) | | 208,710 | | | 3,268,399 |
| | | | | |
| | | | | 21,341,055 |
| | | | | |
| IT Services - 2.8% | | | | | |
Cognizant Technology Solutions Corp.
- Class A* | | 144,390 | | | 3,855,213 |
Visa, Inc. - Class A | | 14,920 | | | 928,919 |
| | | | | |
| | | | | 4,784,132 |
| | | | | |
| | | | | | | |
Security
Description | | Shares/Par
Amount | | Value | |
| | | | | | | |
|
| Semiconductors & Semiconductor Equipment - 10.5% | |
ADVANTEST Corp. | | | 122,400 | | $ | 2,205,189 | |
Analog Devices, Inc. | | | 37,445 | | | 927,887 | |
ASML Holding N.V.(a) | | | 69,360 | | | 1,501,644 | |
Infineon Technologies AG* | | | 148,860 | | | 540,084 | |
Intel Corp. | | | 50,905 | | | 842,478 | |
ON Semiconductor Corp.* | | | 485,360 | | | 3,329,570 | |
Samsung Electronics Co., Ltd. (GDR) (144A)(b) | | | 15,375 | | | 3,586,219 | |
Taiwan Semiconductor Manufacturing Co., Ltd. (ADR) | | | 234,355 | | | 2,205,280 | |
Texas Instruments, Inc. | | | 142,760 | | | 3,040,788 | |
| | | | | | | |
| | | | | | 18,179,139 | |
| | | | | | | |
|
| Software - 19.6% | |
Activision Blizzard, Inc.* | | | 143,105 | | | 1,807,416 | |
Autonomy Corp. Plc* | | | 37,015 | | | 876,897 | |
Intuit, Inc.* | | | 61,820 | | | 1,740,851 | |
McAfee, Inc.*(a) | | | 74,850 | | | 3,157,922 | |
Microsoft Corp. | | | 587,135 | | | 13,956,199 | |
Oracle Corp. | | | 347,925 | | | 7,452,554 | |
Salesforce.com, Inc.*(a) | | | 38,720 | | | 1,477,942 | |
Shanda Interactive Entertainment, Ltd. (ADR)*(a) | | | 31,005 | | | 1,621,251 | |
Symantec Corp.* | | | 99,655 | | | 1,550,632 | |
VMware, Inc. - Class A* | | | 10,690 | | | 291,516 | |
| | | | | | | |
| | | | | | 33,933,180 | |
| | | | | | | |
| Wireless Telecommunication Services - 2.3% | |
American Tower Corp. - Class A* | | | 126,500 | | | 3,988,545 | |
| | | | | | | |
Total Common Stocks
(Cost $156,481,752) | | | | | | 160,054,925 | |
| | | | | | | |
|
| Short-Term Investments - 17.2% | |
| Mutual Funds - 9.4% | |
State Street Navigator Securities Lending Trust Prime Portfolio (c) | | | 16,174,530 | | | 16,174,530 | |
| | | | | | | |
| Repurchase Agreement - 7.8% | | | | |
State Street Bank & Trust Co., Repurchase Agreement, dated 06/30/09 at 0.010% to be repurchased at $13,562,004 on 07/01/09 collateralized by $13,765,000 FNMA at 1.722% due 05/10/11 with a value of $13,833,825. | | $ | 13,562,000 | | | 13,562,000 | |
| | | | | | | |
Total Short-Term Investments
(Cost $29,736,530) | | | | | | 29,736,530 | |
| | | | | | | |
| | |
TOTAL INVESTMENTS - 109.8%
(Cost $186,218,282) | | | | | | 189,791,455 | |
| | | | | | | |
| | |
| Other Assets and Liabilities (net) - (9.8)% | | | | | | (16,973,544 | ) |
| | | | | | | |
| | |
| NET ASSETS - 100.0% | | | | | $ | 172,817,911 | |
| | | | | | | |
See accompanying notes to financial statements
5
Met Investors Series Trust
RCM Technology Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
Portfolio Footnotes:
| * | | Non-income producing security. |
| (a) | | All or a portion of security is on loan. |
| (b) | | Securities that may be resold to “qualified institutional buyers” under Rule 144A or securities offered pursuant to Section 4(2) of the Securities Act of 1933, as amended. These securities have been determined to be liquid under the guidelines established by the Board of Trustees. These securities represent in the aggregate $3,586,219 of net assets. |
| (c) | | Represents investment of collateral received from securities lending transactions. |
ADR - American Depositary Receipt
FNMA - Federal National Mortgage Association
GDR - Global Depositary Receipt
See accompanying notes to financial statements
6
Met Investors Series Trust
RCM Technology Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1—quoted prices in active markets for identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Common Stocks | | | | | | | | | | | | |
Auto Components | | $ | 523,995 | | $ | — | | $ | — | | $ | 523,995 |
Chemicals | | | 2,586,660 | | | — | | | — | | | 2,586,660 |
Communications Equipment | | | 25,839,766 | | | — | | | — | | | 25,839,766 |
Computers & Peripherals | | | 36,504,881 | | | — | | | — | | | 36,504,881 |
Construction & Engineering | | | 603,577 | | | — | | | — | | | 603,577 |
Diversified Telecommunication Services | | | 670,267 | | | — | | | — | | | 670,267 |
Electrical Equipment | | | 4,086,159 | | | — | | | — | | | 4,086,159 |
Electronic Equipment, Instruments & Components | | | 2,305,196 | | | — | | | — | | | 2,305,196 |
Energy Equipment & Services | | | — | | | 281,504 | | | — | | | 281,504 |
Internet & Catalog Retail | | | 4,426,869 | | | — | | | — | | | 4,426,869 |
Internet Software & Services | | | 18,690,874 | | | 2,650,181 | | | — | | | 21,341,055 |
IT Services | | | 4,784,132 | | | — | | | — | | | 4,784,132 |
Semiconductors & Semiconductor Equipment | | | 15,433,866 | | | 2,745,273 | | | — | | | 18,179,139 |
Software | | | 33,056,283 | | | 876,897 | | | — | | | 33,933,180 |
Wireless Telecommunication Services | | | 3,988,545 | | | — | | | — | | | 3,988,545 |
Total Common Stocks | | | 153,501,070 | | | 6,553,855 | | | — | | | 160,054,925 |
Short-Term Investments | | | | | | | | | | | | |
Mutual Funds | | | 16,174,530 | | | — | | | — | | | 16,174,530 |
Repurchase Agreement | | | — | | | 13,562,000 | | | — | | | 13,562,000 |
Total Short-Term Investments | | | 16,174,530 | | | 13,562,000 | | | — | | | 29,736,530 |
TOTAL INVESTMENTS | | $ | 169,675,600 | | $ | 20,115,855 | | $ | — | | $ | 189,791,455 |
See accompanying notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| RCM Technology Portfolio | | | |
| Assets | | | | |
Investments, at value (a)(b) | | $ | 176,229,455 | |
Repurchase Agreement | | | 13,562,000 | |
Cash | | | 667 | |
Cash denominated in foreign currencies (c) | | | 1,079,300 | |
Receivable for Trust shares sold | | | 200,542 | |
Dividends receivable | | | 33,777 | |
Interest receivable | | | 4 | |
| | | | |
Total assets | | | 191,105,745 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 1,640,966 | |
Trust shares redeemed | | | 162,907 | |
Distribution and services fees—Class B | | | 23,806 | |
Distribution and services fees—Class E | | | 1,815 | |
Collateral for securities on loan | | | 16,174,530 | |
Management fee | | | 124,075 | |
Administration fee | | | 1,026 | |
Custodian and accounting fees | | | 60,066 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 95,216 | |
| | | | |
Total liabilities | | | 18,287,834 | |
| | | | |
| Net Assets | | $ | 172,817,911 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 221,650,427 | |
Accumulated net realized loss | | | (52,257,925 | ) |
Unrealized appreciation on investments and foreign currency | | | 3,565,622 | |
Distributions in excess of net investment income | | | (140,213 | ) |
| | | | |
Total | | $ | 172,817,911 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 40,889,004 | |
| | | | |
Class B | | | 117,343,186 | |
| | | | |
Class E | | | 14,585,721 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 13,686,513 | |
| | | | |
Class B | | | 40,317,366 | |
| | | | |
Class E | | | 4,957,342 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 2.99 | |
| | | | |
Class B | | | 2.91 | |
| | | | |
Class E | | | 2.94 | |
| | | | |
| | | | | |
(a) Investments at cost, excluding repurchase agreements | | $ | 172,656,282 | |
(b) Includes cash collateral for securities loaned of | | | 16,174,530 | |
(c) Cost of cash denominated in foreign currencies | | | 1,083,531 | |
See accompanying notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| RCM Technology Portfolio | | | |
| Investment Income | | | | |
Dividends (1) | | $ | 564,942 | |
Interest (2) | | | 91,735 | |
| | | | |
Total investment income | | | 656,677 | |
| | | | |
| Expenses | | | | |
Management fee | | | 608,493 | |
Administration fees | | | 7,244 | |
Custodian and accounting fees | | | 12,786 | |
Distribution and services fees—Class B | | | 116,128 | |
Distribution and services fees—Class E | | | 9,137 | |
Audit and tax services | | | 21,288 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 9,821 | |
Insurance | | | 1,938 | |
Other | | | 2,747 | |
| | | | |
Total expenses | | | 816,015 | |
Less broker commission recapture | | | (19,125 | ) |
| | | | |
Net expenses | | | 796,890 | |
| | | | |
Net investment loss | | | (140,213 | ) |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | (17,177,457 | ) |
Foreign currency | | | 31,358 | |
| | | | |
Net realized loss on investments and foreign currency | | | (17,146,099 | ) |
| | | | |
Net change in unrealized appreciation (depreciation) on: | | | | |
Investments | | | 49,172,251 | |
Foreign currency | | | (9,154 | ) |
| | | | |
Net change in unrealized appreciation on investments and foreign currency | | | 49,163,097 | |
| | | | |
Net realized and unrealized gain on investments and foreign currency | | | 32,016,998 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 31,876,785 | |
| | | | |
| | | | | |
(1) Dividend income is net of foreign withholding taxes of: | | $ | 3,432 | |
(2) Interest income includes securities lending net income of: | | | 91,352 | |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| RCM Technology Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment loss | | $ | (140,213 | ) | | $ | (335,967 | ) |
Net realized loss on investments and foreign currency | | | (17,146,099 | ) | | | (30,959,585 | ) |
Net change in unrealized appreciation (depreciation) on investments and foreign currency | | | 49,163,097 | | | | (76,159,039 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 31,876,785 | | | | (107,454,591 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | — | | | | (6,693,301 | ) |
Class B | | | — | | | | (17,029,716 | ) |
Class E | | | — | | | | (2,721,279 | ) |
From net realized gains | | | | | | | | |
Class A | | | — | | | | (13,965,523 | ) |
Class B | | | — | | | | (36,086,355 | ) |
Class E | | | — | | | | (5,735,313 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | — | | | | (82,231,487 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 7,636,317 | | | | 21,029,517 | |
Class B | | | 23,042,334 | | | | 51,943,635 | |
Class E | | | 2,216,650 | | | | 4,235,980 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | — | | | | 20,658,824 | |
Class B | | | — | | | | 53,116,071 | |
Class E | | | — | | | | 8,456,592 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (5,338,997 | ) | | | (27,487,368 | ) |
Class B | | | (10,937,180 | ) | | | (58,891,499 | ) |
Class E | | | (1,702,344 | ) | | | (9,636,280 | ) |
| | | | | | | | |
Net increase in net assets from capital share transactions | | | 14,916,780 | | | | 63,425,472 | |
| | | | | | | | |
| Net Increase (Decrease) in Net Assets | | | 46,793,565 | | | | (126,260,606 | ) |
Net assets at beginning of period | | | 126,024,346 | | | | 252,284,952 | |
| | | | | | | | |
Net assets at end of period | | $ | 172,817,911 | | | $ | 126,024,346 | |
| | | | | | | | |
Net assets at end of period includes undistributed (distributions in excess of) net investment income | | $ | (140,213 | ) | | $ | — | |
| | | | | | | | |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| RCM Technology Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 2.40 | | | $ | 6.82 | | | $ | 5.39 | | | $ | 5.11 | | | $ | 4.62 | | | $ | 4.83 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income (Loss)(a) | | | (0.00 | )+ | | | 0.00 | + | | | (0.01 | ) | | | (0.03 | ) | | | (0.03 | ) | | | (0.02 | ) |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.59 | | | | (2.19 | ) | | | 1.66 | | | | 0.31 | | | | 0.56 | | | | (0.19 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.59 | | | | (2.19 | ) | | | 1.65 | | | | 0.28 | | | | 0.53 | | | | (0.21 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | (0.72 | ) | | | — | | | | — | | | | — | | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | (1.51 | ) | | | (0.22 | ) | | | — | | | | (0.04 | ) | | | (0.00 | ) + |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | — | | | | (2.23 | ) | | | (0.22 | ) | | | — | | | | (0.04 | ) | | | (0.00 | ) + |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 2.99 | | | $ | 2.40 | | | $ | 6.82 | | | $ | 5.39 | | | $ | 5.11 | | | $ | 4.62 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 24.58 | % | | | (44.25 | )% | | | 31.67 | % | | | 5.48 | % | | | 11.35 | % | | | (4.28 | )% |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.97 | %* | | | 0.95 | % | | | 0.95 | % | | | 1.02 | % | | | 1.10 | % | | | 0.96 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 1.00 | %* | | | 0.97 | % | | | 0.97 | % | | | 1.06 | %(b) | | | 1.19 | % | | | N/A | |
Ratio of Net Investment Income (Loss) to Average Net Assets | | | (0.02 | )%* | | | 0.00 | % | | | (0.20 | )% | | | (0.57 | )% | | | (0.69 | )% | | | (0.45 | )% |
Portfolio Turnover Rate | | | 66.8 | % | | | 181.1 | % | | | 206.8 | % | | | 265.0 | % | | | 290.7 | % | | | 173.0 | % |
Net Assets, End of Period (in millions) | | $ | 40.9 | | | $ | 31.0 | | | $ | 64.8 | | | $ | 184.8 | | | $ | 129.3 | | | $ | 81.8 | |
| |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 2.34 | | | $ | 6.72 | | | $ | 5.32 | | | $ | 5.05 | | | $ | 4.58 | | | $ | 4.79 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Loss(a) | | | (0.00 | )+ | | | (0.01 | ) | | | (0.03 | ) | | | (0.04 | ) | | | (0.04 | ) | | | (0.02 | ) |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.57 | | | | (2.15 | ) | | | 1.65 | | | | 0.31 | | | | 0.55 | | | | (0.19 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.57 | | | | (2.16 | ) | | | 1.62 | | | | 0.27 | | | | 0.51 | | | | (0.21 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | (0.71 | ) | | | — | | | | — | | | | — | | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | (1.51 | ) | | | (0.22 | ) | | | — | | | | (0.04 | ) | | | (0.00 | ) + |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | — | | | | (2.22 | ) | | | (0.22 | ) | | | — | | | | (0.04 | ) | | | (0.00 | ) + |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 2.91 | | | $ | 2.34 | | | $ | 6.72 | | | $ | 5.32 | | | $ | 5.05 | | | $ | 4.58 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 24.36 | % | | | (44.45 | )% | | | 31.52 | % | | | 5.35 | % | | | 11.01 | % | | | (4.31 | )% |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 1.22 | %* | | | 1.20 | % | | | 1.24 | % | | | 1.28 | % | | | 1.35 | % | | | 1.21 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 1.25 | %* | | | 1.22 | % | | | 1.27 | % | | | 1.31 | %(b) | | | 1.44 | % | | | N/A | |
Ratio of Net Investment Loss to Average Net Assets | | | (0.27 | )%* | | | (0.25 | )% | | | (0.51 | )% | | | (0.83 | )% | | | (0.95 | )% | | | (0.57 | )% |
Portfolio Turnover Rate | | | 66.8 | % | | | 181.1 | % | | | 206.8 | % | | | 265.0 | % | | | 290.7 | % | | | 173.0 | % |
Net Assets, End of Period (in millions) | | $ | 117.3 | | | $ | 83.7 | | | $ | 160.4 | | | $ | 91.9 | | | $ | 86.5 | | | $ | 100.2 | |
| + | | Rounds to less than $0.005 per share |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Excludes effect of deferred expense reimbursement. |
See accompanying notes to financial statements
11
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| RCM Technology Portfolio | | Class E | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 2.36 | | | $ | 6.76 | | | $ | 5.34 | | | $ | 5.07 | | | $ | 4.59 | | | $ | 4.80 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Loss(a) | | | (0.00 | )+ | | | (0.01 | ) | | | (0.03 | ) | | | (0.04 | ) | | | (0.04 | ) | | | (0.02 | ) |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.58 | | | | (2.16 | ) | | | 1.67 | | | | 0.31 | | | | 0.56 | | | | (0.19 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.58 | | | | (2.17 | ) | | | 1.64 | | | | 0.27 | | | | 0.52 | | | | (0.21 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | (0.72 | ) | | | — | | | | — | | | | — | | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | (1.51 | ) | | | (0.22 | ) | | | — | | | | (0.04 | ) | | | (0.00 | )+ |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | — | | | | (2.23 | ) | | | (0.22 | ) | | | — | | | | (0.04 | ) | | | (0.00 | )+ |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 2.94 | | | $ | 2.36 | | | $ | 6.76 | | | $ | 5.34 | | | $ | 5.07 | | | $ | 4.59 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 24.58 | % | | | (44.49 | )% | | | 31.78 | % | | | 5.33 | % | | | 11.21 | % | | | (4.30 | )% |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 1.12 | %* | | | 1.09 | % | | | 1.14 | % | | | 1.18 | % | | | 1.25 | % | | | 1.10 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 1.15 | %* | | | 1.12 | % | | | 1.18 | % | | | 1.21 | %(b) | | | 1.34 | % | | | N/A | |
Ratio of Net Investment Loss to Average Net Assets | | | (0.17 | )%* | | | (0.15 | )% | | | (0.42 | )% | | | (0.74 | )% | | | (0.85 | )% | | | (0.55 | )% |
Portfolio Turnover Rate | | | 66.8 | % | | | 181.1 | % | | | 206.8 | % | | | 265.0 | % | | | 290.7 | % | | | 173.0 | % |
Net Assets, End of Period (in millions) | | $ | 14.6 | | | $ | 11.2 | | | $ | 27.1 | | | $ | 16.7 | | | $ | 18.6 | | | $ | 20.3 | |
| + | | Rounds to less than $0.005 per share |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Excludes effect of deferred expense reimbursement. |
See accompanying notes to financial statements
12
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is RCM Technology Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A, B and E Shares are currently offered by the Portfolio. Class C is not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | |
Expiring
12/31/2016 | | Total |
| |
| $ | 27,226,514 | | $27,226,514 |
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Options Contracts - A purchased option contract gives the buyer the right, but not the obligation, to buy (call) or sell (put) an underlying item at a fixed exercise price during a specified period. These contracts are generally used by the Portfolio to provide the return of an index without purchasing all of the securities underlying the index or as a substitute for purchasing or selling specific securities.
Purchases of put and call options are recorded as investments, the value of which are marked-to-market daily. When a purchased option expires, the Portfolio will realize a loss equal to the premium paid. When the Portfolio enters into a closing sale transaction, the Portfolio will realize a gain or loss depending on whether the sales proceeds from the closing sale transaction are greater or less than the cost of the option. When the Portfolio exercises a put option, it will realize a gain or loss from the sale of the underlying security and the proceeds from such sale will be decreased by the premium originally paid. When the Portfolio exercises a call option, the cost of the security which the Portfolio purchases upon exercise will be increased by the premium originally paid.
The premium received for a written option is recorded as an asset and an equivalent liability. The liability is marked-to-market daily based on the option’s quoted market price. When an option expires or the Portfolio enters into a closing purchase transaction, the Portfolio realizes a gain (or loss if the cost of the closing purchase transaction exceeds the premium received when the option was sold) without regard to any unrealized gain or loss on the underlying security and the liability related to such option is eliminated. When a written call option is exercised, the Portfolio realizes a gain or loss from the sale of the underlying security and the proceeds from such sale are increased by the premium originally received. If a written put option is exercised, the amount of the premium originally received will reduce the cost of the underlying security purchased.
The risk associated with purchasing options is limited to the premium originally paid. The risk in writing a covered call option is that the Portfolio may forego the opportunity for profit if the market price of the underlying security increases and the option is exercised. The risk in writing a put option is that the Portfolio may incur a loss if the market price of the underlying security decreases and the option is exercised. This loss can be greater than premium received. In addition, the Portfolio could be exposed to risks if the counterparties to the transactions are unable to meet the terms of the contracts.
G. Forward Foreign Currency Contracts - The Portfolio may enter into forward foreign currency contracts to hedge its portfolio holdings against future movements in certain foreign currency exchange rates. A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a set price. Forward currency contracts are valued at the forward rate and are marked-to-market daily. The change in market value is recorded by the Portfolio as an unrealized gain or loss. When the contract is closed, the Portfolio recognizes a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.
The use of forward foreign currency contracts does not eliminate fluctuations in the underlying prices of the securities of the Portfolio, but it does establish a rate of exchange that can be achieved in the future. Although forward foreign currency contracts to sell limit the risk of loss due to a
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
decline in the value of the currency holdings, they also limit any potential gain that might result should the value of the currency increase. In addition, the Portfolio could be exposed to risks if the counterparties to the contracts are unable to meet the terms of the contracts.
H. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
I. Foreign Currency Translation - The books and records of the Portfolio are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars on a daily basis using prevailing exchange rates. Purchases and sales of securities are translated at the rates of exchange prevailing when such securities were acquired or sold. Income is translated at rates of exchange prevailing when interest is accrued or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in forward foreign currency contracts; sales of foreign currencies; currency gains or losses realized between the trade and settlement dates on securities transactions; and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Portfolio’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end; from changes in the exchange rates of foreign currency held; and from changes in the contract value of forward foreign currency contracts.
J. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
K. Directed Brokerage Agreement - The Trust has entered into a directed brokerage arrangement with State Street Global Markets (“SSGM”). Under this arrangement, the Portfolio directs certain trades to SSGM in return for a recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to the Portfolio are shown separately as an expense reduction on the Statement of Operations of the Portfolio.
L. Futures Contracts - The Portfolio may buy and sell futures contracts (on recognized exchanges) as a hedge, to maintain exposure to the broad equity markets or to enhance return. The Portfolio may be subject to equity price risk, interest rate risk, and foreign currency exchange rate risk in the normal course of pursuing its investment objectives. Futures contracts are agreements to buy or sell a security, or deliver a final cash settlement price in connection with an index, interest rate, currency, or other contracts not calling for physical delivery, for a set price in the future. The Portfolio must post an amount equal to a portion of the total market value of the futures contract as futures variation margin, which is returned when the Portfolio’s obligations under the contract have been satisfied. From time to time thereafter, the Portfolio may have to post variation margin to maintain this amount as the market value of the contract fluctuates. Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with RCM Capital Management LLC (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $ | 608,493 | | 0.88 | % | | First $500 Million |
| | |
| | | 0.85 | % | | Over $500 Million |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Manager has entered into an expense limitation agreement with the Trust (“Expense Limitation Agreement”) in the interest of limiting expenses of the Portfolio of the Trust. The Expense Limitation Agreement shall continue in effect with respect to the Portfolio until April 30, 2010. Pursuant to that Expense Limitation Agreement, the Manager has agreed to waive or limit its fees and to assume other expenses so that the total annual operating expenses of the Portfolio other than interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with accounting principles generally accepted in the United States of America, and other extraordinary expenses not incurred in the ordinary course of the Portfolio’s business, but including amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act, are limited to the following expense ratios as a percentage of the Portfolio’s average daily net assets:
| | | | | | | |
| Maximum Expense Ratio under current Expense Limitation Agreement | |
|
|
| Class A | | | Class B | | | Class E | |
| | |
| 1.10 | % | | 1.35 | % | | 1.25 | % |
If in any year in which the Management Agreement is still in effect, the estimated aggregate portfolio operating expenses of the Portfolio for the fiscal year are less than the Maximum Expense Ratios for that year, subject to approval by the Trust’s Board, the Manager shall be entitled to reimbursement by the Portfolio to the extent that the charge does not cause the expenses in such subsequent year to exceed the Maximum Expense Ratios as stated above. The Portfolio is not obligated to repay any expense paid by the Manager more than five years after the end of the fiscal year in which such expense was incurred.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A, Class B and Class E Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B and Class E distribution plans provide that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%, respectively, of the average net assets of the Portfolio attributable to its Class B and Class E Shares in respect to activities primarily intended to result in the sale of Class B and Class E Shares. However, under the Class B and Class E distribution agreements, payments to the Distributor for activities pursuant to the Class B and Class E distribution plans are currently limited to payments at an annual rate equal to 0.25% and 0.15% of average daily net assets of the Portfolio attributable to its Class B and Class E Shares, respectively.
Under terms of the Class B and Class E distribution plans and distribution agreements, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B and Class E Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
16
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
in Shares
Outstanding | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 12,944,739 | | 2,872,053 | | — | | (2,130,279 | ) | | 741,774 | | 13,686,513 |
12/31/2008 | | 9,503,388 | | 5,159,290 | | 5,408,069 | | (7,126,008 | ) | | 3,441,351 | | 12,944,739 |
| | | | | | |
Class B | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 35,799,892 | | 8,983,828 | | — | | (4,466,354 | ) | | 4,517,474 | | 40,317,366 |
12/31/2008 | | 23,872,419 | | 12,665,833 | | 14,240,234 | | (14,978,594 | ) | | 11,927,473 | | 35,799,892 |
| | | | | | |
Class E | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 4,758,230 | | 867,758 | | — | | (668,646 | ) | | 199,112 | | 4,957,342 |
12/31/2008 | | 4,007,295 | | 1,029,811 | | 2,243,128 | | (2,522,004 | ) | | 750,935 | | 4,758,230 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 95,827,565 | | $ | — | | $ | 87,675,219 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Appreciation |
| | | |
| $186,218,282 | | $ | 12,966,774 | | $ | (9,393,601 | ) | | $ | 3,573,173 |
6. Securities Lending
As of June 30, 2009, the Portfolio had loaned securities which were collateralized by short term investments. The value of securities on loan and the value of the related collateral were as follows:
| | | | | | | | | |
Value of
Securities | | Value of
Cash
Collateral | | Value of
Non-Cash
Collateral* | | Total
Collateral |
| | | |
| $15,793,902 | | $ | 16,174,530 | | $ | — | | $ | 16,174,530 |
* The Portfolio cannot repledge or resell this collateral. The non-cash collateral is typically comprised of government securities and/or bank letters of credit.
7. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $ | 71,606,917 | | $ | 5,171,767 | | $ | 10,624,570 | | $ | 6,570,889 | | $ | 82,231,487 | | $ | 11,742,656 |
17
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
7. Distributions to Shareholders - continued
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards | | | Total | |
| | | | |
| $ | — | | $ | — | | $ | (53,482,787 | ) | | $ | (27,226,514 | ) | | $ | (80,709,301 | ) |
8. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
9. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
18
| | |
| SSgA Growth and Income ETF Portfolio | | For the period ended 6/30/09 |
| Managed by SSgA Funds Management, Inc. | | |
Portfolio Manager Commentary
Performance
During the six month period ended June 30, 2009, the Portfolio had a return of 6.59%, 6.61% and 6.70% for Class A, B and E Shares, respectively, versus 9.17%, 3.16% and 8.65% for its benchmarks, the MSCI All Country World (ACWI) Index, the S&P 500® Index and the SSgA Growth and Income ETF Benchmark Index, respectively.
Market Environment/Conditions
Equity markets around the world endured continued disappointment early in 2009. By early March, many popular benchmarks reached levels more than 50% below the peaks they had achieved less than 18 months ago. Weighing on share prices were a sharp deterioration in the global growth outlook; a similarly steep erosion in profits expectations; and lingering worries about impaired assets and tight credit conditions. But the persistent downward momentum in economic activity began to give rise to questions of its sustainability, particularly with aggressive monetary stimulus and fiscal measures taking ongoing shape in the US, Europe, and Asia. With the Bank of England embarking on a program of direct purchase of securities, defensively positioned investors began to recognize the risks of an upside reversal, and global equity markets caught fire in the second week of March. The US Federal Reserve fanned the flames on March 18 by announcing that it too would buy fixed income securities to expand its balance sheet further.
Moving into the spring, global equity markets finally managed a meaningful rebound after six consecutive quarters of disruption and disappointment. While developed countries around the world were still mired in deep recession, hobbled by excess capacity and painful job losses, the ongoing application of aggressive stimulus measures worked effectively to thwart deflationary tendencies. Leading indicators of economic activity began to turn upward, and investors responded by selling safe-haven assets and increasing exposure to stocks, corporate bonds, and commodities. For equities, the meat of the rally came in April and May, when stock markets around the world posted consistent gains. Overall, double-digit gains were the rule for the full second quarter, with more aggressive asset classes tending to outperform. The strength was particularly robust in non-US equities, which got an additional boost from weakness in the US dollar. Improving growth prospects also brought a stiff rise in yields to government bond markets, particularly in the US, where safe-haven buying of Treasury issues continued to unwind through the second quarter. While government bonds languished, credit instruments enjoyed another strong quarter.
For the first half, most major asset classes finished in positive territory. The strongest asset classes were international equities and high yield bonds. Emerging markets, in particular, surged ahead to achieve gains in excess of 30% while their developed equity counterparts advanced nicely with some help from currency gains. High yield bonds strode forward at nearly the pace of emerging markets as spreads tightened and defaults, while rising, have not increased to levels that offset the comparative yield advantage. Lesser, but still positive returns were found across the fixed income landscape. A pickup in inflation expectations helped Treasury Inflation-Protected Securities (“TIPS”)
achieve solid returns, and investment grade credit edged out aggregate bonds with modestly positive performance. The notable laggard during the first half was real estate investment trusts (“REITs”), which, despite a strong rebound in the second quarter, remained underwater due to dismal first quarter results.
Portfolio Review/Current Positioning
The Portfolio is structured with a broadly diversified mix of exchange traded funds (ETFs) covering the global equity, bond, and real asset classes. The Growth and Income ETF Portfolio is managed relative to a strategic benchmark consisting of 60% equities and 40% fixed income. On top of these strategic allocations, we develop thematic tactical positions as a source of value added.
At the start of 2009, the Portfolio was positioned slightly overweight to equities, underweight to REITs, and modestly overweight to bonds via the credit, high yield and inflation-protected sectors. As markets continued their unabated descent during January and February, we took this as an opportunity to add to our equity and investment-grade credit positions. Within equities, we favored large cap stocks over small and mid cap stocks throughout the period. Later in the first half, we took some profit from our high yield position in order to reduce the underweight to REITs, which had been among the worst performing asset classes in the first quarter. Additionally, we adjusted tactical exposures in the international sphere, by building up an overweight to emerging market equities with an offsetting underweight to international developed equities.
The Portfolio finished the first half in positive territory overall but lagged its custom benchmark. The results of our tactical positioning provided a net benefit to the Portfolio. Key contributors from a tactical perspective were the overweight to emerging markets and our allocations within bonds. Underweighting aggregate bonds in favor of spread product proved profitable as the returns to our credit, high yield, and TIPS positions beat out core aggregate bonds. Conversely, our positioning within US stocks detracted from performance as both small and mid caps outperformed large cap stocks. Although our tactical positioning added value in the first half of 2009, the Portfolio overall still trailed its custom benchmark as a result of some tracking error experienced by a few of the underlying ETFs. Specifically, the core aggregate bond ETF and high yield bond ETF lagged their respective benchmarks which contributed to the relative underperformance of the Portfolio. Exchange Traded Funds (ETFs), unlike straight mutual funds, are traded in a public market throughout the day. Its value at the end of the day is the last trading price, rather than the net asset value of the underlying securities as with a mutual fund. There are times—due to a short-term imbalance in the demand for a particular ETF—when that ETF will sell at a higher (at a premium) or lower (at a discount) price than the actual net asset value of the ETF’s underlying securities. These situations generally rectify themselves quickly through market action.
Alistair Lowe
Executive Vice President
Daniel Farley, CFA
Managing Director
SSgA Funds Management, Inc.
1
| | |
| SSgA Growth and Income ETF Portfolio | | For the period ended 6/30/09 |
| Managed by SSgA Funds Management, Inc. | | |
Portfolio Manager Commentary (continued)
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
SPDR Trust Series 1 | | 26.61% |
Vanguard Total Bond Market ETF | | 18.77% |
SPDR Lehman High Yield Bond ETF | | 11.09% |
iShares MSCI EAFE Index Fund | | 8.95% |
Vanguard Emerging Markets ETF | | 8.90% |
iShares S&P 500 Index Fund | | 5.95% |
iShares Lehman Treasury Inflation Protected Securities Fund | | 4.92% |
iShares S&P SmallCap 600 Index Fund | | 2.03% |
Vanguard REIT ETF | | 2.03% |
SPDR S&P International Small Cap ETF | | 1.98% |
2
| | |
| SSgA Growth and Income ETF Portfolio | | For the period ended 6/30/09 |
| Managed by SSgA Funds Management, Inc. | | |
Portfolio Manager Commentary (continued)
SSgA Growth and Income ETF Portfolio managed by
SSgA Funds Management, Inc. vs. MSCI ACWI (All Country World Index) (net)1, S&P 500® Index2 and SSgA Growth and Income ETF Benchmark Index3
Growth Based on $10,000+
| | | | | | | | | | |
| | | | | Average Annual Return4
(for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | 3 Year | | Since Inception5 |
| | SSgA Growth and Income ETF Portfolio—Class A | | 6.59% | | -13.24% | | -2.45% | | -3.12% |
| — | | Class B | | 6.61% | | -13.44% | | -2.65% | | -1.18% |
| | Class E | | 6.70% | | -13.37% | | -2.58% | | -3.24% |
| - - | | MSCI ACWI (All Country World Index) (net)1 | | 9.17% | | -29.32% | | -7.05% | | -3.34% |
| — | | S&P 500® Index2 | | 3.16% | | -26.21% | | -8.22% | | -5.46% |
| - - | | SSgA Growth and Income ETF Benchmark Index3 | | 8.65% | | -14.56% | | -2.26% | | -0.76% |
+The chart reflects the performance of Class B shares of the Portfolio. The performance of Class B shares will differ from that of the other classes because of the difference in expenses paid by policyholders investing in the different share classes.
1The MSCI ACWI (All Country World Index) (net) is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets.
2The S&P 500® Index is an unmanaged index consisting of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value weighted index (stock price times number of shares outstanding), with each stock’s weight in the Index proportionate to its market value.
3The SSgA Growth and Income ETF Benchmark Index is comprised of 30% S&P 500® Index, 2% S&P® Mid Cap Index, 3% S&P 600® Index, 13% MSCI World ex. U.S. (net), 2% S&P/Citigroup World Ex. U.S. Range <2 billion USD Index
(Gross), 5% MSCI Emerging Markets (net), 3% MSCI U.S. REIT Index, 2% Dow Jones Wilshire Ex-U.S. Real Estate Securities Index, 23% Barclays Capital U.S. Aggregate Bond Index, 10% Barclays Capital High Yield Very Liquid Index, 5% Barclays Capital U.S. TIPS Index, and 2% Barclays Capital 1-3 Month U.S. Treasury Bill Index.
The S&P® Mid Cap Index is a capitalization-weighted index which measures the performance of the mid-range sector of the U.S. stock market.
The S&P 600® Index is a capitalization-weighted index which measures the performance of the small-cap range of the U.S. stock market.
The MSCI World ex-U.S. Index (net) is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global developed and emerging markets.
The S&P/Citigroup World Ex-U.S. Range <2 Billion USD Index (Gross) is a float-adjusted market capitalization weighted index that defines and measures the investable universe of small-cap, publicly traded companies domiciled in countries outside the U.S.
The Morgan Stanley Capital International (MSCI) Emerging Markets (EMF) Index (net)SM is an unmanaged market capitalization weighed equity index composed of companies that are representative of the market structure of the following 24 countries: Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Korea, Malaysia, Mexico, Morocco, Pakistan, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand and Turkey. “Free” MSCI indices exclude those shares not purchasable by foreign investors.
3
| | |
| SSgA Growth and Income ETF Portfolio | | For the period ended 6/30/09 |
| Managed by SSgA Funds Management, Inc. | | |
Portfolio Manager Commentary (continued)
The MSCI U.S. REIT Index is comprised of REIT securities that are included in the MSCI U.S. Investable Market 2500 Index, with the exception of REITs classified in the Mortgage REITs Sub-Industry, and REITs classified in the Specialized REITs Sub-Industry that do not generate a majority of their revenue and income from real estate rental and related leasing operations.
The Dow Jones Wilshire Ex-U.S. Real Estate Securities IndexSM is a float adjusted market capitalization index designed to measure the performance of publicly traded real estate securities in developed and emerging countries excluding the United States.
The Barclays Capital U.S. Aggregate Bond Index includes most obligations of the U.S. Treasury, agencies and quase-federal corporations, most publicly issued investment grade corporate bonds and most bonds backed by mortgage pools of GNMA, FNMA and FHLMC.
The Barclays Capital High Yield Very Liquid Index includes publicly issued U.S. dollar denominated, non-investment grade, fixed-rate, taxable corporate bonds that have a remaining maturity of at least one year, regardless of optionality, are high-yield using the middle rating of Moody’s, S&P, and Fitch, respectively, and have $600 million or more outstanding face value.
The Barclays Capital U.S. TIPS Index represents an unmanaged market index made up of U.S. Treasury Inflation Linked Index securities.
The Barclays Capital 1-3 Month U.S. Treasury Bill Index measures the performance of public obligations of the U.S. Treasury that have a remaining maturity of greater than or equal to 1 month and less than 3 months. The Index includes all publicly issued zero-coupon U.S. Treasury Bills that have a remaining maturity of less than 3 months and more than 1 month, are rated investment grade, and have $250 million or more of outstanding face value.
4“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
5Inception of Class B shares is 10/3/05. Inception of Class A and Class E shares is 5/1/06. Index returns are based on an inception date of 10/3/05.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Indexes do not include fees or expenses and are not available for direct investment.
4
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| SSgA Growth and Income ETF Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.38% | | $ | 1,000.00 | | $ | 1,065.90 | | $ | 1.95 |
Hypothetical | | 0.38% | | | 1,000.00 | | | 1,022.91 | | | 1.91 |
| | | | | | | | | | | |
| | | | |
Class B | | | | | | | | | | | |
Actual | | 0.63% | | $ | 1,000.00 | | $ | 1,066.10 | | $ | 3.23 |
Hypothetical | | 0.63% | | | 1,000.00 | | | 1,021.67 | | | 3.16 |
| | | | | | | | | | | |
| | | | |
Class E | | | | | | | | | | | |
Actual | | 0.53% | | $ | 1,000.00 | | $ | 1,067.00 | | $ | 2.72 |
Hypothetical | | 0.53% | | | 1,000.00 | | | 1,022.17 | | | 2.66 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
5
Met Investors Series Trust
SSgA Growth and Income ETF Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security Description | | Shares | | Value |
| | | | | |
|
| Investment Company Securities - 97.0% |
iShares Barclays 1-3 Year Credit Bond Fund | | 51,900 | | $ | 5,349,333 |
iShares iBoxx $ Investment Grade Corporate Bond Fund | | 54,800 | | | 5,495,344 |
iShares Lehman Treasury Inflation Protected Securities Fund | | 173,400 | | | 17,622,642 |
iShares MSCI Canada Index Fund | | 137,800 | | | 2,951,676 |
iShares MSCI EAFE Index Fund | | 698,700 | | | 32,007,447 |
iShares S&P 500 Index Fund | | 230,700 | | | 21,284,382 |
iShares S&P SmallCap 600 Index Fund | | 164,000 | | | 7,293,080 |
Midcap SPDR Trust Series 1 | | 34,400 | | | 3,622,664 |
SPDR DJ Wilshire International Real Estate ETF(a) | | 112,800 | | | 3,240,744 |
SPDR Lehman High Yield Bond ETF | | 1,121,510 | | | 39,465,937 |
SPDR S&P International Small Cap ETF | | 334,900 | | | 7,119,974 |
SPDR Trust Series 1(a) | | 1,034,400 | | | 95,082,048 |
Vanguard Emerging Markets ETF | | 1,000,300 | | | 31,829,546 |
Vanguard REIT ETF | | 234,700 | | | 7,278,047 |
Vanguard Total Bond Market ETF | | 863,700 | | | 67,100,853 |
| | | | | |
Total Investment Company Securities
(Cost $359,666,326) | | | | | 346,743,717 |
| | | | | |
| | | | | | |
Security Description | | Shares | | Value | |
| |
| Short-Term Investments - 4.7% | | | | |
| Mutual Funds - 4.7% | | | | |
Aim Prime Fund | | 14,426,214 | | $ | 14,426,214 | |
State Street Navigator Securities Lending Trust Prime Portfolio(b) | | 2,242,013 | | | 2,242,013 | |
| | | | | | |
Total Short-Term Investments
(Cost $16,668,227) | | | | | 16,668,227 | |
| | | | | | |
| |
TOTAL INVESTMENTS - 101.7%
(Cost $376,334,553) | | | 363,411,944 | |
| | | | | | |
| | |
| Other Assets and Liabilities (net) - (1.7)% | | | | | (6,175,759 | ) |
| | | | | | |
| | |
| NET ASSETS - 100.0% | | | | $ | 357,236,185 | |
| | | | | | |
Portfolio Footnotes:
| (a) | | All or a portion of security is on loan. |
| (b) | | Represents investment of collateral received from securities lending transactions. |
See accompanying notes to financial statements
6
Met Investors Series Trust
SSgA Growth and Income ETF Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1—quoted prices in active markets for identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs (Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Investment Company Securities | | $ | 346,743,717 | | $ | — | | $ | — | | $ | 346,743,717 |
Short-Term Investments
Mutual Funds | | | 2,242,013 | | | 14,426,214 | | | — | | | 16,668,227 |
Total Short-Term Investments | | | 2,242,013 | | | 14,426,214 | | | — | | | 16,668,227 |
TOTAL INVESTMENTS | | $ | 348,985,730 | | $ | 14,426,214 | | $ | — | | $ | 363,411,944 |
See accompanying notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| SSgA Growth and Income ETF Portfolio | | | |
| Assets | | | | |
Investments, at value (a)(b) | | $ | 363,411,944 | |
Receivable for investments sold | | | 2,087,289 | |
Receivable for Trust shares sold | | | 2,641,656 | |
Dividends receivable | | | 625,610 | |
Interest receivable | | | 2,383 | |
| | | | |
Total assets | | | 368,768,882 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 9,078,113 | |
Trust shares redeemed | | | 50,184 | |
Distribution and services fees—Class B | | | 67,914 | |
Distribution and services fees—Class E | | | 378 | |
Collateral for securities on loan | | | 2,242,013 | |
Management fee | | | 83,076 | |
Administration fee | | | 1,964 | |
Custodian and accounting fees | | | 3,422 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 2,206 | |
| | | | |
Total liabilities | | | 11,532,697 | |
| | | | |
| Net Assets | | $ | 357,236,185 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 380,444,254 | |
Accumulated net realized loss | | | (14,538,950 | ) |
Unrealized depreciation on investments | | | (12,922,609 | ) |
Undistributed net investment income | | | 4,253,490 | |
| | | | |
Total | | $ | 357,236,185 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 3,441,289 | |
| | | | |
Class B | | | 350,629,092 | |
| | | | |
Class E | | | 3,165,804 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 389,963 | |
| | | | |
Class B | | | 39,797,124 | |
| | | | |
Class E | | | 359,420 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 8.82 | |
| | | | |
Class B | | | 8.81 | |
| | | | |
Class E | | | 8.81 | |
| | | | |
| | | | | |
(a) Investments at cost | | $ | 376,334,553 | |
(b) Includes cash collateral for securities loaned of | | | 2,242,013 | |
See accompanying notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| SSgA Growth and Income ETF Portfolio | | | |
| Investment Income | | | | |
Dividends from Underlying ETFs | | $ | 4,886,644 | |
Interest (1) | | | 85,315 | |
| | | | |
Total investment income | | | 4,971,959 | |
| | | | |
| Expenses | | | | |
Management fee | | | 380,751 | |
Administration fees | | | 11,901 | |
Custodian and accounting fees | | | 14,009 | |
Distribution and services fees—Class B | | | 282,168 | |
Distribution and services fees—Class E | | | 1,931 | |
Audit and tax services | | | 15,039 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 18,272 | |
Other | | | 2,556 | |
| | | | |
Total expenses | | | 753,060 | |
Less management fee waiver | | | (34,614 | ) |
| | | | |
Net expenses | | | 718,446 | |
| | | | |
Net investment income | | | 4,253,513 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments | | | | |
Net realized loss on: | | | | |
Investments | | | (10,202,667 | ) |
| | | | |
Net realized loss on investments | | | (10,202,667 | ) |
| | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 28,993,271 | |
| | | | |
Net change in unrealized appreciation on investments | | | 28,993,271 | |
| | | | |
Net realized and unrealized gain on investments | | | 18,790,604 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 23,044,117 | |
| | | | |
| | | | | |
(1) Interest income includes securities lending net income of: | | $ | 69,254 | |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| SSgA Growth and Income ETF Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 4,253,513 | | | $ | 5,557,099 | |
Net realized loss on investments from Underlying ETFs | | | (10,202,667 | ) | | | (4,336,140 | ) |
Net change in unrealized appreciation (depreciation) on investments | | | 28,993,271 | | | | (60,956,068 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 23,044,117 | | | | (59,735,109 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | (66,608 | ) | | | (34,375 | ) |
Class B | | | (5,427,072 | ) | | | (3,813,713 | ) |
Class E | | | (63,412 | ) | | | (44,337 | ) |
From net realized gains | | | | | | | | |
Class A | | | — | | | | (37,296 | ) |
Class B | | | — | | | | (4,739,522 | ) |
Class E | | | — | | | | (50,540 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (5,557,092 | ) | | | (8,719,783 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 1,633,868 | | | | 4,346,856 | |
Class B | | | 171,714,871 | | | | 27,573,905 | |
Class E | | | 805,444 | | | | 2,174,288 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | 66,608 | | | | 71,671 | |
Class B | | | 5,427,072 | | | | 8,553,235 | |
Class E | | | 63,412 | | | | 94,877 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (428,734 | ) | | | (3,276,793 | ) |
Class B | | | (15,955,708 | ) | | | (30,602,108 | ) |
Class E | | | (307,681 | ) | | | (810,261 | ) |
| | | | | | | | |
Net increase in net assets from capital share transactions | | | 163,019,152 | | | | 8,125,670 | |
| | | | | | | | |
| Net Increase (Decrease) in Net Assets | | | 180,506,177 | | | | (60,329,222 | ) |
Net assets at beginning of period | | | 176,730,008 | | | | 237,059,230 | |
| | | | | | | | |
Net assets at end of period | | $ | 357,236,185 | | | $ | 176,730,008 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 4,253,490 | | | $ | 5,557,069 | |
| | | | | | | | |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | |
| | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | |
| SSgA Growth and Income ETF Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended
December 31, | |
| | | | 2008 | | | 2007 | | | 2006(b) | |
| Net Asset Value, Beginning of Period | | $ | 8.49 | | | $ | 11.80 | | | $ | 11.13 | | | $ | 10.56 | |
| | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.16 | | | | 0.30 | | | | 0.32 | | | | 0.25 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.38 | | | | (3.15 | ) | | | 0.35 | | | | 0.47 | |
| | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.54 | | | | (2.85 | ) | | | 0.67 | | | | 0.72 | |
| | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.21 | ) | | | (0.22 | ) | | | (0.00 | )+ | | | (0.15 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (0.24 | ) | | | (0.00 | )+ | | | — | |
| | | | | | | | | | | | | | | | |
Total Distributions | | | (0.21 | ) | | | (0.46 | ) | | | (0.00 | )+ | | | (0.15 | ) |
| | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 8.82 | | | $ | 8.49 | | | $ | 11.80 | | | $ | 11.13 | |
| | | | | | | | | | | | | | | | |
| Total Return | | | 6.59 | % | | | (24.87 | )% | | | 5.76 | % | | | 6.81 | % |
Ratio of Expenses to Average Net Assets After Reimbursement(e) | | | 0.38 | %* | | | 0.51 | % | | | 0.54 | % | | | 0.56 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates(f) | | | 0.41 | %* | | | 0.52 | %(d) | | | 0.56 | %(d) | | | 0.66 | %* |
Ratio of Net Investment Income to Average Net Assets(g) | | | 3.80 | %* | | | 2.97 | % | | | 2.67 | % | | | 3.42 | %* |
Portfolio Turnover Rate | | | 10.4 | % | | | 165.9 | % | | | 37.3 | % | | | 23.2 | % |
Net Assets, End of Period (in millions) | | $ | 3.4 | | | $ | 2.0 | | | $ | 1.6 | | | $ | 0.2 | |
| | | | | | | | | | | | | | | | | | | | |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005(c) | |
| Net Asset Value, Beginning of Period | | $ | 8.47 | | | $ | 11.77 | | | $ | 11.13 | | | $ | 10.11 | | | $ | 10.00 | |
| | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.15 | | | | 0.27 | | | | 0.20 | | | | 0.17 | | | | 0.09 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.38 | | | | (3.14 | ) | | | 0.44 | | | | 1.02 | | | | 0.08 | |
| | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.53 | | | | (2.87 | ) | | | 0.64 | | | | 1.19 | | | | 0.17 | |
| | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.19 | ) | | | (0.19 | ) | | | (0.00 | )+ | | | (0.16 | ) | | | (0.06 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (0.24 | ) | | | (0.00 | )+ | | | (0.01 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.19 | ) | | | (0.43 | ) | | | (0.00 | )+ | | | (0.17 | ) | | | (0.06 | ) |
| | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 8.81 | | | $ | 8.47 | | | $ | 11.77 | | | $ | 11.13 | | | $ | 10.11 | |
| | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 6.61 | % | | | (25.06 | )% | | | 5.40 | % | | | 11.73 | % | | | 1.65 | % |
Ratio of Expenses to Average Net Assets After Reimbursement(e) | | | 0.63 | %* | | | 0.75 | % | | | 0.77 | % | | | 0.80 | % | | | 0.80 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates(f) | | | 0.66 | %* | | | 0.78 | %(d) | | | 0.79 | %(d) | | | 0.84 | % | | | 3.73 | %* |
Ratio of Net Investment Income to Average Net Assets(g) | | | 3.69 | %* | | | 2.64 | % | | | 1.73 | % | | | 1.65 | % | | | 3.31 | %* |
Portfolio Turnover Rate | | | 10.4 | % | | | 165.9 | % | | | 37.3 | % | | | 23.2 | % | | | 3.5 | % |
Net Assets, End of Period (in millions) | | $ | 350.6 | | | $ | 172.3 | | | $ | 233.5 | | | $ | 203.6 | | | $ | 7.2 | |
| + | | Rounds to less $0.005 per share |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—05/01/2006. |
| (c) | | Commencement of operations—10/03/2005. |
| (d) | | Excludes effect of deferred expense reimbursement—See Note 3 of financial statements. |
| (e) | | The ratio of operating expenses to average net assets does not include expenses of the Underlying ETFs in which the Portfolio invests. |
| (f) | | See Note 3 of the Notes to Financial Statements. |
| (g) | | Recognition of net investment income by the Portfolio is affected by the timing of the declaration of dividends by the Underlying ETFs in which it invests. |
See accompanying notes to financial statements
11
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | |
| | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | |
| SSgA Growth and Income ETF Portfolio | | Class E | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended
December 31,
| |
| | | | 2008 | | | 2007 | | | 2006(b) | |
| Net Asset Value, Beginning of Period | | $ | 8.47 | | | $ | 11.77 | | | $ | 11.12 | | | $ | 10.56 | |
| | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.15 | | | | 0.31 | | | | 0.23 | | | | 0.18 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.39 | | | | (3.16 | ) | | | 0.42 | | | | 0.52 | |
| | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.54 | | | | (2.85 | ) | | | 0.65 | | | | 0.70 | |
| | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.20 | ) | | | (0.21 | ) | | | (0.00 | )+ | | | (0.14 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (0.24 | ) | | | (0.00 | )+ | | | — | |
| | | | | | | | | | | | | | | | |
Total Distributions | | | (0.20 | ) | | | (0.45 | ) | | | (0.00 | )+ | | | (0.14 | ) |
| | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 8.81 | | | $ | 8.47 | | | $ | 11.77 | | | $ | 11.12 | |
| | | | | | | | | | | | | | | | |
| Total Return | | | 6.70 | % | | | (25.01 | )% | | | 5.58 | % | | | 6.65 | % |
Ratio of Expenses to Average Net Assets After Reimbursement(d) | | | 0.53 | %* | | | 0.65 | % | | | 0.67 | % | | | 0.70 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates(e) | | | 0.56 | %* | | | 0.68 | %(c) | | | 0.69 | %(c) | | | 0.79 | %* |
Ratio of Net Investment Income to Average Net Assets(f) | | | 3.60 | %* | | | 3.09 | % | | | 1.98 | % | | | 2.52 | %* |
Portfolio Turnover Rate | | | 10.4 | % | | | 165.9 | % | | | 37.3 | % | | | 23.2 | % |
Net Assets, End of Period (in millions) | | $ | 3.2 | | | $ | 2.5 | | | $ | 1.9 | | | $ | 1.1 | |
| + | | Rounds to less $0.005 per share |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—05/01/2006. |
| (c) | | Excludes effect of deferred expense reimbursement—See Note 3 of financial statements. |
| (d) | | The ratio of operating expenses to average net assets does not include expenses of the Underlying ETFs in which the Portfolio invests. |
| (e) | | See Note 3 of the Notes to Financial Statements. |
| (f) | | Recognition of net investment income by the Portfolio is affected by the timing of the declaration of dividends by the Underlying ETFs in which it invests. |
See accompanying notes to financial statements
12
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is SSgA Growth and Income ETF Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A, B and E Shares are currently offered by the Portfolio. Class C is not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
The Portfolio was designed on established principles of asset allocation. The Portfolio will primarily invest its assets in other investment companies known as exchange-traded funds (“Underlying ETFs”), including, but not limited to, series of the iShares® Trust, iShares®, Inc., Standard and Poors Depositary Receipts of the SPDR® Trust, Series 1 and Vanguard ETFs of the Vanguard® Index Funds.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Investments in the Underlying ETFs are valued at the closing market quotation for their shares.
The net asset value of the Portfolio is calculated based on the market values of the Underlying ETFs in which the Portfolio invests. For information about the use of fair value pricing by the Underlying ETFs, please refer to the prospectuses for the Underlying ETFs.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes.
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Income and capital gain distributions from the Underlying ETFs are recorded on the ex-date.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | | |
Expiring
12/31/2016 | | Total |
| |
| $ | 1,954,861 | | $ | 1,954,861 |
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Repurchase Agreement - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
G. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
Due to the affiliation between the Portfolio’s adviser, SSgA Funds Management, Inc. and State Street Bank and Trust Company, the Portfolio relies on an exemptive order issued by the Securities and Exchange Commission to State Street Bank and Trust Company, State Street Navigator Securities Lending Trust (“Navigator Trust”) and the SSgA Funds that permits certain registered investment companies, including the Portfolio, to use cash collateral from securities lending transactions to purchase shares of one of more series of Navigator Trust and to pay fees based on a share of the revenue generated from securities lending transactions to State Street Bank and Trust Company.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with SSgA Funds Management, Inc. (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio. The Adviser is an affiliate of State Street Bank and Trust Company, the administrator and custodian of the Trust.
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | | |
Management Fees
earned by the Manager
for the year ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $ | 380,751 | | 0.33 | % | | First $500 Million |
| | |
| | | 0.30 | % | | Over $500 Million |
The Manager agreed to contractually waive a portion of the management fee paid by the Portfolio through April 30, 2010. This waiver reduces the management fee on the first $500 million of the Portfolio’s average daily net assets from 0.33% to 0.30%. Prior to September 2, 2008, the management fee paid by the Portfolio was 0.45% for the first $300 Million, 0.43% for the next $300 Million and 0.40% for assets over $600 Million.
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Manager has entered into an expense limitation agreement with the Trust (“Expense Limitation Agreement”) in the interest of limiting expenses of the Portfolio of the Trust. The Expense Limitation Agreement shall continue in effect with respect to the Portfolio until April 30, 2010. Pursuant to that Expense Limitation Agreement, the Manager has agreed to waive or limit its fees and to assume other expenses so that the total annual operating expenses of the Portfolio other than interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with accounting principles generally accepted in the United States of America, other extraordinary expenses not incurred in the ordinary course of the
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
Portfolio’s business, and Underlying ETFs’ fees and expenses, but including amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act, are limited to the following expense ratios as a percentage of the Portfolio’s average daily net assets:
| | | | | | | |
Maximum Expense Ratio
under current Expense
Limitation Agreement | |
|
|
Class A | | | Class B | | | Class E | |
| | |
| 0.55 | % | | 0.80 | % | | 0.70 | % |
The amount waived for the period ended June 30, 2009 are shown as management fee waiver in the Statement of Operations of the Portfolio.
If in any year in which the Management Agreement is still in effect, the estimated aggregate portfolio operating expenses of the Portfolio for the fiscal year are less than the Maximum Expense Ratios for that year, subject to approval by the Trust’s Board, the Manager shall be entitled to Reimbursement by the Portfolio to the extent that the charge does not cause the expenses in such subsequent year to exceed the Maximum Expense Ratios as stated above. The Portfolio is not obligated to repay any expense paid by the Manager more than five years after the end of the fiscal year in which such expense was incurred.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A, Class B and Class E Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B and Class E distribution plans provide that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%, respectively, of the average net assets of the Portfolio attributable to its Class B and Class E Shares in respect to activities primarily intended to result in the sale of Class B and Class E Shares. However, under the Class B and Class E distribution agreements, payments to the Distributor for activities pursuant to the Class B and Class E distribution plans are currently limited to payments at an annual rate equal to 0.25% and 0.15% of average daily net assets of the Portfolio attributable to its Class B and Class E Shares, respectively.
Under terms of the Class B and Class E distribution plans and distribution agreements, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B and Class E Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
in Shares
Outstanding | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 235,246 | | 202,144 | | 8,254 | | (55,681 | ) | | 154,717 | | 389,963 |
12/31/2008 | | 138,657 | | 436,599 | | 6,474 | | (346,484 | ) | | 96,589 | | 235,246 |
| | | | | | |
Class B | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 20,339,163 | | 20,752,489 | | 673,334 | | (1,967,862 | ) | | 19,457,961 | | 39,797,124 |
12/31/2008 | | 19,846,712 | | 2,784,934 | | 773,349 | | (3,065,832 | ) | | 492,451 | | 20,339,163 |
| | | | | | |
Class E | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 292,533 | | 96,891 | | 7,867 | | (37,871 | ) | | 66,887 | | 359,420 |
12/31/2008 | | 159,864 | | 206,988 | | 8,586 | | (82,905 | ) | | 132,669 | | 292,533 |
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 179,413,851 | | $ | — | | $ | 24,171,046 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $376,334,553 | | $ | 3,835,368 | | $ | (16,757,977 | ) | | $ | (12,922,609 | ) |
6. Securities Lending
As of June 30, 2009, the Portfolio had loaned securities which were collateralized by short term investments. The value of securities on loan and the value of the related collateral were as follows:
| | | | | | | | | |
Value of
Securities | | Value of
Cash
Collateral | | Value of
Non-Cash
Collateral* | | Total
Collateral |
| | | |
| $2,190,117 | | $ | 2,242,013 | | $ | — | | $ | 2,242,013 |
* The Portfolio cannot repledge or resell this collateral. The non-cash collateral is typically comprised of government securities and/or bank letters of credit.
7. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $ | 4,092,032 | | $ | 1,006 | | $ | 4,627,751 | | $ | 16,077 | | $ | 8,719,783 | | $ | 17,083 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards | | | Total | |
| | | | |
| $5,557,069 | | $ | — | | $ | (44,297,302 | ) | | $ | (1,954,861 | ) | | $ | (40,695,094 | ) |
8. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
9. Market, Credit and Counterparty Risk
In the normal course of business, the Underlying ETFs, in which the Portfolio invests, invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Underlying ETFs may decline in response to certain events, including those directly involving the companies whose securities are
16
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
9. Market, Credit and Counterparty Risk - continued
owned by the Underlying ETFs; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Underlying ETFs may be exposed to counterparty risk, or the risk that an entity with which the Underlying ETFs have unsettled or open transactions may default. Financial assets, which potentially expose the Underlying ETFs to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Underlying ETFs’ exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Underlying ETFs’ Statements of Assets and Liabilities.
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
17
| | |
| SSgA Growth ETF Portfolio | | For the period ended 6/30/09 |
| Managed by SSgA Funds Management, Inc. | | |
Portfolio Manager Commentary
Performance
During the six month period ended June 30, 2009, the Portfolio had a return of 7.33%, 7.19% and 7.29% for Class A, B and E Shares, respectively, versus 9.17%, 3.16% and 8.53% for its benchmarks, the MSCI All Country World (ACWI) Index, the S&P 500® Index and the SSgA Growth ETF Benchmark, respectively.
Market Environment/Conditions
Equity markets around the world endured continued disappointment early in 2009. By early March, many popular benchmarks reached levels more than 50% below the peaks they had achieved less than 18 months ago. Weighing on share prices were a sharp deterioration in the global growth outlook; a similarly steep erosion in profits expectations; and lingering worries about impaired assets and tight credit conditions. But the persistent downward momentum in economic activity began to give rise to questions of its sustainability, particularly with aggressive monetary stimulus and fiscal measures taking ongoing shape in the US, Europe, and Asia. With the Bank of England embarking on a program of direct purchase of securities, defensively positioned investors began to recognize the risks of an upside reversal, and global equity markets caught fire in the second week of March. The US Federal Reserve fanned the flames on March 18 by announcing that it too would buy fixed income securities to expand its balance sheet further.
Moving into the spring, global equity markets finally managed a meaningful rebound after six consecutive quarters of disruption and disappointment. While developed countries around the world were still mired in deep recession, hobbled by excess capacity and painful job losses, the ongoing application of aggressive stimulus measures worked effectively to thwart deflationary tendencies. Leading indicators of economic activity began to turn upward, and investors responded by selling safe-haven assets and increasing exposure to stocks, corporate bonds, and commodities. For equities, the meat of the rally came in April and May, when stock markets around the world posted consistent gains. Overall, double-digit gains were the rule for the full second quarter, with more aggressive asset classes tending to outperform. The strength was particularly robust in non-US equities, which got an additional boost from weakness in the US dollar. Improving growth prospects also brought a stiff rise in yields to government bond markets, particularly in the US, where safe-haven buying of Treasury issues continued to unwind through the second quarter. While government bonds languished, credit instruments enjoyed another strong quarter.
For the first half, most major asset classes finished in positive territory. The strongest asset classes were international equities and high yield bonds. Emerging markets, in particular, surged ahead to achieve gains in excess of 30% while their developed equity counterparts advanced nicely with some help from currency gains. High yield bonds strode forward at nearly the pace of emerging markets as spreads tightened and defaults, while rising, have not increased to levels that offset the comparative yield advantage. Lesser, but still positive returns were found across the fixed income landscape. A pickup in inflation expectations helped Treasury Inflation-Protected Securities (“TIPS”)
achieve solid returns, and investment grade credit edged out aggregate bonds with modestly positive performance. The notable laggard during the first half was real estate investment trusts (”REITs”), which, despite a strong rebound in the second quarter, remained underwater due to dismal first quarter results.
Portfolio Review/Current Positioning
The Portfolio is structured with a broadly diversified mix of exchange traded funds (ETFs) covering the global equity, bond, and real asset classes. The Growth ETF Portfolio is managed relative to a strategic benchmark consisting of 80% equities and 20% fixed income. On top of these strategic allocations, we develop thematic tactical positions as a source of value added.
At the start of 2009, the Portfolio was positioned slightly overweight to equities, underweight to REITs, and modestly overweight to bonds via the credit, high yield and inflation-protected sectors. As markets continued their unabated descent during January and February, we took this as an opportunity to add to our equity and investment-grade credit positions. Within equities, we favored large cap stocks over small and mid cap stocks throughout the period. Later in the first half, we took some profit from our high yield position in order to reduce the underweight to REITs, which had been among the worst performing asset classes in the first quarter. Additionally, we adjusted tactical exposures in the international sphere, by building up an overweight to emerging market equities with an offsetting underweight to international developed equities.
The Portfolio finished the first half in positive territory overall but lagged its custom benchmark. The results of our tactical positioning provided a net benefit to the Portfolio. Key contributors from a tactical perspective were the overweight to emerging markets and our allocations within bonds. Underweighting aggregate bonds in favor of spread product proved profitable as the returns to our credit, high yield, and TIPS positions beat out core aggregate bonds. Conversely, our positioning within US stocks detracted from performance as both small and mid caps outperformed large cap stocks. Although our tactical positioning added value in the first half of 2009, the Portfolio overall still trailed its custom benchmark as a result of some tracking error experienced by a few of the underlying ETFs. Specifically, the core aggregate bond ETF and high yield bond ETF lagged their respective benchmarks which contributed to the relative underperformance of the Portfolio. Exchange Traded Funds (ETFs), unlike straight mutual funds, are traded in a public market throughout the day. Its value at the end of the day is the last trading price, rather than the net asset value of the underlying securities as with a mutual fund. There are times—due to a short-term imbalance in the demand for a particular ETF—when that ETF will sell at a higher (at a premium) or lower (at a discount) price than the actual net asset value of the ETF’s underlying securities. These situations generally rectify themselves quickly through market action.
Alistar Lowe
Executive Vice President
Daniel Farley, CFA
Managing Director
SSgA Funds Management, Inc.
1
| | |
| SSgA Growth ETF Portfolio | | For the period ended 6/30/09 |
| Managed by SSgA Funds Management, Inc. | | |
Portfolio Manager Commentary (continued)
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
SPDR Trust Series 1 | | 28.34% |
iShares MSCI EAFE Index Fund | | 15.46% |
Vanguard Emerging Markets ETF | | 10.90% |
iShares S&P 500 Index Fund | | 9.44% |
SPDR Lehman High Yield Bond ETF | | 5.98% |
Vanguard Total Bond Market ETF | | 5.89% |
iShares S&P SmallCap 600 Index Fund | | 3.99% |
SPDR S&P International Small Cap ETF | | 3.00% |
iShares Lehman Treasury Inflation Protected Securities Fund | | 2.97% |
Midcap SPDR Trust Series I | | 2.35% |
2
| | |
| SSgA Growth ETF Portfolio | | For the period ended 6/30/09 |
| Managed by SSgA Funds Management, Inc. | | |
Portfolio Manager Commentary (continued)
SSgA Growth ETF Portfolio managed by
SSgA Funds Management, Inc. vs. MSCI ACWI (All Country World Index)1,
S&P 500® Index2 and SSgA Growth ETF Benchmark3
Growth Based on $10,000+
| | | | | | | | | | |
| | | | | Average Annual Return4
(for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | 3 Year | | Since Inception5 |
| | SSgA Growth ETF Portfolio—Class A | | 7.33% | | -19.71%
| | -5.47% | | -6.11% |
| — | | Class B | | 7.19% | | -19.87% | | -5.69% | | -3.31% |
| | Class E | | 7.29% | | -19.79% | | -5.61% | | -6.24% |
| - - | | MSCI ACWI (All Country World Index) (net)1 | | 9.17% | | -29.32% | | -7.05% | | -3.34% |
| — | | S&P 500® Index2 | | 3.16% | | -26.21% | | -8.22% | | -5.46% |
| - - | | SSgA Growth ETF Benchmark3 | | 8.53% | | -20.30% | | -5.26% | | -2.68% |
+The chart reflects the performance of Class B shares of the Portfolio. The Performance of Class B shares will differ from that of the other classes because of the difference in expenses paid by policyholders investing in the different share classes.
1The MSCI ACWI (All Country World Index) is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets.
2The S&P 500® Index is an unmanaged index consisting of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value weighted index (stock price times number of shares outstanding), with each stock’s weight in the Index proportionate to its market value.
3The SSgA Growth ETF Benchmark is comprised of 35% S&P 500® Index, 5% S&P® Mid Cap Index, 5% S&P 600® Index, 20% MSCI World ex. U.S. (net), 3% S&P/Citigroup World Ex. U.S. Range <2 billion USD Index (Gross), 7% MSCI Emerging Markets (net), 3% MSCI U.S. REIT Index, 2% Dow Jones Wilshire Ex-U.S. Real Estate Securities Index, 10% Barclays Capital U.S. Aggregate Bond Index, 5% Barclays Capital High Yield Very Liquid Index, 3% Barclays Capital U.S. TIPS Index, and 2% Barclays Capital 1-3 Month U.S. Treasury Bill Index.
The S&P® Mid Cap Index is a capitalization-weighted index which measures the performance of the mid-range sector of the U.S. stock market.
The S&P 600® Index is a capitalization-weighted index which measures the performance of the small-cap range of the U.S. stock market.
The MSCI World ex-U.S. Index (net) is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global developed and emerging markets.
The S&P/Citigroup World Ex-U.S. Range <2 Billion USD Index (Gross) is a float-adjusted market capitalization weighted index that defines and measures the investable universe of small-cap, publicly traded companies domiciled in countries outside the U.S.
The Morgan Stanley Capital International (MSCI) Emerging Markets (EMF) Index (net)SM is an unmanaged market capitalization weighed equity index composed of companies that are representative of the market structure of the following 22 countries: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Korea, Malaysia, Mexico, Morocco, Peru,
3
| | |
| SSgA Growth ETF Portfolio | | For the period ended 6/30/09 |
| Managed by SSgA Funds Management, Inc. | | |
Portfolio Manager Commentary (continued)
Philippines, Poland, Russia, South Africa, Taiwan, Thailand and Turkey. “Free” MSCI indices exclude those shares not purchasable by foreign investors.
The MSCI U.S. REIT Index is comprised of REIT securities that are included in the MSCI U.S. Investable Market 2500 Index, with the exception of REITs classified in the Mortgage REITs Sub-Industry, and REITs classified in the Specialized REITs Sub-Industry that do not generate a majority of their revenue and income from real estate rental and related leasing operations.
The Dow Jones Wilshire Ex-U.S. Real Estate Securities IndexSM is a float adjusted market capitalization index designed to measure the performance of publicly traded real estate securities in developed and emerging countries excluding the United States.
The Barclays Capital U.S. Aggregate Bond Index includes most obligations of the U.S. Treasury, agencies and quase-federal corporations, most publicly issued investment grade corporate bonds and most bonds backed by mortgage pools of GNMA, FNMA and FHLMC.
The Barclays Capital High Yield Very Liquid Index includes publicly issued U.S. dollar denominated, non-investment grade, fixed-rate, taxable corporate bonds that have a remaining maturity of at least one year, regardless of optionality, are high-yield using the middle rating of Moody’s, S&P, and Fitch, respectively, and have $600 million or more outstanding face value.
The Barclays Capital U.S. TIPS Index represents an unmanaged market index made up of U.S. Treasury Inflation Linked Index securities.
The Barclays Capital 1-3 Month U.S. Treasury Bill Index measures the performance of public obligations of the U.S. Treasury that have a remaining maturity of greater than or equal to 1 month and less than 3 months. The Index includes all publicly issued zero-coupon U.S. Treasury Bills that have a remaining maturity of less than 3 months and more than 1 month, are rated investment grade, and have $250 million or more of outstanding face value.
4“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
5Inception of Class B shares is 10/3/05. Inception of Class A and Class E shares is 5/1/06. Index returns are based on an inception date of 10/3/05.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Indexes do not include fees or expenses and are not available for direct investment.
4
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| SSgA Growth ETF Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.40% | | $ | 1,000.00 | | $ | 1,073.30 | | $ | 2.06 |
Hypothetical | | 0.40% | | | 1,000.00 | | | 1,022.81 | | | 2.01 |
| | | | | | | | | | | |
| | | | |
Class B | | | | | | | | | | | |
Actual | | 0.64% | | $ | 1,000.00 | | $ | 1,071.90 | | $ | 3.29 |
Hypothetical | | 0.64% | | | 1,000.00 | | | 1,021.62 | | | 3.21 |
| | | | | | | | | | | |
| | | | |
Class E | | | | | | | | | | | |
Actual | | 0.55% | | $ | 1,000.00 | | $ | 1,072.90 | | $ | 2.83 |
Hypothetical | | 0.55% | | | 1,000.00 | | | 1,022.07 | | | 2.76 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
5
Met Investors Series Trust
SSgA Growth ETF Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| |
| Investment Company Securities - 97.3% | | | |
iShares Barclays 1-3 Year Credit Bond Fund | | 38,400 | | $ | 3,957,888 |
iShares iBoxx $ Investment Grade Corporate Bond Fund | | 42,200 | | | 4,231,816 |
iShares Lehman Treasury Inflation Protected Securities Fund | | 81,900 | | | 8,323,497 |
iShares MSCI Canada Index Fund | | 192,200 | | | 4,116,924 |
iShares MSCI EAFE Index Fund | | 944,500 | | | 43,267,545 |
iShares S&P 500 Index Fund | | 286,400 | | | 26,423,264 |
iShares S&P MidCap 400 Index Fund | | 78,200 | | | 4,519,178 |
iShares S&P SmallCap 600 Index Fund | | 250,800 | | | 11,153,076 |
Midcap SPDR Trust Series 1 | | 62,500 | | | 6,581,875 |
SPDR DJ Wilshire International Real Estate ETF(a) | | 93,700 | | | 2,692,001 |
SPDR Lehman High Yield Bond ETF | | 475,700 | | | 16,739,883 |
SPDR S&P International Small Cap ETF | | 395,300 | | | 8,404,078 |
SPDR Trust Series 1(a) | | 863,000 | | | 79,326,960 |
Vanguard Emerging Markets ETF | | 963,400 | | | 30,655,388 |
Vanguard REIT ETF | | 176,900 | | | 5,485,669 |
Vanguard Total Bond Market ETF | | 212,200 | | | 16,485,818 |
| | | | | |
Total Investment Company Securities
(Cost $299,757,631) | | | | | 272,364,860 |
| | | | | |
| | | | | | | |
Security
Description | | Shares/Par
Amount | | Value | |
| | |
| Short-Term Investments - 4.2% | | | | | | | |
| Mutual Funds - 4.2% | | | | | | | |
Aim Prime Fund | | $ | 11,386,158 | | $ | 11,386,158 | |
State Street Navigator Securities Lending Trust Prime Portfolio(b) | | | 396,548 | | | 396,548 | |
| | | | | | | |
Total Short-Term Investments
(Cost $11,782,706) | | | | | | 11,782,706 | |
| | | | | | | |
| |
TOTAL INVESTMENTS - 101.5%
(Cost $311,540,337) | | | 284,147,566 | |
| | | | | | | |
| |
| Other Assets and Liabilities (net) - (1.5)% | | | (4,281,825 | ) |
| | | | | | | |
| | |
| NET ASSETS - 100.0% | | | | | $ | 279,865,741 | |
| | | | | | | |
Portfolio Footnotes:
| (a) | | All or a portion of security is on loan. |
| (b) | | Represents investment of collateral received from securities lending transactions. |
See accompanying notes to financial statements
6
Met Investors Series Trust
SSgA Growth ETF Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1—quoted prices in active markets for identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets (Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Investment Company Securities | | $ | 272,364,860 | | $ | — | | $ | — | | $ | 272,364,860 |
Short-Term Investments
Mutual Funds | | | 396,548 | | | 11,386,158 | | | — | | | 11,782,706 |
Total Short-Term Investments | | | 396,548 | | | 11,386,158 | | | — | | | 11,782,706 |
TOTAL INVESTMENTS | | $ | 272,761,408 | | $ | 11,386,158 | | $ | — | | $ | 284,147,566 |
See accompanying notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| SSgA Growth ETF Portfolio | | | |
| Assets | | | | |
Investments, at value (a)(b) | | $ | 284,147,566 | |
Receivable for investments sold | | | 1,756,265 | |
Receivable for Trust shares sold | | | 1,210,918 | |
Dividends receivable | | | 553,928 | |
Interest receivable | | | 1,314 | |
| | | | |
Total assets | | | 287,669,991 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 7,253,288 | |
Trust shares redeemed | | | 18,161 | |
Distribution and services fees—Class B | | | 54,471 | |
Distribution and services fees—Class E | | | 402 | |
Collateral for securities on loan | | | 396,548 | |
Management fee | | | 66,586 | |
Administration fee | | | 1,964 | |
Custodian and accounting fees | | | 3,571 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 5,832 | |
| | | | |
Total liabilities | | | 7,804,250 | |
| | | | |
| Net Assets | | $ | 279,865,741 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 315,364,789 | |
Accumulated net realized loss | | | (11,034,111 | ) |
Unrealized depreciation on investments | | | (27,392,771 | ) |
Undistributed net investment income | | | 2,927,834 | |
| | | | |
Total | | $ | 279,865,741 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 1,692,801 | |
| | | | |
Class B | | | 274,930,411 | |
| | | | |
Class E | | | 3,242,529 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 206,858 | |
| | | | |
Class B | | | 33,641,238 | |
| | | | |
Class E | | | 396,709 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 8.18 | |
| | | | |
Class B | | | 8.17 | |
| | | | |
Class E | | | 8.17 | |
| | | | |
| | | | | |
(a) Investments at cost | | $ | 311,540,337 | |
(b) Includes cash collateral for securities loaned of | | | 396,548 | |
See accompanying notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| SSgA Growth ETF Portfolio | | | |
| Investment Income | | | | |
Dividends from Underlying ETFs | | $ | 3,455,054 | |
Interest (1) | | | 81,625 | |
| | | | |
Total investment income | | | 3,536,679 | |
| | | | |
| Expenses | | | | |
Management fee | | | 313,323 | |
Administration fees | | | 11,901 | |
Custodian and accounting fees | | | 14,131 | |
Distribution and services fees—Class B | | | 232,548 | |
Distribution and services fees—Class E | | | 2,058 | |
Audit and tax services | | | 15,039 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 19,229 | |
Other | | | 2,660 | |
| | | | |
Total expenses | | | 637,322 | |
Less management fee waiver | | | (28,484 | ) |
| | | | |
Net expenses | | | 608,838 | |
| | | | |
Net investment income | | | 2,927,841 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments | | | | |
Net realized loss on: | | | | |
Investments | | | (8,014,596 | ) |
| | | | |
Net realized loss on investments | | | (8,014,596 | ) |
| | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 25,829,550 | |
| | | | |
Net change in unrealized appreciation on investments | | | 25,829,550 | |
| | | | |
Net realized and unrealized gain on investments | | | 17,814,954 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 20,742,795 | |
| | | | |
| | | | | |
(1) Interest income includes securities lending net income of: | | $ | 69,236 | |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| SSgA Growth ETF Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 2,927,841 | | | $ | 4,140,681 | |
Net realized loss on investments and Underlying ETFs | | | (8,014,596 | ) | | | (3,016,099 | ) |
Net change in unrealized appreciation (depreciation) on investments | | | 25,829,550 | | | | (81,412,242 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 20,742,795 | | | | (80,287,660 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | (26,348 | ) | | | (22,251 | ) |
Class B | | | (4,051,668 | ) | | | (3,129,750 | ) |
Class E | | | (62,641 | ) | | | (53,827 | ) |
From net realized gains | | | | | | | | |
Class A | | | — | | | | (27,827 | ) |
Class B | | | — | | | | (4,701,290 | ) |
Class E | | | — | | | | (71,893 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (4,140,657 | ) | | | (8,006,838 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 1,000,847 | | | | 1,044,206 | |
Class B | | | 118,063,162 | | | | 13,601,892 | |
Class E | | | 697,125 | | | | 2,037,280 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | 26,348 | | | | 50,078 | |
Class B | | | 4,051,668 | | | | 7,831,040 | |
Class E | | | 62,641 | | | | 125,720 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (423,272 | ) | | | (1,028,144 | ) |
Class B | | | (16,767,079 | ) | | | (35,669,830 | ) |
Class E | | | (384,761 | ) | | | (1,494,810 | ) |
| | | | | | | | |
Net increase (decrease) in net assets from capital share transactions | | | 106,326,679 | | | | (13,502,568 | ) |
| | | | | | | | |
| Net Increase (Decrease) in Net Assets | | | 122,928,817 | | | | (101,797,066 | ) |
Net assets at beginning of period | | | 156,936,924 | | | | 258,733,990 | |
| | | | | | | | |
Net assets at end of period | | $ | 279,865,741 | | | $ | 156,936,924 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 2,927,834 | | | $ | 4,140,650 | |
| | | | | | | | |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | |
| | | | | |
| | | | | | | | | | | | | | | | |
| SSgA Growth ETF Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006(b) | | | | |
| Net Asset Value, Beginning of Period | | $ | 7.81 | | | $ | 12.09 | | | $ | 11.39 | | | $ | 10.76 | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.13 | | | | 0.24 | | | | 0.22 | | | | 0.25 | | | | | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.42 | | | | (4.09 | ) | | | 0.48 | | | | 0.53 | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.55 | | | | (3.85 | ) | | | 0.70 | | | | 0.78 | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.18 | ) | | | (0.19 | ) | | | — | | | | (0.12 | ) | | | | |
Distributions from Net Realized Capital Gains | | | — | | | | (0.24 | ) | | | — | | | | (0.03 | ) | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.18 | ) | | | (0.43 | ) | | | — | | | | (0.15 | ) | | | | |
| | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 8.18 | | | $ | 7.81 | | | $ | 12.09 | | | $ | 11.39 | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 7.33 | % | | | (32.84 | )% | | | 6.15 | % | | | 7.20 | % | | | | |
Ratio of Expenses to Average Net Assets After Reimbursement(e) | | | 0.40 | %* | | | 0.50 | % | | | 0.53 | % | | | 0.57 | %* | | | | |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates(f) | | | 0.43 | %* | | | 0.52 | %(d) | | | 0.54 | %(d) | | | 0.63 | %* | | | | |
Ratio of Net Investment Income to Average Net Assets(g) | | | 3.45 | %* | | | 2.35 | % | | | 1.85 | % | | | 3.33 | %* | | | | |
Portfolio Turnover Rate | | | 12.0 | % | | | 140.3 | % | | | 20.2 | % | | | 27.7 | % | | | | |
Net Assets, End of Period (in millions) | | $ | 1.7 | | | $ | 1.0 | | | $ | 1.5 | | | $ | 0.3 | | | | | |
| |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005(c) | |
| Net Asset Value, Beginning of Period | | $ | 7.79 | | | $ | 12.06 | | | $ | 11.39 | | | $ | 10.14 | | | $ | 10.00 | |
| | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.12 | | | | 0.20 | | | | 0.15 | | | | 0.13 | | | | 0.10 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.42 | | | | (4.07 | ) | | | 0.52 | | | | 1.28 | | | | 0.10 | |
| | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.54 | | | | (3.87 | ) | | | 0.67 | | | | 1.41 | | | | 0.20 | |
| | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.16 | ) | | | (0.16 | ) | | | — | | | | (0.12 | ) | | | (0.06 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (0.24 | ) | | | — | | | | (0.04 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.16 | ) | | | (0.40 | ) | | | — | | | | (0.16 | ) | | | (0.06 | ) |
| | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 8.17 | | | $ | 7.79 | | | $ | 12.06 | | | $ | 11.39 | | | $ | 10.14 | |
| | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 7.19 | % | | | (32.97 | )% | | | 5.88 | % | | | 13.85 | % | | | 2.04 | % |
Ratio of Expenses to Average Net Assets After Reimbursement(e) | | | 0.64 | %* | | | 0.75 | % | | | 0.77 | % | | | 0.80 | % | | | 0.80 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates(f) | | | 0.67 | %* | | | 0.77 | %(d) | | | 0.78 | %(d) | | | 0.82 | % | | | 2.59 | %* |
Ratio of Net Investment Income to Average Net Assets(g) | | | 3.08 | %* | | | 1.99 | % | | | 1.25 | % | | | 1.21 | % | | | 3.85 | %* |
Portfolio Turnover Rate | | | 12.0 | % | | | 140.3 | % | | | 20.2 | % | | | 27.7 | % | | | 6.2 | % |
Net Assets, End of Period (in millions) | | $ | 274.9 | | | $ | 153.2 | | | $ | 253.7 | | | $ | 235.3 | | | $ | 11.6 | |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—05/01/2006. |
| (c) | | Commencement of operations—10/03/2005. |
| (d) | | Excludes effect of deferred expense reimbursement—See Note 3 of financial statements. |
| (e) | | The ratio of operating expenses to average net assets does not include expenses of the Underlying ETFs in which the Portfolio invests. |
| (f) | | See Note 3 of the Notes to Financial Statements. |
| (g) | | Recognition of net investment income by the Portfolio is affected by the timing of the declaration of dividends by the Underlying ETFs in which it invests. |
See accompanying notes to financial statements
11
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | |
| | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | |
| SSgA Growth ETF Portfolio | | Class E | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006(b) | |
| Net Asset Value, Beginning of Period | | $ | 7.79 | | | $ | 12.07 | | | $ | 11.39 | | | $ | 10.76 | |
| | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.11 | | | | 0.23 | | | | 0.21 | | | | 0.18 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.44 | | | | (4.09 | ) | | | 0.47 | | | | 0.60 | |
| | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.55 | | | | (3.86 | ) | | | 0.68 | | | | 0.78 | |
| | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.17 | ) | | | (0.18 | ) | | | — | | | | (0.12 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (0.24 | ) | | | — | | | | (0.03 | ) |
| | | | | | | | | | | | | | | | |
Total Distributions | | | (0.17 | ) | | | (0.42 | ) | | | — | | | | (0.15 | ) |
| | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 8.17 | | | $ | 7.79 | | | $ | 12.07 | | | $ | 11.39 | |
| | | | | | | | | | | | | | | | |
| Total Return | | | 7.29 | % | | | (32.91 | )% | | | 5.97 | % | | | 7.15 | % |
Ratio of Expenses to Average Net Assets After Reimbursement(d) | | | 0.55 | %* | | | 0.65 | % | | | 0.68 | % | | | 0.72 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates(e) | | | 0.58 | %* | | | 0.67 | %(c) | | | 0.69 | %(c) | | | 0.77 | %* |
Ratio of Net Investment Income to Average Net Assets(f) | | | 2.96 | %* | | | 2.28 | % | | | 1.70 | % | | | 2.38 | %* |
Portfolio Turnover Rate | | | 12.0 | % | | | 140.3 | % | | | 20.2 | % | | | 27.7 | % |
Net Assets, End of Period (in millions) | | $ | 3.2 | | | $ | 2.7 | | | $ | 3.5 | | | $ | 1.2 | |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—05/01/2006. |
| (c) | | Excludes effect of deferred expense reimbursement—See Note 3 of financial statements. |
| (d) | | The ratio of operating expenses to average net assets does not include expenses of the Underlying ETFs in which the Portfolio invests. |
| (e) | | See Note 3 of the Notes to Financial Statements. |
| (f) | | Recognition of net investment income by the Portfolio is affected by the timing of the declaration of dividends by the Underlying ETFs in which it invests. |
See accompanying notes to financial statements
12
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is SSgA Growth ETF Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A, B and E Shares are currently offered by the Portfolio. Class C is not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
The Portfolio was designed on established principles of asset allocation. The Portfolio will primarily invest its assets in other investment companies known as exchange-traded funds (“Underlying ETFs”), including, but not limited to, series of the iShares® Trust, iShares®, Inc., Standard and Poors Depositary Receipts of the SPDR® Trust, Series 1 and Vanguard ETFs of the Vanguard® Index Funds.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Investments in the Underlying ETFs are valued at the closing market quotation for their shares.
The net asset value of the Portfolio is calculated based on the market values of the Underlying ETFs in which the Portfolio invests. For information about the use of fair value pricing by the Underlying ETFs, please refer to the prospectuses for such Underlying ETFs.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes.
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Income and capital gain distributions from the Underlying ETFs are recorded on the ex-date.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | | |
Expiring
12/31/2016 | | Total |
| |
| $ | 1,894,400 | | $ | 1,894,400 |
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
Due to the affiliation between the Portfolio’s adviser, SSgA Funds Management, Inc. and State Street Bank and Trust Company, the Portfolio relies on an exemptive order issued by the Securities and Exchange Commission to State Street Bank and Trust Company, State Street Navigator Securities Lending Trust (“Navigator Trust”) and the SSgA Funds that permits certain registered investment companies, including the Portfolio, to use cash collateral from securities lending transactions to purchase shares of one of more series of Navigator Trust and to pay fees based on a share of the revenue generated from securities lending transactions to State Street Bank and Trust Company.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with SSgA Funds Management, Inc. (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio. The Adviser is an affiliate of State Street Bank and Trust Company, the administrator and custodian of the Trust.
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | | |
Management Fees
earned by the Manager
for the year ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $313,323 | | 0.33 | % | | First $ | 500 Million |
| | |
| | 0.30 | % | | Over $ | 500 Million |
The Manager agreed to contractually waive a portion of the management fee paid by the Portfolio through April 30, 2010. This waiver reduces the management fee on the first $500 million of the Portfolio’s average daily net assets from 0.33% to 0.30%. Prior to September 2, 2008, the management fee paid by the Portfolio was 0.45% for the first $300 Million, 0.43% for the next $300 Million and 0.40% for assets over $600 Million.
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Manager has entered into an expense limitation agreement with the Trust (“Expense Limitation Agreement”) in the interest of limiting expenses of the Portfolio of the Trust. The Expense Limitation Agreement shall continue in effect with respect to the Portfolio until April 30, 2010. Pursuant to that Expense Limitation Agreement, the Manager has agreed to waive or limit its fees and to assume other expenses so that the total annual operating expenses of the Portfolio other than interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with accounting principles generally accepted in the United States of America, other extraordinary expenses not incurred in the ordinary course of the Portfolio’s business, and Underlying ETFs’ fees and expenses, but including amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act, are limited to the following expense ratios as a percentage of the Portfolio’s average daily net assets:
| | | | | | | |
Maximum Expense Ratio
under current Expense
Limitation Agreement | |
|
|
Class A | | | Class B | | | Class E | |
| | |
| 0.55 | % | | 0.80 | % | | 0.70 | % |
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
The amount waived for the period ended June 30, 2009 is shown as management fee waiver in the Statement of Operations of the Portfolio.
If in any year in which the Management Agreement is still in effect, the estimated aggregate portfolio operating expenses of the Portfolio for the fiscal year are less than the Maximum Expense Ratios for that year, subject to approval by the Trust’s Board, the Manager shall be entitled to Reimbursement by the Portfolio to the extent that the charge does not cause the expenses in such subsequent year to exceed the Maximum Expense Ratios as stated above. The Portfolio is not obligated to repay any expense paid by the Manager more than five years after the end of the fiscal year in which such expense was incurred.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A, Class B and Class E Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B and Class E distribution plans provide that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%, respectively, of the average net assets of the Portfolio attributable to its Class B and Class E Shares in respect to activities primarily intended to result in the sale of Class B and Class E Shares. However, under the Class B and Class E distribution agreements, payments to the Distributor for activities pursuant to the Class B and Class E distribution plans are currently limited to payments at an annual rate equal to 0.25% and 0.15% of average daily net assets of the Portfolio attributable to its Class B and Class E Shares, respectively.
Under terms of the Class B and Class E distribution plans and distribution agreements, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B and Class E Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
in Shares
Outstanding | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 132,540 | | 128,816 | | 3,580 | | (58,078 | ) | | 74,318 | | 206,858 |
12/31/2008 | | 123,855 | | 107,746 | | 4,475 | | (103,536 | ) | | 8,685 | | 132,540 |
| | | | | | |
Class B | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 19,671,611 | | 15,615,463 | | 551,248 | | (2,197,084 | ) | | 13,969,627 | | 33,641,238 |
12/31/2008 | | 21,046,030 | | 1,407,883 | | 701,077 | | (3,483,379 | ) | | 1,374,419 | | 19,671,611 |
| | | | | | |
Class E | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 347,911 | | 91,077 | | 8,523 | | (50,802 | ) | | 48,798 | | 396,709 |
12/31/2008 | | 290,543 | | 190,369 | | 11,255 | | (144,256 | ) | | 57,368 | | 347,911 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 124,524,602 | | $ | — | | $ | 22,840,816 |
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
5. Investment Transactions - continued
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net
Unrealized
Depreciation | |
| | | |
| $311,540,337 | | $ | 1,899,571 | | $ | (29,292,342 | ) | | $ | (27,392,771 | ) |
6. Securities Lending
As of June 30, 2009, the Portfolio had loaned securities which were collateralized by short term investments. The value of securities on loan and the value of the related collateral were as follows:
| | | | | | | | | |
Value of
Securities | | Value of
Cash
Collateral | | Value of
Non-Cash
Collateral* | | Total
Collateral |
| | | |
| $386,224 | | $ | 396,548 | | $ | — | | $ | 396,548 |
* The Portfolio cannot repledge or resell this collateral. The non-cash collateral is typically comprised of government securities and/or bank letters of credit.
7. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $ | 3,515,121 | | $ | — | | $ | 4,491,717 | | $ | — | | $ | 8,006,838 | | $ | — |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards | | | Total | |
| | | | |
| $4,140,650 | | $ | — | | $ | (54,347,436 | ) | | $ | (1,894,400 | ) | | $ | (52,101,186 | ) |
8. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
9. Market, Credit and Counterparty Risk
In the normal course of business, the Underlying ETFs, in which the Portfolio invests, invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Underlying ETFs may decline in response to certain events, including those directly involving the companies whose securities are owned by the Underlying ETFs; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Underlying ETFs may be exposed to counterparty risk, or the risk that an entity with which the Underlying ETFs have unsettled or open transactions may default. Financial assets, which potentially expose the Underlying ETFs to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Underlying ETFs’ exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Underlying ETFs’ Statements of Assets and Liabilities.
16
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
17
| | |
| T. Rowe Price Mid Cap Growth Portfolio | | For the period ended 6/30/09 |
| Managed by T. Rowe Price Associates, Inc. | | |
Portfolio Manager Commentary
Performance
During the six month period ended June 30, 2009, the Portfolio had a return of 16.79%, 16.57% and 16.60% for Class A, B and E Shares, respectively, versus 16.61% for its benchmark, the Russell Midcap® Growth Index.
Market Environment /Conditions
Growth stocks significantly outperformed value for the six-month period within the mid-cap universe, and mid-cap stocks as a whole outpaced their large-cap peers. All sectors within the Russell Midcap® Growth Index posted positive absolute returns, with several in the double digits. Energy led performance due to a slow but steady increase in oil prices, followed closely by materials, which received a boost from rising commodity prices. Information technology and consumer discretionary also did well. The slowest sector in the index was industrials and business services.
Portfolio Review /Current Positioning
Consumer discretionary was the leading sector, due to stock selection. Our overweight position in Internet and catalogue retail helped here, as did strong holdings within the industry like Amazon.com and Expedia. Elsewhere in the sector, our position in J. Crew Group proved productive.
Stock selection in consumer staples provided a boost as well. Here our holdings are concentrated in the food and staples retailing industry, where upscale grocer Whole Foods benefited from resolving an anti-trust issue.
In industrials and business services, stock selection also helped relative returns. A leading holding here was McDermott International.
The most significant detractor was information technologies, due to stock choices. FLIR Systems and SAIC were among the leading detractors. Our overweight to this high-performing index sector mitigated some of the negative effect of stock selection, however.
Energy also produced a drag on relative returns, due to stock choices. CNX Gas Corporation and EOG Resources were among our underperforming holdings.
The market’s recent rally was one of the most significant on record. In retrospect, it is clear that stock prices were factoring in a depression, and investors reacted positively when it appeared that the worst-case scenario had been avoided. Still, the economy has yet to recover, even though there are signs it is stabilizing. The impact of the federal stimulus package is only beginning to be felt, and firms have struggled as economic activity has stabilized at a relatively low level.
We found tech attractive, and it was the largest single sector in the portfolio at June 30, 2009. For all our economy’s recent challenges, American technology firms remain the worldwide leader in innovation. Technology firms, whose ranks have been trimmed since the bubble years of the late 1990s, have become less capital intensive, which has
improved cash flow. We are less enthusiastic about prospects for consumer-related companies, although we maintain significant positions in uniquely positioned firms. Consumers’ need to reduce debt and increase savings is likely to weigh on retailers and others, and this is unlikely to be a consumer-led economic recovery.
Brian W. H. Berghuis, CFA
Portfolio Manager
T. Rowe Price Associates, Inc.
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
Roper Industries, Inc. | | 1.74% |
AMETEK, Inc. | | 1.67% |
Rockwell Collins, Inc. | | 1.63% |
Juniper Networks, Inc. | | 1.60% |
Western Union Co. | | 1.53% |
Global Payments, Inc. | | 1.50% |
Agnico-Eagle Mines, Ltd. | | 1.42% |
SAIC, Inc. | | 1.42% |
Marriott International, Inc.—Class A | | 1.41% |
Cephalon, Inc. | | 1.32% |
1
| | |
| T. Rowe Price Mid Cap Growth Portfolio | | For the period ended 6/30/09 |
| Managed by T. Rowe Price Associates, Inc. | | |
Portfolio Manager Commentary (continued)
Portfolio Composition (% of portfolio market value)
As of 6/30/09
2
| | |
| T. Rowe Price Mid Cap Growth Portfolio | | For the period ended 6/30/09 |
| Managed by T. Rowe Price Associates, Inc. | | |
Portfolio Manager Commentary (continued)
T. Rowe Price Mid Cap Growth Portfolio managed by
T. Rowe Price Associates, Inc. vs. Russell Midcap® Growth Index1
Growth Based on $10,000+
| | | | | | | | | | | | |
| | | | | Average Annual Return2 (for the period ended 6/30/09) |
| | | | | 6 Months | | 1 year | | 3 Year | | 5 Year | | Since
Inception3 |
| | T. Rowe Price
Mid Cap Growth Portfolio—Class A | | 16.79% | | -24.51% | | -4.32% | | 2.23% | | -2.82% |
| — | | Class B | | 16.57% | | -24.75% | | -4.55% | | 1.98% | | -3.29% |
| | Class E | | 16.60% | | -24.66% | | -4.44% | | 2.08% | | 0.36% |
| - - | | Russell Midcap®
Growth Index1 | | 16.61% | | -30.33% | | -7.93% | | -0.44% | | -1.45% |
+The chart reflects the performance of Class B shares of the Portfolio. The performance of Class B shares will differ from that of the other classes because of the difference in expenses paid by policyholders investing in the different share classes.
1The Russell Midcap® Growth Index is an unmanaged measure of performance of those Russell Midcap companies (the 800 smallest companies in the Russell 1000® Index) with higher price-to-book ratios and higher forecasted growth values.
2“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
3Inception of the Class A shares is 5/1/01. Inception of the Class B shares is 2/12/01. Inception of the Class E shares is 11/1/01. Index returns are based on an inception date of 2/12/01.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Index does not include fees or expenses and is not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | |
| T. Rowe Price Mid Cap Growth Portfolio | | | | | | | | | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.70% | | $ | 1,000.00 | | $ | 1,167.90 | | $ | 3.76 |
Hypothetical | | 0.70% | | | 1,000.00 | | | 1,021.32 | | | 3.51 |
| | | | | | | | | | | |
Class B | | | | | | | | | | | |
Actual | | 0.95% | | $ | 1,000.00 | | $ | 1,165.70 | | $ | 5.10 |
Hypothetical | | 0.95% | | | 1,000.00 | | | 1,020.08 | | | 4.76 |
| | | | | | | | | | | |
Class E | | | | | | | | | | | |
Actual | | 0.85% | | $ | 1,000.00 | | $ | 1,166.00 | | $ | 4.56 |
Hypothetical | | 0.85% | | | 1,000.00 | | | 1,020.58 | | | 4.26 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
4
Met Investors Series Trust
T. Rowe Price Mid Cap Growth Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | |
| Common Stocks - 94.6% | | | | | |
| Aerospace & Defense - 2.7% | | | | | |
Alliant Techsystems, Inc.*(a) | | 62,000 | | $ | 5,106,320 |
Goodrich Corp. | | 92,000 | | | 4,597,240 |
Rockwell Collins, Inc. | | 344,300 | | | 14,367,639 |
| | | | | |
| | | | | 24,071,199 |
| | | | | |
| Air Freight & Logistics - 0.2% | | | | | |
UTI Worldwide, Inc.* | | 187,000 | | | 2,131,800 |
| | | | | |
| Airlines - 0.7% | | | | | |
Southwest Airlines Co. | | 973,000 | | | 6,548,290 |
| | | | | |
| Auto Components - 0.3% | | | | | |
WABCO Holdings, Inc. | | 169,000 | | | 2,991,300 |
| | | | | |
| Biotechnology - 4.2% | | | | | |
Alexion Pharmaceuticals, Inc.* | | 95,000 | | | 3,906,400 |
BioMarin Pharmaceutical, Inc.*(a) | | 191,000 | | | 2,981,510 |
Cephalon, Inc.*(a) | | 205,000 | | | 11,613,250 |
Human Genome Sciences, Inc.*(a) | | 356,000 | | | 1,018,160 |
Medarex, Inc.* | | 124,000 | | | 1,035,400 |
Myriad Genetics, Inc.* | | 127,000 | | | 4,527,550 |
Myriad Pharmaceuticals, Inc.* | | 31,750 | | | 147,638 |
OSI Pharmaceuticals, Inc.*(a) | | 57,000 | | | 1,609,110 |
Theravance, Inc.*(a) | | 158,000 | | | 2,313,120 |
Vertex Pharmaceuticals, Inc.* | | 207,000 | | | 7,377,480 |
| | | | | |
| | | | | 36,529,618 |
| | | | | |
| Capital Markets - 2.6% | | | | | |
Ameriprise Financial, Inc. | | 119,000 | | | 2,888,130 |
E*TRADE Financial Corp.* | | 1,967,000 | | | 2,517,760 |
Eaton Vance Corp. | | 300,000 | | | 8,025,000 |
Raymond James Financial, Inc. | | 197,000 | | | 3,390,370 |
TD Ameritrade Holding Corp.* | | 339,000 | | | 5,946,060 |
| | | | | |
| | | | | 22,767,320 |
| | | | | |
| Commercial Banks - 1.6% | | | | | |
Fifth Third Bancorp | | 469,000 | | | 3,329,900 |
M&T Bank Corp. | | 75,000 | | | 3,819,750 |
Marshall & Ilsley Corp. | | 599,000 | | | 2,875,200 |
SunTrust Banks, Inc. | | 225,000 | | | 3,701,250 |
| | | | | |
| | | | | 13,726,100 |
| | | | | |
| Communications Equipment - 2.4% | | | | | |
JDS Uniphase Corp.* | | 1,213,000 | | | 6,938,360 |
Juniper Networks, Inc.* | | 596,000 | | | 14,065,600 |
| | | | | |
| | | | | 21,003,960 |
| | | | | |
| Computers & Peripherals - 0.5% | | | | | |
Seagate Technology | | 407,000 | | | 4,257,220 |
| | | | | |
| Construction & Engineering - 1.8% | | | | | |
Foster Wheeler AG* | | 190,000 | | | 4,512,500 |
Quanta Services, Inc.* | | 481,000 | | | 11,125,530 |
| | | | | |
| | | | | 15,638,030 |
| | | | | |
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | |
| Diversified Financial Services - 2.4% | | | | | |
Interactive Brokers Group, Inc. - Class A* | | 265,000 | | $ | 4,115,450 |
IntercontinentalExchange, Inc.* | | 76,000 | | | 8,682,240 |
MSCI, Inc. - Class A* | | 353,000 | | | 8,627,320 |
| | | | | |
| | | | | 21,425,010 |
| | | | | |
| Electrical Equipment - 4.1% | | | | | |
AMETEK, Inc. | | 425,000 | | | 14,696,500 |
First Solar, Inc.*(a) | | 16,000 | | | 2,593,920 |
Roper Industries, Inc. | | 338,000 | | | 15,314,780 |
SunPower Corp. - Class B* | | 150,000 | | | 3,592,500 |
| | | | | |
| | | | | 36,197,700 |
| | | | | |
| Electronic Equipment, Instruments & Components - 2.3% |
Dolby Laboratories, Inc. - Class A* | | 236,000 | | | 8,798,080 |
FLIR Systems, Inc.* | | 304,000 | | | 6,858,240 |
Itron, Inc.*(a) | | 88,000 | | | 4,846,160 |
| | | | | |
| | | | | 20,502,480 |
| | | | | |
| Energy Equipment & Services - 3.6% | | | |
BJ Services Co.(a) | | 523,000 | | | 7,128,490 |
Cameron International Corp.* | | 153,000 | | | 4,329,900 |
FMC Technologies, Inc.* | | 223,000 | | | 8,380,340 |
Smith International, Inc.(a) | | 375,000 | | | 9,656,250 |
Trican Well Service, Ltd. | | 229,000 | | | 1,973,662 |
| | | | | |
| | | | | 31,468,642 |
| | | | | |
| Food & Staples Retailing - 1.5% | | | | | |
Shoppers Drug Mart Corp. | | 102,000 | | | 4,385,842 |
Whole Foods Market, Inc.(a) | | 449,000 | | | 8,522,020 |
| | | | | |
| | | | | 12,907,862 |
| | | | | |
| Health Care Equipment & Supplies - 4.2% |
C.R. Bard, Inc. | | 113,000 | | | 8,412,850 |
DENTSPLY International, Inc.(a) | | 239,000 | | | 7,294,280 |
Edwards Lifesciences Corp.* | | 150,000 | | | 10,204,500 |
Gen-Probe, Inc.*(a) | | 17,028 | | | 731,863 |
IDEXX Laboratories, Inc.*(a) | | 60,000 | | | 2,772,000 |
Intuitive Surgical, Inc.*(a) | | 44,000 | | | 7,201,040 |
| | | | | |
| | | | | 36,616,533 |
| | | | | |
| Health Care Providers & Services - 2.0% |
Health Net, Inc.* | | 149,000 | | | 2,316,950 |
Henry Schein, Inc.* | | 223,000 | | | 10,692,850 |
Humana, Inc.* | | 135,000 | | | 4,355,100 |
| | | | | |
| | | | | 17,364,900 |
| | | | | |
| Health Care Technology - 0.3% | | | | | |
Cerner Corp.* | | 45,000 | | | 2,803,050 |
| | | | | |
| Hotels, Restaurants & Leisure - 3.9% | | | | | |
Chipotle Mexican Grill, Inc.* | | 143,000 | | | 9,979,970 |
Gaylord Entertainment Co.*(a) | | 210,000 | | | 2,669,100 |
Marriott International, Inc. - Class A(a) | | 562,000 | | | 12,403,349 |
Panera Bread Co.*(a) | | 38,000 | | | 1,894,680 |
See accompanying notes to financial statements
5
Met Investors Series Trust
T. Rowe Price Mid Cap Growth Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Hotels, Restaurants & Leisure - continued |
Tim Hortons, Inc.(a) | | 166,000 | | $ | 4,073,640 |
Wynn Resorts, Ltd.*(a) | | 90,000 | | | 3,177,000 |
| | | | | |
| | | | | 34,197,739 |
| | | | | |
| Industrial Conglomerates - 1.0% | | | | | |
McDermott International, Inc.* | | 442,600 | | | 8,989,206 |
| | | | | |
| Insurance - 2.7% | | | | | |
Aon Corp. | | 187,000 | | | 7,081,690 |
Assurant, Inc. | | 160,000 | | | 3,854,400 |
Axis Capital Holdings, Ltd. | | 56,000 | | | 1,466,080 |
Principal Financial Group, Inc. | | 243,000 | | | 4,578,120 |
W.R. Berkley Corp. | | 301,000 | | | 6,462,470 |
| | | | | |
| | | | | 23,442,760 |
| | | | | |
| Internet & Catalog Retail - 2.3% | | | | | |
Amazon.com, Inc.* | | 113,000 | | | 9,453,580 |
Expedia, Inc.*(a) | | 642,000 | | | 9,700,620 |
Priceline.com, Inc.*(a) | | 9,000 | | | 1,003,950 |
| | | | | |
| | | | | 20,158,150 |
| | | | | |
| Internet Software & Services - 0.8% | | | | | |
VeriSign, Inc.*(a) | | 372,000 | | | 6,874,560 |
| | | | | |
| IT Services - 5.8% | | | | | |
DST Systems, Inc.* | | 37,000 | | | 1,367,150 |
Fiserv, Inc.* | | 224,000 | | | 10,236,800 |
Global Payments, Inc. | | 352,000 | | | 13,185,920 |
SAIC, Inc.* | | 671,000 | | | 12,447,050 |
Western Union Co. | | 821,000 | | | 13,464,400 |
| | | | | |
| | | | | 50,701,320 |
| | | | | |
| Life Sciences Tools & Services - 3.5% | | | | | |
Illumina, Inc.*(a) | | 221,000 | | | 8,605,740 |
Millipore Corp.* | | 112,000 | | | 7,863,520 |
Qiagen N.V.*(a) | | 300,000 | | | 5,577,000 |
Waters Corp.* | | 169,000 | | | 8,698,430 |
| | | | | |
| | | | | 30,744,690 |
| | | | | |
| Machinery - 2.2% | | | | | |
Danaher Corp. | | 111,000 | | | 6,853,140 |
Harsco Corp. | | 143,000 | | | 4,046,900 |
IDEX Corp. | | 338,000 | | | 8,304,660 |
| | | | | |
| | | | | 19,204,700 |
| | | | | |
| Media - 2.9% | | | | | |
Ascent Media Corp. - Class A* | | 22,000 | | | 584,760 |
Cablevision Systems Corp. - Class A | | 389,000 | | | 7,550,490 |
Clear Channel Outdoor Holdings, Inc.*(a) | | 274,000 | | | 1,452,200 |
Discovery Communications, Inc. - Class A* | | 223,000 | | | 5,028,650 |
Discovery Communications, Inc. - Class C* | | 264,000 | | | 5,419,920 |
Lamar Advertising Co. - Class A*(a) | | 386,000 | | | 5,894,220 |
| | | | | |
| | | | | 25,930,240 |
| | | | | |
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | |
| Metals & Mining - 2.1% | | | | | |
Agnico-Eagle Mines, Ltd.(b) | | 257,000 | | $ | 13,488,690 |
Franco-Nevada Corp. | | 210,000 | | | 5,050,404 |
| | | | | |
| | | | | 18,539,094 |
| | | | | |
| Oil, Gas & Consumable Fuels - 4.3% | | | | | |
CNX Gas Corp.* | | 297,000 | | | 7,802,190 |
CONSOL Energy, Inc. | | 224,000 | | | 7,607,040 |
EOG Resources, Inc. | | 75,000 | | | 5,094,000 |
Murphy Oil Corp. | | 120,000 | | | 6,518,400 |
Peabody Energy Corp. | | 151,000 | | | 4,554,160 |
Ultra Petroleum Corp.* | | 168,000 | | | 6,552,000 |
| | | | | |
| | | | | 38,127,790 |
| | | | | |
| Pharmaceuticals - 2.4% | | | | | |
Allergan, Inc. | | 113,000 | | | 5,376,540 |
Elan Corp. Plc (ADR)*(a) | | 523,000 | | | 3,331,510 |
Perrigo Co. | | 139,500 | | | 3,875,310 |
Valeant Pharmaceuticals International*(a) | | 198,000 | | | 5,092,560 |
Warner Chilcott, Ltd.* | | 229,000 | | | 3,011,350 |
| | | | | |
| | | | | 20,687,270 |
| | | | | |
| Professional Services - 2.5% | | | | | |
IHS, Inc. - Class A*(a) | | 111,000 | | | 5,535,570 |
Manpower, Inc. | | 158,000 | | | 6,689,720 |
Robert Half International, Inc.(a) | | 432,000 | | | 10,203,840 |
| | | | | |
| | | | | 22,429,130 |
| | | | | |
| Real Estate Management & Development - 0.4% |
St. Joe Co. (The)*(a) | | 149,000 | | | 3,947,010 |
| | | | | |
| Road & Rail - 0.6% | | | | | |
Hertz Global Holdings, Inc.* | | 693,000 | | | 5,537,070 |
| | | | | |
| Semiconductors & Semiconductor Equipment - 6.5% |
Altera Corp.(a) | | 519,000 | | | 8,449,320 |
Cree, Inc.*(a) | | 150,000 | | | 4,408,500 |
Intersil Corp. - Class A | | 377,000 | | | 4,738,890 |
Marvell Technology Group, Ltd.* | | 683,000 | | | 7,950,120 |
MEMC Electronic Materials, Inc.* | | 243,000 | | | 4,327,830 |
Microchip Technology, Inc.(a) | | 285,000 | | | 6,426,750 |
NVIDIA Corp.* | | 300,000 | | | 3,387,000 |
PMC-Sierra, Inc.* | | 532,000 | | | 4,234,720 |
Varian Semiconductor Equipment Associates, Inc.*(a) | | 206,000 | | | 4,941,940 |
Xilinx, Inc.(a) | | 397,000 | | | 8,122,620 |
| | | | | |
| | | | | 56,987,690 |
| | | | | |
| Software - 6.1% | | | | | |
Autodesk, Inc.* | | 247,000 | | | 4,688,060 |
Electronic Arts, Inc.* | | 411,000 | | | 8,926,920 |
FactSet Research Systems, Inc.(a) | | 149,000 | | | 7,430,630 |
McAfee, Inc.* | | 268,000 | | | 11,306,920 |
MICROS Systems, Inc.* | | 235,000 | | | 5,950,200 |
See accompanying notes to financial statements
6
Met Investors Series Trust
T. Rowe Price Mid Cap Growth Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | |
| Software - continued | | | | | |
Red Hat, Inc.* | | 474,000 | | $ | 9,541,620 |
Salesforce.com, Inc.*(a) | | 150,000 | | | 5,725,500 |
| | | | | |
| | | | | 53,569,850 |
| | | | | |
| Specialty Retail - 3.5% | | | | | |
Bed Bath & Beyond, Inc.*(a) | | 289,000 | | | 8,886,750 |
CarMax, Inc.*(a) | | 543,000 | | | 7,982,100 |
J. Crew Group, Inc.*(a) | | 219,000 | | | 5,917,380 |
O’Reilly Automotive, Inc.*(a) | | 205,000 | | | 7,806,400 |
| | | | | |
| | | | | 30,592,630 |
| | | | | |
| Trading Companies & Distributors - 1.5% |
Fastenal Co.(a) | | 251,000 | | | 8,325,670 |
MSC Industrial Direct Co., Inc. - Class A(a) | | 131,000 | | | 4,647,880 |
| | | | | |
| | | | | 12,973,550 |
| | | | | |
| Wireless Telecommunication Services - 2.2% |
American Tower Corp. - Class A* | | 317,000 | | | 9,995,010 |
Crown Castle International Corp.* | | 140,000 | | | 3,362,800 |
Leap Wireless International,
Inc.*(a) | | 139,000 | | | 4,577,270 |
Rogers Communications, Inc. - Class B | | 38,000 | | | 978,500 |
| | | | | |
| | | | | 18,913,580 |
| | | | | |
Total Common Stocks
(Cost $897,530,461) | | | | | 831,499,043 |
| | | | | |
| | |
| Warrant - 0.0% | | | | | |
| Metals & Mining - 0.0% | | | | | |
Agnico Eagle Mines, Ltd. expires 12/02/13*
(Cost - $47,500) | | 9,500 | | | 212,686 |
| | | | | |
| | | | | | |
Security
Description | | Shares | | Value | |
| | | | | | |
| |
| Short-Term Investments - 16.1% | | | | |
| Mutual Funds - 16.1% | | | | | | |
State Street Navigator Securities Lending Trust Prime Portfolio
0.000%(c) | | 92,929,911 | | $ | 92,929,911 | |
T. Rowe Price Government Reserve Investment Fund** | | 48,188,086 | | | 48,188,086 | |
| | | | | | |
| | | | | 141,117,997 | |
| | | | | | |
Total Short-Term Investments
(Cost $141,117,997) | | | | | 141,117,997 | |
| | | | | | |
| |
TOTAL INVESTMENTS - 110.7%
(Cost $1,038,695,957) | | | 972,829,726 | |
| | | | | | |
| |
| Other Assets and Liabilities (net) - (10.7)% | | | (93,753,750 | ) |
| | | | | | |
| | |
| NET ASSETS - 100.0% | | | | $ | 879,075,976 | |
| | | | | | |
Portfolio Footnotes:
| * | | Non-income producing security. |
| (a) | | All or a portion of security is on loan. |
| (b) | | Illiquid securities representing in the aggregate $13,488,690 of net assets. |
| (c) | | Represents investment of collateral received from securities lending transactions. |
ADR - American Depositary Receipt
See accompanying notes to financial statements
7
Met Investors Series Trust
T. Rowe Price Mid Cap Growth Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1—quoted prices in active markets for identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
| Common Stocks | | | | | | | | | | | | |
Aerospace & Defense | | $ | 24,071,199 | | $ | — | | $ | — | | $ | 24,071,199 |
Air Freight & Logistics | | | 2,131,800 | | | — | | | — | | | 2,131,800 |
Airlines | | | 6,548,290 | | | — | | | — | | | 6,548,290 |
Auto Components | | | 2,991,300 | | | — | | | — | | | 2,991,300 |
Biotechnology | | | 36,529,618 | | | — | | | — | | | 36,529,618 |
Capital Markets | | | 22,767,320 | | | — | | | — | | | 22,767,320 |
Commercial Banks | | | 13,726,100 | | | — | | | — | | | 13,726,100 |
Communications Equipment | | | 21,003,960 | | | — | | | — | | | 21,003,960 |
Computers & Peripherals | | | 4,257,220 | | | — | | | — | | | 4,257,220 |
Construction & Engineering | | | 15,638,030 | | | — | | | — | | | 15,638,030 |
Diversified Financial Services | | | 21,425,010 | | | — | | | — | | | 21,425,010 |
Electrical Equipment | | | 36,197,700 | | | — | | | — | | | 36,197,700 |
Electronic Equipment, Instruments & Components | | | 20,502,480 | | | — | | | — | | | 20,502,480 |
Energy Equipment & Services | | | 31,468,642 | | | — | | | — | | | 31,468,642 |
Food & Staples Retailing | | | 12,907,862 | | | — | | | — | | | 12,907,862 |
Health Care Equipment & Supplies | | | 36,616,533 | | | — | | | — | | | 36,616,533 |
Health Care Providers & Services | | | 17,364,900 | | | — | | | — | | | 17,364,900 |
Health Care Technology | | | 2,803,050 | | | — | | | — | | | 2,803,050 |
Hotels, Restaurants & Leisure | | | 34,197,739 | | | — | | | — | | | 34,197,739 |
Industrial Conglomerates | | | 8,989,206 | | | — | | | — | | | 8,989,206 |
Insurance | | | 23,442,760 | | | — | | | — | | | 23,442,760 |
Internet & Catalog Retail | | | 20,158,150 | | | — | | | — | | | 20,158,150 |
Internet Software & Services | �� | | 6,874,560 | | | — | | | — | | | 6,874,560 |
IT Services | | | 50,701,320 | | | — | | | — | | | 50,701,320 |
Life Sciences Tools & Services | | | 30,744,690 | | | — | | | — | | | 30,744,690 |
Machinery | | | 19,204,700 | | | — | | | — | | | 19,204,700 |
Media | | | 25,930,240 | | | — | | | — | | | 25,930,240 |
Metals & Mining | | | 18,539,094 | | | — | | | — | | | 18,539,094 |
Oil, Gas & Consumable Fuels | | | 38,127,790 | | | — | | | — | | | 38,127,790 |
Pharmaceuticals | | | 20,687,270 | | | — | | | — | | | 20,687,270 |
Professional Services | | | 22,429,130 | | | — | | | — | | | 22,429,130 |
Real Estate Management & Development | | | 3,947,010 | | | — | | | — | | | 3,947,010 |
Road & Rail | | | 5,537,070 | | | — | | | — | | | 5,537,070 |
Semiconductors & Semiconductor Equipment | | | 56,987,690 | | | — | | | — | | | 56,987,690 |
Software | | | 53,569,850 | | | — | | | — | | | 53,569,850 |
Specialty Retail | | | 30,592,630 | | | — | | | — | | | 30,592,630 |
Trading Companies & Distributors | | | 12,973,550 | | | — | | | — | | | 12,973,550 |
Wireless Telecommunication Services | | | 18,913,580 | | | — | | | — | | | 18,913,580 |
Total Common Stocks | | | 831,499,043 | | | — | | | — | | | 831,499,043 |
See accompanying notes to financial statements
8
Met Investors Series Trust
T. Rowe Price Mid Cap Growth Portfolio
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Warrant | | | | | | | | | | | | |
Metals & Mining | | $ | 212,686 | | $ | — | | $ | — | | $ | 212,686 |
| Short-Term Investments | | | | | | | | | | | | |
Mutual Funds | | | 92,929,911 | | | 48,188,086 | | | — | | | 141,117,997 |
Total Short-Term Investments | | | 92,929,911 | | | 48,188,086 | | | — | | | 141,117,997 |
| TOTAL INVESTMENTS | | $ | 924,641,640 | | $ | 48,188,086 | | $ | — | | $ | 972,829,726 |
FAS 157 Level 3 Reconciliation Disclosure
Following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value:
Asset Valuation Inputs
| | | | | | | | | | | | | | | | | | |
| Investments in Securities | | Balance as of
December 31,
2008 | | Realized Loss | | | Net Sales | | | Net Transfers
out of Level 3 | | | Balance as of
June 30,
2009 |
| Common Stocks | | | | | | | | | | | | | | | | | | |
Metals and Mining | | $ | 1,097,294 | | $ | (51,344 | ) | | $ | (47,500 | ) | | $ | (998,450 | ) | | $ | — |
| Total | | $ | 1,097,294 | | $ | (51,344 | ) | | $ | (47,500 | ) | | $ | (998,450 | ) | | $ | — |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| T. Rowe Price Mid Cap Growth Portfolio | | | |
| Assets | | | | |
Investments, at value (a)(b) | | $ | 972,829,726 | |
Receivable for investments sold | | | 2,726,894 | |
Receivable for Trust shares sold | | | 359,500 | |
Dividends receivable | | | 216,353 | |
Interest receivable | | | 9,500 | |
| | | | |
Total assets | | | 976,141,973 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 3,395,603 | |
Trust shares redeemed | | | 260,838 | |
Distribution and services fees—Class B | | | 82,311 | |
Distribution and services fees—Class E | | | 2,272 | |
Collateral for securities on loan | | | 92,929,911 | |
Management fee | | | 246,479 | |
Administration fee | | | 5,254 | |
Custodian and accounting fees | | | 44,489 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 95,413 | |
| | | | |
Total liabilities | | | 97,065,997 | |
| | | | |
| Net Assets | | $ | 879,075,976 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 990,599,086 | |
Accumulated net realized loss | | | (46,451,025 | ) |
Unrealized depreciation on investments and foreign currency | | | (65,167,619 | ) |
Undistributed net investment income | | | 95,534 | |
| | | | |
Total | | $ | 879,075,976 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 461,194,106 | |
| | | | |
Class B | | | 399,832,136 | |
| | | | |
Class E | | | 18,049,734 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 74,546,057 | |
| | | | |
Class B | | | 66,105,427 | |
| | | | |
Class E | | | 2,956,273 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 6.19 | |
| | | | |
Class B | | | 6.05 | |
| | | | |
Class E | | | 6.11 | |
| | | | |
| | | | | |
(a) Investments at cost | | $ | 1,038,695,957 | |
(b) Includes cash collateral for securities loaned of | | | 92,929,911 | |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| T. Rowe Price Mid Cap Growth Portfolio | | | |
| Investment Income | | | | |
Dividends (1) | | $ | 2,031,468 | |
Interest (2) | | | 953,244 | |
Income earned from affiliated transactions | | | 80,430 | |
| | | | |
Total investment income | | | 3,065,142 | |
| | | | |
| Expenses | | | | |
Management fee | | | 2,717,357 | |
Administration fees | | | 30,541 | |
Custodian and accounting fees | | | 25,026 | |
Distribution and services fees—Class B | | | 420,636 | |
Distribution and services fees—Class E | | | 12,470 | |
Audit and tax services | | | 21,304 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 40,670 | |
Insurance | | | 9,061 | |
Other | | | 4,307 | |
| | | | |
Total expenses | | | 3,307,805 | |
Less management fee waiver | | | (331,096 | ) |
Less broker commission recapture | | | (7,101 | ) |
| | | | |
Net expenses | | | 2,969,608 | |
| | | | |
Net investment income | | | 95,534 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | (27,289,129 | ) |
Foreign currency | | | 14,563 | |
| | | | |
Net realized loss on investments and foreign currency | | | (27,274,566 | ) |
| | | | |
Net change in unrealized appreciation (depreciation) on: | | | | |
Investments | | | 141,513,910 | |
Foreign currency | | | (337 | ) |
| | | | |
Net change in unrealized appreciation on investments and foreign currency | | | 141,513,573 | |
| | | | |
Net realized and unrealized gain on investments and foreign currency | | | 114,239,007 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 114,334,541 | |
| | | | |
| | | | | |
(1) Dividend income is net of foreign withholding taxes of: | | $ | 19,471 | |
(2) Interest income includes securities lending net income of: | | | 872,777 | |
See accompanying notes to financial statements
11
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| T. Rowe Price Mid Cap Growth Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income (loss) | | $ | 95,534 | | | $ | (309,333 | ) |
Net realized loss on investments and foreign currency | | | (27,274,566 | ) | | | (19,477,625 | ) |
Net change in unrealized appreciation (depreciation) on investments and foreign currency | | | 141,513,573 | | | | (400,273,774 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 114,334,541 | | | | (420,060,732 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | — | | | | (315,421 | ) |
Class B | | | — | | | | — | |
Class E | | | — | | | | — | |
From net realized gains | | | | | | | | |
Class A | | | — | | | | (55,433,840 | ) |
Class B | | | — | | | | (51,894,039 | ) |
Class E | | | — | | | | (3,374,259 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | — | | | | (111,017,559 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 139,795,858 | | | | 121,997,443 | |
Class B | | | 57,307,168 | | | | 95,690,540 | |
Class E | | | 2,203,002 | | | | 5,166,208 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | — | | | | 55,749,261 | |
Class B | | | — | | | | 51,894,039 | |
Class E | | | — | | | | 3,374,259 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (84,450,590 | ) | | | (94,459,819 | ) |
Class B | | | (24,854,233 | ) | | | (101,848,163 | ) |
Class E | | | (3,842,472 | ) | | | (12,461,627 | ) |
| | | | | | | | |
Net increase in net assets from capital share transactions | | | 86,158,733 | | | | 125,102,141 | |
| | | | | | | | |
| Net Increase (Decrease) in Net Assets | | | 200,493,274 | | | | (405,976,150 | ) |
Net assets at beginning of period | | | 678,582,702 | | | | 1,084,558,852 | |
| | | | | | | | |
Net assets at end of period | | $ | 879,075,976 | | | $ | 678,582,702 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 95,534 | | | $ | — | |
| | | | | | | | |
See accompanying notes to financial statements
12
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| T. Rowe Price Mid Cap Growth Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 5.30 | | | $ | 9.83 | | | $ | 8.76 | | | $ | 8.49 | | | $ | 7.55 | | | $ | 6.39 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income (Loss)(a) | | | 0.00 | + | | | 0.01 | | | | 0.02 | | | | 0.03 | | | | (0.01 | ) | | | (0.03 | ) |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.89 | | | | (3.54 | ) | | | 1.50 | | | | 0.53 | | | | 1.13 | | | | 1.19 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.89 | | | | (3.53 | ) | | | 1.52 | | | | 0.56 | | | | 1.12 | | | | 1.16 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions: | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | (0.01 | ) | | | (0.02 | ) | | | — | | | | — | | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | (0.99 | ) | | | (0.43 | ) | | | (0.29 | ) | | | (0.18 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | — | | | | (1.00 | ) | | | (0.45 | ) | | | (0.29 | ) | | | (0.18 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 6.19 | | | $ | 5.30 | | | $ | 9.83 | | | $ | 8.76 | | | $ | 8.49 | | | $ | 7.55 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 16.79 | % | | | (39.62 | )% | | | 17.85 | % | | | 6.56 | % | | | 14.87 | % | | | 18.15 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.70 | %* | | | 0.76 | % | | | 0.78 | % | | | 0.81 | % | | | 0.80 | % | | | 0.90 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.79 | %* | | | 0.78 | % | | | 0.80 | % | | | 0.81 | % | | | 0.81 | % | | | 0.83 | %(b) |
Ratio of Net Investment Income (Loss) to Average Net Assets | | | 0.14 | %* | | | 0.09 | % | | | 0.16 | % | | | 0.32 | % | | | (0.08 | )% | | | (0.41 | )% |
Portfolio Turnover Rate | | | 17.2 | % | | | 36.2 | % | | | 35.5 | % | | | 33.7 | % | | | 23.0 | % | | | 51.7 | % |
Net Assets, End of Period (in millions) | | $ | 461.2 | | | $ | 347.4 | | | $ | 524.2 | | | $ | 386.8 | | | $ | 258.6 | | | $ | 145.7 | |
| + | | Rounds to less than 0.005 per share |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Excludes effect of deferred expense reimbursement. |
See accompanying notes to financial statements
13
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| T. Rowe Price Mid Cap Growth Portfolio | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 5.19 | | | $ | 9.66 | | | $ | 8.62 | | | $ | 8.38 | | | $ | 7.47 | | | $ | 6.34 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income (Loss)(a) | | | (0.00 | )+ | | | (0.01 | ) | | | (0.01 | ) | | | 0.01 | | | | (0.03 | ) | | | (0.05 | ) |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.86 | | | | (3.47 | ) | | | 1.48 | | | | 0.52 | | | | 1.12 | | | | 1.18 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.86 | | | | (3.48 | ) | | | 1.47 | | | | 0.53 | | | | 1.09 | | | | 1.13 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions: | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | — | | | | (0.00 | )+ | | | — | | | | — | | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | (0.99 | ) | | | (0.43 | ) | | | (0.29 | ) | | | (0.18 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | — | | | | (0.99 | ) | | | (0.43 | ) | | | (0.29 | ) | | | (0.18 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 6.05 | | | $ | 5.19 | | | $ | 9.66 | | | $ | 8.62 | | | $ | 8.38 | | | $ | 7.47 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 16.57 | % | | | (39.75 | )% | | | 17.64 | % | | | 6.16 | % | | | 14.63 | % | | | 17.82 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.95 | %* | | | 1.01 | % | | | 1.03 | % | | | 1.05 | % | | | 1.05 | % | | | 1.16 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 1.04 | %* | | | 1.03 | % | | | 1.05 | % | | | 1.06 | % | | | 1.06 | % | | | 1.07 | %(b) |
Ratio of Net Investment Income (Loss) to Average Net Assets | | | (0.10 | )%* | | | (0.16 | )% | | | (0.08 | )% | | | 0.12 | % | | | (0.34 | )% | | | (0.69 | )% |
Portfolio Turnover Rate | | | 17.2 | % | | | 36.2 | % | | | 35.5 | % | | | 33.7 | % | | | 23.0 | % | | | 51.7 | % |
Net Assets, End of Period (in millions) | | $ | 399.8 | | | $ | 314.0 | | | $ | 523.0 | | | $ | 453.6 | | | $ | 422.6 | | | $ | 345.0 | |
| + | | Rounds to less than $0.005 per share. |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Excludes effect of deferred expense reimbursement. |
See accompanying notes to financial statements
14
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| T. Rowe Price Mid Cap Growth Portfolio | | Class E | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 5.24 | | | | $ 9.72 | | | $ | 8.67 | | | $ | 8.42 | | | $ | 7.50 | | | $ | 6.36 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income (Loss)(a) | | | 0.00 | + | | | (0.01 | ) | | | 0.00 | + | | | 0.02 | | | | (0.02 | ) | | | (0.04 | ) |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.87 | | | | (3.48 | ) | | | 1.49 | | | | 0.52 | | | | 1.12 | | | | 1.18 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.87 | | | | (3.49 | ) | | | 1.49 | | | | 0.54 | | | | 1.10 | | | | 1.14 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | — | | | | (0.01 | ) | | | — | | | | — | | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | (0.99 | ) | | | (0.43 | ) | | | (0.29 | ) | | | (0.18 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | — | | | | (0.99 | ) | | | (0.44 | ) | | | (0.29 | ) | | | (0.18 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 6.11 | | | | $5.24 | | | $ | 9.72 | | | $ | 8.67 | | | $ | 8.42 | | | $ | 7.50 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 16.60 | % | | | (39.60 | )% | | | 17.62 | % | | | 6.38 | % | | | 14.70 | % | | | 17.92 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.85 | %* | | | 0.91 | % | | | 0.93 | % | | | 0.95 | % | | | 0.95 | % | | | 1.05 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.94 | %* | | | 0.93 | % | | | 0.95 | % | | | 0.96 | % | | | 0.96 | % | | | 0.97 | %(b) |
Ratio of Net Investment Income (Loss) to Average Net Assets | | | 0.01 | %* | | | (0.07 | )% | | | 0.00 | %++ | | | 0.22 | % | | | (0.24 | )% | | | (0.57 | )% |
Portfolio Turnover Rate | | | 17.2 | % | | | 36.2 | % | | | 35.5 | % | | | 33.7 | % | | | 23.0 | % | | | 51.7 | % |
Net Assets, End of Period (in millions) | | $ | 18.0 | | | $ | 17.3 | | | $ | 37.3 | | | $ | 25.0 | | | $ | 25.4 | | | $ | 21.5 | |
| + | | Rounds to less than $0.005 per share |
| ++ | | Rounds to less than 0.005% |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Excludes effect of deferred expense reimbursement. |
See accompanying notes to financial statements
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is T. Rowe Price Mid Cap Growth Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A, B and E Shares are currently offered by the Portfolio. Class C Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
16
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | |
Expiring
12/31/2016 | | Total |
| |
| $ | 15,195,062 | | $15,195,062 |
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
G. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
H. Directed Brokerage Agreement - The Trust has entered into a directed brokerage arrangement with State Street Global Markets (“SSGM”). Under this arrangement, the Portfolio directs certain trades to SSGM in return for a recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to the Portfolio are shown separately as an expense reduction on the Statement of Operations of the Portfolio.
I. Foreign Currency Translation - The books and records of the Portfolio are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars on a daily basis using prevailing exchange rates. Purchases and sales of securities are translated at the rates of exchange prevailing when such securities were acquired or sold. Income is translated at rates of exchange prevailing when interest is accrued or dividends are recorded.
17
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
The Portfolio does not isolate that portion of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in forward foreign currency contracts; sales of foreign currencies; currency gains or losses realized between the trade and settlement dates on securities transactions; and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Portfolio’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities, other than investments in securities at fiscal year end; from changes in the exchange rates of foreign currency held; and from changes in the contract value of forward foreign currency contracts.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with T. Rowe Price Associates, Inc. (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | Average Daily Net Assets |
| | |
$2,717,357 | | 0.75% | | All |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Effective February 17, 2005, the Adviser has agreed to a voluntary advisory fee waiver that applies if (i) assets under management by the Adviser for the Trust and Metropolitan Series Fund, Inc. (“MSF”) in the aggregate exceed $750,000,000, (ii) the Adviser advises three or more portfolios of the Trust and MSF in the aggregate and (iii) at least one of those portfolios is a large cap domestic equity portfolio. The Manager has voluntarily agreed to reduce its management fee for the Portfolio by the amount waived (if any) by T. Rowe Price for the Portfolio pursuant to this voluntary advisory fee waiver.
The waiver schedule for the period January 1 through June 30, 2009 was:
| | |
Percentage Fee Waiver | | Combined Assets |
| |
0.0% | | First $750 Million |
| |
5.0% | | Next $750 Million |
| |
7.5% | | Next $1.5 Billion |
| |
10.0% | | Excess over $3 Billion |
The amount waived for the period ended June 30, 2009 is shown as management fee waiver in the Statement of Operations of the Portfolio.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A, Class B and Class E Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B and Class E distribution plans provide that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%, respectively, of the average net assets of the Portfolio attributable to its Class B and Class E Shares in respect to activities primarily intended to result in the sale of Class B and Class E Shares. However, under the Class B and Class E distribution agreements, payments to the Distributor for activities pursuant to the Class B and Class E distribution plans are currently limited to payments at an annual rate equal to 0.25% and 0.15% of average daily net assets of the Portfolio attributable to its Class B and Class E Shares, respectively.
Under terms of the Class B and Class E distribution plans and distribution agreements, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B and Class E Shares for such entities’ fees or expenses incurred.
18
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
(Decrease)
in Shares
Outstanding | | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 65,478,589 | | 24,046,545 | | — | | (14,979,077 | ) | | 9,067,468 | | | 74,546,057 |
12/31/2008 | | 53,350,236 | | 17,500,671 | | 6,716,779 | | (12,089,097 | ) | | 12,128,353 | | | 65,478,589 |
| | | | | | |
Class B | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 60,466,361 | | 10,411,599 | | — | | (4,772,533 | ) | | 5,639,066 | | | 66,105,427 |
12/31/2008 | | 54,163,938 | | 13,211,253 | | 6,375,189 | | (13,284,019 | ) | | 6,302,423 | | | 60,466,361 |
| | | | | | |
Class E | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 3,293,693 | | 390,047 | | — | | (727,467 | ) | | (337,420 | ) | | 2,956,273 |
12/31/2008 | | 3,837,273 | | 657,801 | | 410,994 | | (1,612,375 | ) | | (543,580 | ) | | 3,293,693 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 177,302,787 | | $ | — | | $ | 119,788,984 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $1,038,695,957 | | $ | 67,951,899 | | $ | (133,818,130 | ) | | $ | (65,866,231 | ) |
6. Securities Lending
As of June 30, 2009, the Portfolio had loaned securities which were collateralized by short-term investments. The value of securities on loan and the value of the related collateral were as follows:
| | | | | | | | | |
Value of
Securities | | Value of
Cash
Collateral | | Value of
Non-Cash
Collateral* | | Total
Collateral |
| | | |
| $95,722,206 | | $ | 92,929,911 | | $ | 47,599 | | $ | 92,977,510 |
* The Portfolio cannot repledge or resell this collateral. The non-cash collateral is typically comprised of government securities and/or bank letters of credit.
19
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
7. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $19,898,858 | | $ | 5,276,388 | | $ | 91,118,701 | | $ | 38,291,419 | | $ | 111,017,559 | | $ | 43,567,807 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards | | | Total | |
| | | | |
| $— | | $ | — | | $ | (210,662,589 | ) | | $ | (15,195,062 | ) | | $ | (225,857,651 | ) |
8. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
9. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
10. Affiliated Issuer
At the end of the period, the Portfolio was the owner of record of 5% or more of the total outstanding voting shares of the following investment company:
| | | | | | | | | | | | |
Security Description | | Number of
shares held at
December 31, 2008 | | Shares purchased
during the period | | Shares sold
during the period | | | Number of
shares held at
June 30, 2009 | | Income earned from
affiliates during the
period |
| | | | | |
T. Rowe Price Government Reserve Investment Fund | | 41,529,198 | | 71,712,638 | | (65,053,750 | ) | | 48,188,086 | | $ | 80,430 |
11. Subsequent Events
Management���s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
12. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
20
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
21
| | |
| Third Avenue Small Cap Value Portfolio | | For the period ended 6/30/09 |
| Managed by Third Avenue Management LLC | | |
Portfolio Manager Commentary
Performance
For the six-month period ended June 30, 2009, the Portfolio had a return of 3.51% and 3.34% for Class A and B Shares, respectively, versus (5.17)% and 10.70% for its benchmarks the Russell 2000® Value Index and Dow Jones U.S. Small-Cap Total Stock Market Index.
Market Environment/Conditions
After a challenging 2008 and a volatile first quarter, the equity markets experienced a notable rebound during the second quarter, as improved sentiment helped drive global indices higher. We continue to focus on fundamentals, rather than on market sentiment, so that our investors will be the long-term beneficiaries of today’s attractive prices and the long-term business prospects of our holdings.
Portfolio Review/Current Positioning
Performance was driven by some of the Portfolio’s top holdings, including telecommunications equipment suppliers Tellabs (up 39%) and Sycamore (up 16%). Both companies reported better than expected quarterly results, despite continued challenging conditions, and remain extremely well financed with debt free balance sheets and large cash positions. Tellabs has $1.2 billion in cash and investments, representing roughly 50% of the company’s market capitalization; Sycamore has $930 million in cash and investments, which is roughly equal to the company’s market capitalization. These strong financial positions should enable the companies to gain market share from troubled competitors such as Nortel, which filed for bankruptcy protection in 2009.
Another top contributor during the period was Hang Lung Group (up 57%). We have been very pleased with the continued strong performance of the company’s real estate leasing portfolios in both Hong Kong and mainland China. Hang Lung remains profitable, has an extremely strong financial position and is very well positioned to take advantage of opportunities presented by the global market dislocations.
Other top contributors included chemical companies Westlake (up 26%) and Lanxess (up 34%). While these companies continue to be negatively impacted by the weak economy, they are cash generative and remain well-financed, while some of their peers have struggled under heavier debt loads and with managing commodity risk.
Auto supplier Superior Industries (up 37%) was also a significant contributor for the period. Despite a terrible operating environment for auto manufacturers and suppliers, Superior continues to generate free cash flow. At the end of the March quarter, Superior had no debt and $163 million in cash, representing roughly 40% of the company’s market capitalization.
On the downside, the top detractor from performance during the period was Lexmark (down 41%), a leading developer, manufacturer and supplier of printing and imaging solutions. Weak global economic conditions continue to negatively impact demand for both hardware and supplies. Despite a difficult operating environment, the company is still profitable and has a strong balance sheet with cash and marketable securities well in excess of debt. Other negative contributors included Bronco Drilling (down 34%), an oil service firm, and Montpelier Reinsurance (down 20%), a property and casualty insurer.
During the first six months of 2009, we trimmed several of our large holdings, particularly in the energy area, and sold a number of small, non-core positions due to net outflows of $172 million (roughly 15% of the Portfolio as of December 31, 2008) in the six-month period ended June 30. There were 58 holdings in the Portfolio as of June 30, 2009, down from 75 holdings at December 31, 2008.
During the period, we took advantage of market volatility to increase several existing positions and add one new position, Ackermans & van Haaren NV (“AvH”). AvH is an investment holding company with interests in marine contracting and dredging services, asset management, private equity and real estate. Its portfolio, the majority of which consists of unlisted securities of small and midsize companies, includes a 50% interest in DEME, one of the largest marine engineering companies in the world; Bank Delen, one of the best private banks in Belgium; and a portfolio of high-quality real estate and property management businesses in and around Belgium and Luxemburg. While we cannot depend on management’s enviable long-term track record continuing ad infinitum, the climate of pessimism currently engulfing most asset classes may enable AvH management to accelerate the company’s pace of development, in as much as other competitive sources of capital (e.g., traditional private equity and buyout firms) remain hamstrung by the credit crisis or are directing their resources toward saving “busted” investments. We view AvH as an attractive way to gain many of the advantages of private equity investing, without the attendant costs and “black box” characteristics. Shares were purchased at a significant discount to net asset value.
The Portfolio remains well positioned for the long run. We remain opportunistic, taking advantage of market volatility to build positions in companies with solid long-term fundamentals. We maintain a disciplined, bottom-up, value-oriented approach in selecting strongly capitalized and well-managed companies trading at significant discounts to our conservative estimates of net asset value.
Curtis Jensen, Co-Portfolio Manager, Chief Investment Officer
Ian Lapey, Co-Portfolio Manager
Kathleen Crawford, Assistant Portfolio Manager
Third Avenue Management LLC
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an
1
| | |
| Third Avenue Small Cap Value Portfolio | | For the period ended 6/30/09 |
| Managed by Third Avenue Management LLC | | |
Portfolio Manager Commentary (continued)
indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
Tellabs, Inc. | | 4.69% |
Sycamore Networks, Inc. | | 4.16% |
Cimarex Energy Co. | | 3.55% |
Westlake Chemical Corp. | | 3.54% |
Lanxess AG | | 3.19% |
Superior Industries International, Inc. | | 3.18% |
Skyline Corp. | | 3.16% |
Wheelock & Co., Ltd. | | 3.12% |
Sapporo Holdings, Ltd. | | 3.09% |
Hang Lung Group, Ltd. | | 2.77% |
Portfolio Composition (% of portfolio market value)
As of 6/30/09
2
| | |
| Third Avenue Small Cap Value Portfolio | | For the period ended 6/30/09 |
| Managed by Third Avenue Management LLC | | |
Portfolio Manager Commentary (continued)
Third Avenue Small Cap Value Portfolio managed by Third Avenue Management LLC vs. Russell 2000® Value Index1 and
Dow Jones U.S. Small-Cap Total Stock Market Index2
Growth Based on $10,000+
| | | | | | | | | | | | |
| | | | | Average Annual Return3 (for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | 3 Year | | 5 Year | | Since
Inception4 |
| — | | Third Avenue Small Cap Value Portfolio—Class A | | 3.51% | | -27.44% | | -8.81% | | 1.02% | | 4.68% |
| | Class B | | 3.34% | | -27.60% | | -9.02% | | 0.78% | | 4.45% |
| - - | | Russell 2000® Value Index1 | | -5.17% | | -25.24% | | -12.07% | | -2.27% | | 1.29% |
| — | | Dow Jones U.S. Small-Cap Total Stock Market Index2 | | 10.70% | | -23.99% | | -8.67% | | -0.41% | | 3.06% |
+The chart reflects the performance of Class A shares of the Portfolio. The performance of Class A shares will differ from that of the other class of shares because of the difference in expenses paid by policyholders investing in the different share class.
1The Russell 2000® Value Index is an unmanaged measure of performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values.
2The Dow Jones U.S. Small-Cap Total Stock Market Index is a float-adjusted market capitalization weighted index that reflects the shares of securities of the small-cap portion of the Dow Jones Wilshire 5000 Composite Index actually available to investors in the marketplace. The Index includes the components ranked 751 to 2,500 by full market capitalization.
3“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
4Inception of the Class A and Class B shares is 5/1/02. Index returns are based on an inception date of 5/1/02.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Indexes do not include fees or expenses and are not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| Third Avenue Small Cap Value Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.80% | | $ | 1,000.00 | | $ | 1,035.10 | | $ | 4.04 |
Hypothetical | | 0.80% | | | 1,000.00 | | | 1,020.83 | | | 4.01 |
| | | | | | | | | | | |
| | | | |
Class B | | | | | | | | | | | |
Actual | | 1.05% | | $ | 1,000.00 | | $ | 1,033.40 | | $ | 5.29 |
Hypothetical | | 1.05% | | | 1,000.00 | | | 1,019.59 | | | 5.26 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
4
Met Investors Series Trust
Third Avenue Small Cap Value Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | |
| Common Stocks - 94.6% | | | | | |
| Aerospace & Defense - 1.2% | | | | | |
Herley Industries, Inc.* | | 1,170,991 | | $ | 12,845,771 |
| | | | | |
| Auto Components - 3.2% | | | | | |
Superior Industries International, Inc. | | 2,371,738 | | | 33,441,506 |
| | | | | |
| Beverages - 3.1% | | | | | |
Sapporo Holdings, Ltd. | | 5,717,800 | | | 32,579,804 |
| | | | | |
| Building Products - 0.8% | | | | | |
Insteel Industries, Inc. | | 1,047,759 | | | 8,633,534 |
| | | | | |
| Capital Markets - 2.7% | | | | | |
Investment Technology Group, Inc.* | | 801,073 | | | 16,333,878 |
Westwood Holdings Group, Inc. | | 276,292 | | | 11,551,769 |
| | | | | |
| | | | | 27,885,647 |
| | | | | |
| Chemicals - 6.7% | | | | | |
Lanxess AG | | 1,354,400 | | | 33,577,773 |
Westlake Chemical Corp. | | 1,826,696 | | | 37,246,332 |
| | | | | |
| | | | | 70,824,105 |
| | | | | |
| Communications Equipment - 9.4% | | | |
Bel Fuse, Inc. - Class A | | 17,922 | | | 251,625 |
Bel Fuse, Inc. - Class B | | 350,262 | | | 5,618,202 |
Sycamore Networks, Inc.* | | 14,011,049 | | | 43,854,583 |
Tellabs, Inc.* | | 8,629,290 | | | 49,445,832 |
| | | | | |
| | | | | 99,170,242 |
| | | | | |
| Computers & Peripherals - 3.0% |
Electronics for Imaging, Inc.* | | 1,443,311 | | | 15,385,695 |
Lexmark International, Inc. - Class A* | | 1,025,108 | | | 16,247,962 |
| | | | | |
| | | | | 31,633,657 |
| | | | | |
| Diversified Financial Services - 2.2% | | | |
Ackermans & van Haaren N.V. | | 243,811 | | | 16,149,739 |
Leucadia National Corp.* | | 336,339 | | | 7,093,389 |
| | | | | |
| | | | | 23,243,128 |
| | | | | |
| Electrical Equipment & Services - 2.7% | | | |
Encore Wire Corp. | | 1,318,887 | | | 28,158,237 |
| | | | | |
| Electronic Equipment, Instruments & Components - 6.0% |
AVX Corp. | | 1,773,865 | | | 17,614,479 |
Coherent, Inc.* | | 319,947 | | | 6,616,504 |
Electro Scientific Industries, Inc.* | | 1,451,738 | | | 16,230,431 |
Ingram Micro, Inc. - Class A* | | 505,450 | | | 8,845,375 |
Park Electrochemical Corp. | | 645,900 | | | 13,906,227 |
| | | | | |
| | | | | 63,213,016 |
| | | | | |
| Energy Equipment & Services - 5.1% | | | |
Bristow Group, Inc.* | | 359,737 | | | 10,659,007 |
Bronco Drilling Co., Inc.* | | 3,854,963 | | | 16,499,242 |
Pioneer Drilling Co.* | | 2,365,439 | | | 11,330,453 |
Tidewater, Inc. | | 352,065 | | | 15,093,026 |
| | | | | |
| | | | | 53,581,728 |
| | | | | |
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| |
| Health Care Providers & Services - 1.6% | | | |
Cross Country Healthcare, Inc.* | | 2,474,533 | | $ | 17,000,042 |
| | | | | |
| Hotels, Restaurants & Leisure - 2.0% | | | |
GuocoLeisure, Ltd. | | 12,185,000 | | | 3,229,105 |
Vail Resorts, Inc.* | | 644,297 | | | 17,280,046 |
| | | | | |
| | | | | 20,509,151 |
| | | | | |
| Household Durables - 8.3% | | | | | |
Cavco Industries, Inc.* | | 802,188 | | | 20,319,422 |
M.D.C. Holdings, Inc. | | 262,814 | | | 7,913,330 |
Skyline Corp. | | 1,530,843 | | | 33,295,835 |
Stanley Furniture Co., Inc. | | 2,419,630 | | | 26,107,808 |
| | | | | |
| | | | | 87,636,395 |
| | | | | |
| Insurance - 4.9% | | | | | |
Arch Capital Group, Ltd.* | | 95,974 | | | 5,622,157 |
E-L Financial Corp. | | 40,155 | | | 12,848,495 |
Montpelier Re Holdings, Ltd. | | 1,593,226 | | | 21,173,974 |
National Western Life Insurance Co. - Class A | | 97,535 | | | 11,387,211 |
| | | | | |
| | | | | 51,031,837 |
| | | | | |
| Leisure Equipment & Products - 0.5% | | | |
JAKKS Pacific, Inc.* | | 441,914 | | | 5,669,757 |
| | | | | |
| Life Sciences Tools & Services - 1.6% |
Pharmaceutical Product Development, Inc. | | 732,400 | | | 17,006,328 |
| | | | | |
| Machinery - 0.6% | | | | | |
Alamo Group, Inc. | | 633,874 | | | 6,402,127 |
| | | | | |
| Marine - 2.5% | | | | | |
Alexander & Baldwin, Inc. | | 1,142,536 | | | 26,781,044 |
| | | | | |
| Media - 0.2% | | | | | |
Journal Communications, Inc. - Class A | | 2,188,383 | | | 2,297,802 |
| | | | | |
| Multiline Retail - 2.5% | | | | | |
Parco Co., Ltd. | | 3,342,000 | | | 25,968,705 |
| | | | | |
| Oil, Gas & Consumable Fuels - 5.7% |
Cimarex Energy Co. | | 1,318,226 | | | 37,358,525 |
St. Mary Land & Exploration Co. | | 1,104,854 | | | 23,058,303 |
| | | | | |
| | | | | 60,416,828 |
| | | | | |
| Paper & Forest Products - 2.4% | | | |
Canfor Corp.* | | 3,497,900 | | | 15,043,437 |
Glatfelter | | 1,181,954 | | | 10,519,391 |
| | | | | |
| | | | | 25,562,828 |
| | | | | |
| Real Estate Investment Trusts (REITs) - 0.1% |
Origen Financial, Inc. | | 811,331 | | | 730,198 |
| | | | | |
| Real Estate Management & Development - 8.9% |
Brookfield Asset Management, Inc. - Class A | | 1,558,917 | | | 26,610,713 |
Forest City Enterprises, Inc. - Class A | | 763,558 | | | 5,039,483 |
See accompanying notes to financial statements
5
Met Investors Series Trust
Third Avenue Small Cap Value Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | |
Security
Description | | Shares/Par
Amount | | Value |
| | | | | | |
|
| Real Estate Management & Development - continued |
Hang Lung Group, Ltd. | | | 6,180,000 | | $ | 29,209,966 |
Wheelock & Co., Ltd. | | | 12,834,000 | | | 32,891,838 |
| | | | | | |
| | | | | | 93,752,000 |
| | | | | | |
| Software - 1.0% | | | | | | |
Borland Software Corp.* | | | 2,152,932 | | | 2,777,282 |
Synopsys, Inc.* | | | 393,936 | | | 7,685,692 |
| | | | | | |
| | | | | | 10,462,974 |
| | | | | | |
| Specialty Retail - 2.1% | | | | | | |
Haverty Furniture Cos., Inc. | | | 2,429,855 | | | 22,233,173 |
| | | | | | |
| Textiles, Apparel & Luxury Goods - 2.4% |
K-Swiss, Inc. - Class A | | | 2,915,468 | | | 24,781,478 |
| | | | | | |
| Thrifts & Mortgage Finance - 1.2% | | | |
Kearny Financial Corp. | | | 660,494 | | | 7,556,051 |
NewAlliance Bancshares, Inc. | | | 443,036 | | | 5,094,914 |
| | | | | | |
| | | | | | 12,650,965 |
| | | | | | |
Total Common Stocks
(Cost $1,258,574,271) | | | | | | 996,104,007 |
| | | | | | |
| |
| Short-Term Investments - 5.3% | | | |
| Repurchase Agreements - 5.3% | | | |
State Street Bank & Trust Co., Repurchase Agreement, dated 06/30/09 at 0.010% to be repurchased at $13,202,259 on 07/01/09 collateralized by $12,440,000 FHLB at 5.600% due 06/28/11 with a value of $13,466,300. | | $ | 13,202,255 | | | 13,202,255 |
| | | | | | |
Security
Description | | Par
Amount | | Value |
|
| Repurchase Agreements - continued |
State Street Bank & Trust Co., Repurchase Agreement, dated 06/30/09 at 0.010% to be repurchased at $43,290,757 on 07/01/09 collateralized by $43,940,000 FNMA at 1.722% due 05/10/11 with a value of $44,159,700. | | $ | 43,290,745 | | $ | 43,290,745 |
| | | | | | |
Total Short-Term Investments
(Cost $56,493,000) | | | | | | 56,493,000 |
| | | | | | |
| |
TOTAL INVESTMENTS - 99.9%
(Cost $1,315,067,271) | | | 1,052,597,007 |
| | | | | | |
| |
| Other Assets and Liabilities (net) - 0.1% | | | 576,353 |
| | | | | | |
| | |
| NET ASSETS - 100.0% | | | | | $ | 1,053,173,360 |
| | | | | | |
Portfolio Footnotes:
| * | | Non-income producing security. |
| FHLB | | - Federal Home Loan Bank |
| FNMA | | - Federal National Mortgage Association |
See accompanying notes to financial statements
6
Met Investors Series Trust
Third Avenue Small Cap Value Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1—quoted prices in active markets for identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Common Stocks | | | | | | | | | | | | |
Aerospace & Defense | | $ | 12,845,771 | | $ | — | | $ | — | | $ | 12,845,771 |
Auto Components | | | 33,441,506 | | | — | | | — | | | 33,441,506 |
Beverages | | | — | | | 32,579,804 | | | — | | | 32,579,804 |
Building Products | | | 8,633,534 | | | — | | | — | | | 8,633,534 |
Capital Markets | | | 27,885,647 | | | — | | | — | | | 27,885,647 |
Chemicals | | | 37,246,332 | | | 33,577,773 | | | — | | | 70,824,105 |
Communications Equipment | | | 99,170,242 | | | — | | | — | | | 99,170,242 |
Computers & Peripherals | | | 31,633,657 | | | — | | | — | | | 31,633,657 |
Diversified Financial Services | | | 7,093,389 | | | 16,149,739 | | | — | | | 23,243,128 |
Electrical Equipment | | | 28,158,237 | | | — | | | — | | | 28,158,237 |
Electronic Equipment, Instruments & Components | | | 63,213,016 | | | — | | | — | | | 63,213,016 |
Energy Equipment & Services | | | 53,581,728 | | | — | | | — | | | 53,581,728 |
Health Care Providers & Services | | | 17,000,042 | | | — | | | — | | | 17,000,042 |
Hotels, Restaurants & Leisure | | | 17,280,046 | | | 3,229,105 | | | — | | | 20,509,151 |
Household Durables | | | 87,636,395 | | | — | | | — | | | 87,636,395 |
Insurance | | | 51,031,837 | | | — | | | — | | | 51,031,837 |
Leisure Equipment & Products | | | 5,669,757 | | | — | | | — | | | 5,669,757 |
Life Sciences Tools & Services | | | 17,006,328 | | | — | | | — | | | 17,006,328 |
Machinery | | | 6,402,127 | | | — | | | — | | | 6,402,127 |
Marine | | | 26,781,044 | | | — | | | — | | | 26,781,044 |
Media | | | 2,297,802 | | | — | | | — | | | 2,297,802 |
Multiline Retail | | | — | | | 25,968,705 | | | — | | | 25,968,705 |
Oil, Gas & Consumable Fuels | | | 60,416,828 | | | — | | | — | | | 60,416,828 |
Paper & Forest Products | | | 25,562,828 | | | — | | | — | | | 25,562,828 |
Real Estate Investment Trusts (REITs) | | | 730,198 | | | — | | | — | | | 730,198 |
Real Estate Management & Development | | | 31,650,196 | | | 62,101,804 | | | — | | | 93,752,000 |
Software | | | 10,462,974 | | | — | | | — | | | 10,462,974 |
Specialty Retail | | | 22,233,173 | | | — | | | — | | | 22,233,173 |
Textiles, Apparel & Luxury Goods | | | 24,781,478 | | | — | | | — | | | 24,781,478 |
Thrifts & Mortgage Finance | | | 12,650,965 | | | — | | | — | | | 12,650,965 |
Total Common Stocks | | | 822,497,077 | | | 173,606,930 | | | — | | | 996,104,007 |
Short-Term Investment | | | | | | | | | | | | |
Repurchase Agreement | | | — | | | 56,493,000 | | | — | | | 56,493,000 |
Total Short-Term Investments | | | — | | | 56,493,000 | | | — | | | 56,493,000 |
TOTAL INVESTMENTS | | $ | 822,497,077 | | $ | 230,099,930 | | $ | — | | $ | 1,052,597,007 |
See accompanying notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| Third Avenue Small Cap Value Portfolio | | | |
| Assets | | | | |
Investments, at value (a) | | $ | 996,104,007 | |
Repurchase Agreement | | | 56,493,000 | |
Cash | | | 696 | |
Receivable for investments sold | | | 749,743 | |
Receivable for Trust shares sold | | | 160,865 | |
Dividends receivable | | | 1,144,278 | |
Interest receivable | | | 16 | |
| | | | |
Total assets | | | 1,054,652,605 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 135,475 | |
Trust shares redeemed | | | 419,717 | |
Distribution and services fees—Class B | | | 96,449 | |
Management fee | | | 656,253 | |
Administration fee | | | 6,349 | |
Custodian and accounting fees | | | 27,793 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 133,782 | |
| | | | |
Total liabilities | | | 1,479,245 | |
| | | | |
| Net Assets | | $ | 1,053,173,360 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 1,542,610,108 | |
Accumulated net realized loss | | | (229,282,821 | ) |
Unrealized depreciation on investments and foreign currency | | | (262,473,528 | ) |
Undistributed net investment income | | | 2,319,601 | |
| | | | |
Total | | $ | 1,053,173,360 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 591,736,159 | |
| | | | |
Class B | | | 461,437,201 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 57,170,323 | |
| | | | |
Class B | | | 44,674,440 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 10.35 | |
| | | | |
Class B | | | 10.33 | |
| | | | |
| | | | | |
(a) Investments at cost, excluding repurchase agreements | | $ | 1,258,574,271 | |
See accompanying notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| Third Avenue Small Cap Value Portfolio | | | |
| Investment Income | | | | |
Dividends (1) | | $ | 7,015,973 | |
Interest (2) | | | 88,002 | |
| | | | |
Total investment income | | | 7,103,975 | |
| | | | |
| Expenses | | | | |
Management fee | | | 3,991,520 | |
Administration fees | | | 44,578 | |
Custodian and accounting fees | | | 80,277 | |
Distribution and services fees—Class B | | | 520,742 | |
Audit and tax services | | | 21,303 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 77,150 | |
Insurance | | | 16,500 | |
Other | | | 5,811 | |
| | | | |
Total expenses | | | 4,784,314 | |
| | | | |
Net investment income | | | 2,319,661 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency | | | | |
Net realized loss on: | | | | |
Investments | | | (223,983,862 | ) |
Foreign currency | | | (533,138 | ) |
| | | | |
Net realized loss on investments and foreign currency | | | (224,517,000 | ) |
| | | | |
Net change in unrealized appreciation (depreciation) on: | | | | |
Investments | | | 257,241,775 | |
Foreign currency | | | (38,908 | ) |
| | | | |
Net change in unrealized appreciation on investments and foreign currency | | | 257,202,867 | |
| | | | |
Net realized and unrealized gain on investments and foreign currency | | | 32,685,867 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 35,005,528 | |
| | | | |
| | | | | |
(1) Dividend income is net of foreign withholding taxes of: | | $ | 304,509 | |
(2) Interest income includes securities lending net income of: | | | 191 | |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| Third Avenue Small Cap Value Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 2,319,661 | | | $ | 17,791,161 | |
Net realized gain (loss) on investments and foreign currency | | | (224,517,000 | ) | | | 9,029,983 | |
Net change in unrealized appreciation (depreciation) on investments and foreign currency | | | 257,202,867 | | | | (523,743,075 | ) |
| | | | | | | | |
Net decrease in net assets resulting from operations | | | 35,005,528 | | | | (496,921,931 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | (12,315,368 | ) | | | (11,647,208 | ) |
Class B | | | (5,454,328 | ) | | | (4,780,555 | ) |
From net realized gains | | | | | | | | |
Class A | | | (8,880,818 | ) | | | (76,540,438 | ) |
Class B | | | (5,062,233 | ) | | | (43,721,320 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (31,712,747 | ) | | | (136,689,521 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 62,373,429 | | | | 172,006,335 | |
Class B | | | 38,338,719 | | | | 88,316,702 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | 21,196,186 | | | | 88,187,646 | |
Class B | | | 10,516,561 | | | | 48,501,875 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (238,227,690 | ) | | | (293,810,458 | ) |
Class B | | | (35,363,041 | ) | | | (191,693,067 | ) |
| | | | | | | | |
Net decrease in net assets from capital share transactions | | | (141,165,836 | ) | | | (88,490,967 | ) |
| | | | | | | | |
| Net Decrease in Net Assets | | | (137,873,055 | ) | | | (722,102,419 | ) |
Net assets at beginning of period | | | 1,191,046,415 | | | | 1,913,148,834 | |
| | | | | | | | |
Net assets at end of period | | $ | 1,053,173,360 | | | $ | 1,191,046,415 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 2,319,601 | | | $ | 17,769,636 | |
| | | | | | | | |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Third Avenue Small Cap Value Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $10.29 | | | $15.75 | | | | $17.48 | | | $ | 16.61 | | | $ | 14.38 | | | $ | 11.62 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | 0.02 | | | 0.16 | | | | 0.17 | | | | 0.27 | | | | 0.14 | | | | 0.16 | |
Net Realized/Unrealized Gain (Loss) on Investments | | 0.32 | | | (4.46 | ) | | | (0.54 | ) | | | 1.89 | | | | 2.13 | | | | 2.96 | |
| | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | 0.34 | | | (4.30 | ) | | | (0.37 | ) | | | 2.16 | | | | 2.27 | | | | 3.12 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | (0.16 | ) | | (0.15 | ) | | | (0.21 | ) | | | (0.11 | ) | | | — | | | | (0.08 | ) |
Distributions from Net Realized Capital Gains | | (0.12 | ) | | (1.01 | ) | | | (1.15 | ) | | | (1.18 | ) | | | (0.04 | ) | | | (0.28 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | (0.28 | ) | | (1.16 | ) | | | (1.36 | ) | | | (1.29 | ) | | | (0.04 | ) | | | (0.36 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $10.35 | | | $10.29 | | | | $15.75 | | | $ | 17.48 | | | $ | 16.61 | | | $ | 14.38 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | 3.51 | % | | (29.69 | )% | | | (2.79 | )% | | | 13.38 | % | | | 15.82 | % | | | 26.81 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | 0.80 | %* | | 0.77 | % | | | 0.76 | % | | | 0.80 | % | | | 0.81 | % | | | 0.87 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | 0.80 | %* | | 0.77 | % | | | 0.76 | % | | | 0.80 | % | | | 0.81 | % | | | N/A | |
Ratio of Net Investment Income to Average Net Assets | | 0.51 | %* | | 1.18 | % | | | 0.99 | % | | | 1.64 | % | | | 0.94 | % | | | 1.12 | % |
Portfolio Turnover Rate | | 11.1 | % | | 39.8 | % | | | 36.0 | % | | | 12.1 | % | | | 19.6 | % | | | 11.3 | % |
Net Assets, End of Period (in millions) | | $591.7 | | | $747.1 | | | $ | 1,171.6 | | | $ | 883.6 | | | $ | 476.8 | | | $ | 206.3 | |
| |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $10.25 | | | $15.68 | | | | $17.41 | | | $ | 16.55 | | | $ | 14.37 | | | $ | 11.61 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | 0.01 | | | 0.13 | | | | 0.13 | | | | 0.21 | | | | 0.10 | | | | 0.06 | |
Net Realized/Unrealized Gain (Loss) on Investments | | 0.32 | | | (4.44 | ) | | | (0.54 | ) | | | 1.91 | | | | 2.12 | | | | 3.02 | |
| | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | 0.33 | | | (4.31 | ) | | | (0.41 | ) | | | 2.12 | | | | 2.22 | | | | 3.08 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | (0.13 | ) | | (0.11 | ) | | | (0.17 | ) | | | (0.08 | ) | | | — | | | | (0.04 | ) |
Distributions from Net Realized Capital Gains | | (0.12 | ) | | (1.01 | ) | | | (1.15 | ) | | | (1.18 | ) | | | (0.04 | ) | | | (0.28 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | (0.25 | ) | | (1.12 | ) | | | (1.32 | ) | | | (1.26 | ) | | | (0.04 | ) | | | (0.32 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $10.33 | | | $10.25 | | | | $15.68 | | | $ | 17.41 | | | $ | 16.55 | | | $ | 14.37 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | 3.34 | % | | (29.82 | )% | | | (3.02 | )% | | | 13.13 | % | | | 15.48 | % | | | 26.50 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | 1.05 | %* | | 1.02 | % | | | 1.01 | % | | | 1.05 | % | | | 1.05 | % | | | 1.07 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | 1.05 | %* | | 1.02 | % | | | 1.01 | % | | | 1.05 | % | | | 1.05 | % | | | N/A | |
Ratio of Net Investment Income to Average Net Assets | | 0.31 | %* | | 0.92 | % | | | 0.76 | % | | | 1.28 | % | | | 0.64 | % | | | 0.46 | % |
Portfolio Turnover Rate | | 11.1 | % | | 39.8 | % | | | 36.0 | % | | | 12.1 | % | | | 19.6 | % | | | 11.3 | % |
Net Assets, End of Period (in millions) | | $461.4 | | | $444.0 | | | | $741.5 | | | $ | 573.8 | | | $ | 442.4 | | | $ | 435.5 | |
| (a) | | Per share amounts based on average shares outstanding during the period. |
See accompanying notes to financial statements
11
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is Third Avenue Small Cap Value Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A and B Shares are currently offered by the Portfolio. Class C and E Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
12
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
G. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
H. Foreign Currency Translation - The books and records of the Portfolio are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars on a daily basis using prevailing exchange rates. Purchases and sales of securities are translated at the rates of exchange prevailing when such securities were acquired or sold. Income is translated at rates of exchange prevailing when interest is accrued or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in forward foreign currency contracts; sales of foreign currencies; currency gains or losses realized between the trade and settlement dates on securities transactions; and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Portfolio’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gain or losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end; from changes in the exchange rates of foreign currency held; and from changes in the contract value of forward foreign currency contracts.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with Third Avenue Management LLC (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | Average Daily Net Assets |
| | |
| $3,991,520 | | 0.75% | | First $1 Billion |
| | |
| | 0.70% | | Over $1 Billion |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A and Class B Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B distribution plan provides that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% of the average net assets of the Portfolio attributable to its Class B shares in respect to activities primarily intended to result in the sale of Class B Shares. However, under the Class B distribution agreement, payments to the Distributor for activities pursuant to the Class B distribution plan are currently limited to payments at an annual rate equal to 0.25% of average daily net assets of the Portfolio attributable to its Class B Shares.
Under terms of the Class B distribution plan and distribution agreement, the Portfolio is authorized to make payments monthly to the distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B Shares for such entities’ fees or expenses incurred or paid in that regard.
During the period ended June 30, 2009 the Portfolio paid brokerage commissions to affiliated brokers/dealers:
| | | |
Affiliate | | Commission |
| |
| M.J. Whitman LLC | | $ | 563,279 |
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
(Decrease)
in Shares
Outstanding | | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 72,575,964 | | 6,500,746 | | 2,203,345 | | (24,109,732 | ) | | (15,405,641 | ) | | 57,170,323 |
12/31/2008 | | 74,413,206 | | 12,430,006 | | 5,801,819 | | (20,069,067 | ) | | (1,837,242 | ) | | 72,575,964 |
| | | | | | |
Class B | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 43,323,761 | | 4,013,989 | | 1,095,476 | | (3,758,786 | ) | | 1,350,679 | | | 44,674,440 |
12/31/2008 | | 47,301,820 | | 6,536,193 | | 3,199,332 | | (13,713,584 | ) | | (3,978,059 | ) | | 43,323,761 |
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 110,949,240 | | $ | — | | $ | 262,601,413 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $1,315,067,271 | | $ | 48,523,594 | | $ | (310,993,858 | ) | | $ | (262,470,264 | ) |
6. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $ | 40,428,276 | | $ | 21,514,243 | | $ | 96,261,245 | | $ | 94,288,864 | | $ | 136,689,521 | | $ | 115,803,107 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | Loss Carryforwards | | Total |
| | | | |
| $17,769,637 | | $13,915,972 | | $(524,415,138) | | $— | | $(492,729,529) |
7. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
8. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
9. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
10. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
16
| | |
| Turner Mid Cap Growth Portfolio | | For the period ended 6/30/09 |
| Managed by Turner Investment Partners, Inc. | | |
Portfolio Manager Commentary
Performance
During the six-month period ended June 30, 2009, the Portfolio had a return of 12.84% and 12.86% for Class A and B Shares, respectively, versus 16.61% for its benchmark, the Russell Midcap® Growth Index.
Market Environment/Conditions
Many have dubbed the rally that started on March 6th as a “low quality” rally. Evidence of this can be found in the performance of low priced stocks within the midcap growth universe. Beginning with the market bottom on March 6th and continuing through the end of the quarter, stocks priced below $5 a share returned an astounding 113%, compared to a return of 37% for stocks priced above $10 a share. This is just one of several ways that quality could be examined, but the story is similar when analyzing other factors as well. In our view much of this rally was led by investor activity that was focused more on macro factors and less on company fundamentals. While past performance is no guarantee of future results, we have seen this type of rally in the past, most recently coming off the tech bubble burst earlier this decade. This type of rally on the early end was followed by a more sustained rally which was fueled by strong company fundamentals.
Portfolio Review/Current Positioning
The Portfolio, which focuses on investing in companies with above average earnings growth, trailed the results of the benchmark, the Russell Midcap® Growth Index, for the six-month period ended June 30, 2009. In a strong equity market like we had during this period, investors have come to expect this strategy to provide strong performance results on both an absolute and relative basis. We feel the Portfolio delivered on the absolute return, however it fell short of the index on a relative basis.
During the six-month period, two of the Portfolio’s nine sector positions beat their corresponding index sectors. Adding the most value were the energy and technology sectors. In the energy sector, overweight positions within oilfield services companies helped performance. Holdings in Weatherford International Ltd. and Dresser-Rand Group Inc. were the strongest performers. In the technology sector, holdings in the computer communications and semiconductor companies helped generate positive returns with our positions in F5 Networks Inc. and PMC-Sierra Inc. added the most to performance.
The largest detractors from the Portfolio’s performance occurred in the materials and processing and financial services sectors. In materials and processing, Cliff Natural Resources Inc. and CF Industries Holdings Inc. were two significant relative detractors. In financial services, Hudson City Bancorp Inc., and AON Corp. were the largest underperformers.
We continued to position the Portfolio to focus on pure growth companies, early cycle opportunities, and companies focused on gaining market share in their respective industries. Pure growth companies, which are a staple of our portfolio, include Warnaco Group and retailer Urban Outfitters Inc. These companies are looking to grow their earnings through new products and services and are run by dynamic management teams. Early cycle holdings in the Portfolio include Lam Research Corp in the producer durables sector and
homebuilder Pulte Homes Inc. as we feel these companies will be the first to rebound from an improving economy. Finally, examples of companies looking to expand on market share within their respective industries include Atheros Communications in technology and gaming company WMS Industries Inc. We believe the Portfolio is well-positioned to benefit from this diversified approach allowing us to withstand the volatile market swings that we have seen over the past six months while being well-positioned to take advantage of opportunities in an upward moving equity market.
Christopher K. McHugh, Vice President/Senior Portfolio Manager/Security Analyst
Tara R. Hedlund, CFA, CPA, Security Analyst/Portfolio Manager, Principal
Jason D. Schrotberger, CFA, Security Analyst/Portfolio Manager, Principal
Turner Investment Partners, Inc.
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
McAfee, Inc. | | 2.02% |
Alexion Pharmaceuticals, Inc. | | 1.90% |
F5 Networks, Inc. | | 1.89% |
Kohl’s Corp. | | 1.80% |
Broadcom Corp.—Class A | | 1.80% |
St. Jude Medical, Inc. | | 1.61% |
T. Rowe Price Group, Inc. | | 1.59% |
Express Scripts, Inc. | | 1.52% |
NetApp, Inc. | | 1.51% |
Guess?, Inc. | | 1.46% |
1
| | |
| Turner Mid Cap Growth Portfolio | | For the period ended 6/30/09 |
| Managed by Turner Investment Partners, Inc. | | |
Portfolio Manager Commentary (continued)
Portfolio Composition (% of portfolio market value)
As of 6/30/09
2
| | |
| Turner Mid Cap Growth Portfolio | | For the period ended 6/30/09 |
| Managed by Turner Investment Partners, Inc. | | |
Portfolio Manager Commentary (continued)
Turner Mid Cap Growth Portfolio managed by
Turner Investment Partners, Inc. vs. Russell Midcap® Growth Index1
Growth Based on $10,000+
| | | | | | | | | | | | |
| | | | | Average Annual Return2
(for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | 3 Year | | 5 Year | | Since
Inception3 |
| — | | Turner Mid Cap Growth
Portfolio—Class A | | 12.84% | | -35.79% | | -9.36% | | -1.36% | | -0.55% |
| | Class B | | 12.86% | | -36.00% | | -9.61% | | -1.60% | | -0.78% |
| - - | | Russell Midcap® Growth Index1 | | 16.61% | | -30.33% | | -7.93% | | -0.44% | | 0.33% |
+The chart reflects the performance of Class A shares of the Portfolio. The performance of Class A shares will differ from that of the other class of shares because of the difference in expenses paid by policyholders investing in the different share class.
1The Russell Midcap® Growth Index is an unmanaged measure of performance of those Russell Midcap companies (the 800 smallest companies in the Russell 1000®Index) with higher price-to-book ratios and higher forecasted growth values. The stocks are also members of the Russell 1000 Growth index.
2“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
3Inception of the Class A and Class B shares is 5/1/04. Index returns are based on an inception date of 5/1/04.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Index does not include fees or expenses and is not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| Turner Mid Cap Growth Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.80% | | $ | 1,000.00 | | $ | 1,129.80 | | $ | 4.22 |
Hypothetical | | 0.80% | | | 1,000.00 | | | 1,020.83 | | | 4.01 |
| | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class B | | | | | | | | | | | |
Actual | | 1.05% | | $ | 1,000.00 | | $ | 1,128.60 | | $ | 5.54 |
Hypothetical | | 1.05% | | | 1,000.00 | | | 1,019.59 | | | 5.26 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
4
Met Investors Series Trust
Turner Mid Cap Growth Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | |
| Common Stocks - 96.7% | | | | | |
| Aerospace & Defense - 1.1% | | | | | |
Precision Castparts Corp. | | 50,010 | | $ | 3,652,230 |
| | | | | |
| Air Freight & Logistics - 1.1% | | | | | |
C.H. Robinson Worldwide, Inc. | | 69,420 | | | 3,620,253 |
| | | | | |
| Airlines - 0.4% | | | | | |
Continental Airlines, Inc. - Class B*(a) | | 147,170 | | | 1,303,926 |
| | | | | |
| Auto Components - 1.3% | | | | | |
Goodyear Tire & Rubber Co. (The)* | | 230,970 | | | 2,600,722 |
Magna International, Inc. - Class A | | 37,720 | | | 1,593,293 |
| | | | | |
| | | | | 4,194,015 |
| | | | | |
| Beverages - 0.7% | | | | | |
Hansen Natural Corp.* | | 69,920 | | | 2,154,934 |
| | | | | |
| Biotechnology - 3.7% | | | | | |
Alexion Pharmaceuticals, Inc.* | | 148,520 | | | 6,107,142 |
Myriad Genetics, Inc.* | | 39,840 | | | 1,420,296 |
Myriad Pharmaceuticals, Inc.* | | 13,093 | | | 60,880 |
United Therapeutics Corp.*(a) | | 51,350 | | | 4,278,996 |
| | | | | |
| | | | | 11,867,314 |
| | | | | |
| Capital Markets - 4.6% | | | | | |
Northern Trust Corp. | | 80,410 | | | 4,316,409 |
T. Rowe Price Group, Inc. | | 122,260 | | | 5,094,574 |
TD Ameritrade Holding Corp.* | | 182,800 | | | 3,206,312 |
Waddell & Reed Financial, Inc. - Class A | | 77,220 | | | 2,036,291 |
| | | | | |
| | | | | 14,653,586 |
| | | | | |
| Chemicals - 2.6% | | | | | |
Airgas, Inc. | | 48,610 | | | 1,970,163 |
CF Industries Holdings, Inc. | | 45,520 | | | 3,374,853 |
Ecolab, Inc. | | 73,180 | | | 2,853,288 |
| | | | | |
| | | | | 8,198,304 |
| | | | | |
| Commercial & Professional Services - 0.5% | | | |
Stericycle, Inc.*(a) | | 32,810 | | | 1,690,699 |
| | | | | |
| Communications Equipment - 4.9% |
Alcatel-Lucent (ADR)* | | 869,310 | | | 2,155,889 |
Brocade Communications Systems, Inc.* | | 165,920 | | | 1,300,813 |
Ciena Corp.*(a) | | 141,986 | | | 1,469,555 |
F5 Networks, Inc.*(a) | | 175,546 | | | 6,072,136 |
Juniper Networks, Inc.* | | 138,730 | | | 3,274,028 |
Riverbed Technology, Inc.*(a) | | 67,960 | | | 1,575,992 |
| | | | | |
| | | | | 15,848,413 |
| | | | | |
| Computers & Peripherals - 1.5% | | | | | |
NetApp, Inc.* | | 245,290 | | | 4,837,119 |
| | | | | |
| Construction & Engineering - 1.0% |
Quanta Services, Inc.* | | 84,990 | | | 1,965,819 |
URS Corp.* | | 25,940 | | | 1,284,549 |
| | | | | |
| | | | | 3,250,368 |
| | | | | |
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Diversified Financial Services - 2.3% |
IntercontinentalExchange, Inc.* | | 36,850 | | $ | 4,209,744 |
MSCI, Inc. - Class A* | | 123,355 | | | 3,014,796 |
| | | | | |
| | | | | 7,224,540 |
| | | | | |
| Electric Utilities - 1.3% | | | | | |
PPL Corp. | | 123,410 | | | 4,067,594 |
| | | | | |
| Energy Equipment & Services - 2.0% |
Cameron International Corp.* | | 123,550 | | | 3,496,465 |
Nabors Industries, Ltd.* | | 183,860 | | | 2,864,539 |
| | | | | |
| | | | | 6,361,004 |
| | | | | |
| Food & Staples Retailing - 1.2% | | | | | |
Whole Foods Market, Inc.(a) | | 201,410 | | | 3,822,762 |
| | | | | |
| Gas Utilities - 0.6% | | | | | |
Questar Corp. | | 64,420 | | | 2,000,885 |
| | | | | |
| Health Care Equipment & Supplies - 2.9% | | | | | |
Beckman Coulter, Inc. | | 29,170 | | | 1,666,774 |
Intuitive Surgical, Inc.*(a) | | 14,380 | | | 2,353,431 |
St. Jude Medical, Inc.* | | 125,510 | | | 5,158,461 |
| | | | | |
| | | | | 9,178,666 |
| | | | | |
| Health Care Providers & Services - 5.2% |
AmerisourceBergen Corp. | | 117,380 | | | 2,082,321 |
DaVita, Inc.* | | 49,510 | | | 2,448,765 |
Express Scripts, Inc.* | | 70,889 | | | 4,873,619 |
Laboratory Corp. of America Holdings* | | 67,470 | | | 4,573,791 |
Omnicare, Inc. | | 101,040 | | | 2,602,790 |
| | | | | |
| | | | | 16,581,286 |
| | | | | |
| Hotels, Restaurants & Leisure - 5.1% |
Darden Restaurants, Inc. | | 81,640 | | | 2,692,487 |
Penn National Gaming, Inc.* | | 73,260 | | | 2,132,599 |
Starwood Hotels & Resorts Worldwide, Inc.(a) | | 184,610 | | | 4,098,342 |
WMS Industries, Inc.*(a) | | 132,944 | | | 4,189,065 |
Wynn Resorts, Ltd.*(a) | | 93,550 | | | 3,302,315 |
| | | | | |
| | | | | 16,414,808 |
| | | | | |
| Household Durables - 1.7% | | | | | |
D.R. Horton, Inc.(a) | | 318,570 | | | 2,981,815 |
Pulte Homes, Inc.(a) | | 280,910 | | | 2,480,436 |
| | | | | |
| | | | | 5,462,251 |
| | | | | |
| Household Products - 1.0% | | | | | |
Energizer Holdings, Inc.* | | 63,970 | | | 3,341,793 |
| | | | | |
| Independent Power Producers & Energy Traders - 0.4% |
AES Corp. (The)* | | 103,670 | | | 1,203,609 |
| | | | | |
| Industrial Conglomerates - 0.9% | | | | | |
McDermott International, Inc.* | | 134,530 | | | 2,732,304 |
| | | | | |
| Internet & Catalog Retail - 0.9% | | | | | |
Priceline.com, Inc.*(a) | | 24,630 | | | 2,747,477 |
| | | | | |
See accompanying notes to financial statements
5
Met Investors Series Trust
Turner Mid Cap Growth Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Internet Software & Services - 1.9% |
MercadoLibre, Inc.*(a) | | 53,490 | | $ | 1,437,811 |
VeriSign, Inc.*(a) | | 158,660 | | | 2,932,037 |
VistaPrint, Ltd.*(a) | | 43,730 | | | 1,865,085 |
| | | | | |
| | | | | 6,234,933 |
| | | | | |
| IT Services - 2.6% | | | | | |
Fiserv, Inc.* | | 59,940 | | | 2,739,258 |
Global Payments, Inc. | | 53,630 | | | 2,008,980 |
Paychex, Inc.(a) | | 137,550 | | | 3,466,260 |
| | | | | |
| | | | | 8,214,498 |
| | | | | |
| Life Sciences Tools & Services - 1.9% |
Illumina, Inc.*(a) | | 102,480 | | | 3,990,571 |
Life Technologies Corp.* | | 51,330 | | | 2,141,488 |
| | | | | |
| | | | | 6,132,059 |
| | | | | |
| Machinery - 4.1% | | | | | |
Cummins, Inc. | | 115,850 | | | 4,079,078 |
ESCO Technologies, Inc.* | | 42,010 | | | 1,882,048 |
Joy Global, Inc. | | 60,190 | | | 2,149,987 |
Navistar International Corp.* | | 25,770 | | | 1,123,572 |
Parker Hannifin Corp. | | 89,430 | | | 3,841,913 |
| | | | | |
| | | | | 13,076,598 |
| | | | | |
| Media - 0.6% | | | | | |
Cablevision Systems Corp. - Class A | | 101,490 | | | 1,969,921 |
| | | | | |
| Metals & Mining - 3.0% | | | | | |
Alcoa, Inc.(a) | | 250,690 | | | 2,589,628 |
Steel Dynamics, Inc. | | 177,800 | | | 2,618,994 |
Teck Resources, Ltd. - Class B* | | 80,370 | | | 1,281,098 |
United States Steel Corp.(a) | | 87,180 | | | 3,115,813 |
| | | | | |
| | | | | 9,605,533 |
| | | | | |
| Multiline Retail - 2.6% | | | | | |
Kohl’s Corp.* | | 135,370 | | | 5,787,067 |
Nordstrom, Inc.(a) | | 128,540 | | | 2,556,661 |
| | | | | |
| | | | | 8,343,728 |
| | | | | |
| Oil, Gas & Consumable Fuels - 3.9% |
CONSOL Energy, Inc. | | 108,880 | | | 3,697,565 |
Petrohawk Energy Corp.* | | 183,260 | | | 4,086,698 |
Range Resources Corp. | | 112,005 | | | 4,638,127 |
| | | | | |
| | | | | 12,422,390 |
| | | | | |
| Personal Products - 2.1% | | | | | |
Alberto-Culver Co. | | 89,370 | | | 2,272,679 |
Avon Products, Inc. | | 171,630 | | | 4,424,622 |
| | | | | |
| | | | | 6,697,301 |
| | | | | |
| Pharmaceuticals - 0.6% | | | | | |
Allergan, Inc. | | 40,580 | | | 1,930,796 |
| | | | | |
| Professional Services - 1.3% | | | | | |
Robert Half International, Inc.(a) | | 170,860 | | | 4,035,713 |
| | | | | |
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Real Estate Investment Trusts (REITs) - 0.6% |
Digital Realty Trust, Inc.(a) | | 56,080 | | $ | 2,010,468 |
| | | | | |
| Real Estate Management & Development - 0.4% |
CB Richard Ellis Group, Inc. - Class A* | | 145,190 | | | 1,358,978 |
| | | | | |
| Semiconductors & Semiconductor Equipment - 10.7% |
ASML Holding N.V.(a) | | 143,180 | | | 3,099,847 |
Atheros Communications, Inc.*(a) | | 199,451 | | | 3,837,437 |
Broadcom Corp. - Class A* | | 232,430 | | | 5,761,940 |
Lam Research Corp.*(a) | | 134,250 | | | 3,490,500 |
Marvell Technology Group, Ltd.* | | 273,100 | | | 3,178,884 |
Micron Technology, Inc.*(a) | | 881,260 | | | 4,459,175 |
Netlogic Microsystems, Inc.* | | 35,530 | | | 1,295,424 |
PMC-Sierra, Inc.* | | 404,610 | | | 3,220,696 |
Teradyne, Inc.*(a) | | 397,450 | | | 2,726,507 |
Varian Semiconductor Equipment Associates, Inc.*(a) | | 141,810 | | | 3,402,022 |
| | | | | |
| | | | | 34,472,432 |
| | | | | |
| Software - 4.8% | | | | | |
Activision Blizzard, Inc.* | | 259,210 | | | 3,273,822 |
Adobe Systems, Inc.* | | 80,300 | | | 2,272,490 |
BMC Software, Inc.* | | 35,520 | | | 1,200,221 |
McAfee, Inc.*(a) | | 153,970 | | | 6,495,994 |
Salesforce.com, Inc.*(a) | | 59,100 | | | 2,255,847 |
| | | | | |
| | | | | 15,498,374 |
| | | | | |
| Specialty Retail - 2.8% | | | | | |
Guess?, Inc. | | 182,200 | | | 4,697,116 |
Urban Outfitters, Inc.*(a) | | 202,090 | | | 4,217,618 |
| | | | | |
| | | | | 8,914,734 |
| | | | | |
| Textiles, Apparel & Luxury Goods - 1.9% | | | |
Coach, Inc. | | 169,040 | | | 4,543,795 |
Warnaco Group, Inc. (The)* | | 51,910 | | | 1,681,884 |
| | | | | |
| | | | | 6,225,679 |
| | | | | |
| Trading Companies & Distributors - 0.6% | | | |
Fastenal Co.(a) | | 59,540 | | | 1,974,942 |
| | | | | |
| Wireless Telecommunication Services - 1.4% |
MetroPCS Communications, Inc.* | | 161,890 | | | 2,154,756 |
Millicom International Cellular S.A.*(a) | | 42,100 | | | 2,368,546 |
| | | | | |
| | | | | 4,523,302 |
| | | | | |
Total Common Stocks
(Cost $298,414,744) | | | | | 310,052,519 |
| | | | | |
See accompanying notes to financial statements
6
Met Investors Series Trust
Turner Mid Cap Growth Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | | | |
Security
Description | | Shares/Par
Amount | | Value | |
| | | | | | | |
| | |
| Short-Term Investments - 15.1% | | | | | | | |
| Mutual Funds - 10.8% | | | | | | | |
State Street Navigator Securities Lending Trust Prime Portfolio(b) | | | 34,854,192 | | $ | 34,854,192 | |
| | | | | | | |
| Repurchase Agreement - 4.3% | |
State Street Bank & Trust Co., Repurchase Agreement, dated 06/30/09 at 0.010% to be repurchased at $13,683,004 on 07/01/09 collateralized by $13,890,000 FNMA at 1.722% due 05/10/11 with a value of $13,959,450. | | $ | 13,683,000 | | | 13,683,000 | |
| | | | | | | |
Total Short-Term Investments
(Cost $48,537,192) | | | | | | 48,537,192 | |
| | | | | | | |
| | |
TOTAL INVESTMENTS - 111.8%
(Cost $346,951,936) | | | | | | 358,589,711 | |
| | | | | | | |
| |
| Other Assets and Liabilities (net) - (11.8)% | | | (37,743,852 | ) |
| | | | | | | |
| | |
| NET ASSETS - 100.0% | | | | | $ | 320,845,859 | |
| | | | | | | |
Portfolio Footnotes:
| * | | Non-income producing security. |
| (a) | | All or a portion of security is on loan. |
| (b) | | Represents investment of collateral received from securities lending transactions. |
ADR - American Depositary Receipt
FNMA - Federal National Mortgage Association
See accompanying notes to financial statements
7
Met Investors Series Trust
Turner Mid Cap Growth Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
| Level 1—quoted | | prices in active markets for identical securities |
| Level 2—other | | significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.) |
| Level 3—significant | | unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments) |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
| Common Stocks | | | | | | | | | | | | |
Aerospace & Defense | | $ | 3,652,230 | | $ | — | | $ | — | | $ | 3,652,230 |
Air Freight & Logistics | | | 3,620,253 | | | — | | | — | | | 3,620,253 |
Airlines | | | 1,303,926 | | | — | | | — | | | 1,303,926 |
Auto Components | | | 4,194,015 | | | — | | | — | | | 4,194,015 |
Beverages | | | 2,154,934 | | | — | | | — | | | 2,154,934 |
Biotechnology | | | 11,867,314 | | | — | | | — | | | 11,867,314 |
Capital Markets | | | 14,653,586 | | | — | | | — | | | 14,653,586 |
Chemicals | | | 8,198,304 | | | — | | | — | | | 8,198,304 |
Commercial & Professional Services | | | 1,690,699 | | | — | | | — | | | 1,690,699 |
Communications Equipment | | | 15,848,413 | | | — | | | — | | | 15,848,413 |
Computers & Peripherals | | | 4,837,119 | | | — | | | — | | | 4,837,119 |
Construction & Engineering | | | 3,250,368 | | | — | | | — | | | 3,250,368 |
Diversified Financial Services | | | 7,224,540 | | | — | | | — | | | 7,224,540 |
Electric Utilities | | | 4,067,594 | | | — | | | — | | | 4,067,594 |
Energy Equipment & Services | | | 6,361,004 | | | — | | | — | | | 6,361,004 |
Food & Staples Retailing | | | 3,822,762 | | | — | | | — | | | 3,822,762 |
Gas Utilities | | | 2,000,885 | | | — | | | — | | | 2,000,885 |
Health Care Equipment & Supplies | | | 9,178,666 | | | — | | | — | | | 9,178,666 |
Health Care Providers & Services | | | 16,581,286 | | | — | | | — | | | 16,581,286 |
Hotels, Restaurants & Leisure | | | 16,414,808 | | | — | | | — | | | 16,414,808 |
Household Durables | | | 5,462,251 | | | — | | | — | | | 5,462,251 |
Household Products | | | 3,341,793 | | | — | | | — | | | 3,341,793 |
Independent Power Producers & Energy Traders | | | 1,203,609 | | | — | | | — | | | 1,203,609 |
Industrial Conglomerates | | | 2,732,304 | | | — | | | — | | | 2,732,304 |
Internet & Catalog Retail | | | 2,747,477 | | | — | | | — | | | 2,747,477 |
Internet Software & Services | | | 6,234,933 | | | — | | | — | | | 6,234,933 |
IT Services | | | 8,214,498 | | | — | | | — | | | 8,214,498 |
Life Sciences Tools & Services | | | 6,132,059 | | | — | | | — | | | 6,132,059 |
Machinery | | | 13,076,598 | | | — | | | — | | | 13,076,598 |
Media | | | 1,969,921 | | | — | | | — | | | 1,969,921 |
Metals & Mining | | | 9,605,533 | | | — | | | — | | | 9,605,533 |
Multiline Retail | | | 8,343,728 | | | — | | | — | | | 8,343,728 |
See accompanying notes to financial statements
8
Met Investors Series Trust
Turner Mid Cap Growth Portfolio
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Oil, Gas & Consumable Fuels | | $ | 12,422,390 | | $ | — | | $ | — | | $ | 12,422,390 |
Personal Products | | | 6,697,301 | | | — | | | — | | | 6,697,301 |
Pharmaceuticals | | | 1,930,796 | | | — | | | — | | | 1,930,796 |
Professional Services | | | 4,035,713 | | | — | | | — | | | 4,035,713 |
Real Estate Investment Trusts (REITs) | | | 2,010,468 | | | — | | | — | | | 2,010,468 |
Real Estate Management & Development | | | 1,358,978 | | | — | | | — | | | 1,358,978 |
Semiconductors & Semiconductor Equipment | | | 34,472,432 | | | — | | | — | | | 34,472,432 |
Software | | | 15,498,374 | | | — | | | — | | | 15,498,374 |
Specialty Retail | | | 8,914,734 | | | — | | | — | | | 8,914,734 |
Textiles, Apparel & Luxury Goods | | | 6,225,679 | | | — | | | — | | | 6,225,679 |
Trading Companies & Distributors | | | 1,974,942 | | | — | | | — | | | 1,974,942 |
Wireless Telecommunication Services | | | 4,523,302 | | | — | | | — | | | 4,523,302 |
Total Common Stocks | | | 310,052,519 | | | — | | | — | | | 310,052,519 |
| Short-Term Investments | | | | | | | | | | | | |
Mutual Funds | | | 34,854,192 | | | — | | | — | | | 34,854,192 |
Repurchase Agreement | | | — | | | 13,683,000 | | | — | | | 13,683,000 |
Total Short-Term Investments | | | 34,854,192 | | | 13,683,000 | | | — | | | 48,537,192 |
| TOTAL INVESTMENTS | | $ | 344,906,711 | | $ | 13,683,000 | | $ | — | | $ | 358,589,711 |
9
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| Turner Mid Cap Growth Portfolio | | | |
| Assets | | | | |
Investments, at value (a)(b) | | $ | 344,906,711 | |
Repurchase Agreement | | | 13,683,000 | |
Cash | | | 999 | |
Receivable for investments sold | | | 2,253,517 | |
Receivable for Trust shares sold | | | 9,549 | |
Dividends receivable | | | 123,552 | |
Interest receivable | | | 4 | |
| | | | |
Total assets | | | 360,977,332 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 4,920,942 | |
Trust shares redeemed | | | 49,441 | |
Distribution and services fees—Class B | | | 12,071 | |
Collateral for securities on loan | | | 34,854,192 | |
Management fee | | | 211,125 | |
Administration fee | | | 1,934 | |
Custodian and accounting fees | | | 36,428 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 41,913 | |
| | | | |
Total liabilities | | | 40,131,473 | |
| | | | |
| Net Assets | | $ | 320,845,859 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 434,929,332 | |
Accumulated net realized loss | | | (125,996,040 | ) |
Unrealized appreciation on investments | | | 11,637,775 | |
Undistributed net investment income | | | 274,792 | |
| | | | |
Total | | $ | 320,845,859 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 262,864,160 | |
| | | | |
Class B | | | 57,981,699 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 31,809,150 | |
| | | | |
Class B | | | 7,108,442 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 8.26 | |
| | | | |
Class B | | | 8.16 | |
| | | | |
| | | | | |
(a) Investments at cost, excluding repurchase agreement | | $ | 333,268,936 | |
(b) Includes cash collateral for securities loaned of | | | 34,854,192 | |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| Turner Mid Cap Growth Portfolio | | | |
| Investment Income | | | | |
Dividends (1) | | $ | 1,218,137 | |
Interest (2) | | | 315,577 | |
| | | | |
Total investment income | | | 1,533,714 | |
| | | | |
| Expenses | | | | |
Management fee | | | 1,185,306 | |
Administration fees | | | 13,619 | |
Custodian and accounting fees | | | 14,289 | |
Distribution and services fees—Class B | | | 63,805 | |
Audit and tax services | | | 21,301 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 15,442 | |
Insurance | | | 3,912 | |
Other | | | 3,123 | |
| | | | |
Total expenses | | | 1,347,230 | |
Less broker commission recapture | | | (88,441 | ) |
| | | | |
Net expenses | | | 1,258,789 | |
| | | | |
Net investment income | | | 274,925 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments and Futures Contracts | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | (37,337,241 | ) |
Futures contracts | | | 174,698 | |
| | | | |
Net realized loss on investments and futures contracts | | | (37,162,543 | ) |
| | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 75,427,349 | |
| | | | |
Net change in unrealized appreciation on investments | | | 75,427,349 | |
| | | | |
Net realized and unrealized gain on investments and futures contracts | | | 38,264,806 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 38,539,731 | |
| | | | |
| | | | | |
(1) Dividend income is net of foreign withholding taxes of: | | $ | 3,310 | |
(2) Interest income includes securities lending net income of: | | | 315,207 | |
See accompanying notes to financial statements
11
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| Turner Mid Cap Growth Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 274,925 | | | $ | 26,703 | |
Net realized loss on investments and futures contracts | | | (37,162,543 | ) | | | (88,855,595 | ) |
Net change in unrealized appreciation (depreciation) on investments | | | 75,427,349 | | | | (151,759,960 | ) |
| | | | | | | | |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 38,539,731 | | | | (240,588,852 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | — | | | | (1,025 | ) |
Class B | | | — | | | | — | |
From net realized gains | | | | | | | | |
Class A | | | — | | | | (29,084,879 | ) |
Class B | | | — | | | | (6,960,269 | ) |
| | | | | | | | |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | — | | | | (36,046,173 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 24,896,576 | | | | 89,324,784 | |
Class B | | | 8,788,090 | | | | 35,474,894 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | — | | | | 29,085,904 | |
Class B | | | — | | | | 6,960,269 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (41,102,924 | ) | | | (30,791,958 | ) |
Class B | | | (7,517,066 | ) | | | (32,038,820 | ) |
| | | | | | | | |
| | | | | | | | |
Net increase (decrease) in net assets from capital share transactions | | | (14,935,324 | ) | | | 98,015,073 | |
| | | | | | | | |
| Net Increase (Decrease) in Net Assets | | | 23,604,407 | | | | (178,619,952 | ) |
Net assets at beginning of period | | | 297,241,452 | | | | 475,861,404 | |
| | | | | | | | |
Net assets at end of period | | $ | 320,845,859 | | | $ | 297,241,452 | |
| | | | | | | | |
Net assets at end of period includes undistributed (distributions in excess of) net investment income | | $ | 274,792 | | | $ | (133 | ) |
| | | | | | | | |
See accompanying notes to financial statements
12
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Turner Mid Cap Growth Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004(b) | |
| Net Asset Value, Beginning of Period | | $ | 7.32 | | | $ | 15.33 | | | $ | 12.75 | | | $ | 12.13 | | | $ | 11.23 | | | $ | 10.00 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income (Loss)(a) | | | 0.01 | | | | 0.01 | | | | (0.03 | ) | | | (0.00 | )+ | | | (0.04 | ) | | | (0.03 | ) |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.93 | | | | (6.88 | ) | | | 3.08 | | | | 0.77 | | | | 1.35 | | | | 1.26 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total From Investment Operations | | | 0.94 | | | | (6.87 | ) | | | 3.05 | | | | 0.77 | | | | 1.31 | | | | 1.23 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | (0.00 | )+ | | | — | | | | — | | | | — | | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | (1.14 | ) | | | (0.47 | ) | | | (0.15 | ) | | | (0.41 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | — | | | | (1.14 | ) | | | (0.47 | ) | | | (0.15 | ) | | | (0.41 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 8.26 | | | $ | 7.32 | | | $ | 15.33 | | | $ | 12.75 | | | $ | 12.13 | | | $ | 11.23 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 12.84 | % | | | (48.14 | )% | | | 24.49 | % | | | 6.30 | % | | | 11.61 | % | | | 12.30 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.80 | %* | | | 0.77 | % | | | 0.80 | % | | | 0.87 | % | | | 0.85 | % | | | 0.91 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.86 | %* | | | 0.82 | % | | | 0.83 | % | | | 0.92 | % | | | 0.85 | % | | | 0.91 | %* |
Ratio of Net investment Income (Loss) to Average Net Assets | | | 0.23 | %* | | | 0.06 | % | | | (0.19 | )% | | | 0.03 | % | | | (0.30 | )% | | | (0.42 | )%* |
Portfolio Turnover Rate | | | 67.2 | % | | | 158.0 | % | | | 139.8 | % | | | 153.0 | % | | | 156.4 | % | | | 101.7 | % |
Net Assets, End of Period (in millions) | | $ | 262.9 | | | $ | 246.8 | | | $ | 381.8 | | | $ | 274.8 | | | $ | 168.7 | | | $ | 76.5 | |
| |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004(b) | |
| Net Asset Value, Beginning of Period | | $ | 7.23 | | | $ | 15.20 | | | $ | 12.68 | | | $ | 12.09 | | | $ | 11.22 | | | $ | 10.00 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment Loss(a) | | | — | | | | (0.02 | ) | | | (0.06 | ) | | | (0.03 | ) | | | (0.07 | ) | | | (0.05 | ) |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.93 | | | | (6.81 | ) | | | 3.05 | | | | 0.77 | | | | 1.35 | | | | 1.27 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.93 | | | | (6.83 | ) | | | 2.99 | | | | 0.74 | | | | 1.28 | | | | 1.22 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | (1.14 | ) | | | (0.47 | ) | | | (0.15 | ) | | | (0.41 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | — | | | | (1.14 | ) | | | (0.47 | ) | | | (0.15 | ) | | | (0.41 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 8.16 | | | $ | 7.23 | | | $ | 15.20 | | | $ | 12.68 | | | $ | 12.09 | | | $ | 11.22 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 12.86 | % | | | (48.30 | )% | | | 24.15 | % | | | 6.07 | % | | | 11.36 | % | | | 12.20 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 1.05 | %* | | | 1.02 | % | | | 1.05 | % | | | 1.12 | % | | | 1.10 | % | | | 1.10 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 1.11 | %* | | | 1.07 | % | | | 1.08 | % | | | 1.17 | % | | | 1.10 | % | | | 1.10 | %* |
Ratio of Net Investment Loss to Average Net Assets | | | (0.02 | )%* | | | (0.20 | )% | | | (0.44 | )% | | | (0.22 | )% | | | (0.58 | )% | | | (0.72 | )%* |
Portfolio Turnover Rate | | | 67.2 | % | | | 158.0 | % | | | 139.8 | % | | | 153.0 | % | | | 156.4 | % | | | 101.7 | % |
Net Assets, End of Period (in millions) | | $ | 58.0 | | | $ | 50.5 | % | | $ | 94.0 | | | $ | 69.0 | | | $ | 56.9 | | | $ | 79.7 | |
| + | | Rounds to less than $0.005 per share. |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—05/01/2004. |
See accompanying notes to financial statements
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is Turner Mid Cap Growth Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A and B Shares are currently offered by the Portfolio. Class C and E Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | | |
Expiring
12/31/2016 | | Total |
| |
| $ | 82,769,367 | | $ | 82,769,367 |
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
G. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
H. Directed Brokerage Agreement - The Trust has entered into a directed brokerage arrangement with State Street Global Markets (“SSGM”). Under this arrangement, the Portfolio directs certain trades to SSGM in return for a recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to the Portfolio are shown separately as an expense reduction on the Statement of Operations of the Portfolio.
I. Financial Derivative Instruments - Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133, (“FAS 161” or the “Statement”) requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. The disclosure requirements of FAS 161 distinguish between derivatives which are accounted for as “hedges” under FAS 133 and those that do not qualify for such accounting. The Portfolio reflects derivatives at fair value and recognizes changes in fair value through the Statement of Operations, and as such do not qualify for FAS 133 hedge accounting treatment.
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
J. Futures Contracts - The Portfolio may buy and sell futures contracts (on recognized exchanges) as a hedge, to maintain exposure to the broad equity markets, manage exposure to the securities markets or to movements in interest rates or to enhance return. The Portfolio may be subject to equity price risk, interest rate risk, and foreign currency exchange rate risk in the normal course of pursuing its investment objectives. Futures contracts are agreements to buy or sell a security, or deliver a final cash settlement price in connection with an index, interest rate, currency, or other contracts not calling for physical delivery, for a set price in the future. The Portfolio must post an amount equal to a portion of the total market value of the futures contract as futures variation margin, which is returned when the Portfolio’s obligations under the contract have been satisfied. From time to time thereafter, the Portfolio may have to post variation margin to maintain this amount as the market value of the contract fluctuates. Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities. During the period ended June 30, 2009, the Portfolio entered into Equity Index Futures which were subject to equity price risk. At June 30, 2009, the Portfolio did not have any open futures contracts. For the period ended June 30, 2009, the Portfolio had realized gains in the amount of $174,698 which is located in Net realized gain (loss) on Futures Contracts in the Statement of Operations.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with Turner Investment Partners, Inc. (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | Average Daily Net Assets |
| | |
| $1,185,306 | | 0.80% | | First $300 Million |
| | |
| | 0.70% | | Over $300 Million |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A and Class B Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B distribution plan provides that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% of the average net assets of the Portfolio attributable to its Class B Shares in respect to activities primarily intended to result in the sale of Class B Shares. However, under the Class B distribution agreement, payments to the Distributor for activities pursuant to the Class B distribution plan are currently limited to payments at an annual rate equal to 0.25% of average daily net assets of the Portfolio, attributable to its Class B Shares.
Under terms of the Class B distribution plan and distribution agreement, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B Shares for such entities’ fees or expenses incurred.
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
16
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
(Decrease)
in Shares
Outstanding | | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 33,731,668 | | 3,276,056 | | — | | (5,198,574 | ) | | (1,922,518 | ) | | 31,809,150 |
12/31/2008 | | 24,909,018 | | 9,236,533 | | 2,206,821 | | (2,620,704 | ) | | 8,822,650 | | | 33,731,668 |
| | | | | | |
Class B | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 6,979,185 | | 1,171,700 | | — | | (1,042,443 | ) | | 129,257 | | | 7,108,442 |
12/31/2008 | | 6,185,298 | | 2,978,424 | | 533,354 | | (2,717,891 | ) | | 793,887 | | | 6,979,185 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 197,150,952 | | $ | — | | $ | 194,253,267 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Appreciation |
| | | |
| $346,951,936 | | $ | 29,182,472 | | $ | (17,544,697 | ) | | $ | 11,637,775 |
6. Securities Lending
As of June 30, 2009, the Portfolio had loaned securities which were collateralized by short-term investments. The value of securities on loan and the value of the related collateral were as follows:
| | | | | | | | | |
Value of
Securities | | Value of
Cash
Collateral | | Value of
Non-Cash
Collateral* | | Total
Collateral |
| | | |
| $33,994,512 | | $ | 34,854,192 | | $ | 33,651 | | $ | 34,887,843 |
* The Portfolio cannot repledge or resell this collateral. The non-cash collateral is typically comprised of government securities and/or bank letters of credit.
7. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $2,848,762 | | $ | — | | $ | 33,197,411 | | $ | 12,921,197 | | $ | 36,046,173 | | $ | 12,921,197 |
17
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
7. Distributions to Shareholders - continued
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards | | | Total | |
| | | | |
| $(133) | | $ | — | | $ | (69,853,705 | ) | | $ | (82,769,367 | ) | | $ | (152,623,205 | ) |
8. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
9. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
18
| | |
| Van Kampen Comstock Portfolio | | For the period ended 6/30/09 |
| Managed by Morgan Stanley Investment Management, Inc. (d/b/a Van Kampen) |
Portfolio Manager Commentary
Performance
During the six-month period ended June 30, 2009, the Portfolio had a return of 2.06% and 1.89% for Class A and B Shares, respectively, versus (2.87)% and 3.16% for its benchmarks, the Russell 1000® Value Index and the S&P 500® Index, respectively.
Market Environment/Conditions
The month of January started in a severe recession similar to, but deeper, than that of November and December of 2008. Indeed, some worried about the economy falling into a depression. The financial system was still under strain, and almost every measure of the economy was bad and getting worse. Against this backdrop, stocks had become very inexpensive.
In February, business at many companies continued to deteriorate, but some companies began to see stabilization in their business and a few even saw improvements. We saw a continuation in that trend through March and into the second quarter of 2009, although progress has been spotty. While some of the U.S. government’s stimulus program has begun, the majority of spending has not yet occurred.
After a substantial decline in stock prices, equities began a large rally from depressed valuation levels in early March. The S&P 500® Index was up more than 35% from its low on March 9 through June 30. Since March, a few important things have happened. First, the risk of a depression has been substantially reduced. The financial system has strengthened as some participants have reduced leverage, substantially so in some cases. In addition, large capital raisings by some banks have further improved the stability of the financial system.
While we have seen some improvements, we believe the economy still faces some real risks and challenges. Probably the greatest headwind is from reduced consumer spending. In recent years, the American consumer has been spending too much. In fact, for a brief time last August, the American consumer spent more than they made in income. Today, with the shock of the economic downturn and reduced stock portfolio and home value wealth, the consumer is spending less and saving more.
Portfolio Review/Current Positioning
Relative to the Russell 1000® Value Index, the primary positive contributors were in technology, consumer discretionary, and health care. Within technology, an overweight to the sector added to relative gains, with a number of stocks driving performance, including holdings in the hardware, internet, and semiconductor industries, among others. We believe the technology companies held by the Portfolio demonstrate compelling businesses characteristics with their attractive operating margins, high return on equity, and conservative balance sheets with usually more cash than debt. The companies were extraordinarily inexpensive and remain attractively valued, in our opinion.
An overweight position in consumer discretionary also was advantageous. Within the sector, the media stocks helped performance. In our view, these media stocks are attractively valued and may benefit from an improvement in the advertising environment. However, a large percentage of the companies’ revenues are driven by more stable sources such as cable networks. In addition, the companies have
improved capital allocation as they have made fewer acquisitions than they did years ago.
Stock selection and overweight position in the health care sector was the third largest contributor. Here, acquisitions of two drug companies, Wyeth and Schering-Plough, benefited performance. While we do not invest based on takeovers, our experience has been that investing in inexpensive stocks has led to a higher likelihood of investing in companies that are eventually acquired.
The only meaningful detractor from performance relative to the Russell 1000® Value Index during the period was in the financial sector. Stock selection dampened relative returns driven chiefly by a property and casualty company. While this company and others in the insurance space have gained some market share from AIG, the gain was less than expected. However, this property and casualty stock remains attractively valued with a very favorable risk/return profile, in our opinion.
Relative to the S&P 500® Index, the main contributors to performance during the period were stock selection in the health care sector and an overweight position in the consumer discretionary sector. Conversely, the Portfolio’s performance was hurt by stock selection in the financial sector and an underweight in the technology sector.
In closing, we want to thank you for the trust that you have placed in us.
B. Robert Baker, Jr., Managing Director
Jason S. Leder, Managing Director
Kevin C. Holt, Managing Director
James N. Warwick, Executive Director
Devin E. Armstrong, Executive Director
Morgan Stanley Investment Management, Inc. (d/b/a Van Kampen)
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
1
| | |
| Van Kampen Comstock Portfolio | | For the period ended 6/30/09 |
| Managed by Morgan Stanley Investment Management, Inc. (d/b/a Van Kampen) |
Portfolio Manager Commentary (continued)
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
Chubb Corp. (The) | | 4.49% |
Viacom, Inc.—Class B | | 3.71% |
Comcast Corp.—Class A | | 3.57% |
International Paper Co. | | 3.46% |
eBay, Inc. | | 2.76% |
Cadbury Plc (ADR) | | 2.75% |
JPMorgan Chase & Co. | | 2.70% |
Schering-Plough Corp. | | 2.59% |
Time Warner, Inc. | | 2.35% |
Verizon Communications, Inc. | | 2.34% |
Portfolio Composition (% of portfolio market value)
As of 6/30/09
2
| | |
| Van Kampen Comstock Portfolio | | For the period ended 6/30/09 |
| Managed by Morgan Stanley Investment Management, Inc. (d/b/a Van Kampen) |
Portfolio Manager Commentary (continued)
Van Kampen Comstock Portfolio managed by
Morgan Stanley Investment Management, Inc. (d/b/a Van Kampen) vs. Russell 1000® Value Index1 and S&P 500® Index2
Growth Based on $10,000+
| | | | | | | | | | | | | | |
| | | | | Average Annual Return3
(for the period ended 6/30/09) | |
| | | | | 6 Months | | | 1 Year | | | 3 Year | | | Since
Inception4 | |
| — | | Van Kampen Comstock Portfolio—Class A | | 2.06 | % | | -21.98 | % | | -10.47 | % | | -5.53 | % |
| | Class B | | 1.89 | % | | -22.07 | % | | -10.67 | % | | -5.75 | % |
| — | | Russell 1000® Value Index1 | | -2.87 | % | | -29.03 | % | | -11.11 | % | | -4.78 | % |
| - - | | S&P 500® Index2 | | 3.16 | % | | -26.21 | % | | -8.22 | % | | -3.35 | % |
+The chart reflects the performance of Class A shares of the Portfolio. The performance of Class A shares will differ from that of the other class of shares because of the difference in expenses paid by policyholders investing in the different share classes.
1The Russell 1000® Value Index is an unmanaged measure of the largest capitalized U.S. domiciled companies with a less than average growth orientation. Companies in this Index generally have low price-to-book ratios and price-to-earning ratios, higher dividend yields and lower forecasted growth values.
2The S&P 500® Index is an unmanaged index consisting of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value weighted index (stock price times number of shares outstanding), with each stock’s weight in the Index proportionate to its market value.
3“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
4Inception of Class A and Class B shares is 5/2/05. Index returns are based on an inception date of 5/2/05.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Indexes do not include fees or expenses and are not available for direct investment.
3
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| Van Kampen Comstock Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.64% | | $ | 1,000.00 | | $ | 1,020.60 | | $ | 3.21 |
Hypothetical | | 0.64% | | | 1,000.00 | | | 1,021.62 | | | 3.21 |
| | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class B | | | | | | | | | | | |
Actual | | 0.91% | | $ | 1,000.00 | | $ | 1,018.90 | | $ | 4.56 |
Hypothetical | | 0.91% | | | 1,000.00 | | | 1,020.28 | | | 4.56 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
4
Met Investors Series Trust
Van Kampen Comstock Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Common Stocks - 93.9% |
| Beverages - 2.3% |
Coca-Cola Co. | | 333,404 | | $ | 16,000,058 |
Dr Pepper Snapple Group, Inc.* | | 390,283 | | | 8,270,097 |
| | | | | |
| | | | | 24,270,155 |
| | | | | |
| Capital Markets - 3.0% |
Bank of New York Mellon Corp. | | 835,372 | | | 24,484,753 |
Goldman Sachs Group, Inc. (The) | | 53,171 | | | 7,839,532 |
| | | | | |
| | | | | 32,324,285 |
| | | | | |
| Chemicals - 1.1% |
E.I. du Pont de Nemours & Co. | | 440,854 | | | 11,294,679 |
| | | | | |
| Commercial Banks - 2.3% |
PNC Financial Services Group, Inc. | | 260,011 | | | 10,091,027 |
U.S. Bancorp | | 340,019 | | | 6,093,140 |
Wells Fargo & Co. | | 357,619 | | | 8,675,837 |
| | | | | |
| | | | | 24,860,004 |
| | | | | |
| Communications Equipment - 1.3% |
Cisco Systems, Inc.* | | 715,289 | | | 13,332,987 |
| | | | | |
| Computers & Peripherals - 4.7% |
Dell, Inc.*(a) | | 1,741,678 | | | 23,913,239 |
Hewlett-Packard Co. | | 302,597 | | | 11,695,374 |
International Business Machines Corp. | | 133,154 | | | 13,903,941 |
| | | | | |
| | | | | 49,512,554 |
| | | | | |
| Diversified Financial Services - 3.7% |
Bank of America Corp. | | 822,051 | | | 10,851,073 |
JPMorgan Chase & Co. | | 841,577 | | | 28,706,192 |
| | | | | |
| | | | | 39,557,265 |
| | | | | |
| Diversified Telecommunication Services - 3.7% |
AT&T, Inc. | | 586,697 | | | 14,573,554 |
Verizon Communications, Inc. | | 809,736 | | | 24,883,187 |
| | | | | |
| | | | | 39,456,741 |
| | | | | |
| Electrical Equipment - 0.5% |
Emerson Electric Co. | | 164,125 | | | 5,317,650 |
| | | | | |
| Electronic Equipment, Instruments & Components - 0.3% |
Cognex Corp.(a) | | 227,490 | | | 3,214,434 |
Flextronics International, Ltd.* | | 38,675 | | | 158,954 |
| | | | | |
| | | | | 3,373,388 |
| | | | | |
| Energy Equipment & Services - 1.2% |
Halliburton Co. | | 609,831 | | | 12,623,502 |
| | | | | |
| Food & Staples Retailing - 3.4% |
CVS Caremark Corp. | | 415,485 | | | 13,241,507 |
Wal-Mart Stores, Inc. | | 461,841 | | | 22,371,578 |
| | | | | |
| | | | | 35,613,085 |
| | | | | |
| Food Products - 6.9% |
Cadbury Plc (ADR)(a) | | 848,767 | | | 29,197,585 |
Kraft Foods, Inc. - Class A | | 845,523 | | | 21,425,553 |
Unilever N.V. | | 929,126 | | | 22,466,266 |
| | | | | |
| | | | | 73,089,404 |
| | | | | |
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Health Care Equipment & Supplies - 1.2% |
Boston Scientific Corp.* | | 1,299,663 | | $ | 13,178,583 |
| | | | | |
|
| Health Care Providers & Services - 3.0% |
Cardinal Health, Inc. | | 613,675 | | | 18,747,771 |
UnitedHealth Group, Inc. | | 233,907 | | | 5,842,997 |
WellPoint, Inc.* | | 144,249 | | | 7,340,832 |
| | | | | |
| | | | | 31,931,600 |
| | | | | |
| Household Products - 0.6% |
Kimberly-Clark Corp. | | 66,676 | | | 3,495,823 |
Procter & Gamble Co. (The) | | 60,600 | | | 3,096,660 |
| | | | | |
| | | | | 6,592,483 |
| | | | | |
| Industrial Conglomerates - 1.0% |
General Electric Co. | | 944,711 | | | 11,072,013 |
| | | | | |
| Insurance - 8.5% |
Aflac, Inc. | | 117,527 | | | 3,653,914 |
Berkshire Hathaway, Inc. - Class B* | | 3,011 | | | 8,719,043 |
Chubb Corp. (The) | | 1,195,485 | | | 47,675,942 |
Torchmark Corp. | | 205,973 | | | 7,629,240 |
Travelers Cos., Inc. (The) | | 552,698 | | | 22,682,726 |
| | | | | |
| | | | | 90,360,865 |
| | | | | |
| Internet & Catalog Retail - 0.5% |
Liberty Media Holding Corp. - Interactive - Class A* | | 1,029,377 | | | 5,157,179 |
| | | | | |
| Internet Software & Services - 3.2% |
eBay, Inc.* | | 1,711,174 | | | 29,312,411 |
Yahoo!, Inc.*(a) | | 275,246 | | | 4,310,352 |
| | | | | |
| | | | | 33,622,763 |
| | | | | |
| IT Services - 1.3% |
Accenture, Ltd. - Class A | | 155,200 | | | 5,192,992 |
Computer Sciences Corp.* | | 73,191 | | | 3,242,361 |
Western Union Co. | | 337,305 | | | 5,531,802 |
| | | | | |
| | | | | 13,967,155 |
| | | | | |
| Media - 13.5% |
Comcast Corp. - Class A | | 2,619,031 | | | 37,949,759 |
Liberty Media Corp. - Entertainment* | | 573,549 | | | 15,342,436 |
News Corp. - Class B(a) | | 1,547,641 | | | 16,358,565 |
Time Warner Cable, Inc. | | 305,900 | | | 9,687,854 |
Time Warner, Inc. | | 989,985 | | | 24,937,722 |
Viacom, Inc. - Class B* | | 1,735,012 | | | 39,384,772 |
| | | | | |
| | | | | 143,661,108 |
| | | | | |
| Metals & Mining - 1.3% |
Alcoa, Inc.(a) | | 1,336,569 | | | 13,806,758 |
| | | | | |
| Multiline Retail - 1.8% |
JC Penney Co., Inc. | | 283,168 | | | 8,129,753 |
Macy’s, Inc.(a) | | 595,106 | | | 6,998,447 |
Target Corp. | | 95,122 | | | 3,754,465 |
| | | | | |
| | | | | 18,882,665 |
| | | | | |
See accompanying notes to financial statements
5
Met Investors Series Trust
Van Kampen Comstock Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Oil, Gas & Consumable Fuels - 2.4% |
BP Plc (ADR)(a) | | 125,961 | | $ | 6,005,821 |
Chevron Corp. | | 83,400 | | | 5,525,250 |
ConocoPhillips | | 149,170 | | | 6,274,090 |
Total S.A. (ADR) | | 147,970 | | | 8,024,413 |
| | | | | |
| | | | | 25,829,574 |
| | | | | |
| Paper & Forest Products - 3.5% |
International Paper Co. | | 2,427,611 | | | 36,729,754 |
| | | | | |
| Pharmaceuticals - 11.4% |
Abbott Laboratories | | 161,480 | | | 7,596,019 |
Bristol-Myers Squibb Co. | | 1,122,886 | | | 22,805,815 |
Eli Lilly & Co. | | 363,809 | | | 12,602,344 |
GlaxoSmithKline Plc (ADR) | | 134,323 | | | 4,746,975 |
Pfizer, Inc. | | 1,404,449 | | | 21,066,735 |
Roche Holding AG (ADR) | | 214,702 | | | 7,323,485 |
Schering-Plough Corp. | | 1,096,708 | | | 27,549,305 |
Wyeth | | 389,713 | | | 17,689,073 |
| | | | | |
| | | | | 121,379,751 |
| | | | | |
| Semiconductors & Semiconductor Equipment - 2.0% |
Intel Corp. | | 799,965 | | | 13,239,421 |
KLA-Tencor Corp.(a) | | 336,446 | | | 8,495,261 |
| | | | | |
| | | | | 21,734,682 |
| | | | | |
| Software - 0.8% |
Microsoft Corp. | | 349,863 | | | 8,316,244 |
| | | | | |
| Specialty Retail - 1.7% |
Home Depot, Inc. (The)(a) | | 394,729 | | | 9,327,446 |
Lowe’s Cos., Inc. | | 437,079 | | | 8,483,704 |
| | | | | |
| | | | | 17,811,150 |
| | | | | |
| Tobacco - 1.8% |
Altria Group, Inc. | | 489,509 | | | 8,023,052 |
Philip Morris International, Inc. | | 252,916 | | | 11,032,196 |
| | | | | |
| | | | | 19,055,248 |
| | | | | |
Total Common Stocks
(Cost $1,015,930,593) | | | | | 997,715,274 |
| | | | | |
| | | | | | | |
Security
Description | | Shares/Par
Amount | | Value | |
| | | | | | | |
| |
| Short-Term Investments - 10.7% | | | | |
| Mutual Funds - 4.7% | |
State Street Navigator Securities Lending Trust Prime Portfolio(b) | | | 49,813,283 | | $ | 49,813,283 | |
| | | | | | | |
| Repurchase Agreement - 6.0% | |
State Street Bank & Trust Co.,
Repurchase Agreement,
dated 06/30/09 at 0.010% to be repurchased at $63,740,018
on 07/01/09 collateralized by $64,695,000 FNMA at 1.722% due 05/10/11 with a value of $65,018,475. | | $ | 63,740,000 | | | 63,740,000 | |
| | | | | | | |
Total Short-Term Investments
(Cost $113,553,283) | | | | | | 113,553,283 | |
| | | | | | | |
| |
TOTAL INVESTMENTS - 104.6%
(Cost $1,129,483,876) | | | 1,111,268,557 | |
| | | | | | | |
| |
| Other Assets and Liabilities (net) - (4.6)% | | | (48,767,097 | ) |
| | | | | | | |
| | |
| NET ASSETS - 100.0% | | | | | $ | 1,062,501,460 | |
| | | | | | | |
Portfolio Footnotes:
| * | | Non-income producing security |
| (a) | | All or a portion of security is on loan. |
| (b) | | Represents investment of collateral received from securities lending transactions. |
ADR - American Depositary Receipt
FNMA - Federal National Mortgage Association
See accompanying notes to financial statements
6
Met Investors Series Trust
Van Kampen Comstock Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1—quotedprices in active markets for identical securities
Level 2—othersignificant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significantunobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Common Stocks | | | | | | | | | | | | |
Beverages | | $ | 24,270,155 | | $ | — | | $ | — | | $ | 24,270,155 |
Capital Markets | | | 32,324,285 | | | — | | | — | | | 32,324,285 |
Chemicals | | | 11,294,679 | | | — | | | — | | | 11,294,679 |
Commercial Banks | | | 24,860,004 | | | — | | | — | | | 24,860,004 |
Communications Equipment | | | 13,332,987 | | | — | | | — | | | 13,332,987 |
Computers & Peripherals | | | 49,512,554 | | | — | | | — | | | 49,512,554 |
Diversified Financial Services | | | 39,557,265 | | | — | | | — | | | 39,557,265 |
Diversified Telecommunication Services | | | 39,456,741 | | | — | | | — | | | 39,456,741 |
Electrical Equipment | | | 5,317,650 | | | — | | | — | | | 5,317,650 |
Electronic Equipment, Instruments & Components | | | 3,373,388 | | | — | | | — | | | 3,373,388 |
Energy Equipment & Services | | | 12,623,502 | | | — | | | — | | | 12,623,502 |
Food & Staples Retailing | | | 35,613,085 | | | — | | | — | | | 35,613,085 |
Food Products | | | 73,089,404 | | | — | | | — | | | 73,089,404 |
Health Care Equipment & Supplies | | | 13,178,583 | | | — | | | — | | | 13,178,583 |
Health Care Providers & Services | | | 31,931,600 | | | — | | | — | | | 31,931,600 |
Household Products | | | 6,592,483 | | | — | | | — | | | 6,592,483 |
Industrial Conglomerates | | | 11,072,013 | | | — | | | — | | | 11,072,013 |
Insurance | | | 90,360,865 | | | — | | | — | | | 90,360,865 |
Internet & Catalog Retail | | | 5,157,179 | | | — | | | — | | | 5,157,179 |
Internet Software & Services | | | 33,622,763 | | | — | | | — | | | 33,622,763 |
IT Services | | | 13,967,155 | | | — | | | — | | | 13,967,155 |
Media | | | 143,661,108 | | | — | | | — | | | 143,661,108 |
Metals & Mining | | | 13,806,758 | | | — | | | — | | | 13,806,758 |
Multiline Retail | | | 18,882,665 | | | — | | | — | | | 18,882,665 |
Oil, Gas & Consumable Fuels | | | 25,829,574 | | | — | | | — | | | 25,829,574 |
Paper & Forest Products | | | 36,729,754 | | | — | | | — | | | 36,729,754 |
Pharmaceuticals | | | 121,379,751 | | | — | | | — | | | 121,379,751 |
Semiconductors & Semiconductor Equipment | | | 21,734,682 | | | — | | | — | | | 21,734,682 |
Software | | | 8,316,244 | | | — | | | — | | | 8,316,244 |
Specialty Retail | | | 17,811,150 | | | — | | | — | | | 17,811,150 |
Tobacco | | | 19,055,248 | | | — | | | — | | | 19,055,248 |
Total Common Stocks | | | 997,715,274 | | | — | | | — | | | 997,715,274 |
Short-Term Investments | | | | | | | | | | | | |
Mutual Funds | | | 49,813,283 | | | — | | | — | | | 49,813,283 |
Repurchase Agreement | | | — | | | 63,740,000 | | | — | | | 63,740,000 |
Total Short-Term Investments | | | 49,813,283 | | | 63,740,000 | | | — | | | 113,553,283 |
TOTAL INVESTMENTS | | $ | 1,047,528,557 | | $ | 63,740,000 | | $ | — | | $ | 1,111,268,557 |
See accompanying notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| Van Kampen Comstock Portfolio | | | |
| Assets | | | | |
Investments, at value (a)(b) | | $ | 1,047,528,557 | |
Repurchase Agreement | | | 63,740,000 | |
Cash | | | 461 | |
Receivable for investments sold | | | 1,096,497 | |
Receivable for Trust shares sold | | | 191,896 | |
Dividends receivable | | | 1,502,117 | |
Interest receivable | | | 18 | |
| | | | |
Total assets | | | 1,114,059,546 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 422,376 | |
Trust shares redeemed | | | 576,856 | |
Distribution and services fees—Class B | | | 84,572 | |
Collateral for securities on loan | | | 49,813,283 | |
Management fee | | | 539,580 | |
Administration fee | | | 6,290 | |
Custodian and accounting fees | | | 22,690 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 89,012 | |
| | | | |
Total liabilities | | | 51,558,086 | |
| | | | |
| Net Assets | | $ | 1,062,501,460 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 1,890,020,941 | |
Accumulated net realized loss | | | (822,588,963 | ) |
Unrealized depreciation on investments | | | (18,215,319 | ) |
Undistributed net investment income | | | 13,284,801 | |
| | | | |
Total | | $ | 1,062,501,460 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 651,426,251 | |
| | | | |
Class B | | | 411,075,209 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 96,058,230 | |
| | | | |
Class B | | | 60,705,590 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 6.78 | |
| | | | |
Class B | | | 6.77 | |
| | | | |
| | | | | |
(a) Investments at cost, excluding repurchase agreement | | $ | 1,065,743,876 | |
(b) Includes cash collateral for securities loaned of | | | 49,813,283 | |
See accompanying notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| Van Kampen Comstock Portfolio | | | |
| Investment Income | | | | |
Dividends (1) | | $ | 17,109,991 | |
Interest (2) | | | 256,561 | |
| | | | |
Total investment income | | | 17,366,552 | |
| | | | |
| Expenses | | | | |
Management fee | | | 3,609,416 | |
Administration fees | | | 49,440 | |
Custodian and accounting fees | | | 50,006 | |
Distribution and services fees—Class B | | | 244,545 | |
Audit and tax services | | | 21,306 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 56,166 | |
Insurance | | | 18,730 | |
Other | | | 5,592 | |
| | | | |
Total expenses | | | 4,081,634 | |
| | | | |
Net investment income | | | 13,284,918 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments and Futures Contracts | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | (519,741,261 | ) |
Futures contracts | | | 3,169,686 | |
| | | | |
Net realized loss on investments and futures contracts | | | (516,571,575 | ) |
| | | | |
Net change in unrealized appreciation on: | | | | |
Investments | | | 514,679,592 | |
| | | | |
Net change in unrealized appreciation on investments | | | 514,679,592 | |
| | | | |
Net realized and unrealized loss on investments and futures contracts | | | (1,891,983 | ) |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 11,392,935 | |
| | | | |
| | | | | |
(1) Dividend income is net of foreign withholding taxes of: | | $ | 186,181 | |
(2) Interest income includes securities lending net income of: | | | 252,206 | |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| Van Kampen Comstock Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations: | | | | | | | | |
Net investment income | | $ | 13,284,918 | | | $ | 41,295,694 | |
Net realized loss on investments and futures contracts | | | (516,571,575 | ) | | | (303,763,987 | ) |
Net change in unrealized appreciation (depreciation) on investments | | | 514,679,592 | | | | (498,917,517 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 11,392,935 | | | | (761,385,810 | ) |
| | | | | | | | |
| Distributions to Shareholders: | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | (38,246,397 | ) | | | (32,673,417 | ) |
Class B | | | (2,985,227 | ) | | | (2,427,390 | ) |
From net realized gains | | | | | | | | |
Class A | | | — | | | | (61,910,308 | ) |
Class B | | | — | | | | (5,354,631 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (41,231,624 | ) | | | (102,365,746 | ) |
| | | | | | | | |
| Capital Share Transactions: | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 142,806,541 | | | | 295,042,539 | |
Class B | | | 302,160,173 | | | | 37,691,332 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | 38,246,397 | | | | 94,583,725 | |
Class B | | | 2,985,227 | | | | 7,782,021 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (743,072,837 | ) | | | (174,505,462 | ) |
Class B | | | (16,021,086 | ) | | | (32,762,386 | ) |
| | | | | | | | |
Net increase (decrease) in net assets from capital share transactions | | | (272,895,585 | ) | | | 227,831,769 | |
| | | | | | | | |
| Net Decrease in Net Assets | | | (302,734,274 | ) | | | (635,919,787 | ) |
Net assets at beginning of period | | | 1,365,235,734 | | | | 2,001,155,521 | |
| | | | | | | | |
Net assets at end of period | | $ | 1,062,501,460 | | | $ | 1,365,235,734 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 13,284,801 | | | $ | 41,231,507 | |
| | | | | | | | |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | |
| | | | | |
| | | | | | | | | | | | | | | | |
| Van Kampen Comstock Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005(b) | |
| Net Asset Value, Beginning of Period | | $ | 6.85 | | | $ | 11.26 | | | $ | 11.95 | | | $ | 10.40 | | | $ | 10.00 | |
| | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations: | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.07 | | | | 0.21 | | | | 0.25 | | | | 0.23 | | | | 0.14 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.05 | | | | (4.06 | ) | | | (0.49 | ) | | | 1.45 | | | | 0.45 | |
| | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.12 | | | | (3.85 | ) | | | (0.24 | ) | | | 1.68 | | | | 0.59 | |
| | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.19 | ) | | | (0.19 | ) | | | (0.19 | ) | | | (0.00 | )+ | | | (0.11 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (0.37 | ) | | | (0.26 | ) | | | (0.13 | ) | | | (0.08 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.19 | ) | �� | | (0.56 | ) | | | (0.45 | ) | | | (0.13 | ) | | | (0.19 | ) |
| | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 6.78 | | | $ | 6.85 | | | $ | 11.26 | | | $ | 11.95 | | | $ | 10.40 | |
| | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 2.06 | % | | | (35.79 | )% | | | (2.31 | )% | | | 16.34 | % | | | 5.93 | % |
Ratio of Expenses to Average Net Assets | | | 0.64 | %* | | | 0.61 | % | | | 0.61 | % | | | 0.67 | % | | | 0.68 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.64 | %* | | | 0.61 | % | | | 0.61 | % | | | 0.67 | % | | | 0.68 | %* |
Ratio of Net investment Income to Average Net Assets | | | 2.32 | %* | | | 2.35 | % | | | 2.04 | % | | | 2.11 | % | | | 2.02 | %* |
Portfolio Turnover Rate | | | 25.9 | % | | | 40.2 | % | | | 22.2 | % | | | 32.7 | % | | | 75.7 | % |
Net Assets, End of Period (in millions) | | $ | 651.4 | | | $ | 1,257.6 | | | $ | 1,839.2 | | | $ | 1,210.1 | | | $ | 880.4 | |
| |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005(b) | |
| Net Asset Value, Beginning of Period | | $ | 6.83 | | | $ | 11.22 | | | $ | 11.91 | | | $ | 10.39 | | | $ | 10.00 | |
| | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations: | | | | | | | | | | | | | | | | | | | | |
Net Investment Income(a) | | | 0.06 | | | | 0.19 | | | | 0.22 | | | | 0.20 | | | | 0.12 | |
Net Realized/Unrealized Gain (Loss) on Investments | | | 0.05 | | | | (4.04 | ) | | | (0.48 | ) | | | 1.45 | | | | 0.46 | |
| | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.11 | | | | (3.85 | ) | | | (0.26 | ) | | | 1.65 | | | | 0.58 | |
| | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.17 | ) | | | (0.17 | ) | | | (0.17 | ) | | | — | | | | (0.11 | ) |
Distributions from Net Realized Capital Gains | | | — | | | | (0.37 | ) | | | (0.26 | ) | | | (0.13 | ) | | | (0.08 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.17 | ) | | | (0.54 | ) | | | (0.43 | ) | | | (0.13 | ) | | | (0.19 | ) |
| | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 6.77 | | | $ | 6.83 | | | $ | 11.22 | | | $ | 11.91 | | | $ | 10.39 | |
| | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 1.89 | % | | | (35.91 | )% | | | (2.49 | )% | | | 16.05 | % | | | 5.75 | % |
Ratio of Expenses to Average Net Assets | | | 0.91 | %* | | | 0.86 | % | | | 0.85 | % | | | 0.92 | % | | | 0.93 | %* |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.91 | %* | | | 0.86 | % | | | 0.86 | % | | | 0.92 | % | | | 0.93 | %* |
Ratio of Net Investment Income to Average Net Assets | | | 1.83 | %* | | | 2.10 | % | | | 1.80 | % | | | 1.85 | % | | | 1.71 | %* |
Portfolio Turnover Rate | | | 25.9 | % | | | 40.2 | % | | | 22.2 | % | | | 32.7 | % | | | 75.7 | % |
Net Assets, End of Period (in millions) | | $ | 411.1 | | | $ | 107.7 | | | $ | 162.0 | | | $ | 145.3 | | | $ | 58.8 | |
| + | | Rounds to less than $0.005 per share |
| (a) | | Per share amounts based on average shares outstanding during the period. |
| (b) | | Commencement of operations—05/02/2005. |
See accompanying notes to financial statements
11
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is Van Kampen Comstock Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A and B Shares are currently offered by the Portfolio. Class C and E Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
12
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | | |
Expiring
12/31/2016 | | Total |
| |
| $ | 282,014,371 | | $ | 282,014,371 |
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
G. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
H. Financial Derivative Instruments - Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133, (“FAS 161” or the “Statement”) requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. The disclosure requirements of FAS 161 distinguish between derivatives which are accounted for as “hedges” under FAS 133 and those that do not qualify for such accounting. The Portfolio reflects derivatives at fair value and recognizes changes in fair value through the Statement of Operations, and as such do not qualify for FAS 133 hedge accounting treatment.
I. Futures Contracts - The Portfolio may buy and sell futures contracts (on recognized exchanges) as a hedge, to maintain exposure to the broad equity markets, manage exposure to the securities markets or to movements in interest rates or to enhance return. The Portfolio may be subject to equity price risk, interest rate risk, and foreign currency exchange rate risk in the normal course of pursuing its investment objectives.
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
Futures contracts are agreements to buy or sell a security, or deliver a final cash settlement price in connection with an index, interest rate, currency, or other contracts not calling for physical delivery, for a set price in the future. The Portfolio must post an amount equal to a portion of the total market value of the futures contract as futures variation margin, which is returned when the Portfolio’s obligations under the contract have been satisfied. From time to time thereafter, the Portfolio may have to post variation margin to maintain this amount as the market value of the contract fluctuates. Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities. During the period ended June 30, 2009, the Portfolio entered into Equity Index Futures which were subject to equity price risk. At June 30, 2009, the Portfolio did not have any open futures contracts. For the period ended June 30, 2009, the Portfolio had realized gains in the amount of $3,169,686 which is located in Net realized gain (loss) on Futures Contracts in the Statement of Operations.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with Morgan Stanley Investment Management, Inc., d/b/a Van Kampen, (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | Average Daily Net Assets |
| | |
| $ | 3,609,416 | | 0.65% | | First $500 Million |
| | |
| | | 0.60% | | $500 Million to $1 Billion |
| | |
| | | 0.525% | | Over $1 Billion |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A and Class B Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the Manager. The Class B distribution plan provides that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% of the average net assets of the Portfolio attributable to its Class B Shares in respect to activities primarily intended to result in the sale of Class B Shares. However, under the Class B distribution agreement, payments to the Distributor for activities pursuant to the Class B distribution plan are currently limited to payments at an annual rate equal to 0.25% of average daily net assets of the Portfolio attributable to its Class B Shares.
Under terms of the Class B distribution plan and distribution agreement, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B Shares for such entities’ fees or expenses incurred.
During the period ended June 30, 2009 the Portfolio paid brokerage commissions to affiliated brokers/dealers:
| | | |
Affiliate | | Commission |
| |
| Morgan Stanley & Co., Inc. | | $ | 5,066 |
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolio, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
(Decrease)
in Shares
Outstanding | | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 183,463,534 | | 23,148,493 | | 6,178,739 | | (116,732,536 | ) | | (87,405,304 | ) | | 96,058,230 |
12/31/2008 | | 163,319,115 | | 31,064,241 | | 9,392,624 | | (20,312,446 | ) | | 20,144,419 | | | 183,463,534 |
| | | | | | |
Class B | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 15,769,953 | | 46,968,508 | | 483,046 | | (2,515,917 | ) | | 44,935,637 | | | 60,705,590 |
12/31/2008 | | 14,443,577 | | 4,212,675 | | 774,330 | | (3,660,629 | ) | | 1,326,376 | | | 15,769,953 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchase | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 272,831,485 | | $ | — | | $ | 841,589,181 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $1,129,483,876 | | $ | 51,903,253 | | $ | (70,811,572 | ) | | $ | (18,215,319 | ) |
6. Securities Lending
As of June 30, 2009, the Portfolio had loaned securities which were collateralized by short-term investments. The value of securities on loan and the value of the related collateral were as follows:
| | | | | | | | | |
Value of
Securities | | Value of
Cash
Collateral | | Value of
Non-Cash
Collateral* | | Total
Collateral |
| | | |
| $48,827,210 | | $ | 49,813,283 | | $ | — | | $ | 49,813,283 |
* The Portfolio cannot repledge or resell this collateral. The non-cash collateral is typically comprised of government securities and/or bank letters of credit.
7. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $ | 43,649,078 | | $ | 34,621,692 | | $ | 58,716,668 | | $ | 20,062,145 | | $ | 102,365,746 | | $ | 54,683,837 |
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
7. Distributions to Shareholders - continued
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards | | | Total | |
| | | | |
| $41,231,507 | | $ | — | | $ | (556,897,928 | ) | | $ | (282,014,371 | ) | | $ | (797,680,792 | ) |
8. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
9. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS 157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
16
| | |
| Van Kampen Mid Cap Growth Portfolio | | For the period ended 6/30/09 |
| Managed by Morgan Stanley Investment Management, Inc. (d/b/a Van Kampen) |
Portfolio Manager Commentary
Performance
During the period ended June 30, 2009, the Portfolio had a return of 23.85% and 23.52% for Class A and B Shares, respectively, versus 16.61% for its benchmark, the Russell Midcap® Growth Index.
Market Environment/Conditions
Portfolio performance rebounded significantly from the second half of 2008, yet we have made few changes to the names held. While conditions do appear to have improved so far this year, we believe that there has been little visibility and the risk of potential volatility still exists. Last year we felt that market volatility was far greater than fundamental business volatility. The market was fearful and rotational, and there was little differentiation on fundamentals and quality. However, in our view, we have started to see some focus on company fundamentals. In this environment, our investment team continued to focus on quality—the nature and sustainability of competitive advantage and balance sheet strength.
Portfolio Review/Current Positioning
The Portfolio’s outperformance of the Index during the period was driven primarily by three sectors. Stock selection and an overweight position in consumer discretionary had by far the largest positive effect on relative performance. Within the sector, top contributors were commercial services and consumer electronics holdings. Although an underweight position in the technology sector detracted from relative performance, it was more than offset by good stock selection, led by the computer services software and systems segment. Both stock selection and an overweight in financial services were additive to relative results, boosted by exposure to rental and leasing services.
Although the Portfolio outperformed the Index, there were two areas that were the most detrimental to overall performance. Stock selection in the materials and processing sector detracted the most from relative performance, chiefly in the Portfolio’s exposure to agriculture fishing and ranching. Stock selection and an overweight position in autos and transportation also hurt relative performance. Within the sector, transportation logistics names were the primary area of weakness.
Dennis Lynch, Managing Director
David Cohen, Managing Director
Sam Chainani, Managing Director
Alexander Norton, Executive Director
Jason Yeung, Executive Director
Armistead Nash, Executive Director
Morgan Stanley Investment Management, Inc. (d/b/a Van Kampen)
This commentary may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates, and information about possible or future results related to the Portfolio, market or regulatory developments. The views expressed above are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed
herein. The views expressed above are subject to change at any time based upon economic, market, or other conditions and the subadvisory firm undertakes no obligation to update the views expressed herein. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. The views expressed above (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Portfolio’s trading intent. Information about the Portfolio’s holdings, asset allocation or country diversification is historical and is not an indication of future Portfolio composition, which may vary. Direct investment in any index is not possible. The performance of any index mentioned in this commentary has not been adjusted for ongoing management, distribution and operating expenses, and sales charges applicable to mutual fund investments. In addition, the returns do not reflect additional fees charged by separate accounts or variable insurance contracts that an investor in the portfolio may pay. If these additional fees were reflected, performance would have been lower.
Top Ten Holdings by Market Value
As of 6/30/09
| | |
| Description | | Percent of
Net Assets |
Southwestern Energy Co. | | 4.47% |
Tencent Holdings, Ltd. | | 4.01% |
Ultra Petroleum Corp. | | 3.90% |
Illumina, Inc. | | 3.84% |
Baidu.com (ADR) | | 3.58% |
Ctrip.com International, Ltd. (ADR) | | 3.19% |
Li & Fung, Ltd. | | 2.79% |
Expeditors International of Washington, Inc. | | 2.73% |
Redecard S.A. | | 2.60% |
Priceline.com, Inc. | | 2.60% |
Portfolio Composition (% of portfolio market value)
As of 6/30/09
1
| | |
| Van Kampen Mid Cap Growth Portfolio | | For the period ended 6/30/09 |
| Managed by Morgan Stanley Investment Management, Inc. (d/b/a Van Kampen) |
Portfolio Manager Commentary (continued)
Van Kampen Mid Cap Growth Portfolio managed by
Morgan Stanley Investment Management, Inc. (d/b/a Van Kampen) vs. Russell Midcap® Growth Index1
Growth Based on $10,000+
| | | | | | | | | | | | |
| | | | | Average Annual Return2 (for the period ended 6/30/09) |
| | | | | 6 Months | | 1 Year | | 3 Year | | 5 Year | | Since
Inception3 |
| | Van Kampen Mid Cap Growth Portfolio—Class A | | 23.85% | | -26.94% | | -4.68% | | 0.28% | | 0.16% |
| — | | Class B | | 23.52% | | -27.12% | | -4.94% | | 0.02% | | -0.63% |
| - - | | Russell Midcap® Growth Index1 | | 16.61% | | -30.33% | | -7.93% | | -0.44% | | -1.45% |
+The chart reflects the performance of Class B shares of the Portfolio. The performance of Class B shares will differ from that of the other class because of the difference in expenses paid by policyholders investing in the different share classes.
1The Russell Midcap® Growth Index is an unmanaged measure of performance of those Russell Midcap companies (the 800 smallest companies in the Russell 1000® Index) with higher price-to-book ratios and higher forecasted growth values. The stocks are also members of the Russell 1000® Growth index.
2“Average Annual Return” is calculated including reinvestment of all income dividends and capital gain distributions.
3Inception of the Class A shares is 5/1/01. Inception of the Class B shares is 2/12/01. Index returns are based on an inception date of 2/12/01.
Past performance does not guarantee future results. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, on any given day or when redeemed, may be worth more or less than their original cost. Performance numbers are net of all Portfolio expenses but do not include any insurance, sales, or administration charges of variable annuity or life insurance contracts. If these charges were included, the returns would be lower. The Index does not include fees or expenses and is not available for direct investment.
2
Met Investors Series Trust
Understanding Your Portfolio’s Expenses
Shareholder Expense Example
As a shareholder of the Portfolio, you incur ongoing costs, including management fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) (referred to as “expenses”) of investing in the Portfolio and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 through June 30, 2009.
Actual Expenses
The first line for each share class of the Portfolio in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested in the particular share class of the Portfolio, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class of the Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any fees or charges of your variable insurance product or any additional expenses that participants in certain eligible qualified plans may bear relating to the operations of their plan. Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these other costs were included, your costs would have been higher.
| | | | | | | | | | | |
| | | Annualized
Expense
Ratio | | Beginning
Account Value
1/1/09 | | Ending
Account Value
6/30/09 | | Expenses Paid
During Period*
1/1/09-6/30/09 |
| | | | | | | | | | | |
| Van Kampen Mid Cap Growth Portfolio | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | |
Class A | | | | | | | | | | | |
Actual | | 0.86% | | $ | 1,000.00 | | $ | 1,238.50 | | $ | 4.77 |
Hypothetical | | 0.86% | | | 1,000.00 | | | 1,020.53 | | | 4.31 |
| | | | | | | | | | | |
| | | | |
Class B | | | | | | | | | | | |
Actual | | 1.10% | | $ | 1,000.00 | | $ | 1,235.20 | | $ | 6.10 |
Hypothetical | | 1.10% | | | 1,000.00 | | | 1,019.34 | | | 5.51 |
| | | | | | | | | | | |
* Expenses paid are equal to the Portfolio’s annualized expense ratio for the most recent six month period, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, divided by 365 (to reflect the one-half year period.)
3
Met Investors Series Trust
Van Kampen Mid Cap Growth Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited)
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| | |
| Common Stocks - 95.6% | | | | | |
| Air Freight & Logistics - 4.8% | | | | | |
C.H. Robinson Worldwide, Inc. | | 38,445 | | $ | 2,004,907 |
Expeditors International of Washington, Inc. | | 79,757 | | | 2,659,098 |
| | | | | |
| | | | | 4,664,005 |
| | | | | |
| Capital Markets - 2.0% | | | | | |
Calamos Asset Management, Inc. - Class A | | 70,867 | | | 999,934 |
Greenhill & Co., Inc. | | 13,030 | | | 940,896 |
| | | | | |
| | | | | 1,940,830 |
| | | | | |
| Chemicals - 4.2% | | | | | |
Intrepid Potash, Inc.*(a) | | 53,447 | | | 1,500,792 |
Nalco Holding Co. | | 94,403 | | | 1,589,747 |
Rockwood Holdings, Inc.* | | 67,927 | | | 994,451 |
| | | | | |
| | | | | 4,084,990 |
| | | | | |
| Commercial & Professional Services - 1.1% |
Covanta Holding Corp.*(a) | | 64,748 | | | 1,098,126 |
| | | | | |
| Computers & Peripherals - 2.0% | | | | | |
Teradata Corp.* | | 84,631 | | | 1,982,904 |
| | | | | |
| Construction & Engineering - 1.3% |
Aecom Technology Corp.* | | 39,521 | | | 1,264,672 |
| | | | | |
| Construction Materials - 2.9% | | | | | |
Martin Marietta Materials, Inc.(a) | | 29,033 | | | 2,290,123 |
Texas Industries, Inc.(a) | | 18,171 | | | 569,843 |
| | | | | |
| | | | | 2,859,966 |
| | | | | |
| Distributors - 2.8% | | | | | |
Li & Fung, Ltd. | | 1,024,000 | | | 2,717,509 |
| | | | | |
| Diversified Consumer Services - 3.2% |
New Oriental Education & Technology Group, Inc. (ADR)*(a) | | 26,231 | | | 1,766,920 |
Strayer Education, Inc.(a) | | 6,170 | | | 1,345,739 |
| | | | | |
| | | | | 3,112,659 |
| | | | | |
| Diversified Financial Services - 5.4% | | | |
IntercontinentalExchange, Inc.* | | 18,468 | | | 2,109,784 |
Leucadia National Corp.* | | 110,495 | | | 2,330,339 |
Moody’s Corp. | | 30,173 | | | 795,059 |
| | | | | |
| | | | | 5,235,182 |
| | | | | |
| Electronic Equipment, Instruments & Components - 0.9% |
BYD Co., Ltd.* | | 218,500 | | | 883,773 |
| | | | | |
| Health Care Equipment & Supplies - 4.0% |
Gen-Probe, Inc.*(a) | | 35,134 | | | 1,510,059 |
Intuitive Surgical, Inc.*(a) | | 5,949 | | | 973,613 |
Mindray Medical International, Ltd. (ADR)(a) | | 50,607 | | | 1,412,948 |
| | | | | |
| | | | | 3,896,620 |
| | | | | |
| Hotels, Restaurants & Leisure - 8.1% | | | |
Ctrip.com International, Ltd. (ADR)* | | 66,943 | | | 3,099,461 |
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
| |
| Hotels, Restaurants & Leisure - continued | | | |
Las Vegas Sands Corp.*(a) | | 97,795 | | $ | 768,669 |
Starbucks Corp.* | | 152,986 | | | 2,124,975 |
Wynn Resorts, Ltd.*(a) | | 52,157 | | | 1,841,142 |
| | | | | |
| | | | | 7,834,247 |
| | | | | |
| Household Durables - 2.4% | | | | | |
Gafisa S.A. (ADR)(a) | | 51,190 | | | 844,635 |
Mohawk Industries, Inc.*(a) | | 15,244 | | | 543,906 |
NVR, Inc.*(a) | | 1,960 | | | 984,684 |
| | | | | |
| | | | | 2,373,225 |
| | | | | |
| Internet & Catalog Retail - 3.3% | | | | | |
Netflix, Inc.*(a) | | 17,628 | | | 728,741 |
Priceline.com, Inc.*(a) | | 22,654 | | | 2,527,054 |
| | | | | |
| | | | | 3,255,795 |
| | | | | |
| Internet Software & Services - 10.6% |
Alibaba.com, Ltd.* | | 1,011,800 | | | 1,793,796 |
Baidu.com (ADR)* | | 11,559 | | | 3,480,299 |
Equinix, Inc.*(a) | | 14,950 | | | 1,087,463 |
Tencent Holdings, Ltd. | | 336,400 | | | 3,901,623 |
| | | | | |
| | | | | 10,263,181 |
| | | | | |
| IT Services - 2.6% |
Redecard S.A. | | 164,832 | | | 2,528,458 |
| | | | | |
| Life Sciences Tools & Services - 6.4% |
Illumina, Inc.*(a) | | 96,060 | | | 3,740,576 |
Techne Corp. | | 38,627 | | | 2,464,789 |
| | | | | |
| | | | | 6,205,365 |
| | | | | |
| Media - 3.9% |
Discovery Communications, Inc. - Class C* | | 48,442 | | | 994,514 |
Groupe Aeroplan, Inc. | | 142,226 | | | 1,009,259 |
Morningstar, Inc.* | | 42,207 | | | 1,740,195 |
| | | | | |
| | | | | 3,743,968 |
| | | | | |
| Multiline Retail - 1.0% |
Sears Holdings Corp.* | | 14,286 | | | 950,305 |
| | | | | |
| Oil, Gas & Consumable Fuels - 10.1% |
Petrohawk Energy Corp.* | | 38,149 | | | 850,723 |
Range Resources Corp. | | 20,284 | | | 839,960 |
Southwestern Energy Co.*(a) | | 112,026 | | | 4,352,210 |
Ultra Petroleum Corp.* | | 97,340 | | | 3,796,260 |
| | | | | |
| | | | | 9,839,153 |
| | | | | |
| Pharmaceuticals - 1.8% |
Allergan, Inc. | | 25,759 | | | 1,225,613 |
Ironwood Pharmaceutical(b) | | 44,752 | | | 537,024 |
| | | | | |
| | | | | 1,762,637 |
| | | | | |
| Professional Services - 3.2% |
Corporate Executive Board Co. | | 39,402 | | | 817,986 |
IHS, Inc. - Class A*(a) | | 32,666 | | | 1,629,053 |
Monster Worldwide, Inc.*(a) | | 58,037 | | | 685,417 |
| | | | | |
| | | | | 3,132,456 |
| | | | | |
See accompanying notes to financial statements
4
Met Investors Series Trust
Van Kampen Mid Cap Growth Portfolio
PORTFOLIO OF INVESTMENTS (Unaudited) - continued
June 30, 2009
(Percentage of Net Assets)
| | | | | |
Security
Description | | Shares | | Value |
| | | | | |
|
| Real Estate Management & Development - 1.6% |
Brookfield Asset Management, Inc. - Class A | | 91,309 | | $ | 1,558,645 |
| | | | | |
|
| Software - 3.6% |
Autodesk, Inc.* | | 67,154 | | | 1,274,583 |
Salesforce.com, Inc.*(a) | | 57,966 | | | 2,212,562 |
| | | | | |
| | | | | 3,487,145 |
| | | | | |
| Specialty Retail - 1.0% |
Abercrombie & Fitch Co. - Class A(a) | | 39,637 | | | 1,006,384 |
| | | | | |
| Wireless Telecommunication Services - 1.4% |
Millicom International Cellular S.A.*(a) | | 9,729 | | | 547,353 |
NII Holdings, Inc.* | | 42,724 | | | 814,747 |
| | | | | |
| | | | | 1,362,100 |
| | | | | |
Total Common Stocks
(Cost $113,694,687) | | | | | 93,044,300 |
| | | | | |
| | | | | | | |
Security
Description | | Shares/Par
Amount | | Value | |
| |
| Short-Term Investments - 19.2% | | | | |
| Mutual Funds - 11.8% | | | | | | | |
State Street Navigator Securities Lending Trust Prime Portfolio(c) | | | 11,444,858 | | $ | 11,444,858 | |
| Repurchase Agreement - 7.4% | | | | |
State Street Bank & Trust Co., Repurchase Agreement, dated 06/30/09 at 0.010% to be repurchased at $7,226,002 on 07/01/09 collateralized by $7,335,000 FNMA at 1.722% due 05/10/11 with a value of $7,371,675. | | $ | 7,226,000 | | | 7,226,000 | |
| | | | | | | |
Total Short-Term Investments
(Cost $18,670,858) | | | | | | 18,670,858 | |
| | | | | | | |
| |
TOTAL INVESTMENTS - 114.8%
(Cost $132,365,545) | | | 111,715,158 | |
| | | | | | | |
| |
| Other Assets and Liabilities (net) - (14.8)% | | | (14,424,550 | ) |
| | | | | | | |
| | |
| NET ASSETS - 100.0% | | | | | $ | 97,290,699 | |
| | | | | | | |
Portfolio Footnotes:
| * | | Non-income producing security. |
| (a) | | All or a portion of security is on loan. |
| (b) | | Security valued at fair value as determined in good faith by or under the direction of the Board of Trustees. |
| (c) | | Represents investment of collateral received from securities lending transactions. |
ADR - American Depositary Receipt
FNMA - Federal National Mortgage Association
See accompanying notes to financial statements
5
Met Investors Series Trust
Van Kampen Mid Cap Growth Portfolio
The Portfolio is subject to the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements in financial statements. The three levels of the hierarchy under FAS 157 are described below:
Level 1—quoted prices in active markets for identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Portfolio’s investments as of June 30, 2009 by security type as required by FAS 157-4:
ASSETS VALUATION INPUT
| | | | | | | | | | | | |
| Description | | Quoted Prices
in Active
Markets for
Identical
Assets (Level 1) | | Significant
Other
Observable
Inputs (Level 2) | | Significant
Unobservable
Inputs (Level 3) | | Total |
Common Stocks | | | | | | | | | | | | |
Air Freight & Logistics | | $ | 4,664,005 | | $ | — | | $ | — | | $ | 4,664,005 |
Capital Markets | | | 1,940,830 | | | — | | | — | | | 1,940,830 |
Chemicals | | | 4,084,990 | | | — | | | — | | | 4,084,990 |
Commercial & Professional Services | | | 1,098,126 | | | — | | | — | | | 1,098,126 |
Computers & Peripherals | | | 1,982,904 | | | — | | | — | | | 1,982,904 |
Construction & Engineering | | | 1,264,672 | | | — | | | — | | | 1,264,672 |
Construction Materials | | | 2,859,966 | | | — | | | — | | | 2,859,966 |
Distributors | | | — | | | 2,717,509 | | | — | | | 2,717,509 |
Diversified Consumer Services | | | 3,112,659 | | | — | | | — | | | 3,112,659 |
Diversified Financial Services | | | 5,235,182 | | | — | | | — | | | 5,235,182 |
Electronic Equipment, Instruments & Components | | | — | | | 883,773 | | | — | | | 883,773 |
Health Care Equipment & Supplies | | | 3,896,620 | | | — | | | — | | | 3,896,620 |
Hotels, Restaurants & Leisure | | | 7,834,247 | | | — | | | — | | | 7,834,247 |
Household Durables | | | 2,373,225 | | | — | | | — | | | 2,373,225 |
Internet & Catalog Retail | | | 3,255,795 | | | — | | | — | | | 3,255,795 |
Internet Software & Services | | | 4,567,762 | | | 5,695,419 | | | — | | | 10,263,181 |
IT Services | | | 2,528,458 | | | — | | | — | | | 2,528,458 |
Life Sciences Tools & Services | | | 6,205,365 | | | — | | | — | | | 6,205,365 |
Media | | | 3,743,968 | | | — | | | — | | | 3,743,968 |
Multiline Retail | | | 950,305 | | | — | | | — | | | 950,305 |
Oil, Gas & Consumable Fuels | | | 9,839,153 | | | — | | | — | | | 9,839,153 |
Pharmaceuticals | | | 1,225,613 | | | — | | | 537,024 | | | 1,762,637 |
Professional Services | | | 3,132,456 | | | — | | | — | | | 3,132,456 |
Real Estate Management & Development | | | 1,558,645 | | | — | | | — | | | 1,558,645 |
Software | | | 3,487,145 | | | — | | | — | | | 3,487,145 |
Specialty Retail | | | 1,006,384 | | | — | | | — | | | 1,006,384 |
Wireless Telecommunication Services | | | 1,362,100 | | | — | | | — | | | 1,362,100 |
Total Common Stocks | | | 83,210,575 | | | 9,296,701 | | | 537,024 | | | 93,044,300 |
Short-Term Investments | | | | | | | | | | | | |
Mutual Funds | | | 11,444,858 | | | — | | | — | | | 11,444,858 |
Repurchase Agreement | | | — | | | 7,226,000 | | | — | | | 7,226,000 |
Total Short-Term Investments | | | 11,444,858 | | | 7,226,000 | | | — | | | 18,670,858 |
TOTAL INVESTMENTS | | $ | 94,655,433 | | $ | 16,522,701 | | $ | 537,024 | | $ | 111,715,158 |
See accompanying notes to financial statements
6
Met Investors Series Trust
Van Kampen Mid Cap Growth Portfolio
FAS 157 Level 3 Reconciliation Disclosure
Following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value:
Asset Valuation Inputs
| | | | | | |
| Investments in Securities | | Balance as of
December 31,
2008 | | Balance as of
June 30,
2009 |
| Common Stocks | | | | | | |
Pharmaceuticals | | $ | 537,024 | | $ | 537,024 |
| Total | | $ | 537,024 | | $ | 537,024 |
See accompanying notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2009 (Unaudited)
| | | | |
| Van Kampen Mid Cap Growth Portfolio | | | |
| Assets | | | | |
Investments, at value (a)(b) | | $ | 104,489,158 | |
Repurchase Agreement | | | 7,226,000 | |
Cash | | | 713 | |
Cash denominated in foreign currencies (c) | | | 1 | |
Receivable for investments sold | | | 78,299 | |
Receivable for Trust shares sold | | | 30,601 | |
Dividends receivable | | | 24,106 | |
Interest receivable | | | 2 | |
| | | | |
Total assets | | | 111,848,880 | |
| | | | |
| Liabilities | | | | |
Payables for: | | | | |
Investments purchased | | | 2,879,404 | |
Trust shares redeemed | | | 85,698 | |
Distribution and services fees—Class B | | | 16,410 | |
Collateral for securities on loan | | | 11,444,858 | |
Management fee | | | 56,801 | |
Administration fee | | | 597 | |
Custodian and accounting fees | | | 35,298 | |
Deferred trustee fees | | | 3,427 | |
Accrued expenses | | | 35,688 | |
| | | | |
Total liabilities | | | 14,558,181 | |
| | | | |
| Net Assets | | $ | 97,290,699 | |
| | | | |
| Net Assets Represented by | | | | |
Paid in surplus | | $ | 130,604,795 | |
Accumulated net realized loss | | | (12,703,640 | ) |
Unrealized depreciation on investments and foreign currency | | | (20,650,760 | ) |
Undistributed net investment income | | | 40,304 | |
| | | | |
Total | | $ | 97,290,699 | |
| | | | |
| Net Assets | | | | |
Class A | | $ | 18,496,465 | |
| | | | |
Class B | | | 78,794,234 | |
| | | | |
| Capital Shares Outstanding | | | | |
Class A | | | 2,617,238 | |
| | | | |
Class B | | | 11,451,960 | |
| | | | |
| Net Asset Value and Offering Price Per Share | | | | |
Class A | | $ | 7.07 | |
| | | | |
Class B | | | 6.88 | |
| | | | |
| | | | | |
(a) Investments at cost, excluding repurchase agreement | | $ | 125,139,545 | |
(b) Includes cash collateral for securities loaned of | | | 11,444,858 | |
(c) Cost of cash denominated in foreign currencies | | | 1 | |
See accompanying notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2009 (Unaudited)
| | | | |
| Van Kampen Mid Cap Growth Portfolio | | | |
| Investment Income | | | | |
Dividends (1) | | $ | 340,814 | |
Interest (2) | | | 125,937 | |
| | | | |
Total investment income | | | 466,751 | |
| | | | |
| Expenses | | | | |
Management fee | | | 283,362 | |
Administration fees | | | 4,964 | |
Custodian and accounting fees | | | 9,923 | |
Distribution and services fees—Class B | | | 80,673 | |
Audit and tax services | | | 20,835 | |
Legal | | | 16,734 | |
Trustee fees and expenses | | | 9,699 | |
Shareholder reporting | | | 4,235 | |
Insurance | | | 1,160 | |
Other | | | 2,012 | |
| | | | |
Total expenses | | | 433,597 | |
Less expenses reimbursed by the Manager | | | (7,153 | ) |
| | | | |
Net expenses | | | 426,444 | |
| | | | |
Net investment income | | | 40,307 | |
| | | | |
| Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | (2,246,421 | ) |
Foreign currency | | | 25 | |
| | | | |
Net realized loss on investments and foreign currency | | | (2,246,396 | ) |
| | | | |
Net change in unrealized appreciation (depreciation) on: | | | | |
Investments | | | 20,418,997 | |
Foreign currency | | | (405 | ) |
| | | | |
Net change in unrealized appreciation on investments and foreign currency | | | 20,418,592 | |
| | | | |
Net realized and unrealized gain on investments and foreign currency | | | 18,172,196 | |
| | | | |
| Net Increase in Net Assets from Operations | | $ | 18,212,503 | |
| | | | |
| | | | | |
(1) Dividend income is net of foreign withholding taxes of: | | $ | 7,840 | |
(2) Interest income includes securities lending net income of: | | | 125,134 | |
See accompanying notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | |
| Van Kampen Mid Cap Growth Portfolio | | | | | | |
| | | Period Ended
June 30, 2009
(Unaudited) | | | Year Ended
December 31,
2008 | |
| Increase (Decrease) in Net Assets: | | | | | | | | |
| Operations | | | | | | | | |
Net investment income | | $ | 40,307 | | | $ | 44,950 | |
Net realized loss on investments and foreign currency | | | (2,246,396 | ) | | | (7,239,495 | ) |
Net change in unrealized appreciation (depreciation) on investments and foreign currency | | | 20,418,592 | | | | (55,074,336 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 18,212,503 | | | | (62,268,881 | ) |
| | | | | | | | |
| Distributions to Shareholders | | | | | | | | |
From net investment income | | | | | | | | |
Class A | | | (4,077 | ) | | | (351,356 | ) |
Class B | | | — | | | | (983,771 | ) |
From net realized gains | | | | | | | | |
Class A | | | — | | | | (2,087,595 | ) |
Class B | | | — | | | | (6,817,410 | ) |
| | | | | | | | |
Net decrease in net assets resulting from distributions | | | (4,077 | ) | | | (10,240,132 | ) |
| | | | | | | | |
| Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | | | | | | |
Class A | | | 334,876 | | | | 20,377,053 | |
Class B | | | 12,342,077 | | | | 35,966,940 | |
Net asset value of shares issued through dividend reinvestment | | | | | | | | |
Class A | | | 4,077 | | | | 2,438,951 | |
Class B | | | — | | | | 7,801,181 | |
Cost of shares repurchased | | | | | | | | |
Class A | | | (1,742,214 | ) | | | (16,616,330 | ) |
Class B | | | (6,232,193 | ) | | | (14,272,955 | ) |
| | | | | | | | |
Net increase in net assets from capital share transactions | | | 4,706,623 | | | | 35,694,840 | |
| | | | | | | | |
| Net Increase (Decrease) in Net Assets | | | 22,915,049 | | | | (36,814,173 | ) |
Net assets at beginning of period | | | 74,375,650 | | | | 111,189,823 | |
| | | | | | | | |
Net assets at end of period | | $ | 97,290,699 | | | $ | 74,375,650 | |
| | | | | | | | |
Net assets at end of period includes undistributed net investment income | | $ | 40,304 | | | $ | 4,074 | |
| | | | | | | | |
See accompanying notes to financial statements
10
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Selected Per Share Data for the Year or Period Ended: | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Van Kampen Mid Cap Growth Portfolio | | Class A | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 5.71 | | | $ | 11.82 | | | $ | 10.44 | | | $ | 10.19 | | | $ | 10.43 | | | $ | 9.24 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income (Loss)(a) | | | 0.01 | | | | 0.02 | | | | 0.05 | | | | (0.01 | ) | | | (0.04 | ) | | | (0.04 | ) |
Net Realized/Unrealized Gain (Loss) on Investments | | | 1.35 | | | | (5.10 | ) | | | 2.29 | | | | 0.90 | | | | 0.54 | | | | 1.23 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 1.36 | | | | (5.08 | ) | | | 2.34 | | | | 0.89 | | | | 0.50 | | | | 1.19 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | (0.00 | )+ | | | (0.15 | ) | | | — | | | | — | | | | — | | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | (0.88 | ) | | | (0.96 | ) | | | (0.64 | ) | | | (0.74 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | (0.00 | )+ | | | (1.03 | ) | | | (0.96 | ) | | | (0.64 | ) | | | (0.74 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 7.07 | | | $ | 5.71 | | | $ | 11.82 | | | $ | 10.44 | | | $ | 10.19 | | | $ | 10.43 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 23.85 | % | | | (46.67 | )% | | | 23.84 | % | | | 8.65 | % | | | 4.71 | % | | | 12.76 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 0.86 | %* | | | 0.89 | % | | | 0.88 | % | | | 0.90 | % | | | 0.90 | % | | | 0.90 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 0.87 | %* | | | 0.89 | % | | | 0.88 | % | | | 1.08 | % | | | 0.99 | % | | | 0.95 | % |
Ratio of Net Investment Income (Loss) to Average Net Assets | | | 0.30 | %* | | | 0.25 | % | | | 0.46 | % | | | (0.08 | )% | | | (0.35 | )% | | | (0.43 | )% |
Portfolio Turnover Rate | | | 10.8 | % | | | 38.1 | % | | | 62.0 | % | | | 226.6 | % | | | 103.9 | % | | | 99.5 | % |
Net Assets, End of Period (in millions) | | $ | 18.5 | | | $ | 16.3 | | | $ | 29.6 | | | $ | 24.0 | | | $ | 21.5 | | | $ | 26.5 | |
| |
| | | Class B | |
| | | For the Period
Ended
June 30, 2009
(Unaudited) | | | For the Years Ended December 31, | |
| | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| Net Asset Value, Beginning of Period | | $ | 5.57 | | | $ | 11.55 | | | $ | 10.25 | | | $ | 10.04 | | | $ | 10.30 | | | $ | 9.16 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Income (Loss) from Investment Operations | | | | | | | | | | | | | | | | | | | | | | | | |
Net Investment Income (Loss)(a) | | | 0.00 | + | | | (0.00 | )+ | | | 0.02 | | | | (0.03 | ) | | | (0.06 | ) | | | (0.06 | ) |
Net Realized/Unrealized Gain (Loss) on Investments | | | 1.31 | | | | (4.97 | ) | | | 2.24 | | | | 0.88 | | | | 0.54 | | | | 1.20 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 1.31 | | | | (4.97 | ) | | | 2.26 | | | | 0.85 | | | | 0.48 | | | | 1.14 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Less Distributions | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from Net Investment Income | | | — | | | | (0.13 | ) | | | — | | | | — | | | | — | | | | — | |
Distributions from Net Realized Capital Gains | | | — | | | | (0.88 | ) | | | (0.96 | ) | | | (0.64 | ) | | | (0.74 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions | | | — | | | | (1.01 | ) | | | (0.96 | ) | | | (0.64 | ) | | | (0.74 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Asset Value, End of Period | | $ | 6.88 | | | $ | 5.57 | | | $ | 11.55 | | | $ | 10.25 | | | $ | 10.04 | | | $ | 10.30 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 23.52 | % | | | (46.75 | )% | | | 23.48 | % | | | 8.37 | % | | | 4.58 | % | | | 12.45 | % |
Ratio of Expenses to Average Net Assets After Reimbursement | | | 1.10 | %* | | | 1.14 | % | | | 1.13 | % | | | 1.15 | % | | | 1.15 | % | | | 1.15 | % |
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates | | | 1.12 | %* | | | 1.14 | % | | | 1.14 | % | | | 1.34 | % | | | 1.24 | % | | | 1.20 | % |
Ratio of Net Investment Income (Loss) to Average Net Assets | | | 0.05 | %* | | | (0.03 | )% | | | 0.19 | % | | | (0.30 | )% | | | (0.58 | )% | | | (0.66 | )% |
Portfolio Turnover Rate | | | 10.8 | % | | | 38.1 | % | | | 62.0 | % | | | 226.6 | % | | | 103.9 | % | | | 99.5 | % |
Net Assets, End of Period (in millions) | | $ | 78.8 | | | $ | 58.0 | | | $ | 81.5 | | | $ | 54.8 | | | $ | 40.9 | | | $ | 36.0 | |
| + | | Rounds to less than $0.005 per share. |
| (a) | | Per share amounts based on average shares outstanding during the period. |
See accompanying notes to financial statements
11
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. Organization
Met Investors Series Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust currently offers forty-eight Portfolios (the “Portfolios”), each of which operates as a distinct investment vehicle of the Trust. As of June 30, 2009, the Portfolio included in this report is Van Kampen Mid Cap Growth Portfolio (the “Portfolio”), which is diversified. Shares in the Trust are not offered directly to the general public and are currently available only to separate accounts established by certain affiliated life insurance companies.
The Trust is managed by MetLife Advisers, LLC (the “Manager”), an affiliate of MetLife, Inc.
The Trust has registered four classes of shares: Class A and B Shares are currently offered by the Portfolio. Class C and E Shares are not currently offered by the Portfolio. Shares of each Class of the Portfolio represent an equal pro rata interest in the Portfolio and generally give the shareholder the same voting, dividend, liquidation, and other rights. Investment income, realized and unrealized capital gains and losses, the common expenses of the Portfolio and certain Portfolio-level expense reductions, if any, are allocated on a pro rata basis to each Class based on the relative net assets of each Class to the total net assets of the Portfolio. Each Class of shares differs in its respective distribution expenses.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires management to make estimates and assumptions that affect the reported amounts of 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 these estimates.
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with GAAP.
A. Security Valuation - Equity securities for which the primary market is on a domestic exchange (except the NASDAQ) will be valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price, using prices as of the close of trading. Equity securities traded over-the-counter and quoted on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is a “normalized” price. At 4:00 pm Eastern Time on each business day the NOCP is calculated as follows: (i) if the last traded price of a listed security reported by a NASDAQ member falls within the current best bid and ask price, then the NOCP will be the last traded price; (ii) if the last traded price falls outside of that range, however, the NOCP will be the last bid price (if higher) or the last ask price (if lower). Equity securities not quoted on NASDAQ that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, will be valued at the most recently quoted bid price provided by the principal market makers.
Debt securities (other than short term obligations with a remaining maturity of sixty days or less) are generally valued on the basis of evaluated or composite bid quotations obtained by independent pricing services and/or brokers and dealers selected by the relevant adviser pursuant to authorization of the Board of Trustees (the “Board”). Such quotations take into account appropriate factors such as institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. Short term obligations with a remaining maturity of sixty days or less are valued at amortized cost which approximates fair market value.
The Manager may, from time to time, under the general supervision of the Board or its Valuation Committee, utilize the services of one or more pricing services available in valuing the assets of the Trust. The Manager will continuously monitor the performance of these services. The Portfolio has retained a third party pricing service to fair value each of its equity investments that is traded principally on a foreign exchange or market, subject to adjustment by the Valuation Committee of the Trust’s Board. The Valuation Committee will regularly monitor and review the services provided by the pricing service to the Portfolio and periodically report to the Board on the pricing services’ performance.
Futures contracts and options are valued based upon their daily settlement prices. Forward currency exchange contracts are valued daily at forward foreign currency exchange rates. Investments in mutual funds are valued at the daily net asset value (“NAV”) of the mutual fund.
If market values are not readily available, or if available market quotations are not reliable, securities are priced at their fair value as determined by the Valuation Committee of the Trust’s Board using procedures approved by the Board. The Portfolio may use fair value pricing if the value of a security has been materially affected by events occurring before the Portfolio’s calculation of NAV but after the close of the primary markets on which the security is traded. The Portfolio may also use fair value pricing if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Portfolio’s calculation of NAV. Such fair value may be determined by utilizing information furnished by a pricing service which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders.
B. Security Transactions - Security transactions are recorded on a trade date basis. Realized gains and losses are determined on investments and unrealized appreciation and depreciation are determined on the identified cost basis, which is the same basis used for federal income tax purposes. The Portfolio may purchase and sell securities on a “when-issued” or “delayed delivery” basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Portfolio segregates assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made.
12
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
C. Investment Income and Expenses - Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Portfolio has determined the existence of a dividend declaration after exercising reasonable due diligence. Foreign income and foreign capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable.
D. Income Taxes - It is the Portfolio’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable to regulated investment companies. Accordingly, the Portfolio intends to distribute substantially all of its taxable income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Portfolio’s financial statements. The Portfolio files U.S. Federal and various state tax returns. No income tax returns are currently under examination. The 2005 through 2008 tax years remain subject to examination by U.S. Federal and most tax authorities. It is also the Portfolio’s policy to comply with the diversification requirements of the Code so that variable annuity and variable life insurance contracts investing in the Portfolio will not fail to qualify as annuity and life insurance contracts for tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The Portfolio utilizes the provisions of the federal income tax laws that provide for the carryforward of capital losses for eight years, offsetting such losses against any future net realized capital gains. At December 31, 2008, the accumulated capital loss carryforwards and expiration dates by the Portfolio were as follows:
| | | | | | | |
Expiring
12/31/2011 | | Expiring
12/31/2016 | | Total |
| | |
| $ | 2,315,583 | | $ | 8,070,733 | | $ | 10,386,316 |
The Portfolio acquired losses of $13,507,053 in the merger with Lord Abbett Developing Growth Portfolio on April 28, 2003 which are subject to an annual limitation of $771,861.
E. Distribution of Income and Gains - Distributions of net investment income and capital gains are recorded on the ex-dividend date.
F. Securities Lending - The Portfolio may lend its securities to certain qualified brokers who borrow securities in order to complete certain transactions. By lending its investment securities, the Portfolio attempts to increase its net investment income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Portfolio. Risks of delay in recovery of the securities or even loss of rights in the collateral may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives cash or other securities as collateral in an amount equal to or exceeding 102% of the current market value of the loaned securities. Any cash received as collateral is generally invested by State Street Bank and Trust Company, acting in its capacity as securities lending agent (the “Agent”), in the State Street Navigator Securities Lending Prime Portfolio, which is a money market fund registered under the 1940 Act. A portion of the dividends received on the collateral is rebated to the borrower of the securities and the remainder is split between the Agent and the Portfolio. On loans collateralized by U.S. Treasuries, a fee is received from the borrower and is allocated between the Portfolio and the Agent.
G. Repurchase Agreements - The Portfolio may enter into repurchase agreements with selected commercial banks and broker-dealers, under which the Portfolio acquires securities as collateral and agrees to resell the securities at an agreed upon time and at an agreed upon price. The Portfolio accrues interest for the difference between the amount it pays for the securities and the amount it receives upon resale. At the time the Portfolio enters into a repurchase agreement, the value of the collateral securities, including accrued interest, will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the collateral securities, including accrued interest, will continue to be at least equal to the value of the repurchase agreement.
H. Foreign Currency Translation - The books and records of the Portfolio are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars on a daily basis using prevailing exchange rates. Purchases and sales of securities are translated at the rates of exchange prevailing when such securities were acquired or sold. Income is translated at rates of exchange prevailing when interest is accrued or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in forward foreign currency contracts; sales of foreign currencies; currency gains or losses realized between the trade and settlement dates on securities transactions; and the difference between the amounts of
13
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
2. Significant Accounting Policies - continued
dividends, interest, and foreign withholding taxes recorded on the Portfolio’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end; from changes in the exchange rates of foreign currency held; and from changes in the contract value of forward foreign currency contracts.
3. Investment Management Agreement and Other Transactions with Affiliates
The Trust has entered into a management agreement with the Manager (the “Management Agreement”) for investment management services in connection with the investment management of the Portfolios. The Manager is subject to the supervision and direction of the Board and has overall responsibility for the general management and administration of the Trust. The Manager has entered into an advisory agreement with Morgan Stanley Investment Management, Inc. d/b/a Van Kampen (the “Adviser”) for investment advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises the Adviser and has full discretion with respect to the retention or renewal of the advisory agreement. The Manager pays the Adviser a fee based on the Portfolio’s average daily net assets.
Under the terms of the Portfolio’s Management Agreement, the Portfolio pays the Manager a monthly fee based upon annual rates applied to the Portfolio’s average daily net assets as follows:
| | | | | | |
Management Fees
earned by the Manager
for the period ended
June 30, 2009 | | % per annum | | | Average Daily Net Assets |
| | |
| $ | 283,362 | | 0.70 | % | | First $200 Million |
| | |
| | | 0.65 | % | | $200 Million to $500 Million |
| | |
| | | 0.625 | % | | Over $500 Million |
Metropolitan Life Insurance Company (“MLIC”) serves as the transfer agent for the Trust. MLIC is an affiliate of the Manager. MLIC receives no fees for its services to the Trust.
The Manager has entered into an expense limitation agreement with the Trust (“Expense Limitation Agreement”) in the interest of limiting expenses of the Portfolio of the Trust. The Expense Limitation Agreement shall continue in effect with respect to the Portfolio until April 30, 2010. Pursuant to that Expense Limitation Agreement, the Manager has agreed to waive or limit its fees and to assume other expenses so that the total annual operating expenses of the Portfolio other than interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with accounting principles generally accepted in the United States of America, and other extraordinary expenses not incurred in the ordinary course of the Portfolio’s business, but including amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act, are limited to the following expense ratios as a percentage of the Portfolio’s average daily net assets:
| | | | | | | | | | | | | | | | | | | | | | |
Maximum Expense Ratio
under current Expense
Limitation Agreement | | | Expenses Deferred in |
| | 2004 | | 2005 | | 2006 | | 2007 | | 2008 | | 2009 |
| | Subject to repayment until December 31, |
| Class A | | | Class B | | | 2009 | | 2010 | | 2011 | | 2012 | | 2013 | | 2014 |
| | | | | | | |
| 0.90 | % | | 1.15 | % | | $ | 29,476 | | $ | 33,406 | | $ | 127,383 | | $ | 6,445 | | $ | — | | $ | 7,153 |
The expenses reimbursed for the period ended June 30, 2009 are shown as expenses reimbursed in the Statement of Operations of the Portfolio.
If in any year in which the Management Agreement is still in effect, the estimated aggregate portfolio operating expenses of the Portfolio for the fiscal year are less than the Maximum Expense Ratios for that year, subject to approval by the Trust’s Board, the Manager shall be entitled to reimbursement by the Portfolio to the extent that the charge does not cause the expenses in such subsequent year to exceed the Maximum Expense Ratios as stated above. The Portfolio is not obligated to repay any expense paid by the Manager more than five years after the end of the fiscal year in which such expense was incurred.
The Trust has distribution agreements with MetLife Investors Distribution Company (“MIDC” or the “Distributor”) in which MIDC serves as the Distributor for the Trust’s Class A and Class B Shares. MIDC is a wholly-owned subsidiary of MetLife Investors Group, Inc., an affiliate of the
14
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
3. Investment Management Agreement and Other Transactions with Affiliates - continued
Manager. The Class B distribution plan provides that the Trust, on behalf of the Portfolio, may pay annually up to 0.50% of the average net assets of the Portfolio attributable to its Class B Shares in respect to activities primarily intended to result in the sale of Class B Shares. However, under the Class B distribution agreement, payments to the Distributor for activities pursuant to the Class B distribution plan are currently limited to payments at an annual rate equal to 0.25% of average daily net assets of the Portfolio attributable to its Class B Shares.
Under terms of the Class B distribution plan and distribution agreement, the Portfolio is authorized to make payments monthly to the Distributor that may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class B Shares for such entities’ fees or expenses incurred.
During the period ended June 30, 2009 the Portfolio paid brokerage commissions to affiliated brokers/dealers:
| | | |
Affiliate | | Commission |
| |
| Morgan Stanley & Co., Inc. | | $ | 651 |
Each Trustee of the Trust who is not currently an employee of the Manager or any of its affiliates receives compensation from the Trust. A deferred compensation plan (the “Plan”) is available to the Trustees on a voluntary basis. Deferred amounts remain in the Trust until distributed in accordance with the provisions of the Plan. The value of a participating Trustee’s deferral account is based on theoretical investments of deferred amounts, on the normal payment dates, in certain portfolios of the Trust or Metropolitan Series Fund, Inc. as designated by the participating Trustee. Changes in the value of participants’ deferral accounts are reflected as Trustees’ fees and expenses in the Statement of Operations. The portions of the accrued obligations allocated to the Portfolios, if any, under the Plan are reflected as Deferred Trustees’ fees in the Statement of Assets and Liabilities.
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest for the periods ended noted below were as follows:
| | | | | | | | | | | | | | |
| | | Beginning
Shares | | Sales | | Reinvestments | | Redemptions | | | Net Increase
(Decrease)
in Shares
Outstanding | | | Ending
Shares |
| | | | | | |
Class A | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 2,858,577 | | 53,634 | | 658 | | (295,631 | ) | | (241,339 | ) | | 2,617,238 |
12/31/2008 | | 2,507,167 | | 2,014,924 | | 245,862 | | (1,909,376 | ) | | 351,410 | | | 2,858,577 |
| | | | | | |
Class B | | | | | | | | | | | | | | |
| | | | | | |
6/30/2009 | | 10,429,426 | | 2,056,161 | | — | | (1,033,627 | ) | | 1,022,534 | | | 11,451,960 |
12/31/2008 | | 7,059,412 | | 4,242,948 | | 805,075 | | (1,678,009 | ) | | 3,370,014 | | | 10,429,426 |
5. Investment Transactions
Aggregate cost of purchases and proceeds of sales of investment securities, excluding short-term securities, for the period ended June 30, 2009 were as follows:
| | | | | | | | | |
| Purchases | | Sales |
| U.S. Government | | Non-Government | | U.S. Government | | Non-Government |
| | | |
| $— | | $ | 15,742,746 | | $ | — | | $ | 8,236,311 |
At June 30, 2009, the cost of securities for federal income tax purposes and the unrealized appreciation (depreciation) of investments for federal income tax purposes for the Portfolio were as follows:
| | | | | | | | | | | |
Federal
Income Tax
Cost | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | | Net Unrealized
Depreciation | |
| | | |
| $132,365,545 | | $ | 8,313,823 | | $ | (28,964,210 | ) | | $ | (20,650,387 | ) |
15
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
6. Securities Lending
As of June 30, 2009, the Portfolio had loaned securities which were collateralized by short-term investments. The value of securities on loan and the value of the related collateral were as follows:
| | | | | | | | | |
Value of
Securities | | Value of
Cash
Collateral | | Value of
Non-Cash
Collateral* | | Total
Collateral |
| | | |
| $11,349,212 | | $ | 11,444,858 | | $ | 194,660 | | $ | 11,639,518 |
* The Portfolio cannot repledge or resell this collateral. The non-cash collateral is typically comprised of government securities and/or bank letters of credit.
7. Distributions to Shareholders
The tax character of distributions paid for the years ended December 31, 2008 and 2007 were as follows:
| | | | | | | | | | | | | | | | |
| Ordinary Income | | Long-Term Capital Gain | | Total |
| 2008 | | 2007 | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | |
| $ | 8,878,237 | | $ | — | | $ | 1,361,895 | | $ | 7,696,204 | | $ | 10,240,132 | | $ | 7,696,204 |
As of December 31, 2008, the components of distributable earnings (accumulated losses) on a federal income tax basis were as follows:
| | | | | | | | | | | | | | | |
Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gain | | Net
Unrealized
Depreciation | | | Loss Carryforwards | | | Total | |
| $4,074 | | $ | — | | $ | (41,140,280 | ) | | $ | (10,386,316 | ) | | $ | (51,522,522 | ) |
8. Contractual Obligations
The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
9. Market, Credit and Counterparty Risk
In the normal course of business, the Portfolio invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit risk). The value of securities held by the Portfolio may decline in response to certain events, including those directly involving the companies whose securities are owned by the Portfolio; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Portfolio may be exposed to counterparty risk, or the risk that an entity with which the Portfolio has unsettled or open transactions may default. Financial assets, which potentially expose the Portfolio to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Portfolio’s exposure to credit and counterparty risks in respect to these financial assets approximates their value as recorded in the Portfolio’s Statement of Assets and Liabilities.
10. Subsequent Events
Management’s evaluation of the impact of all subsequent events on the Portfolio’s financial statements was completed through August 24, 2009, the date the financial statements were issued, and management has determined that as of that date there were no subsequent events requiring adjustments or disclosure in the Portfolio’s financial statements.
11. Recent Accounting Pronouncement
The Portfolio adopted the provisions of Statement of Financial Accounting Standards No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FAS 157-4”) effective June 30, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity has significantly decreased in relation to normal market activity for the asset or liability. FAS 157-4 also provides additional guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures in annual and interim reporting periods. FAS
16
MET INVESTORS SERIES TRUST
Notes to Financial Statements
June 30, 2009 (Unaudited)
11. Recent Accounting Pronouncement - continued
157-4 is effective for fiscal periods and interim periods ending after June 15, 2009. Management has evaluated the impact of FAS 157-4 and has concluded that FAS 157-4 has no material impact on these financial statements.
Quarterly Portfolio Schedule
The Trust files Form N-Q for the first and third quarters of each fiscal year. The Trust’s Forms N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov. The Trust’s Forms N-Q may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed, the most recent Form N-Q will be available without charge, upon request, by calling (800) 848-3854.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 848-3854 and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Proxy Voting Record
The Trust, on behalf of each of its Portfolios, has filed with the Securities and Exchange Commission its proxy voting record for the 12-month period ending June 30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31. Once filed, the most recent Form N-PX will be available without charge, upon request, by calling (800) 848-3854 or on the Securities and Exchange Commission’s website at http://www.sec.gov.
17
Item 2. Code of Ethics.
Item applicable only to annual report on Form N-CSR.
Item 3. Audit Committee Financial Expert.
Item applicable only to annual report on Form N-CSR.
Item 4. Principal Accountant Fees and Services.
Item applicable only to annual report on Form N-CSR.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Schedule of Investments.
(a) Schedule of Investments is included as a part of the report to shareholders filed under Item 1 of this Form N-CSR.
(b) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
The registrant does not have procedures by which shareholders may recommend nominees to the registrant’s Board of Trustees.
Item 11. Controls and Procedures.
(a) Within 90 days of the filing date of this Form N-CSR, Elizabeth M. Forget, the registrant’s President and Jeffrey A. Tupper, the registrant’s Chief Financial Officer and Treasurer, reviewed the registrant’s disclosure controls and procedures (as defined in
Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) (the “Procedures”) and evaluated their effectiveness. Based on their review, Ms. Forget and Mr. Tupper determined that the Procedures adequately ensure that information required to be disclosed by the registrant on Form N-CSR and Form N-Q is recorded, processed, summarized and reported within the time periods required by the Securities and Exchange Commission.
(b) There were no significant changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant’s second fiscal quarter of the period covered by the report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Exhibits
| | |
| (a)(1) | | Not applicable. |
| |
| (a)(2) | | The certifications required by Rule 30a-2(a) of the 1940 Act are attached hereto. |
| |
| (a)(3) | | Not applicable. |
| |
| (b) | | The certifications required by Rule 30a-2(b) of the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | |
| MET INVESTORS SERIES TRUST |
| |
| By: | | /s/ Elizabeth M. Forget |
| | Elizabeth M. Forget |
| | President |
Date: September 2, 2009
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| | |
| By: | | /s/ Elizabeth M. Forget |
| | Elizabeth M. Forget |
| | President |
Date: September 2, 2009
| | |
By: | | /s/ Jeffrey A. Tupper |
| | Jeffrey A. Tupper |
| | Chief Financial Officer and Treasurer |
Date: September 2, 2009
