SULLIVAN & WORCESTER LLP
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January 4, 2008
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
Lazard Mid-Cap Portfolio
Form N-14 Registration Statement
File No. 333-147928
Ladies and Gentlemen:
This letter is in response to certain comments from Ms. Allison White of
the Staff with respect to the Trust's Registration Statement on Form N-14 filed
with the Commission on December 7, 2007. Our response to certain accounting
related comments will be in a separate letter. Where noted, changes, as
applicable, have been made to the Prospectus/Proxy Statement. All page
references refer to the pages of these documents which have been marked to show
changes from the previous versions included in the Registration Statement.
1. Comment: In the first sentence of the first paragraph under the bullet
points on page 2 of the prospectus/proxy statement, add the word "of"
immediately after the phrase "all the assets".
Response: The requested change has been made on page 2.
2. Comment: In the penultimate paragraph on page 2 of the prospectus/proxy
statement, explain what synthetic instruments are and describe the types of
synthetic instruments that Lazard Mid-Cap Portfolio may use to comply with
the 80% investment requirement.
Response: The requested additional disclosure has been added to page 2.
3. Comment: On pages 17 through 20 of the prospectus/proxy statement, identify
additional risks, if any, associated with investing in synthetic
instruments.
Response: Risk disclosure with respect to synthetic instruments has been
added to page 20.
4. Comment: Page 13 of the prospectus/proxy statement shows year-by-year total
returns for Lazard Mid-Cap Portfolio beginning in 2003 but the lowest
quarter returns for that Portfolio are shown as occurring in the third
quarter of 2002. Please make the appropriate correction to this disclosure.
Response: Performance information for 2002 has been added to the
year-by-year total returns of Lazard Mid-Cap (page 13).
5. Comment: Page 14 of the prospectus/proxy statement shows prior experience
with a comparable fund. If Lazard Asset Management LLC manages any other
funds with similar investment objectives and strategies to those of Lazard
Mid-Cap Portfolio, supplementally include a representation that it is not
misleading to omit the performance of those other funds from the
prospectus/proxy statement.
Response: The use of prior experience with a comparable fund in the
Prospectus/Proxy Statement is the same disclosure as found in the current
prospectus for Lazard Mid-Cap. Since the Portfolio and the Lazard
comparable fund are managed in substantially similar ways, it is not
misleading to present just the result of the comparable fund instead of a
composite of funds managed in the mid-cap strategy.
6. Comment: On page 15 of the prospectus/proxy statement, define the term
"Manager" again.
Response: The requested definition has been added to page 15.
7. Comment: The discussion of the federal tax consequences of the
reorganization that is required by Item 3 of Form N-14 should appear in the
prospectus/proxy statement before the performance information.
Response: The format for the Prospectus/Proxy Statement has been utilized
by Met Investors Series Trust for over five years. The most important tax
consequence of the Reorganization is whether or not it is tax free. A
statement to the effect that the Reorganization is structured as a tax-free
reorganization for federal income tax purposes is found in the Summary on
page 6 under the section titled "What are the key features of the
Reorganization?" This section is before the section on performance.
8. Comment: Provide the accountant's consent dated within 5 days of the filing
date.
Response: The consent of Deloitte & Touche LLP will be included in
Post-Effective Amendment No. 1.
9. Comment: Include Tandy language in your response letter.
Response: The requested language is included in this letter.
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 expects to file a 485(b) filing on January 7, 2008.
If you have any questions, please feel free to call me at (202) 775-1205.
Very truly yours,
/s/ Robert N. Hickey
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Robert N. Hickey
Attachments
cc: Elizabeth Forget
Jack Huntington
John Rizzo
o "Record Holder" of Batterymarch Mid-Cap Stock refers to each Insurance
Company which holds Batterymarch Mid-Cap Stock's shares of record
unless indicated otherwise in this Prospectus/Proxy Statement;
o "shares" refers generally to your shares of beneficial interest in the
Portfolio; and
o "shareholder" or "Contract Owner" refers to you.
In the Reorganization, all of the assets of Batterymarch Mid-Cap Stock
will be acquired by Lazard Mid-Cap in exchange for Class A shares of Lazard
Mid-Cap and the assumption by Lazard Mid-Cap of the liabilities of Batterymarch
Mid-Cap Stock (the "Reorganization"). If the Reorganization is approved, Class A
shares of Lazard Mid-Cap will be distributed to each Record Holder in
liquidation of Batterymarch Mid-Cap Stock, and Batterymarch Mid-Cap Stock will
be terminated as a series of the Trust. You will then hold that number of full
and fractional shares of Lazard Mid-Cap which have an aggregate net asset value
equal to the aggregate net asset value of your shares of Batterymarch Mid-Cap
Stock.
Batterymarch Mid-Cap Stock and Lazard Mid-Cap are each separate
diversified series of the Trust, a Delaware statutory trust, which is registered
as an open-end management investment company under the Investment Company Act of
1940, as amended (the "1940 Act"). The investment objective of Batterymarch
Mid-Cap Stock is substantially similar to that of Lazard Mid-Cap, as follows:
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Portfolio Investment Objective
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Batterymarch Mid-Cap Stock Growth of capital
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Lazard Mid-Cap Long-term growth of capital
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The investment strategies for Batterymarch Mid-Cap Stock are similar to
those of Lazard Mid-Cap: each invests at least 80% of its assets in the equity
securities of companies with medium market capitalizations. However,
Batterymarch Mid-Cap Stock does not anticipate that foreign securities will
exceed 20% of its net assets while Lazard Mid-Cap may invest up to 25% of its
total assets in foreign securities. In addition, Lazard Mid-Cap may invest in
synthetic instruments in complying with its 80% investment requirement.
Synthetic instruments are instruments that have economic characteristics similar
to the Portfolio's direct investment, and may include warrants, futures,
options, exchange-traded funds and American Depositary Receipts. Further, the
weighted average market capitalization of companies invested in by Batterymarch
Mid-Cap Stock as of September 30, 2007 was $6.4 billion compared to the weighted
average market of $6.8 billion of companies invested in by Lazard Mid-Cap.
This Prospectus/Proxy Statement explains concisely the information about
Lazard Mid-Cap that you should know before voting on a Reorganization. Please
read it carefully and keep it for future reference. Additional information
concerning each Portfolio and Reorganization is contained in the documents
described below, all of which have been filed with the Securities and Exchange
Commission ("SEC"):
Portfolio, which may have occurred before your Contract began; accordingly, your
investment results may differ. Each Portfolio can also experience short-term
performance swings as indicated in the high and low quarter information at the
bottom of each chart.
Batterymarch Mid-Cap Stock
- ------------ --------- ----------- ----------- ----------- ---------- ---------- --------- --------- ----------
16.91% 13.38% 16.61% -4.02% -14.32% 33.75% 16.45% 12.41% 5.67% 6.06%
=====
98 99 00 01 02 03 04 05 06 07
- ------------ --------- ----------- ----------- ----------- ---------- ---------- --------- --------- ----------
High Quarter 4th - 1998 + 26.68%
Low Quarter: 3rd - 2001 - 16.71%
Lazard Mid-Cap
- ------------------ ----------- ----------- ---------- ----------- ----------
-10.18% 26.42% 14.60% 8.40% 14.78% -2.47%
======= ======
02
03 04 05 06 07
- ------------------ ----------- ----------- ---------- ----------- ----------
High Quarter: 2nd - 2003 + 15.50%
Low Quarter: 3rd - 2002 - 14.30%
The next set of tables lists the average annual total return of the Class A
shares of Batterymarch Mid-Cap Stock for the past one-, five- and ten-year
periods (through December 31, 2007), and the average annual total return of the
Class A shares of Lazard Mid-Cap for the past one- and five-year periods and
since inception (through December 31, 2007). These tables include the effects of
Portfolio expenses and are intended to provide you with some indication of the
risks of investing in each Portfolio by comparing its performance with an
appropriate widely recognized index of securities, a description of which can be
found following the table. An index does not reflect fees or expenses. It is not
possible to invest directly in an index.
Average Annual Total Return (for the period ended 12/31/07)
- ----------------------------- -------------- ---------------- ------------------
1 Year 5 Years 10 Years
Batterymarch Mid-Cap Stock
- ----------------------------- -------------- ---------------- ------------------
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Class A 6.06% 14.44% 9.58%
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S&P MidCap 400 Index 7.98% 16.20% 11.19%
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Since Inception Inception Date
Lazard Mid-Cap 1 Year 5 Year
- ----------------------------- -------------- ---------------- ------------------- ------------------
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Class A -2.47% 11.96% 7.91% 1/2/02
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Russell Midcap Index 5.60% 18.21% 11.63%
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Important information about Lazard Mid-Cap is also contained in
management's discussion of Lazard Mid-Cap's performance which appears in the
most recent Annual Report and Semi-Annual Report of the Trust relating to Lazard
Mid-Cap.
Who will be the investment adviser of my Portfolio after the Reorganization?
What will the management and advisory fees be after the Reorganization?
Management of the Portfolios
The overall management of Batterymarch Mid-Cap Stock and Lazard Mid-Cap
is the responsibility of, and is supervised by, the Board of Trustees of the
Trust.
Manager
Met Investors Advisory, LLC (the "Manager") selects and pays the fees
of the Adviser for each Portfolio and monitors the Adviser's investment program.
MetLife Investors Group, Inc., an affiliate of MetLife, owns all of the
outstanding common shares of the Manager.
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Facts about the Manager:
o The Manager is an affiliate of MetLife.
o The Manager manages a family of investment portfolios sold
primarily to separate accounts of MetLife and its affiliates to
fund variable life insurance contracts and variable annuity
certificates and contracts, with assets of approximately $37.2
billion as of September 30, 2007.
o The Manager is located at 5 Park Plaza, Suite 1900, Irvine,
California 92614.
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Adviser
Lazard Asset Management LLC or "Lazard" (the "Adviser") is the
investment adviser to Lazard Mid-Cap. Pursuant to an Advisory Agreement with the
Manager, the Adviser continuously furnishes an investment program for the
Portfolio, makes day-to-day investment decisions on behalf of the Portfolio, and
arranges for the execution of Portfolio transactions.
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Facts about the Adviser:
o The Adviser and its global affiliates provide investment management
services to client discretionary accounts with assets totaling
approximately $127.7 billion as of September 30, 2007.
Different investment styles tend to shift in and out of favor depending
upon market and economic conditions as well as investor sentiment. A Portfolio
may outperform or underperform other funds that employ a different investment
style. A Portfolio may also employ a combination of styles that impact its risk
characteristics. Examples of different investment styles include growth and
value investing. Growth stocks may be more volatile than other stocks because
they are more sensitive to investor perceptions of the issuing company's growth
of earnings potential. Also, since growth companies usually invest a high
portion of earnings in their business, growth stocks may lack the dividends of
value stocks that can cushion stock prices in a falling market. Growth oriented
funds will typically underperform when value investing is in favor. Value stocks
are those which are undervalued in comparison to their peers due to adverse
business developments or other factors. Value investing carries the risk that
the market will not recognize a security's inherent value for a long time, or
that a stock judged to be undervalued may actually be appropriately priced or
overvalued. Value oriented funds will typically underperform when growth
investing is in favor.
Are there any other risks of investing in each Portfolio?
In complying with Lazard Mid-Cap's 80% investment requirement in mid-cap
companies, the Portfolio's investments may include synthetic (derivative)
instruments. The Portfolio's investments in derivatives can significantly
increase the Portfolio's exposure to market risk or credit risk of the
counterparty. Derivatives can also involve the risk of mispricing or improper
valuation and the risk that changes in the value of the derivative may not
correlate perfectly with the relevant assets rates or indices.
Batterymarch Mid-Cap Stock's portfolio turnover rates may exceed 100%.
High portfolio turnover rates generally mean greater brokerage costs which can
already affect a Portfolio's performance. The portfolio turnover rates for
Lazard Mid-Cap are expected to be under 100%.
INFORMATION ABOUT THE REORGANIZATION
Reasons for the Reorganization
The Reorganization is part of an overall plan to reduce the number of
portfolios with overlapping investment objectives and policies in the families
of funds which serve as funding vehicles for insurance contracts issued by the
Insurance Company and its affiliates. Reduction in the number of such portfolios
is an attempt to improve the operating efficiencies of the Trust's remaining
portfolios.
At a regular meeting held on November 6, 2007, all of the Trustees of the
Trust, including the Independent Trustees, considered and approved the
Reorganization; they determined that the Reorganization was in the best
interests of shareholders of Batterymarch Mid-Cap Stock, and that the interests
of existing shareholders of Batterymarch Mid-Cap Stock will not be diluted as a
result of the transactions contemplated by the Reorganization.