<Page>
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 811-04911
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State Street Research Financial 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, MA 02111
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(Name and address of agent for service)
Registrant's telephone number, including area code: 617-357-1200
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Date of fiscal year end: 02/28/04
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Date of reporting period: 03/1/03 - 08/31/03
----------------------------
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 CFR 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 LOGO]
[GRAPHIC]
HEALTH SCIENCES FUND
AUGUST 31, 2003
SEMIANNUAL REPORT TO SHAREHOLDERS
<Page>
TABLE OF CONTENTS
<Table>
3 Performance Discussion
4 Portfolio Holdings
5 Financial Statements
9 Financial Highlights
12 Trustees and Officers
</Table>
FROM THE CHAIRMAN
STATE STREET RESEARCH
The uncertainty that plagued the markets early in the six-month period ended
August 31, 2003, gave way to optimism as a military victory was declared in Iraq
and economic news brightened. Lower short-term interest rates, a significant
income tax cut and higher government spending worked together to boost
economic growth in the last six months of the period. Housing and auto sales
remained strong throughout the period. Corporate profits staged a solid rebound.
Employment was the only holdout, as the jobless rate remained at a nine-year
high.
A WEAK START, THEN STOCKS MOVE HIGHER
The economy's weak showing held stocks back early in the period as investors
backed away from risk in the build-up to war. However, in the second quarter of
2003 stocks staged an impressive rally that continued through the summer.
Technology stocks were the strongest performers. Consumer stocks also gained
ground as spending remained strong. In general, small- and mid-cap stocks
outperformed large-caps, and growth stocks significantly out-paced value.
BONDS RETREAT IN SECOND HALF
As investors began to add risk to their portfolios, lower-quality segments of
the bond market staged an impressive comeback. High-yield and emerging market
bonds were the period's strongest performers. However, as interest rates began
to climb and as investors moved money into the stock market, they gave back some
of their gains in the second half of the period. Mortgage bonds lagged as
mortgage prepayment activity heated up in the spring. Municipal bonds were hurt
by concerns over state budget deficits and revenue shortfalls.
LOOKING AHEAD
A revival for riskier segments of both the stock and bond markets took many
investors by surprise over the past year. Yet, it provided an excellent reminder
that the best way to take advantage of the market's strongest gains is to own a
diversified portfolio of stocks and bonds. We hope you will take time to talk to
your financial advisor about diversification. And as always, we look forward to
helping you achieve your long-term financial goals with State Street Research
Funds.
Sincerely,
/s/ Richard S. Davis
Richard S. Davis
Chairman
August 31, 2003
2
<Page>
PERFORMANCE
DISCUSSION AS OF AUGUST 31, 2003
HOW STATE STREET RESEARCH HEALTH SCIENCES FUND PERFORMED
State Street Research Health Sciences Fund returned 52.46% for the six-month
period ended August 31, 2003.(1) The fund did significantly better than the
Lipper Health/Biotechnology Funds Index, which returned 17.62%.(2) It also
outperformed the S&P 500 Index, which returned 20.87% for the same period.(3)
REASONS FOR THE FUND'S PERFORMANCE
Health care stocks that underperformed during the past three years were buoyed
by the market rally, and our stock selection allowed us to capitalize on that
rebound. In general, the fund benefited from its investments in biotechnology
and small-cap pharmaceutical companies. Within biotechnology, DOV Pharmaceutical
and Axonyx, both micro-cap names with demonstrated product development, were
strong performers. In the pharmaceutical industry, MGI Pharmaceutical and
BioMarin Pharmaceutical also outperformed. In medical instruments, Staar
Surgical, an optical supply firm that markets implants that improve a patient's
vision, was also a strong performer.
By contrast, our decision to overweight Wyeth, one of the world's largest drug
makers, and Aradigm, a small firm that develops pulmonary drug delivery systems,
detracted from performance.
LOOKING AHEAD
We expect that increased pressure to control health care costs will pose a
challenge to the Health Care sector as the nation begins to count down to a
presidential election. However, we will continue to focus on select small- and
mid-cap securities, as well as international drug/biotech stocks, with
innovative pipeline products that address unmet medical needs. We believe these
stocks have the best potential to succeed in the current environment going
forward.
TOP 10 HOLDINGS
<Table>
<Caption>
ISSUER/SECURITY % OF FUND NET ASSETS
1 Novartis AG 4.4%
2 Orphan Medical 4.4%
3 DOV Pharmaceutical 4.3%
4 Wyeth 4.0%
5 Pfizer 3.1%
6 Aspect Medical Systems 3.0%
7 Amgen 2.5%
8 Discovery Laboratories 2.5%
9 TheraSense 2.4%
10 Schering-Plough 2.3%
TOTAL 32.9%
</Table>
BECAUSE FINANCIAL MARKETS AND MUTUAL FUND STRATEGIES ARE CONSTANTLY EVOLVING, IT
IS POSSIBLE THAT THE FUND'S HOLDINGS, MARKET STANCE, OUTLOOK FOR VARIOUS
INDUSTRIES OR SECURITIES AND OTHER MATTERS DISCUSSED IN THIS REPORT HAVE CHANGED
SINCE THIS INFORMATION WAS PREPARED. PORTFOLIO CHANGES SHOULD NOT BE CONSIDERED
RECOMMENDATIONS FOR ACTION BY INDIVIDUAL INVESTORS.
PERFORMANCE
Fund average annual total return as of 8/31/03(4),(6),(7)
(does not reflect sales charge)
<Table>
<Caption>
SINCE
INCEPTION
1 YEAR 3 YEARS (12/21/99)
Class A 47.86% 5.77% 19.14%
Class B(1) 46.82% 5.17% 18.59%
Class B 46.85% 4.97% 18.41%
Class C 46.94% 5.11% 18.54%
Class S 48.33% 6.03% 19.38%
</Table>
Fund average annual total return as of 9/30/03(4),(5),(6),(7)
(at maximum applicable sales charge)
<Table>
<Caption>
SINCE
INCEPTION
1 YEAR 3 YEARS (12/21/99)
Class A 53.24% 2.80% 17.61%
Class B(1) 56.31% 3.30% 18.41%
Class B 56.43% 3.11% 18.23%
Class C 60.48% 4.17% 18.85%
Class S 62.97% 5.12% 19.71%
</Table>
(1) Class A shares; does not reflect sales charge.
(2) The Lipper Health/Biotechnology Funds Index is an equally weighted index of
typically the 30 largest mutual funds within its respective investment
objective. The index is unmanaged and does not take transaction charges
into consideration. It is not possible to invest directly in the index.
(3) The S&P 500 Index (officially the "Standard & Poor's 500 Composite Stock
Price Index") is an unmanaged index of 500 U.S. stocks. The index does not
take transaction charges into consideration. It is not possible to invest
directly in the index.
(4) KEEP IN MIND THAT PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The
fund's share price 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
distributions or the redemption of fund shares. Because this fund is
focused on one market sector, it may involve more risk than broadly
diversified funds, since its entire portfolio will be impacted by the
performance of the health care industry in general. Performance results for
the fund are increased by voluntary reduction of fund fees and expenses;
without subsidization, performance would have been lower.
(5) Performance reflects a maximum 5.75% Class A share front-end sales charge,
or a 5% Class B or Class B(1), or 1% Class C share contingent deferred
sales charge, where applicable.
(6) For Classes B(1), B, C and S, performance for the period December 21, 1999
through October 16, 2000 (commencement of share class) reflects performance
of Class A shares.
(7) Class S shares, offered without sales charge, are available through certain
employee benefit plans and special programs.
State Street Research HEALTH SCIENCES FUND
3
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PORTFOLIO
HOLDINGS
AUGUST 31, 2003 (UNAUDITED)
<Table>
<Caption>
ISSUER SHARES VALUE
- ------------------------------------------------------------------------------
COMMON STOCKS 86.2%
FINANCIAL SERVICES 1.5%
INSURANCE 0.8%
Cigna Corp. 7,440 $ 354,739
WellChoice Inc.* 11,250 326,475
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Total Financial Services 681,214
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HEALTH CARE 84.7%
DRUGS & BIOTECHNOLOGY 67.6%
Abbott Laboratories Inc. 11,110 447,733
Adolor Corp.* 35,530 505,947
Altana AG ADR 7,490 387,233
Amgen Inc.* 17,720 1,167,748
Atrix Laboratories Inc.* 27,395 827,329
Aventis ADR 3,430 168,070
Axonyx Inc.* 322,560 877,363
Biogen Inc.* 17,495 690,353
BioMarin Pharmaceutical Inc.* 32,505 307,172
Bristol-Myers Squibb Co. 25,500 646,935
CV Therapeutics Inc.* 12,425 318,701
Cypress Biosciences Inc.* 176,600 1,040,174
Cytyc Corp.* 37,050 484,614
Discovery Laboratories Inc.* 155,290 1,152,252
DOV Pharmaceutical Inc.* 136,710 2,011,004
First Horizon Pharmaceutical Corp.* 166,670 1,008,354
Forest Laboratories Inc.* 17,230 809,810
Genzyme Corp.* 5,820 274,413
ICN Pharmaceuticals Inc. 28,020 490,350
Indevus Pharmaceuticals Inc.* 174,720 1,043,078
Inspire Phamaceutical Inc.* 25,660 375,919
InterMune Inc.* 47,790 909,922
Johnson & Johnson Ltd. 21,090 1,045,642
Millennium Pharmaceuticals Inc.* 24,590 341,801
Mylan Laboratories Inc. 12,810 466,284
Novartis AG ADR 55,360 2,046,659
Orphan Medical Inc.* 167,690 2,037,433
OSI Pharmaceuticals Inc.* 9,670 368,427
Penwest Pharmaceuticals Co.* 20,090 439,569
Pfizer Inc. 48,099 1,439,122
Progenics Pharmaceuticals Inc.* 57,890 995,708
Protein Design Laboratories, Inc.* 40,600 499,380
QLT PhotoTherapeutics Inc.* 11,000 149,380
SangStat Medical Corp.* 21,240 474,289
Sanofi Synthelabo Inc. ADR 13,210 372,258
Schering-Plough Inc. 68,930 1,047,047
Shire Pharmaceuticals Group ADR* 18,990 441,518
Teva Pharmaceutical Industries Ltd. ADR 3,920 230,151
Transkaryotic Therapies Inc.* 50,680 635,983
Vicuron Phamaceuticals Inc.* 23,550 351,837
Watson Pharmaceuticals Inc.* 5,130 210,843
Wyeth Inc. 42,950 1,840,408
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31,378,213
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HEALTH CARE FACILITIES 1.5%
HCA Inc. 18,835 715,542
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HEALTH CARE SERVICES 4.6%
Aetna Inc. 8,420 $ 479,940
Anthem Inc.* 7,038 515,182
Caremark Rx Inc.* 12,200 306,586
Universal Health Services Inc.* 10,050 500,289
WellPoint Health Networks Inc. Cl. A* 4,240 330,720
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2,132,717
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HOSPITAL SUPPLIES 11.0%
Aspect Medical Systems Inc.* 137,461 1,408,975
Becton Dickinson & Co. 11,890 434,461
Conceptus Inc.* 26,640 431,834
Guidant Corp. 16,660 836,332
Medtronic Inc. 6,700 332,186
Staar Surgical Co.* 45,790 551,770
TheraSense Inc.* 79,050 1,126,462
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5,122,020
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Total Health Care 39,348,492
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TOTAL COMMON STOCKS (COST $29,120,055) 40,029,706
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SHORT-TERM INVESTMENTS 24.8%
State Street Navigator
Securities Lending Prime Portfolio 11,526,033 11,526,033
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TOTAL SHORT-TERM INVESTMENTS (COST $11,526,033) 11,526,033
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<Caption>
MATURITY AMOUNT OF
DATE PRINCIPAL
- ------------------------------------------------------------------------------
COMMERCIAL PAPER 13.0%
American Express Credit
Corp., 0.98% 9/08/2003 $ 980,000 979,813
American Express Credit
Corp., 1.04% 9/08/2003 558,000 557,887
American Express Credit
Corp., 1.02% 9/22/2003 624,000 623,629
Federal National Mortgage
Association, 1.02% 9/02/2003 673,000 672,981
Federal National Mortgage
Association, 1.03% 9/02/2003 1,500,000 1,499,957
General Electric Capital
Corp., 1.05% 9/22/2003 1,687,000 1,685,967
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TOTAL COMMERCIAL PAPER (COST $6,020,234) 6,020,234
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<Caption>
% OF
NET ASSETS
- ------------------------------------------------------------------------------
SUMMARY OF PORTFOLIO ASSETS
Investments (Cost $46,666,322) 124.0% 57,575,973
Cash and Other Assets, Less Liabilities (24.0%) (11,139,444)
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Net Assets 100.0% $ 46,436,529
====== =============
</Table>
KEY TO SYMBOLS
* Denotes a security which has not paid a dividend during the last year.
ADR Stands for American Depositary Receipt, representing ownership of foreign
securities.
FEDERAL INCOME TAX INFORMATION
<Table>
At August 31, 2003, the net unrealized appreciation of
investments based on cost for federal income tax
purposes of $47,505,298 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there is an excess of value
over tax cost $ 10,828,904
Aggregate gross unrealized depreciation for all
investments in which there is an excess of tax cost
over value
(758,229)
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$ 10,070,675
============
</Table>
The notes are an integral part of the financial statements.
4
<Page>
FINANCIAL
STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
August 31, 2003 (unaudited)
<Table>
ASSETS
Investments, at value (cost $46,666,322) (NOTE I) $ 57,575,973
Cash 4,396
Receivable for fund shares sold 417,722
Receivable for securities sold 150,633
Receivable from distributor 28,355
Dividends receivable 26,494
Foreign tax receivable 3,053
Other assets 22,423
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58,229,049
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LIABILITIES
Payable for collateral received on securities loaned 11,526,033
Payable for fund shares redeemed 50,319
Accrued transfer agent and shareholder services 39,136
Accrued management fee 27,355
Accrued distribution and service fees 22,263
Accrued administration fee 9,816
Accrued trustees' fees 5,476
Other accrued expenses 112,122
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11,792,520
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NET ASSETS $ 46,436,529
============
Net Assets consist of:
Unrealized appreciation of investments $ 10,909,651
Accumulated net realized loss (3,392,805)
Paid-in capital 38,919,683
------------
$ 46,436,529
============
</Table>
NET ASSET VALUE (NAV) OF EACH SHARE CLASS
EXCEPT WHERE NOTED, THE NAV IS THE OFFERING AND THE REDEMPTION PRICE FOR EACH
CLASS.
<Table>
<Caption>
CLASS NET ASSETS DIVIDED BY NUMBER OF SHARES = NAV
A $ 23,816,984 1,349,811 $ 17.64*
B(1) $ 15,198,304 876,333 $ 17.34**
B $ 2,820,223 163,588 $ 17.24**
C $ 3,158,012 182,486 $ 17.31**
S $ 1,443,006 81,183 $ 17.77
</Table>
* Maximum offering price per share = $18.72 ($17.64 DIVIDED BY 0.9425)
** When you sell Class B(1), Class B or Class C shares, you receive the net
asset value minus deferred sales charge, if any.
STATEMENT OF OPERATIONS
For the six months ended August 31, 2003 (unaudited)
<Table>
INVESTMENT INCOME
Interest (NOTE 1) $ 23,147
Dividends, net of foreign taxes (NOTE 1) 103,852
--------------
126,999
EXPENSES
Management fee (NOTE 2) 129,183
Transfer agent and shareholder services (NOTE 2) 114,180
Custodian fee 43,478
Administration fee (NOTE 2) 40,637
Reports to shareholders 6,033
Distribution and service fees - Class A (NOTE 5) 24,728
Distribution and service fees - Class B(1) (NOTE 5) 60,921
Distribution and service fees - Class B (NOTE 5) 11,261
Distribution and service fees - Class C (NOTE 5) 11,119
Registration fees 26,925
Audit fee 10,971
Trustees' fees (NOTE 2) 6,350
Legal fees 644
Miscellaneous 9,526
--------------
495,956
Expenses borne by the distributor (NOTE 3) (173,503)
Fees paid indirectly (NOTE 2) (881)
--------------
321,572
--------------
Net investment loss (194,573)
--------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain on investments (NOTES 1 AND 4) 2,092,385
Net realized loss on foreign currency (337)
--------------
Total net realized gain 2,092,048
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Change in unrealized appreciation of investments 10,927,974
--------------
Net gain on investments 13,020,022
--------------
Net increase in net assets resulting from operations $ 12,825,449
==============
</Table>
The notes are an integral part of the financial statements.
5
<Page>
STATEMENT OF CHANGES IN NET ASSETS
<Table>
<Caption>
SIX MONTHS ENDED
AUGUST 31, 2003 YEAR ENDED
(UNAUDITED) FEBRUARY 28, 2003
------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment loss $ (194,573) $ (354,863)
Net realized gain (loss) on investments
and foreign currency 2,092,048 (5,060,168)
Change in unrealized appreciation
(depreciation) of investments 10,927,974 (873,778)
------------------------------------
Net increase (decrease) resulting
from operations 12,825,449 (6,288,809)
------------------------------------
Distribution from capital gains:
Class A -- (32,999)
Class B(1) -- (29,756)
Class B -- (6,142)
Class C -- (3,829)
Class S -- (2,787)
------------------------------------
-- (75,513)
------------------------------------
Net increase (decrease) from fund
share transactions (NOTE 7) 11,139,616 (588,099)
------------------------------------
Total increase (decrease) in net
assets 23,965,065 (6,952,421)
NET ASSETS
Beginning of period 22,471,464 29,423,885
------------------------------------
End of period $ 46,436,529 $ 22,471,464
====================================
</Table>
NOTES TO UNAUDITED FINANCIAL STATEMENTS
August 31, 2003
NOTE 1
State Street Research Health Sciences Fund (the "Fund"), is a series of State
Street Research Financial Trust (the "Trust"), which was organized as a
Massachusetts business trust in November, 1986, and is registered under the
Investment Company Act of 1940 as an open-end management investment company. The
Trust consists presently of two separate funds: State Street Research Health
Sciences Fund and State Street Research Government Income Fund.
The investment objective of the fund is to provide long-term growth of capital.
Under normal market conditions, the fund invests at least 80% of total assets in
securities of companies in health sciences and related industries. These may
include common and preferred stocks, convertible securities, warrants and
depositary receipts.
The fund offers five classes of shares. Class A shares are subject to an initial
sales charge of up to 5.75% and pay annual service and distribution fees equal
to 0.30% of average daily net assets. Class B(1) and Class B shares pay annual
service and distribution fees of 1.00% and automatically convert into Class A
shares (which pay lower ongoing expenses) at the end of eight years. Class B(1)
and Class B shares are subject to a contingent deferred sales charge on certain
redemptions made within six years and five years of purchase, respectively.
Class B shares are offered only to current shareholders through reinvestment of
dividends and distributions or through exchanges from existing Class B accounts
of State Street Research funds. Class C shares are subject to a contingent
deferred sales charge of 1.00% on any shares redeemed within one year of their
purchase, and also pay annual service and distribution fees of 1.00%. Class S
shares are only offered through certain retirement accounts, advisory accounts
of State Street Research & Management Company (the "Adviser"), an investment
manager subsidiary of MetLife, Inc. ("MetLife"), and special programs. No sales
charge is imposed at the time of purchase or redemption of Class S shares. Class
S shares do not pay any service or distribution fees. The fund's expenses are
borne prorata by each class, except that each class bears expenses, and has
exclusive voting rights with respect to provisions of the plans of distribution,
related specifically to that class. The Trustees declare separate dividends on
each class of shares.
The following significant accounting policies are consistently followed by the
fund in preparing its financial statements, and such policies are in conformity
with accounting principles generally accepted in the United States of America.
A. INVESTMENT VALUATION
Values for listed equity securities reflect final sales 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 closing prices
supplied through such system. If not quoted on the Nasdaq system, such
securities are valued at prices obtained from independent brokers. In the
absence of recorded sales, valuations are at the mean of the closing bid and
asked quotations. Short-term securities maturing within sixty days are valued at
amortized cost. Other securities, if any, are valued at their fair value as
determined in good faith under consistently applied procedures established by
and under the supervision of the Trustees. If trading or events occurring in
other markets after the close of the principal market in which foreign
securities are traded, and before the close of business of the fund, are
expected to materially affect the value of these securities, then they are
valued at their fair value taking this trading or these events into account.
B. SECURITY TRANSACTIONS
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). Realized gains or losses are reported on the basis of
identified cost of securities delivered.
The notes are an integral part of the financial statements.
6
<Page>
C. NET INVESTMENT INCOME
Net investment income is determined daily and consists of interest and dividends
accrued and discount earned, less the estimated daily expenses of the fund.
Interest income is accrued daily as earned. Dividend income is accrued on the
ex-dividend date. The fund is charged for expenses directly attributable to it,
while indirect expenses are allocated between both funds in the Trust.
D. DIVIDENDS
Dividends from net investment income are declared and paid or reinvested
annually. Net realized capital gains, if any, are distributed annually, unless
additional distributions are required for compliance with applicable tax
regulations.
Income dividends and capital gains distributions are determined in accordance
with federal income tax regulations which may differ from accounting principles
generally accepted in the United States of America. The difference is primarily
due to differing treatments for wash sale deferrals.
The fund hereby designates the maximum amount allowable of its net taxable
income as qualified dividend income as provided in the Jobs and Growth Tax
Relief Reconciliation Act of 2003. This amount will be reflected on Form 1099
for the calendar year 2003.
E. FEDERAL INCOME TAXES
No provision for federal income taxes is necessary because the fund has elected
to qualify under Subchapter M of the Internal Revenue Code and its policy is to
distribute all of its taxable income, including net realized capital gains,
within the prescribed time periods.
At February 28, 2003, the fund had a capital loss carryforward of $2,643,815
available, to the extent provided in regulations, to offset future capital
gains, if any, which expires on February 28, 2011.
In order to meet certain excise tax distribution requirements under Section 4982
of the Internal Revenue Code, the fund is required to measure and distribute
annually, if necessary, net capital gains realized during a twelve-month period
ending October 31. In this connection, the fund is permitted to defer into its
next fiscal year any net capital losses incurred between each November 1 and the
end of its fiscal year. From November 1, 2002 through February 28, 2003, the
fund incurred net capital losses of approximately $1,413,000 and intends to
defer and treat such losses as arising in the fiscal year ended February 28,
2004.
F. ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted 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.
G. 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 August 31,
2003, the value of the securities loaned and the value of collateral were
$11,350,377 and $11,526,033 (including $11,472,847 of collateral cash invested
in State Street Navigator Securities Lending prime portfolio and $53,186 of U.S.
Government obligations), respectively. During the six months ended August 31,
2003, income from securities lending amounted to $8,028 and is included in
interest income.
NOTE 2
The Trust and the Adviser have entered into an agreement under which the Adviser
earns monthly fees at an annual rate of 0.75% of the fund's 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 August 31, 2003, the fees pursuant to such agreement
amounted to $129,183.
State Street Research Service Center, a division of State Street Research
Investment Services, Inc., the Trust's principal underwriter (the
"Distributor"), 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. In addition, MetLife receives a
fee for maintenance of the accounts of certain shareholders who are participants
in sponsored arrangements, such as employee benefit plans, through or under
which shares of the fund may be purchased. Total shareholder service costs are
allocated to each fund in the same ratios as the transfer agent costs. During
the six months ended August 31, 2003, the amount of such expenses allocated to
the Fund was $29,674.
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 August 31, 2003, the fund's
transfer agent fees were reduced by $881 under this arrangement.
The fees of the Trustees not currently affiliated with the Adviser amounted to
$6,350 during the six months ended August 31, 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 was based on a
fixed amount that has been allocated equally among State Street Research funds.
During the six months ended August 31 2003, the amount of such expenses was
$40,637.
NOTE 3
The Distributor and its affiliates may from time to time and in varying amounts
voluntarily assume some portion of fees or expenses relating to the fund. During
the six months ended August 31, 2003, the amount of such expenses assumed by the
Distributor and its affiliates was $173,503.
NOTE 4
For the six months ended August 31, 2003, purchases and sales of securities,
exclusive of short-term obligations and U.S. government obligations, aggregated
$23,482,664, and $18,700,860, respectively.
NOTE 5
The Trust has adopted plans of distribution pursuant to Rule 12b-1 under the
Investment Company Act of 1940. Under the plans, the fund pays annual service
fees to the Distributor at a rate of 0.25% of average daily net assets for Class
A, Class B(1) and Class C shares. In addition, the fund pays annual distribution
fees of 0.05% of average daily net assets for Class A shares. The fund pays
annual distribution fees of 0.75% of average daily net assets for Class B(1),
Class B and Class C shares. The Distributor uses such payments for personal
services and/or the maintenance of shareholder accounts, to reimburse securities
dealers for distribution and marketing services, to furnish ongoing assistance
to investors and to defray a portion of its distribution and marketing expenses.
For the six months ended August 31, 2003, fees pursuant to such plans amounted
to $24,728, $60,921, $11,261 and $11,119 for Class A, Class B(1), Class B and
Class C shares, respectively. The payments compensate the distributor for
services and expenditures incurred under the plan, and none of the payments are
returnable to the fund.
The fund has been informed that the Distributor and MetLife Securities, Inc., a
wholly-owned subsidiary of MetLife, earned initial sales charges aggregating
$20,917 and $33,364, respectively, on sales of Class A shares of the fund during
the six months ended August 31, 2003, and that MetLife Securities, Inc., earned
commissions aggregating $25,310 and $345 on sales of Class B(1) and Class C
shares, respectively, and the Distributor collected contingent deferred sales
charges aggregating $18,925, $253 and $647 on redemptions of Class B(1), Class B
and Class C shares, respectively, during the same period.
7
<Page>
NOTE 6
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 February 28,
2004. 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 7
These transactions break down by share class as follows:
<Table>
<Caption>
SIX MONTHS ENDED
AUGUST 31, 2003 YEAR ENDED
(UNAUDITED) FEBRUARY 28, 2003
---------------------------------------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------------------------
Shares sold 1,054,599 $ 17,050,522 424,141 $ 5,509,615
Issued upon reinvestment of distribution from capital gains -- -- 2,097 31,088
Shares redeemed (504,142) (8,301,853) (532,299) (6,628,461)
---------- ------------ ---------- ------------
Net increase (decrease) 550,457 $ 8,748,669 (106,061) $ (1,087,758)
========== ============ ========== ============
<Caption>
CLASS B(1) SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------------------------
Shares sold 133,754 $ 2,138,102 216,449 $ 2,769,137
Issued upon reinvestment of distribution from capital gains -- -- 1,989 29,278
Shares redeemed (71,324) (1,024,648) (199,671) (2,377,172)
---------- ------------ ---------- ------------
Net increase 62,430 $ 1,113,454 18,767 $ 421,243
========== ============ ========== ============
<Caption>
CLASS B SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------------------------
Shares sold 32,723 $ 520,034 34,052 $ 442,039
Issued upon reinvestment of distribution from capital gains -- -- 412 6,044
Shares redeemed (14,845) (220,545) (65,760) (795,205)
---------- ------------ ---------- ------------
Net increase (decrease) 17,878 $ 299,489 (31,296) $ (347,122)
========== ============ ========== ============
<Caption>
CLASS C SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------------------------
Shares sold 115,428 $ 1,808,927 43,631 $ 582,314
Issued upon reinvestment of distribution from capital gains -- -- 257 3,769
Shares redeemed (46,317) (743,055) (22,332) (267,641)
---------- ------------ ---------- ------------
Net increase 69,111 $ 1,065,872 21,556 $ 318,442
========== ============ ========== ============
<Caption>
CLASS S SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------------------------
Shares sold 14,877 $ 231,335 17,914 $ 229,325
Issued upon reinvestment of distribution from capital gains -- -- 187 2,787
Shares redeemed (18,574) (319,203) (9,811) (125,016)
---------- ------------ ---------- ------------
Net increase (decrease) (3,697) $ (87,868) 8,290 $ 107,096
========== ============ ========== ============
</Table>
8
<Page>
FINANCIAL HIGHLIGHTS
<Table>
<Caption>
CLASS A
----------------------------------------------------
SIX MONTHS ENDED YEARS ENDED FEBRUARY 28
AUGUST 31, 2003 --------------------------------
(UNAUDITED)(a) 2003(a) 2002(a) 2001(a)
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD ($) 11.57 14.43 14.14 13.33
----- ----- ----- -----
Net investment loss ($)* (0.06) (0.12) (0.13) (0.06)
Net realized and unrealized gain (loss) on investments and
foreign currency ($) 6.13 (2.70) 0.47 1.88
----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS ($) 6.07 (2.82) 0.34 1.82
----- ----- ----- -----
Distributions from capital gains ($) -- (0.04) (0.05) (1.01)
----- ----- ----- -----
TOTAL DISTRIBUTIONS ($) -- (0.04) (0.05) (1.01)
----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ($) 17.64 11.57 14.43 14.14
===== ===== ===== =====
Total return (%)(b) 52.46 (19.63) 2.41 14.31
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period ($ thousands) 23,817 9,250 13,069 6,863
Expense ratio (%)* 1.56(d) 1.56 1.58 1.57
Expense ratio after expense reductions (%)* 1.55(d) 1.55 1.55 1.54
Ratio of net investment loss to average net assets (%)* (0.80)(d) (0.99) (0.88) (0.48)
Portfolio turnover rate (%) 59.87 157.37 75.31 139.09
*Reflects voluntary reduction of expenses of these amounts (%) 0.96(d) 1.48 1.83 6.87
<Caption>
CLASS A
--------------------
DECEMBER 21, 1999
(COMMENCEMENT OF
OPERATIONS) TO
FEBRUARY 29, 2000(a)
- ----------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD ($) 10.00
------
Net investment loss ($)* (0.00)
Net realized and unrealized gain (loss) on investments and
foreign currency ($) 3.33
------
TOTAL FROM INVESTMENT OPERATIONS ($) 3.33
------
Distributions from capital gains ($) --
------
TOTAL DISTRIBUTIONS ($) --
------
NET ASSET VALUE, END OF PERIOD ($) 13.33
======
Total return (%)(b) 33.30(c)
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period ($ thousands) 1,654
Expense ratio (%)* 1.50(d)
Expense ratio after expense reductions (%)* 1.50(d)
Ratio of net investment loss to average net assets (%)* (0.13)(d)
Portfolio turnover rate (%) 44.48
*Reflects voluntary reduction of expenses of these amounts (%) 8.56(d)
<Caption>
CLASS B(1)
-------------------------------------------------------
SIX MONTHS ENDED YEARS ENDED FEBRUARY 28
AUGUST 31, 2003 -----------------------------------
(UNAUDITED)(a) 2003(a) 2002(a) 2001(a)(e)
- --------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD ($) 11.41 14.34 14.14 15.50
------ ------ ------ ------
Net investment loss ($)* (0.11) (0.21) (0.23) (0.04)
Net realized and unrealized gain (loss) on investments and
foreign currency ($) 6.04 (2.68) 0.48 (0.63)
------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ($) 5.93 (2.89) 0.25 (0.67)
------ ------ ------ ------
Distributions from capital gains ($) -- (0.04) (0.05) (0.69)
------ ------ ------ ------
TOTAL DISTRIBUTIONS ($) -- (0.04) (0.05) (0.69)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ($) 17.34 11.41 14.34 14.14
====== ====== ====== ======
Total return (%)(b) 51.97(c) (20.24) 1.77 (4.47)(c)
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period ($ thousands) 15,198 9,290 11,399 4,645
Expense ratio (%)* 2.26(d) 2.26 2.28 2.28(d)
Expense ratio after expense reductions (%)* 2.25(d) 2.25 2.25 2.25(d)
Ratio of net investment loss to average net assets (%)* (1.50)(d (1.69) (1.59) (0.81)(d)
Portfolio turnover rate (%) 59.87 157.37 75.31 139.09
*Reflects voluntary reduction of expenses of these amounts (%) 1.06(d) 1.48 1.71 6.26(d)
</Table>
9
<Page>
<Table>
<Caption>
CLASS B
-------------------------------------------------------
SIX MONTHS ENDED YEARS ENDED FEBRUARY 28
AUGUST 31, 2003 -----------------------------------
(UNAUDITED)(a) 2003(a) 2002(a) 2001(a)(e)
- --------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD ($) 11.34 14.31 14.12 15.50
------ ------ ------ ------
Net investment loss ($)* (0.11) (0.21) (0.22) (0.04)
Net realized and unrealized gain (loss) on investments
and foreign currency ($) 6.01 (2.72) 0.46 (0.65)
------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ($) 5.90 (2.93) 0.24 (0.69)
------ ------ ------ ------
Distributions from capital gains ($) -- (0.04) (0.05) (0.69)
------ ------ ------ ------
TOTAL DISTRIBUTIONS ($) -- (0.04) (0.05) (0.69)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ($) 17.24 11.34 14.31 14.12
====== ====== ====== ======
Total return (%)(b) 52.03(c) (20.56) 1.70 (4.61)(c)
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period ($ thousands) 2,820 1,653 2,533 1,964
Expense ratio (%)* 2.26(d) 2.26 2.28 2.28(d)
Expense ratio after expense reductions (%)* 2.25(d) 2.25 2.25 2.25(d)
Ratio of net investment loss to average net assets (%)* (1.51)(d) (1.70) (1.57) (0.83)(d)
Portfolio turnover rate (%) 59.87 157.37 75.31 139.09
*Reflects voluntary reduction of expenses of these amounts (%) 1.05(d) 1.47 1.97 6.36(d)
<Caption>
CLASS C
-------------------------------------------------------
SIX MONTHS ENDED YEARS ENDED FEBRUARY 28
AUGUST 31, 2003 -----------------------------------
(UNAUDITED)(a) 2003(a) 2002(a) 2001(a)(e)
- --------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD ($) 11.39 14.31 14.11 15.50
------ ------ ------ ------
Net investment loss ($)* (0.12) (0.21) (0.23) (0.04)
Net realized and unrealized gain (loss) on investments
and foreign currency ($) 6.04 (2.67) 0.48 (0.66)
------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ($) 5.92 (2.88) 0.25 (0.70)
------ ------ ------ ------
Distributions from capital gains ($) -- (0.04) (0.05) (0.69)
------ ------ ------ ------
TOTAL DISTRIBUTIONS ($) -- (0.04) (0.05) (0.69)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ($) 17.31 11.39 14.31 14.11
====== ====== ====== ======
Total return (%)(b) 51.98(c) (20.21) 1.77 (4.67)(c)
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period ($ thousands) 3,158 1,291 1,314 645
Expense ratio (%)* 2.26(d) 2.26 2.28 2.28(d)
Expense ratio after expense reductions (%)* 2.25(d) 2.25 2.25 2.25(d)
Ratio of net investment loss to average net assets (%)* (1.50)(d) (1.69) (1.58) (0.83)(d)
Portfolio turnover rate (%) 59.87 157.37 75.31 139.09
*Reflects voluntary reduction of expenses of these amounts (%) 0.97(d) 1.49 1.71 5.87(d)
<Caption>
CLASS S
-------------------------------------------------------
SIX MONTHS ENDED YEARS ENDED FEBRUARY 28
AUGUST 31, 2003 -----------------------------------
(UNAUDITED)(a) 2003(a) 2002(a) 2001(a)(e)
- --------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD ($) 11.64 14.48 14.14 15.50
------ ------ ------ ------
Net investment income (loss) ($)* (0.04) (0.09) (0.08) 0.01
Net realized and unrealized gain (loss) on investments and
foreign currency ($) 6.17 (2.71) 0.47 (0.68)
------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ($) 6.13 (2.80) 0.39 (0.67)
------ ------ ------ ------
Distributions from capital gains ($) -- (0.04) (0.05) (0.69)
------ ------ ------ ------
TOTAL DISTRIBUTIONS ($) -- (0.04) (0.05) (0.69)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ($) 17.77 11.64 14.48 14.14
====== ====== ====== ======
Total return (%)(b) 52.66(c) (19.42) 2.76 (4.48)(c)
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period ($ thousands) 1,443 988 1,109 946
Expense ratio (%)* 1.26(d) 1.26 1.28 1.28(d)
Expense ratio after expense reductions (%)* 1.25(d) 1.25 1.25 1.25(d)
Ratio of net investment income (loss) to average net assets (%)* (0.50)(d) (0.69) (0.56) 0.18(d)
Portfolio turnover rate (%) 59.87 157.37 75.31 139.09
*Reflects voluntary reduction of expenses of these amounts (%) 1.06(d) 1.49 1.97 5.58(d)
</Table>
(a) Per-share figures have been calculated using the average shares method.
(b) Does not reflect any front-end or contingent deferred sales charges. Total
return would be lower if the distributor and its affiliates had not
voluntarliy assumed a portion of the fund's expenses.
(c) Not annualized
(d) Annualized
(e) October 16, 2000 (commencement of share class) to February 28, 2001
10
<Page>
TRUSTEES AND OFFICERS STATE STREET RESEARCH FINANCIAL TRUST
<Table>
<Caption>
NUMBER OF FUNDS
NAME, POSITION(S) TERM OF OFFICE IN FUND COMPLEX OTHER
ADDRESS HELD WITH AND LENGTH OF PRINCIPAL OCCUPATIONS OVERSEEN BY DIRECTORSHIPS HELD
AND AGE(a) FUND TIME SERVED(b) DURING PAST 5 YEARS TRUSTEE/OFFICER(c) BY TRUSTEE/OFFICER
- ------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
BRUCE R. BOND Trustee Since Retired; formerly Chairman of the Board, 19 Ceridian Corporation
(57) 1999 Chief Executive Officer and President,
PictureTel Corporation (video conferencing
systems)
STEVE A. GARBAN Trustee Since Retired; formerly Senior Vice President 55 Metropolitan Series
(66) 1997 for Finance and Operations and Treasurer, Fund, Inc.(d)
The Pennsylvania State University
DEAN O. MORTON Trustee Since Retired; formerly Executive Vice 55 The Clorox Company;
(71) 1987 President, Chief Operating Officer and KLA-Tencor
Director, Hewlett-Packard Company Corporation; BEA
(computer manufacturer) Systems, Inc.;
Cepheid; Pharsight
Corporation; and
Metropolitan Series
Fund, Inc.
SUSAN M. PHILLIPS Trustee Since Dean, School of Business and Public 19 The Kroger Co.
(58) 1998 Management, 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. 55 A.P. Pharma, Inc.;
(65) 1993 (investments); formerly President, The and Metropolitan
Glen Ellen Company (private investment Series Fund, Inc.(d)
firm)
MICHAEL S. Trustee Since Jay W. Forrester Professor of Management, 55 Metropolitan Series
SCOTT MORTON (66) 1987 Sloan School of Management, Massachusetts Fund, Inc.(d)
Institute of Technology
JAMES M. STOREY Trustee Since Attorney; formerly Partner, Dechert (law 19 SEI Investments Funds
(72) 2002 firm) (consisting of 104
portfolios); and The
Massachusetts Health
& Education
Tax-Exempt Trust
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
OFFICERS
C. KIM GOODWIN Vice Since Managing Director and Chief Investment 18 None
(44) President 2002 Officer - Equities of State Street
Research & Management Company; formerly
Chief Investment Officer - U.S. Growth
Equities, American Century
JOHN S. LOMBARDO Vice Since Managing Director, Chief Financial Officer 19 None
(48) President 2001 and 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
MARK A. MARINELLA Vice Since Managing Director and Chief Investment 9 None
(45) President 2003 Officer - Fixed Income, State Street
Research & Management Company; formerly
Executive Vice President and Senior Vice
President, State Street Research &
Management Company; and Chief Investment
Officer and Head of Fixed Income, Columbia
Management Group
AJAY MEHRA (38) Vice Since Managing Director, State Street Research & 2 None
President 2003 Management Company; formerly Senior Vice
President, Vice President and portfolio
manager, Columbia Management Group
ELIZABETH M. Vice Since Managing Director, State Street Research & 8 None
WESTVOLD (43) President 2003 Management Company; formerly Senior Vice
President, State Street Research &
Management Company
ERIN XIE (35) Vice Since Senior Vice President, State Street 2 None
President 2003 Research & Management Company; formerly
Vice President, State Street Research &
Management Company; and research
associate, Sanford Bernstein & Company
DOUGLAS A. ROMICH Treasurer Since Senior Vice President and Treasurer of 19 None
(46) 2001 State Street Research & Management
Company; formerly Vice President and
Assistant Treasurer, State Street Research
& Management Company
FRANCIS J. Secretary Since Managing Director, General Counsel and 19 None
McNAMARA, III (48) 1995 Secretary of State Street Research &
Management Company; formerly Executive
Vice President, State Street Research &
Management Company
</Table>
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.
11
<Page>
[STATE STREET RESEARCH LOGO] PRSRT STD
U.S. POSTAGE
One Financial Center PAID
Boston, MA 02111-2690 PERMIT #6
HUDSON, MA
Did You Know?
State Street Research offers electronic delivery of quarterly statements,
shareholder reports and fund prospectuses. If you elect this option, we will
send these materials to you via e-mail. To learn more, visit us on the Web at
www.ssrfunds.com and click on "Go to Your Account" or call us at 1-87-SSR-FUNDS
(1-877-773-8637).
Did you know that you can give a State Street Research mutual fund as a gift?
Call a service center representative at 1-87-SSR-FUNDS (1-877-773-8637), Monday
through Friday, 8am-6pm eastern time, to learn more.
[SEAL]
<Page>
FORM N-CSR(2 OF 3)
ITEM 2 (CODE OF ETHICS): Not applicable to this filing.
ITEM 3 (AUDIT COMMITTEE FINANCIAL EXPERT): Not applicable to this filing.
ITEM 4 (PRINCIPAL ACCOUNTANT FEES AND SERVICES): Not applicable to this filing.
ITEM 5 (RESERVED)
ITEM 6 (RESERVED)
ITEM 7 (DISCLOSURE OF PROXY VOTING POLICIES & PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES): Not applicable to this filing.
ITEM 8 (RESERVED)
ITEM 9 (CONTROLS AND PROCEDURES):
SUB-ITEM 9a - The Principal Executive Officer and the Principal Financial
Officer have concluded that the State Street Research Master Investment
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 Master
Investment 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.
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):
SUB-ITEM 10a - Not applicable to this filing.
SUB-ITEM 10b - Certification Exhibits are attached.
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.
State Street Research Financial Trust
By: /s/ Richard S. Davis
------------------------------------------------------
Richard S. Davis, President, Chairman and
Chief Executive Officer
Principal Executive Officer
Date October 30, 2003
------------------------------------------------------
<Page>
FORM N-CSR(3 OF 3)
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/ Richard S. Davis
------------------------------------------------------
Richard S. Davis, President, Chairman and
Chief Executive Officer
Principal Executive Officer
Date October 30, 2003
------------------------
By: /s/ Douglas A. Romich
------------------------------------------------------
Douglas A. Romich, Treasurer
Principal Financial Officer
Date October 30, 2003
------------------------