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 811-4256
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STATE STREET RESEARCH EXCHANGE TRUST
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(Exact name of registrant as specified in charter)
One Financial Center, Boston, MA 02111
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(Address of principal executive offices) (Zip code)
Francis J. McNamara, III, Secretary
State Street Research
One Financial Center
Boston, Massachusetts 02111
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(Name and address of agents for service)
Registrant's telephone number, including area code: (617) 357-1200
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Date of fiscal year end: December 31, 2002
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Date of reporting period: January 1, 2003 - June 30, 2003
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CPR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure
review, inspection, and policymaking roles.
ITEM 1 (REPORT TO SHAREHOLDERS): The Semiannual Report is attached.
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STATE STREET RESEARCH
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EXCHANGE FUND
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SEMIANNUAL REPORT
June 30, 2003
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WHAT'S INSIDE
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INVESTMENT UPDATE
About the Fund,
Economy and Markets
FUND INFORMATION
Facts and Figures
PLUS, COMPLETE PORTFOLIO HOLDINGS
AND FINANCIAL STATEMENTS
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[Dalbar logo] [Dalbar logo]
DALBAR DALBAR
RATED FOR MUTUAL FUND
COMMUNICATION SERVICE AWARD
2003 2002
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For Excellence For Excellence
in Shareholder in Shareholder
Communication Service
[logo] STATE STREET RESEARCH
STATE STREET RESEARCH EXCHANGE FUND
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INVESTMENT UPDATE
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INVESTMENT ENVIRONMENT
THE ECONOMY
o During the six-month period ended June 30, 2003, the uncertainty that plagued
the economy and the markets in the first quarter began to lift in the second
quarter.
o Consumer spending was steady, which benefited the housing and auto markets.
o The Federal Reserve Board lowered a key short-term interest rate from 1.25%
to 1.00% -- the lowest it has been in 45 years.
o The end to major military conflicts in Iraq and higher corporate profits
raised hopes that second half growth would continue to gain momentum.
THE MARKETS
o All major U.S. stock markets staged a strong comeback during the first six
months of the year. The S&P 500 Index rose 11.75% and the Russell 1000(R)
Index gained 12.34%.(1)
o Stocks outperformed bonds, but bonds continued to deliver solid returns. The
Lehman Brothers Aggregate Bond Index returned 3.93%.(1)
o High-yield bonds outperformed other bond sectors and many stock sectors: The
CSFB Global High Yield II Index returned 17.32% for the period.(1)
THE FUND
OVER THE PAST SIX MONTHS
o For the six months ended June 30, 2003, State Street Research Exchange Fund
returned 10.06%. It performed in line with its peer group, the Lipper
Large-Cap Core Funds Average, which returned 10.38% for the same period.(1)
o The fund's emphasis on Health Care helped returns during the first half of
the period, but detracted from returns in the second half when riskier
segments of the market dominated.
o The fund's investments in the Other Energy and Producer Durables sectors were
a source of positive return late in the period.
CURRENT STRATEGY
o The fund's s strategy remains unchanged: we invest in high-quality stocks
with the potential for long-term growth of earnings and dividends.
o We continue to emphasize the Consumer Staples, Health Care and Integrated
Oils sectors.
o The fund has less exposure to Consumer Discretionary, Financial Services,
Technology and Utilities stocks than its benchmark.
June 30, 2003
(1) The S&P 500 Index (officially the "Standard & Poor's 500 Composite Stock
Price Index") is an index of 500 U.S. stocks. The Russell 1000 Index
measures the performance of the 1,000 largest securities in the Russell
3000(R) Index (an Index of the 3,000 largest publicly traded companies). The
Lehman Brothers Aggregate Bond Index includes fixed-rate debt issues rated
investment-grade or higher. The CSFB High Yield II Index mirrors the public
high-yield debt market, representing a total of 250 different sectors within
this market. The indexes are unmanaged and do not take transaction charges
into consideration. It is not possible to invest directly in an index. The
Lipper Large-Cap Core Funds Average shows the performance of a category of
mutual funds with similar goals. The Lipper average shows you how well the
fund has done compared to competing funds.
(2) KEEP IN MIND THAT PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The
fund's share price, yield and return will fluctuate, and you may have a gain
or loss when you sell your shares. All returns assume reinvestment of
capital gains distributions and income dividends at net asset value. The
returns shown do not reflect the deduction of taxes that a shareholder would
pay on fund distributions or the redemption of fund shares.
PLEASE NOTE THAT THE DISCUSSION THROUGHOUT THIS SHAREHOLDER REPORT IS DATED AS
INDICATED AND, BECAUSE OF POSSIBLE CHANGES IN VIEWPOINT, DATA AND TRANSACTIONS,
SHOULD NOT BE RELIED UPON AS BEING CURRENT THEREAFTER.
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FUND INFORMATION (all data are for periods ended June 30, 2003)
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AVERAGE ANNUAL TOTAL RETURN (2)
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LIFE OF FUND
(since 12/17/76) 10 YEARS 5 YEARS 1 YEAR
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12.03% 10.80% -0.34% 1.35%
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TOP 10 STOCK POSITIONS
(by percentage of fund net assets)
1 EXXON MOBIL 6.8%
2 PFIZER 5.6%
3 JOHNSON & JOHNSON 5.0%
4 AMERICAN EXPRESS 4.9%
5 WAL-MART STORES 4.1%
6 ANHEUSER-BUSCH 4.0%
7 ST. PAUL COS. 3.9%
8 FIRST DATA 3.8%
9 PROCTER & GAMBLE 3.8%
10 TARGET 3.6%
These securities represent an aggregate of 45.5% of net assets. Because of
active management, there is no guarantee that the fund currently invests, or
will continue to invest, in the securities listed in this table or in the text
above.
TOP 5 INDUSTRIES
(by percentage of fund net assets)
Drugs & Biotechnology 21.6%
Oil: Integrated International 9.5%
Retail 7.7%
Miscellaneous Financial 7.4%
Multi-Sector 6.5%
Total: 52.7%
STATE STREET RESEARCH EXCHANGE FUND
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INVESTMENT PORTFOLIO
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June 30, 2003 (Unaudited)
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VALUE
SHARES (NOTE 1)
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COMMON STOCKS 97.2%
AUTOMOBILES & TRANSPORTATION 1.4%
AUTOMOBILES 1.4%
General Motors Corp. .......................... 112,800 $ 4,060,800
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Total Automobiles & Transportation ............ 4,060,800
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CONSUMER DISCRETIONARY 7.7%
RETAIL 7.7%
Target Corp. .................................. 273,222 10,338,720
Wal-Mart Stores Inc. .......................... 223,200 11,979,144
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Total Consumer Discretionary .................. 22,317,864
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CONSUMER STAPLES 13.9%
BEVERAGES 5.3%
Anheuser-Busch Inc. ........................... 225,200 11,496,460
Coca-Cola Co. ................................. 87,735 4,071,781
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15,568,241
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FOODS 2.3%
General Mills Inc. ............................ 138,400 6,561,544
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HOUSEHOLD PRODUCTS 3.8%
Procter & Gamble Co. .......................... 123,200 10,986,976
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TOBACCO 2.5%
Altria Group Inc. ............................. 160,300 7,284,032
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Total Consumer Staples ........................ 40,400,793
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FINANCIAL SERVICES 16.6%
BANKS & SAVINGS & LOAN 1.5%
J.P. Morgan Chase & Co. ....................... 124,728 4,263,203
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FINANCIAL DATA PROCESSING SERVICES & SYSTEMS 3.8%
First Data Corp. .............................. 270,017 11,189,505
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INSURANCE 3.9%
St. Paul Cos., Inc. ........................... 314,400 11,478,744
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MISCELLANEOUS FINANCIAL 7.4%
American Express Co. .......................... 339,531 14,195,791
Federal National Mortgage Association ......... 110,400 7,445,376
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21,641,167
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Total Financial Services ...................... 48,572,619
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HEALTH CARE 22.6%
DRUGS & BIOTECHNOLOGY 21.6%
AstraZeneca PLC ADR ........................... 76,000 3,098,520
Johnson & Johnson Ltd. ........................ 281,183 14,537,161
Merck & Company Inc. .......................... 92,244 5,585,374
Millipore Corp.* .............................. 150,000 6,655,500
Novartis AG ADR ............................... 185,384 7,380,137
Pfizer Inc. ................................... 476,342 16,267,080
Wyeth Inc. .................................... 206,944 9,426,299
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62,950,071
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HOSPITAL SUPPLY 1.0%
Medtronic Inc. ................................ 60,000 2,878,200
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Total Health Care ............................. 65,828,271
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INTEGRATED OILS 9.5%
INTEGRATED INTERNATIONAL 9.5%
BP PLC ADR .................................... 187,702 $7,887,238
Exxon Mobil Corp. ............................. 550,632 19,773,195
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Total Integrated Oils ......................... 27,660,433
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OTHER 6.5%
MULTI-SECTOR 6.5%
Berkshire Hathaway Inc. Cl. B* ................ 3,687 8,959,410
General Electric Co. .......................... 344,970 9,893,740
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Total Other ................................... 18,853,150
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OTHER ENERGY 2.0%
OFFSHORE DRILLING 0.2%
Transocean Inc. ............................... 21,148 464,621
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OIL WELL EQUIPMENT & SERVICES 1.8%
Schlumberger Ltd. ............................. 109,238 5,196,452
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Total Other Energy ............................ 5,661,073
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PRODUCER DURABLES 4.0%
AEROSPACE 1.6%
Boeing Co. .................................... 131,800 4,523,376
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INDUSTRIAL PRODUCTS 0.2%
Agilent Technologies Inc.* .................... 29,749 581,593
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MACHINERY 2.2%
Caterpillar Inc. .............................. 116,800 6,501,088
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Total Producer Durables ....................... 11,606,057
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TECHNOLOGY 10.9%
COMPUTER SOFTWARE 3.5%
Microsoft Corp. ............................... 399,890 10,241,183
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COMPUTER TECHNOLOGY 5.2%
Hewlett-Packard Co. ........................... 349,270 7,439,451
IBM Corp. ..................................... 92,371 7,620,608
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15,060,059
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ELECTRONICS 0.8%
Applera Corp. - Celera Genomics Group ......... 126,880 2,414,526
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ELECTRONICS: SEMICONDUCTORS/COMPONENTS 1.4%
Intel Corp. ................................... 200,000 4,156,800
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Total Technology .............................. 31,872,568
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UTILITIES 2.1%
TELECOMMUNICATIONS 2.1%
Vodafone Group PLC ADR ........................ 309,500 6,081,675
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Total Utilities ............................... 6,081,675
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Total Common Stocks (Cost $89,786,578) ........ 282,915,303
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PRINCIPAL MATURITY VALUE
AMOUNT DATE (NOTE 1)
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COMMERCIAL PAPER 2.9%
Citicorp. 0.95% ..................... $ 259,000 7/01/2003 $ 259,000
Citicorp. 1.07% ..................... 6,295,000 7/03/2003 6,294,626
General Electric Capital Corp. 0.90% 1,732,000 7/01/2003 1,732,000
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Total Commercial Paper (Cost $8,285,626) .................... 8,285,626
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Total Investments (Cost $98,072,204) - 101.1% ............... 291,200,929
Cash and Other Assets, Less Liabilities - (0.1%) ............ (183,357)
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Net Assets - 100.0% ......................................... $291,017,572
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Federal Income Tax Information:
At June 30, 2003, the net unrealized appreciation of investments
based on cost for federal income tax purposes of $89,655,097
was as follows:
Aggregate gross unrealized appreciation for all investments
in which there is an excess of value over tax cost ........ $205,076,542
Aggregate gross unrealized depreciation for all investments
in which there is an excess of tax cost over value ......... (3,530,710)
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$201,545,832
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* Non-income-producing securities.
ADR stands for American Depositary Receipt, representing ownership of foreign
securities.
The accompanying notes are an integral part of the financial statements.
STATE STREET RESEARCH EXCHANGE FUND
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STATEMENT OF ASSETS AND LIABILITIES
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JUNE 30, 2003 (Unaudited)
ASSETS
Investments, at value (Cost $98,072,204) (Note 1) . $291,200,929
Cash .............................................. 2,316
Dividends receivable .............................. 441,644
Other assets ...................................... 1,893
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291,646,782
LIABILITIES
Dividends payable ................................. 400,564
Accrued management fee (Note 2) ................... 115,936
Accrued administration fee (Note 2) ............... 14,487
Payable for fund shares redeemed .................. 10,000
Accrued transfer agent and shareholder services
(Note 2) ........................................ 8,953
Accrued trustees' fees (Note 2) ................... 110
Other accrued expenses ............................ 79,160
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629,210
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NET ASSETS
$291,017,572
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Net Assets consist of:
Undistributed net investment income ............. $832,949
Unrealized appreciation of investments .......... 193,128,725
Accumulated net realized loss ................... (15,245,745)
Paid-in capital ................................. 112,301,643
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$291,017,572
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Net Asset Value per share
($291,017,572 / 645,636 shares) ................. $ 450.75
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The accompanying notes are an integral part of the financial statements.
STATE STREET RESEARCH EXCHANGE FUND
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STATEMENT OF OPERATIONS
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For the six months ended June 30, 2003 (Unaudited)
INVESTMENT INCOME
Dividends, net of foreign taxes of $39,762 ......... $2,517,416
Interest (Note 1) .................................. 48,333
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2,565,749
EXPENSES
Management fee (Note 2) ............................ 671,540
Custodian fee ...................................... 47,640
Administration fee (Note 2) ........................ 41,912
Audit fee .......................................... 19,976
Transfer agent and shareholder services (Note 2) ... 13,919
Trustees' fees (Note 2) ............................ 5,820
Reports to shareholders ............................ 5,689
Legal fees ......................................... 1,612
Miscellaneous ...................................... 3,100
811,208
Fees paid indirectly (Note 2) ...................... (65)
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811,143
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Net investment income .............................. 1,754,606
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REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments (Notes 1 and 3) ... 2,034,908
Change in unrealized appreciation of investments ... 22,956,332
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Net gain on investments ............................ 24,991,240
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Net increase in net assets resulting from operations $26,745,846
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The accompanying notes are an integral part of the financial statements.
STATE STREET RESEARCH EXCHANGE FUND
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STATEMENT OF CHANGES IN NET ASSETS
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SIX MONTHS ENDED
JUNE 30, 2003 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2002
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INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income .............. $ 1,754,606 $ 3,148,853
Net realized gain on investments ... 2,034,908 18,801,652
Change in unrealized appreciation
(depreciation) of investments ...... 22,956,332 (87,422,804)
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Net increase (decrease) resulting
from operations .................. 26,745,846 (65,472,299)
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Dividends from net investment income
..................................... (970,056) (3,193,325)
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Share transactions:
Net asset value of shares issued in
payment of dividends ............. 167,370 497,555
Cost of shares repurchased ......... (3,428,768) (30,968,588)
------------ ------------
Net decrease from fund share
transactions ..................... (3,261,398) (30,471,033)
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Total increase (decrease) in net
assets ........................... 22,514,392 (99,136,657)
NET ASSETS
Beginning of period ................ 268,503,180 367,639,837
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End of period (including
undistributed net investment income
of $832,949 and $48,399,
respectively) .................... $291,017,572 $268,503,180
============ ============
Number of shares:
Issued upon reinvestment of
dividends ........................ 393 1,164
Repurchased ........................ (8,037) (66,335)
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Net decrease in fund shares ........ (7,644) (65,171)
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The accompanying notes are an integral part of the financial statements.
STATE STREET RESEARCH EXCHANGE FUND
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NOTES TO UNAUDITED FINANCIAL STATEMENTS
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NOTE 1
State Street Research Exchange Fund is a series of State Street Research
Exchange Trust (the "Trust"), which is a Massachusetts business trust registered
under the Investment Company Act of 1940, as an open-end management investment
company. The fund is presently the only series of the Trust.
The investment objective of the fund is to provide long-term growth of capital
and consequent long-term growth of income. In seeking to achieve its investment
objective, the fund invests primarily in common stocks, or securities
convertible into common stocks, that have long-term growth potential.
The following significant policies are consistently followed by the fund in
preparing its financial statements, and such policies are in conformity with
generally accepted accounting principles in the United States of America for
investment companies.
A. INVESTMENTS IN SECURITIES
Values for listed securities represent the last sale on national securities
exchanges quoted prior to the close of the New York Stock Exchange. Over-the-
counter securities quoted on the National Association of Securities Dealers
Automated Quotation ("Nasdaq") system are valued at the closing price supplied
through such system. In the absence of recorded sales and for those over-the-
counter securities not quoted on the Nasdaq system, valuations are at the mean
of the closing bid and asked quotations, except for securities that may be
restricted as to public resale, which are valued in accordance with methods
adopted by the Trustees. Security transactions are accounted for on the trade
date (date the order to buy or sell is executed), and dividends declared but not
received are accrued on the ex-dividend date. Interest income is determined on
the accrual basis. Realized gains and losses from security transactions are
reported on the basis of average cost of securities delivered.
B. FEDERAL INCOME TAXES
No provision for federal income taxes is necessary with respect to net
investment income since the fund has elected to qualify under Subchapter M of
the Internal Revenue Code and maintains a policy to distribute substantially all
of such income. It is also the intention of the fund to distribute an amount
sufficient to avoid imposition of any federal excise tax under Section 4982 of
the Internal Revenue Code. The fund retains and designates as undistributed
gains all of its taxable net long-term capital gains and pays federal income
taxes thereon on behalf of the shareholders. At December 31, 2002, the fund had
a capital loss carryforward of $17,280,653 available, to the extent provided in
regulations, to offset future capital gains, if any, of which $10,168,070 and
$7,112,583 expire on December 31, 2009 and 2010, respectively.
C. DIVIDENDS
Dividends from net investment income are declared and paid or reinvested
quarterly. Net realized short-term capital gains, if any, are distributed
annually.
Income dividends and capital gain distributions are determined in accordance
with federal income tax regulations which may differ from generally accepted
accounting principles in the United States of America. The difference is
primarily due to differing treatments for nontaxable redemptions in kind and the
disposition of securities that have different bases for financial reporting and
tax purposes. The permanent book and tax basis difference relating to
shareholder distributions will result in reclassifications to paid-in capital.
D. ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of income and expenses during
the reporting period. Actual results could differ from these estimates.
E. SECURITIES LENDING
The fund may seek additional income by lending portfolio securities to qualified
institutions. The fund will receive cash or securities as collateral in an
amount equal to at least 100% of the current market value of any loaned
securities plus accrued interest. By reinvesting any cash collateral it receives
in these transactions, the fund could realize additional gains and losses. If
the borrower fails to return the securities and the value of the collateral has
declined during the term of the loan, the fund will bear the loss. At June 30,
2003, there were no loaned securities.
NOTE 2
The Trust and State Street Research & Management Company (the "Adviser"), an
investment management subsidiary of MetLife, Inc. ("MetLife"), have entered into
a contract that provides for an annual fee equal to 0.50% of the fund's average
daily net assets. In consideration of these fees, the Adviser furnishes the fund
with management, investment advisory, statistical and research facilities and
services. The Adviser also pays all salaries, rent and certain other expenses of
management. During the six months ended June 30, 2003, the fees pursuant to such
agreement amounted to $671,540.
State Street Research Service Center, a division of State Street Research
Investment Services, Inc., the Trust's principal underwriter (the
"Distributor"), a subsidiary of MetLife, provides certain shareholder services
to the fund, such as responding to inquiries and instructions from investors
with respect to the purchase and redemption of shares of the fund. Total
shareholder service costs are allocated to each fund in the same ratio as the
transfer agent costs. During the six months ended June 30, 2003, the amount of
such expenses was $3,844.
The fund has entered into an arrangement with its transfer agent whereby credits
realized as a result of uninvested cash balances were used to reduce a portion
of the fund's expenses. During the six months ended June 30, 2003, the fund's
transfer agent fees were reduced by $65 under this arrangement.
The fees of the Trustees not currently affiliated with the Adviser amounted to
$5,820 during the six months ended June 30, 2003.
The fund has agreed to pay the Adviser for certain administrative costs incurred
in providing other assistance and services to the fund. The fee is based on a
fixed amount that has been allocated equally among State Street Research funds.
During the six months ended June 30, 2003, the amount of such expenses was
$41,912.
NOTE 3
For the six months ended June 30, 2003, exclusive of short-term investments and
U.S. government obligations, purchases and sales of securities, including
$2,853,096 representing redemptions in kind, aggregated $0 and $2,853,096,
respectively.
NOTE 4
PricewaterhouseCoopers LLP resigned as the Fund's independent accountants as of
April 25, 2003. The Trustees voted to appoint Deloitte & Touche LLP as the
Fund's independent accountants for the Fund's fiscal year ended December 31,
2003. During the previous two years, PricewaterhouseCoopers LLP's audit reports
contained no adverse opinion or disclaimer of opinion; nor were its reports
qualified or modified as to uncertainty, audit scope, or accounting principle.
Further, in connection with its audits for the two previous fiscal years and
through April 25, 2003, there were no disagreements between the Fund and
PricewaterhouseCoopers LLP on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure, which if not
resolved to the satisfaction of PricewaterhouseCoopers LLP would have caused it
to make reference to the disagreements in its report on the financial statements
for such years.
NOTE 5
The Trustees have the authority to issue an unlimited number of shares of
beneficial interest at $0.001 par value per share.
At June 30, 2003, the Adviser owned 13,766 shares of the fund.
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FINANCIAL HIGHLIGHTS
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For a share outstanding throughout each period:
SIX MONTHS ENDED YEARS ENDED DECEMBER 31
JUNE 30, 2003 --------------------------------------------------
(UNAUDITED) 2002 2001 2000 1999 1998
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NET ASSET VALUE, BEGINNING OF PERIOD ($) 411.01 511.71 575.76 616.80 524.22 421.09
------ ------ ------ ------ ------ ------
Net investment income ($) 2.72 4.74 4.22 4.75 4.54 5.00
Net realized and unrealized gain (loss) on investments ($) 38.52 (100.64) (64.02) (41.19) 92.69 103.13
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ($) 41.24 (95.90) (59.80) (36.44) 97.23 108.13
------ ------ ------ ------ ------ ------
Dividends from net investment income ($) (1.50) (4.80) (4.25) (4.60) (4.65) (5.00)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ($) (1.50) (4.80) (4.25) (4.60) (4.65) (5.00)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ($) 450.75 411.01 511.71 575.76 616.80 524.22
====== ====== ====== ====== ====== ======
Total return (%) 10.06(a) (18.78) (10.35) (4.13) 18.59 28.09
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period ($ thousands) 291,018 268,503 367,640 437,804 485,161 431,194
Expense ratio (%) 0.60(b) 0.60 0.57 0.55 0.55 0.56
Expense ratio after expense reductions (%) 0.60(b) 0.60 0.57 0.55 0.55 0.56
Ratio of net investment income to average net assets (%) 1.31(b) 1.00 0.81 0.78 0.78 1.05
Portfolio turnover rate (%) 0.00 3.32 1.44 10.51 1.04 4.52
*After provision for federal tax on retained capital gains at end
of period -- -- -- 11.01 -- 9.72
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(a) Not Annualized
(b) Annualized
STATE STREET RESEARCH EXCHANGE TRUST
NUMBER OF
TERM OF FUNDS
OFFICE IN FUND
AND COMPLEX OTHER
POSITION(s) LENGTH OF OVERSEEN BY DIRECTORSHIPS
NAME, ADDRESS HELD TIME TRUSTEE/ HELD BY
AND AGE(a) WITH FUND SERVED(b) PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS OFFICER(c) TRUSTEE/OFFICER
- ------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
BRUCE R. BOND Trustee Since Retired; formerly Chairman of the Board, Chief 19 Ceridian Corporation
(57) 1999 Executive Officer and President, PictureTel
Corporation (video conferencing systems)
- ------------------------------------------------------------------------------------------------------------------------------------
STEVE A. GARBAN Trustee Since Retired; formerly Senior Vice President for Finance 55 Metropolitan Series Fund,
(65) 1997 and Operations and Treasurer, The Pennsylvania Inc.(d)
State University
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DEAN O. MORTON Trustee Since Retired; formerly Executive Vice President, Chief 55 The Clorox Company; KLA-
(71) 1994 Operating Officer and Director, Hewlett-Packard Tencor Corporation; BEA
Company (computer manufacturer) Systems, Inc.; Cepheid;
Pharsight Corporation;
and Metropolitan Series
Fund, Inc.(d)
- ------------------------------------------------------------------------------------------------------------------------------------
SUSAN M. PHILLIPS Trustee Since Dean, School of Business and Public Management, 19 The Kroger Co.
(58) 1999 George Washington University; formerly a member of
the Board of Governors of the Federal Reserve
System and Chairman and Commissioner of the
Commodity Futures Trading Commission
- ------------------------------------------------------------------------------------------------------------------------------------
TOBY ROSENBLATT Trustee Since President, Founders Investments Ltd. (investments); 55 AP Pharmacia, Inc.; and
(65) 1994 formerly President, The Glen Ellen Company (private Metropolitan Series Fund,
investment firm) Inc.(d)
- ------------------------------------------------------------------------------------------------------------------------------------
MICHAEL S. SCOTT Trustee Since Jay W. Forrester Professor of Management, Sloan 55 Metropolitan Series Fund,
MORTON 1994 School of Management, Massachusetts Institute of Inc.(d)
(66) Technology
- ------------------------------------------------------------------------------------------------------------------------------------
JAMES M. STOREY Trustee Since Attorney; formerly Partner, Dechert (law firm) 19 SEI Investments Funds
(72) 2002 (consisting of 104
portfolios); and The
Massachusetts Health &
Education Tax-Exempt
Trust
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INTERESTED TRUSTEES
RICHARD S. DAVIS((+)) Trustee Since Chairman of the Board, President and Chief 19 None
(57) 2000 Executive Officer of State Street Research &
Management Company; formerly Senior Vice President,
Fixed Income Investments, Metropolitan Life
Insurance Company
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OFFICERS
EDWARD DOWD Vice Since Vice President of State Street Research & 7 None
(36) President 2003 Management Company; formerly Vice President,
Independence Investment, LLC and equity research
associate, Donaldson, Lufkin and Jenrette
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C. KIM GOODWIN Vice Since Managing Director and Chief Investment Officer- 18 None
(44) President 2002 Equities of State Street Research & Management
Company; formerly Chief Investment Officer-U.S.
Growth Equities, American Century; and Senior Vice
President and portfolio manager, Putnam Investments
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JEFFREY LINDSEY Vice Since Managing Director of State Street Research & 7 None
(41) President 2003 Management Company; formerly Managing Director
and Senior Vice President, Putnam Investments
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JOHN S. LOMBARDO Vice Since Managing Director, Chief Financial Officer and 19 None
(48) President 2001 Director of State Street Research & Management
Company; formerly Executive Vice President, State
Street Research & Management Company; and Senior
Vice President, Product and Financial Management,
MetLife Auto & Home
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DOUGLAS A. ROMICH Treasurer Since Senior Vice President and Treasurer of State Street 19 None
(46) 2001 Research & Management Company; formerly Vice
President and Assistant Treasurer, State Street
Research & Management Company
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FRANCIS J. MCNAMARA, Secretary Since Managing Director, General Counsel and Secretary of 19 None
III 1995 State Street Research & Management Company;
(47) formerly Executive Vice President, State Street
Research & Management Company
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The fund's Statement of Additional Information includes additional information about the fund's trustees, and is available without
charge, by contacting State Street Research, One Financial Center, Boston, Massachusetts 02111-2690, or by calling toll-free
1-87-SSR-FUNDS (1-877-773-8637).
(a) The address of each person is c/o State Street Research & Management Company, One Financial Center, Boston, MA 02111-2690.
(b) A Trustee serves until he or she retires, resigns or is removed as provided in the master trust agreement of the respective
Trust. Each Trust has adopted a mandatory retirement age of 72. Each officer holds office until he or she resigns, is removed
or a successor is elected.
(c) Includes all series of 9 investment companies for which State Street Research & Management Company has served as sole
investment adviser and all series of Metropolitan Series Fund, Inc. The primary adviser to Metropolitan Series Fund, Inc. is
MetLife Advisers, LLC, which has retained State Street Research & Management Company as sub-adviser to certain series of
Metropolitan Series Fund, Inc.
(d) Serves as Director of Metropolitan Series Fund, Inc., an investment company comprising 36 separate portfolios.
(+) Mr. Davis is an "interested person" of the Trust under the Investment Company Act of 1940 by reason of his affiliation with the
Trust's Investment Manager, State Street Research & Management Company as noted.
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STATE STREET RESEARCH EXCHANGE FUND PRSRT STD
One Financial Center U.S. POSTAGE
Boston, MA 02111-2690 PAID
PERMIT NO. 6
HUDSON, MA
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QUESTIONS? COMMENTS?
E-MAIL us at:
info@ssrfunds.com
VISIT us at:
WWW.SSRFUNDS.COM
CALL us toll-free at 1-87-SSR-FUNDS (1-877-773-8637)
Hearing-impaired: 1-800-676-7876
Spanish-speaking: 1-888-638-3193
WRITE us at:
State Street Research
Service Center
P.O. Box 8408
Boston, MA 02266-8408
[Logo] STATE STREET RESEARCH
(C)2003 State Street Research Investment Services, Inc., One Financial Center,
Boston, MA 02111-2690
This report is prepared for the general information of current shareholders.
Portfolio changes should not be considered recommendations for action by
individual investors.
The Dalbar awards recognize quality shareholder service and quality shareholder
communications, and should not be considered a rating of fund performance. The
survey included mutual fund complexes that volunteered or were otherwise
selected to participate and was not industry wide.
CONTROL NUMBER: (exp0804)SSR-LD EX-2191-0803
ITEM 2. CODE OF ETHICS.
Not applicable at this time. Applicable for annual reports filed for fiscal
years ending on or after July 15, 2003.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable at this time. Applicable for annual reports filed for fiscal
years ending on or after July 15, 2003.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable at this time. Applicable for annual reports filed for the first
fiscal year ending after December 15, 2003.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
If applicable, not applicable at this time. Applicable for annual reports
covering periods ending on or after the compliance date for the listing
standards applicable to the particular issuer. Listed issuers must be in
compliance with the new listing rules by the earlier of the registrant's first
annual shareholders meeting after January 15, 2004 or October 31, 2004.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
If applicable, not applicable at this time. Applicable for annual reports filed
on or after July 1, 2003.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) SUB-ITEM 9A -- The Principal Executive Officer and the Principal
Financial Officer have concluded that the State Street Research Exchange
Trust disclosure controls and procedures (as defined in Rule 30-a2(c)
under the Investment Company Act) provide reasonable assurances that
material information relating to the State Street Research Exchange Trust
is made known to them by the appropriate persons, based on their
evaluation of these controls and procedures as of a date within 90 days of
the filing date of this report.
(b) SUB ITEM 9b -- There were no significant changes in the registrant's
internal controls or in other factors that could significantly affect
these controls subsequent to the date of their evaluation referenced in
(a)(i) above.
ITEM 10. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant
intends to satisfy the Item 2 requirements through filing of an
exhibit: Not applicable.
(b) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule
30a-2(a) under the Act (17 CFR 270.30a-2): Attached hereto.
[If the report is filed under Section 13(a) or 15(d) of the Exchange Act,
provide the certifications required by Rule 30a-2(b) under the Act (17 CFR
270.30a-2(b)) and Section 1350 of Chapter 63 of Title 18 of the United
States Code (18 U.S.C. 1350) as an exhibit. A certification furnished
pursuant to this paragraph will not be deemed "filed" for the purposes of
Section 18 of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the
liability of that section. Such certification will not be deemed to be
incorporated by reference into any filing under the Securities Act of 1933
or the Exchange Act, except to the extent that the registrant specifically
incorporates it by reference: Attached hereto.][The submission of Section
906 certifications has been proposed by the SEC, but has not yet been
finalized. The SEC has encouraged issuers to submit Section 906
certifications as an exhibit to Form N-CSR until the final rule has been
adopted. Please see Proposed Rule: Certification of Disclosure in Certain
Exchange Act Reports, Release No. 33-8212 (March 21, 2003)].
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.
(Registrant) STATE STREET RESEARCH EXCHANGE TRUST
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By (Signature and Title)* /s/ RICHARD S. DAVIS
-----------------------------------------------------
Richard S. Davis, President, Chairman and
Chief Executive Officer
Principal Executive Officer
Date: August 29, 2003
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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 (Signature and Title)* /s/ RICHARD S. DAVIS
-----------------------------------------------------
Richard S. Davis, President, Chairman and
Chief Executive Officer
Principal Executive Officer
Date: August 29, 2003
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By (Signature and Title)* /s/ DOUGLAS A. ROMICH
------------------------------------------------------
Douglas A. Romich, Treasurer,
Principal Financial Officer
Date: August 29, 2003
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* Print name and title of each signing officer under his or her signature.