Sullivan & Worcester LLP T 202 775 1200
1666 K Street, NW F 202 293 2275
Washington, DC 20006 www.sandw.com
October 11, 2006
EDGAR Operations Branch
Division of Investment Management
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
Re: Met Investors Series Trust
Strategic Growth Portfolio
Strategic Growth and Income Portfolio
Strategic Conservative Growth Portfolio
Post-Effective Amendment No. 24
File No. 333-48456
Ladies and Gentlemen:
This letter is in response to certain comments from Mr. Robert Lamont of
the Staff with respect to the Trust's Post-Effective Amendment No. 24 to its
Registration Statement on Form N-1A filed with the Commission on August 16,
2006. Where noted, changes, as applicable, have been made to the Prospectus
and/or Statement of Additional Information. All page references refer to the
pages of these documents which have been marked to show changes from the
previous versions included in Post-Effective Amendment No. 24.
1. Comment: Please include Tandy language in your response letter.
Response: The request language is included in this letter.
2. Comment: Under the heading "Understanding the Trust", the Registrant states
that there are forty-six portfolios but the first page of the SAI states
that it applies to forty-four investment portfolios. This disclosure should
be consistent.
Response: The SAI only covers 44 of the 46 Met Funds. A separate SAI covers
two ETF funds.
3. Comment: Under the heading "Understanding the Portfolios", the Registrant
states that "[e]ach Portfolio is well diversified . . ." Should this
sentence say "non-diversified" or "diversified" rather than "well
diversified." Please note that on page 8, the Registrant indicates that the
Strategic Growth and Income Portfolio is "non-diversified."
Response: The disclosure on page 3 has been modified to delete "well
diversified." Revised page 3 is attached.
4. Comment: On page 7, at the bottom of the page there is a disclaimer in bold
print. This disclaimer should either be added or moved to the front cover
page of the prospectus.
Response: All of Met's current prospectuses have the same disclosure in its
position just prior to the disclosure of Portfolio objectives,
policies and risks. It is proposed that at the next annual update, the
disclaimer will be moved to the appropriate place.
5. Comment: On page 8, in the fourth paragraph down from the heading
"Principal Investment Strategy", the Registrant states that "[t]he
Portfolio is non-diversified, which means that it may concentrate its
assets in a smaller number of issuers than a diversified portfolio". Please
revise this disclosure so that the word "concentrate" is not used in the
context of diversification.
Response: The requested revision has been made with respect to each
Portfolio. Revised page 8 is attached.
6. Comment: Please note that when a fund invests in affiliated funds, the fund
must aggregate the amount of investments of all underlying funds for
purposes of concentration.
Response: Disclosure has been added to the SAI regarding the
aggregation of underlying investments in affiliated funds for
concentration purposes. Revised page 47 of the SAI is attached.
7. Comment: On page 10, it would be helpful if for each primary risk listed,
the Registrant would include one or two sentences describing the risk and
refer readers to the back of the prospectus for more detailed descriptions
of the primary risks.
Response: The style of all Met prospectuses is to list the risk factor
with a cross reference to the section on primary risks. It is believed
that the current format is clear and adequately presents the risks
involved for each Portfolio.
8. Comment: On the back cover page, the public reference room's telephone
number is 202-551-8090.
Response: The requested change has been made.
9. Comment: On page 28, for both the Manager and the Adviser, please include
more disclosure about their experience.
Response: The requested disclosures have been added. Revised pages 28 and
30 are attached.
10. Comment: On page 32, in the discussion of voting in the second full
paragraph, please state whether or not there is a minimum number of votes
that is required for a quorum. If the Registrant uses echo voting or mirror
voting, please state that as a result of using such a voting method the
disposition of a matter may be determined by a small number of
shareholders.
Response: The requested disclosure has been added. Revised page 32 is
attached.
In connection with this filing, the Trust acknowledges that: (1) the
Trust is responsible for the adequacy and accuracy of the disclosure in the
filings; (2) staff comments or changes to disclosure in response to staff
comments in the filings reviewed by the staff do not foreclose the Commission
from taking any action with respect to filing; (3) the Trust may not assert
staff comments as a defense in any proceeding initiated by the Commission or any
person under the federal securities laws of the United States.
The Trust will file a 485(b) filing on November 1, 2006.
If you have any questions, please feel free to call me at (202)
775-1205.
Very truly yours,
/s/ Robert N. Hickey
Robert N. Hickey
Attachments
cc: Liz Forget
Anthony Dufault
Francine Hayes
John Rizzo
INTRODUCTION
Understanding the Trust
Met Investors Series Trust (the "Trust") is an open-end management
investment company that offers a selection of forty-six managed investment
portfolios or mutual funds, only three of which are offered through this
Prospectus (the "Portfolios"). Each of the three Portfolios described in this
Prospectus has its own investment objective designed to meet different
investment goals. Please see the Investment Summary section of this Prospectus
for specific information on each Portfolio.
Investing Through a Variable Insurance Contract
Class B shares of the Portfolios are currently only sold to separate
accounts of certain affiliates of Metropolitan Life Insurance Company
(collectively, "MetLife") to fund the benefits under certain individual flexible
premium variable life insurance policies and individual and group variable
annuity contracts (collectively, "Contracts").
As a Contract owner, your premium payments are allocated to one or more
of the Portfolios in accordance with your Contract.
Please read this Prospectus carefully before selecting a Portfolio. It
provides information to assist you in your decision. If you would like
additional information about a Portfolio, please request a copy of the Statement
of Additional Information ("SAI"). For details about how to obtain a copy of the
SAI and other reports and information, see the back cover of this Prospectus.
The SAI is incorporated by reference into this Prospectus.
[SIDE BAR:
Please see the Contract prospectus for a detailed explanation of your
Contract.]
Understanding the Portfolios
Each Portfolio was designed on established principles of asset allocation and
risk tolerance. Each Portfolio will invest substantially all of its assets in
other portfolios of the Trust or of Metropolitan Series Fund, Inc. (the "Fund")
which invest either in equity securities, fixed income securities or cash
equivalent money market securities, as applicable ("Underlying Portfolios").
Each Portfolio has a target allocation among the three primary asset classes
(equity, fixed income and cash/money market). The Adviser establishes specific
target investment percentages for the asset classes and the various components
of each asset category and then selects the Underlying Portfolios in which a
Portfolio invests based on, among other things, the Underlying Portfolios'
investment objectives, policies, investment processes and portfolio analytical
and management personnel. The Adviser may add new Underlying Portfolios or
replace existing Underlying Portfolios or change the allocations among the
Underlying Portfolios, dependent upon, among other factors, changing market
dynamics, changes to the personnel, investment process, or criteria for holdings
of the Underlying Portfolios, or the availability of other Underlying Portfolios
that may provide a risk-adjusted benefit to a Portfolio. Information regarding
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Strategic Growth and Income Portfolio
Investment Objective:
Seeks both growth of capital and income where growth of capital takes
precedence over income.
Principal Investment Strategy:
The Portfolio seeks to achieve its objective by investing in Class A
shares of a diversified group of Underlying Portfolios of the Trust and of the
Fund. Under normal circumstances, the Portfolio primarily invests in large cap,
small cap, mid cap and international equity Underlying Portfolios and also
invests in fixed income Underlying Portfolios in accordance with targeted
allocations of 65% to equity Underlying Portfolios including Underlying
Portfolios that invest in real estate investment trusts (REITs) and 35% to fixed
income Underlying Portfolios. The names of the Underlying Portfolios in which
the Portfolio may invest and the approximate percentage of the Portfolio's
assets allocated to various types of equity and fixed income Underlying
Portfolios, as of the date of this Prospectus, are set forth above in
"Understanding the Portfolios."
The Portfolio seeks to achieve capital growth through its investments
in Underlying Portfolios that invest primarily in equity securities. These
investments may include Underlying Portfolios that invest mainly in stocks of
large established U.S. companies as well, to a lesser extent, in stocks of
foreign companies and smaller U.S. companies with above-average growth
potential.
The Portfolio seeks to achieve current income through its investments
in Underlying Funds that invest primarily in fixed income securities. These
investments may include Underlying Portfolios that invest exclusively in bonds
of U.S. issuers as well as Underlying Portfolios that invest in U.S. and foreign
investment-grade securities, as well as Underlying Portfolios that invest in
high-yield, high-risk bonds, commonly referred to as "junk bonds."
The Portfolio is non-diversified, which means that it may invest its
assets in a smaller number of issuers than a diversified portfolio. However, the
Portfolio invests its assets in the Underlying Portfolios, each of which
generally has diversified holdings.
As of the date of this Prospectus, the Portfolio currently plans to
invest in the following Underlying Portfolios and cash or cash equivalents at
the approximate percentages indicated:
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With respect to swaps, a Portfolio (except for the Lord Abbett Bond
Debenture, Lord Abbett Mid-Cap Value, Lord Abbett America's Value, Lord Abbett
Growth and Income, Pioneer Fund, Pioneer Mid-Cap Value and Pioneer Strategic
Income Portfolios) will not enter into any swap, cap, floor or collar
transaction unless, at the time of entering into such transaction, the unsecured
long-term debt of the counterparty, combined with any credit enhancements, is
rated at least A by Standard & Poor's or Moody's or has an equivalent equity
rating from an NRSRO or is determined to be of equivalent credit quality of the
Portfolio's Adviser. With respect to repurchase agreements, the Portfolio may
invest up to 20% of its assets in securities subject to repurchase agreements.
For the purposes of determining concentration in any one industry, each
Allocation Portfolio will aggregate the amount of investments of all affiliated
Underlying Portfolios.
80% Investment Policy (Lord Abbett Bond Debenture, Lord Abbett Mid-Cap Value,
Lazard Mid-Cap, Met/AIM Small Cap Growth, T. Rowe Price Mid-Cap Growth, PIMCO
Inflation Protected Bond, Third Avenue Small Cap Value, Neuberger Berman Real
Estate, Turner Mid-Cap Growth, Goldman Sachs Mid-Cap Value, RCM Global
Technology, Van Kampen Comstock, Legg Mason Value Equity, Batterymarch Mid-Cap
Stock, BlackRock High Yield, BlackRock Large-Cap Core, Pioneer Mid-Cap Value,
Pioneer Strategic Income, Dreman Small-Cap Value, Van Kampen Mid-Cap Growth and
MFS(R) Emerging Markets Equity Portfolios)
Under normal circumstances, each of the Portfolios listed above will
invest at least 80% of its respective assets (defined as net assets plus the
amount of any borrowing for investment purposes) in certain securities as
indicated in the current Prospectus. (See the Prospectus for a detailed
discussion of these Portfolios' investments.) Shareholders will be provided with
at least 60-days' prior written notice of any changes in the 80% investment
policy. Such notice will comply with the conditions set forth in any applicable
Securities and Exchange Commission rule then in effect.
Unless otherwise indicated, all limitations applicable to a Portfolio's
investments apply only at the time a transaction is entered into. Any subsequent
change in a rating assigned by any rating service to a security (or, if unrated,
deemed to be of comparable quality), or change in the percentage of Portfolio
assets invested in certain securities or other instruments, or change in the
average duration of a Portfolio's investment portfolio, resulting from market
fluctuations or other changes in a Portfolio's total assets will not require a
Portfolio to dispose of an investment until the Adviser determines that it is
practicable to sell or close out the investment without undue market or tax
consequences to the Portfolio. In the event that ratings services assign
different ratings to the same security, the Adviser will determine which rating
it believes best reflects the security's quality and risk at that time, which
may be the higher of the several assigned ratings.
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Management
The Trust's Board of Trustees is responsible for managing the business
affairs of the Trust. The Trustees meet periodically to review the affairs of
the Trust and to establish certain guidelines which the Manager is expected to
follow in implementing the investment policies and objectives of the Trust. The
Trustees also review the investment program furnished to the Manager by the
Adviser. Information about the Trustees and executive officers of the Trust is
contained in the SAI.
The Manager
Met Investors Advisory, LLC (the "Manager"), 5 Park Plaza, Suite 1900,
Irvine, California 92614, has overall responsibility for the general management
and administration of the Portfolios. Since February, 2001, the Manager has been
the investment adviser of the Trust with portfolio assets of approximately $24.3
billion as of June 30, 2006. The Manager selects and pays the fees of the
Adviser for the Portfolio and monitors the Adviser's investment program. The
Manager is responsible for implementing the asset allocation determinations of
the Adviser and identifying the Underlying Portfolios that are available for
investment by each Portfolio. The Manager is an affiliate of MetLife.
As compensation for its services to the Portfolios, the Manager
receives monthly compensation at an annual rate of a percentage of the average
daily net assets of each Portfolio. The advisory fees for each Portfolio are:
- ----------------------------------------------------- ----------------------------------------------------
Portfolio Advisory Fee
- ----------------------------------------------------- ----------------------------------------------------
- ----------------------------------------------------- ----------------------------------------------------
Strategic Growth and Income Portfolio 0.15% of first
$250 million of such
assets plus 0.125% of such
assets over $250 million
up to $500 million plus
0.10% of such assets over
$500 million
- ----------------------------------------------------- ----------------------------------------------------
- ----------------------------------------------------- ----------------------------------------------------
Strategic Conservative Growth 0.15% of first $250 million of
such assets plus 0.125% of
such assets over $250
million up to $500 million
plus 0.10% of such assets
over $500 million
- ----------------------------------------------------- ----------------------------------------------------
- ----------------------------------------------------- ----------------------------------------------------
Strategic Growth Portfolio 0.15% of first $250 million of such
assets plus 0.125% of such
assets over $250 million
up to $500 million plus
0.10% of such assets over
$500 million
- ----------------------------------------------------- ----------------------------------------------------
A discussion regarding the basis of the Trust's Board of Trustees' approval of
the Management Agreement with the Manager and the investment advisory agreements
between the Manager and the Adviser is included in the Trust's annual report.
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sub-adviser. In such circumstances, shareholders would receive notice
of such action, including the information concerning the new sub-adviser that
normally is provided in a proxy statement.
The Manager pays the Adviser a fee based on each Portfolio's average
daily net assets. No Portfolio is responsible for the fees paid to the Adviser.
GALLATIN ASSET MANAGEMENT, INC. ("Gallatin"), One North Jefferson Avenue, St.
Louis, Missouri 63103, is the investment adviser (the "Adviser"). Gallatin,
organized in 2005, is a wholly-owned subsidiary of A.G. Edwards, Inc. and an
affiliate of A. G. Edwards & Sons, Inc. ("A. G. Edwards"), one of the nation's
oldest and largest investment firms. Gallatin provides asset management and
advisory services to high net worth individuals and institutional investors. As
of June 30, 2006, Gallatin had in excess of $7.5 billion in assets under
management.
The construction and maintenance of the asset allocation models that are
used by the Portfolios, and the analysis and selection of the Underlying
Portfolios that are used in those models are performed by Gallatin's
Professional Fund Advisor Investment Committee, which is a team of investment
management professionals.
Mark A. Keller, CFA, Senior Vice President, Chief Investment Officer-Gallatin,
Chairman of A.G. Edwards Investment Strategy Committee, Chairman of Gallatin
Investment Strategy Committee
Mr. Keller has primary responsibility for the Investment Strategy used in the
models. He is Chairman of the investment committees representing these
portfolios, Gallatin Allocation Advisors, and Gallatin Professional Fund
Advisor.
2005 to present, Senior Vice President, Chief Investment Officer-Gallatin, Asset
Management Department; 2005 to present, Vice President, Chief Investment
Officer-A.G. Edwards, Asset Management Department; 1994 to 2005, Vice President,
Investment Officer-A.G. Edwards Trust Company FSB; 1999 to 2001, Vice
President-A.G. Edwards Trust Company (Missouri); 1994 to 2001; Equity
Strategist-A.G. Edwards.
Gregory W. Ellston, Vice President
Mr. Ellston is the director of manager research and is responsible for oversight
of the Gallatin Manager Analysis Group, which is comprised of research analysts
who recommend Underlying Portfolios to the Portfolios. He is Secretary of the
investment committees representing these portfolios, Gallatin Allocation
Advisors, Gallatin Manager Analysis, and Gallatin Professional Fund Advisor.
2005 to present, Vice President-Gallatin; 2000 to 2005, Vice President-A.G
Edwards, Managed Products Department; 1997 to 2000, Associate Vice
President-A.G. Edwards, Managed Products Department.
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YOUR INVESTMENT
Shareholder Information
The separate accounts of MetLife are the record owners of the Portfolios'
shares. Any reference to the shareholder in this Prospectus technically refers
to those separate accounts and not to you, the Contract owner. The legal rights
of you, the Contract owner, are different from the legal rights of the record
owner.
However, MetLife is required to solicit instructions from Contract owners
when voting on shareholder issues. Any voting by MetLife as shareholder would
therefore reflect the actual votes of Contract owners. Neither the Securities
and Exchange Commission nor MetLife requires any specific minimum percentage of
Contract owners to vote in order for MetLife to echo vote the remaining unvoted
votes. MetLife seeks to obtain a reasonable level of turnout given the
particular voting trend. MetLife may use various methods of encouraging Contract
owners to vote, including additional solicitations. The practice of echo voting
means that a minority of Contract owners may, in practice, determine whether an
item passes or fails. Please see "Voting Rights" in the prospectus for the
Contracts accompanying this Prospectus for more information on your voting
rights.
Disclosure of Portfolio Holdings
Shares of the Trust are offered only to separate accounts of MetLife. The
following information is generally made available on one or more Insurance
Company web sites (including www.metlifeinvestors.com); (i) the ten largest
portfolio holdings of each Portfolio; (ii) unless the Adviser has objected, the
percentage that each of these holdings represents of the Portfolio's net assets;
and the percentage of the Portfolio's net assets that these top ten holdings
represent in the aggregate. This information is generally posted to the web site
on or about the first business day of the second month following the calendar
quarter. The Trust may exclude any portion of these holdings from the posting
when deemed in the best interest of the Trust. These postings generally remain
until replaced by new postings as described above.
A description of the Portfolios' policies and procedures with respect to
the disclosure of the Portfolios' portfolio securities is available in the SAI.
Dividends, Distributions and Taxes
Dividends and Distributions
Each Portfolio intends to distribute substantially all of its net
investment income, if any. Each Portfolio distributes its dividends from its net
investment income to MetLife's separate accounts at least once a year and not to
you, the Contract owner. These distributions are in the form of additional
shares and not cash. The result is that a Portfolio's investment performance,
including the effect of dividends, is reflected in the cash value of the
Contracts. Please see the Contract prospectus accompanying this Prospectus for
more information.
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