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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 811-00084
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State Street Research Investment 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)
Richard S. Davis, President and Chief Executive Officer
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: 12/31/04
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Date of reporting period: 01/01/04 - 06/30/04
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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 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 Semi-annual Report is attached.
STATE STREET RESEARCH [LOGO]
[LOGO] STATE STREET RESEARCH
Investment Trust
June 30, 2004
Semiannual Report to Shareholders
Table of Contents
3 Performance Discussion
4 Portfolio Holdings
6 Financial Statements
10 Financial Highlights
12 Trustees and Officers
FROM THE CHAIRMAN
State Street Research
The U.S. economy grew at a solid pace during the six-month period from January
1, 2004, to June 30, 2004. Gross Domestic Product (GDP), a common measure of
economic growth, rose 3.9% for the first quarter of 2004. Estimates for
second-quarter growth, which will not be released until well into the third
quarter, range from 2.5% to 4.0%.
Consumer confidence wavered early in the period as the number of new jobs added
to the economy fell below expectations. However, when the job picture brightened
in April and May, consumer confidence tracked higher. More than 1.2 million jobs
were added in the second half of the period, and the quality of new jobs also
improved, as reported by the U.S. Labor Department.
Although most of the news was upbeat during the period, durable goods orders
dipped in February and again in April and May--news that surprised most
analysts. And after months of strong sales, auto dealerships reported a decline
in June.
Yet, consumers continued to fuel the economy, pumping dollars into the retail
and housing markets. Sales of new and existing homes soared as homebuyers
anticipated higher mortgage rates ahead. Corporate profits staged a solid
rebound, making it easier for companies to increase spending, especially on
information technology, electronic equipment and new jobs.
As the period wore on, it became clear that the days of record-low short-term
interest rates were coming to an end. On the last day of the period, the Federal
Reserve Board raised a key short-term interest rate--the federal funds
rate--from 1.0% to 1.25%.
Stocks Edge Higher, Bonds Stumble
The stock market moved sharply higher in the first months of the year, fueled by
a substantial increase in profits for 2003 and expectations of continued profit
growth in 2004. However, a host of worries stopped the major indexes in their
tracks as the period wore on. As investors grew more cautious about interest
rates and the threat of terrorist attacks, stocks retreated. For the six months,
the S&P 500 Index gained a modest 3.44%. Small-cap stock gains were higher. The
energy sector was the stock market's strongest performer.
High-yield bonds continued to rally as the year began. However, they also
stalled along with the stock market late in the period. Mortgage bonds eked out
a small gain, but most other segments of the bond market reported negative
returns.
Looking Ahead
Any time the financial markets deliver negative returns, it can be disheartening
for investors. However, the seeds of a new market rally are often sown in
periods of weakness and decline. A diversified portfolio and a long-term
perspective on the markets can make it easier to weather periods of
volatility--and more likely that you will reap the potential benefits in better
times. We urge you to talk to your investment professional about your investment
plan.
As always, we thank you for investing with State Street Research funds. We look
forward to helping you achieve your long-term financial goals.
Sincerely,
/s/ RICHARD S. DAVIS
Richard S. Davis
Chairman
June 30, 2004
2
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PERFORMANCE
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Discussion as of June 30, 2004
How State Street Research Investment Trust Performed
State Street Research Investment Trust (Class A shares, without sales charge)
returned 2.82% for the six-month period ended June 30, 2004. That was slightly
less than the return of the S&P 500 Index, which was 3.44% over the same period.
However, the fund outperformed the Lipper Large-Cap Core Funds Average, which
was 2.03% for the period.
Performance
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Fund average annual total return as of 6/30/04
(does not reflect sales charge)
1 Year 5 Years 10 Years
Class A 18.58% -4.14% 9.33%
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Class B(1) 17.69% -4.80% 8.54%
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Class B 19.47% -4.13% 8.92%
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Class C 17.78% -4.80% 8.53%
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Class S 18.99% -3.85% 9.64%
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Fund average annual total return as of 6/30/04
(at maximum applicable sales charge)
1 Year 5 Years 10 Years
Class A 11.76% -5.27% 8.68%
- --------------------------------------------------------------------------------
Class B(1) 12.69% -5.13% 8.54%
- --------------------------------------------------------------------------------
Class B 14.47% -4.46% 8.92%
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Class C 16.78% -4.80% 8.53%
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Class S 18.99% -3.85% 9.64%
- --------------------------------------------------------------------------------
Keep in mind that the performance data quoted represents past performance and is
no guarantee of future results. Current performance may be lower or higher than
the performance data quoted herein. For the most recent month-end performance
results, visit our website at www.ssrfunds.com. 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.
Average Annual Total Return without sales charge does not reflect the maximum
applicable sales charges. If the applicable sales charges were deducted,
performance results would be lower.
Performance at maximum applicable sales charge reflects a maximum 5.75% Class A
share front-end sales charge, or a 5% Class B(1) or Class B share or 1% Class C
share contingent deferred sales charge, where applicable.
Performance for Class B(1) shares reflects Class B share performance through
December 31, 1998 and Class B(1) performance thereafter. If the returns for
Class B(1) shares had reflected their current service/distribution (Rule 12b-1)
fees for the entire period, these returns would have been lower.
Class S shares, offered without sales charge, are available through certain
employee benefit plans and special programs.
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. 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.
Reasons for the Fund's Performance
In an environment that was generally weak for the stock market, the fund
benefited from favorable stock selection in the financial services, health care
and energy sectors. We were rewarded for our decision to focus on energy
companies whose stock prices were levered to the prices of natural gas, oil and
coal. Shares of oil and gas producers EOG Resources and Newfield Exploration
rose strongly, especially in the second half of the period. EOG Resources
benefited from the success of a potentially major discovery in Texas. Peabody
Energy gained as demand for coal rose and supply was tight. Peabody Energy's
performance is highly levered to the price of coal.
In the consumer discretionary sector, Yahoo! was a standout performer. The
company benefited from its leadership position among search engines and
continued robust spending on Internet advertising. Yahoo!'s share price jumped
significantly in the second half of the period, and we used the opportunity to
take some profits and pare back our position. In addition, Tyco International
contributed positively, thanks to rising earnings estimates and an attractive
valuation.
These gains were partially offset by our investment in utilities and producer
durables stocks. The fund lost ground with its investment in Comcast, which
slipped after its failed attempt to acquire Disney. Newmont Mining also
detracted from return. The company experienced production concerns, and gold
prices moved lower during the period.
Looking Ahead
As investors continue to digest the prospects of future interest rate increases,
higher energy costs and geopolitical factors, we believe that bottom-up stock
selection will continue to drive performance. As a result, we will continue to
look for stocks with stable growth and attractive valuations, and we will adhere
to our disciplined investment approach.
A Word about Risk
The major risks of stock investing include sudden and unpredictable drops in
value and period of lackluster performance. The fund invests in larger, more
established companies which may be unable to respond quickly to new competitive
challenges, such as changes in technology and consumer trends. Many larger
companies also cannot sustain the higher growth rates of successful smaller
companies during periods of extended economic expansion. The fund may
underperform other stock funds during periods when growth and income stocks are
out of favor.
Top 10 Holdings
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Issuer/Security % of Fund Net Assets
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1 Microsoft 3.4%
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2 Pfizer 2.8%
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3 American International Group 2.7%
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4 General Electric 2.5%
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5 Procter & Gamble 2.4%
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6 Tyco International 2.4%
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7 Intel 2.3%
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8 Exxon Mobil 2.2%
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9 Cisco Systems 2.2%
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10 Novartis 2.1%
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Total 25.0%
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.
State Street Research Investment Trust 3
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PORTFOLIO
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Holdings
June 30, 2004 (unaudited)
Issuer Shares Value
- ------------------------------------------------------------------------------------------------------------------
Common Stocks 98.8%
Automobiles & Transportation 0.4%
Air Transport 0.4%
Expeditors International of
Washington Inc. ........................................................ 130,900 $ 6,467,769
-------------
Total Automobiles & Transportation ............................................................... 6,467,769
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Consumer Discretionary 17.3%
Casinos/Gambling, Hotel/Motel 1.0%
International Game Technology Inc. ....................................... 364,300 14,061,980
-------------
Commercial Services 1.4%
InterActiveCorp* ......................................................... 696,600 20,995,524
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Communications, Media & Entertainment 2.9%
DirecTV Group Inc.* ...................................................... 898,316 15,361,204
Time Warner Inc.* ........................................................ 1,168,700 20,545,746
Walt Disney Co. .......................................................... 305,000 7,774,450
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43,681,400
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Consumer Electronics 1.1%
Yahoo! Inc.* ............................................................. 436,000 15,839,880
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Printing & Publishing 1.6%
News Corp. Ltd. ADR ...................................................... 678,600 24,036,012
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Restaurants 1.8%
McDonald's Corp. ......................................................... 1,028,600 26,743,600
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Retail 6.2%
Bed Bath & Beyond Inc.* .................................................. 226,400 8,705,080
Home Depot Inc. .......................................................... 651,350 22,927,520
Lowe's Companies, Inc. ................................................... 69,500 3,652,225
Nordstrom Inc. ........................................................... 224,700 9,574,467
Staples Inc.* ............................................................ 679,400 19,913,214
Target Corp. ............................................................. 634,000 26,925,980
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91,698,486
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Shoes 1.3%
Nike Inc. Cl. B .......................................................... 259,200 19,634,400
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Total Consumer Discretionary ..................................................................... 256,691,282
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Consumer Staples 5.4%
Beverages 1.8%
Coca-Cola Co. ............................................................ 513,800 25,936,624
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Drug & Grocery Store Chains 1.2%
CVS Corp. ................................................................ 412,000 17,312,240
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Household Products 2.4%
Procter & Gamble Co. ..................................................... 662,200 36,050,168
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Total Consumer Staples ........................................................................... 79,299,032
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Financial Services 20.9%
Banks & Savings & Loan 4.2%
Bank of America Corp. .................................................... 315,300 26,680,686
Fifth Third Bancorp ...................................................... 332,400 17,876,472
Goldman Sachs Group Inc. ................................................. 55,200 5,187,586
North Fork Bancorp Inc. .................................................. 348,300 13,252,815
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62,997,559
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Issuer Shares Value
- ------------------------------------------------------------------------------------------------------------------
Financial Data Processing Services & Systems 1.2%
First Data Corp. ......................................................... 388,700 $ 17,304,924
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Insurance 5.1%
Allstate Corp. ........................................................... 333,000 15,501,150
American International Group Inc. ........................................ 567,851 40,476,419
Hartford Financial Services Group Inc. 284,400 19,549,656
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75,527,225
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Miscellaneous Financial 8.1%
Ambac Financial Group Inc. ............................................... 218,300 16,031,952
American Express Co. ..................................................... 291,200 14,961,856
Citigroup Inc. ........................................................... 639,300 29,727,450
Federal National Mortgage
Association ............................................................ 103,700 7,400,032
Merrill Lynch & Co. Inc. ................................................. 286,700 15,476,066
SLM Corp. ................................................................ 370,300 14,978,635
Willis Group Holdings Ltd. ............................................... 584,031 21,871,961
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120,447,952
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Securities Brokerage & Services 2.3%
Countrywide Financial Corp. .............................................. 153,350 10,772,837
Franklin Resources Inc. .................................................. 151,550 7,589,624
Lehman Brothers Holdings Inc. ............................................ 199,800 15,034,950
33,397,411
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Total Financial Services ......................................................................... 309,675,071
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Health Care 10.9%
Drugs & Biotechnology 7.6%
Amgen Inc.* .............................................................. 137,900 7,525,203
Baxter International Inc. ................................................ 518,500 17,893,435
Johnson & Johnson Ltd. ................................................... 267,000 14,871,900
Novartis AG ADR .......................................................... 704,600 31,354,700
Pfizer Inc. .............................................................. 1,219,225 41,795,033
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113,440,271
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Health Care Services 2.8%
Caremark Rx Inc.* ........................................................ 706,800 23,281,992
Medco Health Solutions Inc.* ............................................. 223,100 8,366,250
UnitedHealth Group Inc. .................................................. 148,300 9,231,675
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40,879,917
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Hospital Supply 0.5%
Guidant Corp. ............................................................ 136,600 7,633,208
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Total Health Care ................................................................................ 161,953,396
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Integrated Oils 2.2%
Integrated International 2.2%
Exxon Mobil Corp. ........................................................ 729,300 32,388,213
-------------
Total Integrated Oils ............................................................................ 32,388,213
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Materials & Processing 7.9%
Agriculture 1.6%
Monsanto Co. ............................................................. 604,000 23,254,000
-------------
Chemicals 2.9%
Praxair Inc. ............................................................. 514,500 20,533,695
Sherwin Williams Co. ..................................................... 527,700 21,925,935
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42,459,630
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Forest Products 1.2%
Weyerhaeuser Co. ......................................................... 293,400 18,519,408
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Gold & Precious Metals 1.0%
Newmont Mining Corp. ..................................................... 374,580 14,518,721
-------------
Paper & Forest Products 1.2%
International Paper Co. .................................................. 396,300 17,714,610
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Total Materials & Processing ..................................................................... 116,466,369
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4 The notes are an integral part of the financial statements.
Issuer Shares Value
- --------------------------------------------------------------------------------------------------------
Other 5.9%
Multi-Sector 5.9%
General Electric Co. ..................................................... 1,131,600 $ 36,663,840
ITT Industries Inc. ...................................................... 184,200 15,288,600
Tyco International Ltd. .................................................. 1,055,600 34,982,584
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Total Other ............................................................................ 86,935,024
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Other Energy 4.8%
Gas Pipelines 1.8%
EOG Resources Inc. ....................................................... 452,800 27,036,688
-------------
Miscellaneous Energy 1.2%
Peabody Energy Corp. ..................................................... 313,600 17,558,464
-------------
Oil & Gas Producers 0.5%
Newfield Exploration Co.* ................................................ 135,300 7,541,622
-------------
Oil Well Equipment & Services 1.3%
Nabors Industries Ltd.* .................................................. 430,600 19,471,732
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Total Other Energy ..................................................................... 71,608,506
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Producer Durables 3.3%
Electronics: Industrial 1.0%
Thermo Electron Corp.* ................................................... 498,600 15,326,964
-------------
Industrial Products 0.9%
Agilent Technologies Inc.* ............................................... 434,500 12,722,160
-------------
Production Technology Equipment 1.4%
Lam Research Corp.* ...................................................... 746,500 20,006,200
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Total Producer Durables ................................................................ 48,055,324
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Technology 15.5%
Communications Technology 2.7%
Cisco Systems Inc.* ...................................................... 1,352,800 32,061,360
QUALCOMM Inc. ............................................................ 111,200 8,115,376
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40,176,736
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Computer Software 5.8%
Microsoft Corp. .......................................................... 1,754,700 50,114,232
Oracle Systems Corp.* .................................................... 1,721,700 20,539,881
Red Hat Inc.* ............................................................ 266,200 6,114,614
SAP AG ADR ............................................................... 230,700 9,645,567
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86,414,294
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Computer Technology 1.0%
Hewlett-Packard Co. ...................................................... 701,706 14,805,997
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Electronics 1.4%
General Dynamics Corp. ................................................... 204,000 20,257,200
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Electronics: Semiconductors/Components 4.6%
Analog Devices Inc. ...................................................... 408,200 19,218,056
Intel Corp. .............................................................. 1,246,200 34,395,120
Taiwan Semiconductor Manufacturing
Co. Ltd. ............................................................... 1,773,764 14,739,976
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68,353,152
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Total Technology ....................................................................... 230,007,379
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Utilities 4.3%
Cable Television & Radio 0.7%
Comcast Corp.* ........................................................... 372,700 10,290,247
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Telecommunications 3.6%
America Movil Inc. ADR ................................................... 272,000 9,892,640
Nextel Communications Inc. Cl. A* ........................................ 476,300 12,698,158
Verizon Communications Inc. .............................................. 450,900 16,318,071
Vodafone Group PLC ADR ................................................... 682,600 15,085,460
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53,994,329
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Total Utilities ........................................................................ 64,284,576
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Total Common Stocks (Cost $1,118,873,377) .............................................. 1,463,831,941
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Issuer Shares Value
- --------------------------------------------------------------------------------------------------------
Short-Term Investments 3.4%
State Street Navigator
Securities Lending Prime Portfolio ......... 50,538,675 $ 50,538,675
--------------
Total Short-Term Investments (Cost $50,538,675) ........................................ 50,538,675
--------------
Maturity Amount of
Date Principal
- ---------------------------------------------------------------------------------------------------------
Commercial Paper 1.5%
Caterpillar Financial
Services Inc., 1.16% ................................... 7/06/2004 $ 6,068,00 6,067,022
Citicorp, 1.05% .......................................... 7/02/2004 10,000,00 9,999,708
Goldman Sachs
Group LP, 1.27% ........................................ 7/06/2004 1,704,00 1,703,700
UBS Finance Inc., 1.42% .................................. 7/01/2004 3,902,00 3,902,000
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Total Commercial Paper (Cost $21,672,430) 21,672,430
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% of
Net Assets
- ---------------------------------------------------------------------------------------------------------
Summary of Portfolio Assets
Investments (Cost $1,191,084,482) ........................................ 103.7% 1,536,043,046
Cash and Other Assets, Less Liabilities .................................. (3.7%) (54,890,076)
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Net Assets ............................................................... 100.0% $1,481,152,970
===== ==============
* Denotes a security which has not paid a dividend during the last year.
ADR Stands for American Depository Receipt, representing ownership of foreign
securities.
Federal Income Tax Information
At June 30, 2004, the net unrealized appreciation of
investments based on cost for federal income tax
purposes of $1,188,788,543 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there is an excess of value over
tax cost $ 351,594,556
Aggregate gross unrealized depreciation for all
investments in which there is an excess of tax cost
over value (4,340,053)
--------------
$ 347,254,503
==============
The notes are an integral part of the financial statements.
State Street Research Investment Trust 5
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FINANCIAL
- ---------
Statements
Statement of Assets and Liabilities
- --------------------------------------------------------------------------------
June 30, 2004 (unaudited)
Assets
Investments, at value (Cost $1,191,084,482) (Note 1) ..... $1,536,043,046
Cash ..................................................... 41,935
Receivable for securities sold ........................... 12,612,946
Dividends receivable ..................................... 1,370,712
Receivable for fund shares sold .......................... 274,057
Other assets ............................................. 18,243
--------------
1,550,360,939
--------------
Liabilities
Payable for collateral received on securities loaned ..... 50,538,675
Payable for securities purchased ......................... 13,799,768
Payable for fund shares redeemed ......................... 1,886,408
Accrued transfer agent and shareholder services .......... 1,647,758
Accrued management fee ................................... 651,001
Accrued distribution and service fees .................... 349,114
Accrued trustees' fee .................................... 40,811
Accrued administration fee ............................... 13,511
Other accrued expenses ................................... 280,923
--------------
69,207,969
--------------
Net Assets ............................................... $1,481,152,970
==============
Net Assets consist of:
Undistributed net investment income ..................... $ 1,345,614
Unrealized appreciation of investments .................. 344,958,564
Accumulated net realized loss ........................... (370,140,038)
Paid in capital ......................................... 1,504,988,830
--------------
$1,481,152,970
==============
Net Asset Value (NAV) of Each Share Class
Except where noted, the NAV is the offering and the redemption price for each
class.
Class Net Assets [divided by] Number of Shares = NAV
A $438,460,061 46,483,379 $9.43*
B(1) $264,405,297 29,436,565 $8.98**
B $204,987,706 22,108,128 $9.27**
C $ 28,432,197 3,154,236 $9.01**
S $544,867,709 56,928,158 $9.57
* Maximum offering price per share = $10.01 ($9.43 [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 June 30, 2004 (unaudited)
Investment Income
Dividends, net of foreign taxes of $125,458
(Note 1) ............................................... $ 9,304,917
-----------
Expenses
Management fee (Note 2) .................................. 3,692,628
Transfer agent and shareholder services .................. 2,174,339
Distribution and service fees - Class A (Note 4) ......... 636,293
Distribution and service fees - Class B(1) (Note 4) ...... 1,313,449
Distribution and service fees - Class C (Note 4) ......... 146,012
Custodian fee ............................................ 267,038
Reports to shareholders .................................. 189,830
Administration fee (Note 2) .............................. 54,525
Registration fees ........................................ 31,000
Trustees' fees (Note 2) .................................. 31,000
Audit fee ................................................ 14,632
Miscellaneous ............................................ 37,420
-----------
8,588,166
Fees paid indirectly (Note 2) ............................ (134,760)
-----------
8,453,406
-----------
Net investment income .................................... 851,511
-----------
Realized and Unrealized Gain (Loss) on
Investments
Net increase from payment by affiliate (Note 2) .......... 10,814
Net realized gain on investments (Notes 1 and 3) ......... 121,753,973
Change in unrealized depreciation of investments ......... (80,021,510)
-----------
Net gain on investments .................................. 41,743,277
-----------
Net increase in net assets resulting from operations ..... $42,594,788
===========
6 The notes are an integral part of the financial statements.
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
Six months ended
June 30, 2004 Year ended
(unaudited) December 31, 2003
---------------- -----------------
Increase (Decrease) In Net Assets
Operations:
Net investment income ............. $ 851,511 $ 3,618,270
Net increase from payment
by affiliate .................... 10,814 --
Net realized gain on
investments ..................... 121,753,973 45,684,153
Change in unrealized
appreciation
(depreciation) of
investments ..................... (80,021,510) 322,089,172
-------------- --------------
Net increase resulting
from operations ................. 42,594,788 371,391,595
-------------- --------------
Dividends from net
investment income:
Class A ......................... (421,079) --
Class B ......................... (797,001) --
Class S ......................... (1,866,482) (1,876,380)
-------------- --------------
(3,084,562) (1,876,380)
-------------- --------------
Net decrease from fund share
transactions (Note 5) ........... (99,800,753) (223,775,410)
-------------- --------------
Total increase (decrease) in
net assets ...................... (60,290,527) 145,739,805
Net Assets
Beginning of period ............... 1,541,443,497 1,395,703,692
-------------- --------------
End of period (including
undistributed net investment
income of $1,345,614 and
$3,567,851, respectively) ......... $1,481,152,970 $1,541,443,497
============== ==============
Notes to Unaudited Financial Statements
- --------------------------------------------------------------------------------
June 30, 2004
Note 1
State Street Research Investment Trust is a series of State Street Research
Master Investment Trust (the "Trust"), which is organized as a Massachusetts
business trust, and is registered under the Investment Company Act of 1940, as
amended, as an open-end management investment company.
The investment objective of the fund is long-term growth of capital and,
secondarily, long-term growth of income. Under normal market conditions, the
fund invests at least 65% of its net assets in stock and convertible securities
that have long-term growth potential. In seeking to achieve its investment
objective, the fund generally attempts to identify the industries that over the
long term will grow faster than the economy as a whole.
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) 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) shares are
subject to a contingent deferred sales charge on certain redemptions made within
six years of purchase. 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. Currently, the annual
service and distribution fees paid by Class B shares have been voluntarily
reduced to 0.00%. Class B shares automatically convert into Class A shares at
the end of eight years. Class B shares are subject to a contingent deferred
sales charge on certain redemptions made within five years of purchase. 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 management 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.
The notes are an integral part of the financial statements.
State Street Research Investment Trust 7
Notes (continued)
- --------------------------------------------------------------------------------
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.
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.
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 has been 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 December 31, 2003, the fund had a capital loss carryforward of $489,841,266
available, to the extent provided in regulations, to offset future capital
gains, if any, of which $168,635,993 and $321,205,273 expire on December 31,
2009 and 2010, respectively.
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 June 30,
2004, the value of the securities loaned and the value of collateral were
$46,596,974 and $50,538,675 (consisting entirely of cash collateral invested in
State Street Navigator Securities Lending Prime Portfolio), respectively. During
the six months ended June 30, 2004, income from securities lending amounted to
$12,066 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 0.55% of the first $500 million of net
assets annually, 0.50% of the next $500 million, and 0.45% of any amount over $1
billion. 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, 2004, the fees pursuant to such
agreement amounted to $3,692,628.
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 June 30, 2004, the amount of such expenses allocated to the
fund was $264,340.
The fund has entered into an arrangement with its transfer agent and custodian
whereby credits realized as a result of uninvested cash balances and directed
brokerage commissions, respectively, were used to reduce a portion of the fund's
expenses. During the six months ended June 30, 2004, the fund's transfer agent
and custodian fees were reduced by $14,335 and $120,425, respectively, under
these arrangements.
The fees of the Trustees not currently affiliated with the Adviser amounted to
$31,000 during the six months ended June 30, 2004.
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 the State Street Research
funds. During the six months ended June 30, 2004, the amount of such expenses
was $54,525.
On February 19, 2004, the Distributor entered into an agreement with the NASD
resolving all outstanding issues relating to an investigation by the NASD of the
Distributor's email retention practices and supervision of trading activity in
shares of the State Street Research funds. The Distributor, without admitting or
denying the allegations or the findings set forth in the agreement, and solely
for the purposes of the settlement, agreed to the entry of certain findings by
the NASD relating to the Distributor's compliance with document retention
requirements and the Distributor's supervision of enforcement of shareholder
exchange limitations set forth in the funds' prospectuses. The agreement
contains no allegations or findings of fraudulent conduct by the Distributor. As
part of this agreement the Distributor made a payment to the fund to compensate
the fund for losses relating to the exchange of fund shares beyond the annual
limit set forth in the fund's prospectus. The payment was allocated among the
fund's share classes as follows: $3,110 to Class A; $1,922 to Class B(1); $1,632
to Class B; $214 to Class C and $3,936 to Class S. These amounts are shown in
the total amount of $10,814 as "Net increase from payment by affiliate" in the
Statement of Operations.
Note 3
For the six months ended June 30, 2004, purchases and sales of securities,
exclusive of short-term obligations, aggregated $627,306,724, and $741,682,899,
respectively.
Note 4
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), Class B and Class C shares. In addition, the fund pays annual
distribution fees of 0.05% of average daily net assets for Class A shares and
0.75% of average daily net assets for Class B(1), Class B and Class C shares.
Currently, the annual service and distribution fees paid by Class B shares have
been voluntarily reduced to 0.00%. The fund expects this waiver to continue,
although there is no guarantee that it will. 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 Class A, Class B and Class C shares, the payments are
intended to reimburse the distributor for expenditures incurred under the plan,
and any unused payments are returnable to the fund. For Class B(1), the payments
compensate the distributor for services and expenditures incurred under the
plan, and none of the payments are returnable to the fund. For the six months
ended June 30, 2004, fees pursuant to such plans amounted to $636,293,
$1,313,449, and $146,012 for Class A, Class B(1) and Class C shares,
respectively. As of June 30, 2004, there were $7,069,297 and $2,662,438 for
Class A and Class C shares, respectively, of unreimbursed distribution and
shareholder servicing related expenses to be carried forward to future plan
years.
8
The fund has been informed that the Distributor and MetLife Securities, Inc., a
wholly owned subsidiary of MetLife, earned initial sales charges aggregating
$175,160 and $989,058, respectively, on sales of Class A shares of the fund
during the six months ended June 30, 2004, and that MetLife Securities, Inc.
earned commissions aggregating $1,307,618 and $7,857 on sales of Class B(1) and
Class C shares, respectively, and the Distributor collected contingent deferred
sales charges aggregating $359,960, $160 and $300 on redemptions of Class B(1),
Class B and Class C shares, respectively, during the same period.
Note 5
The Trustees have the authority to issue an unlimited number of shares of
beneficial interest at $0.001 par value per share. These transactions break down
by share class as follows:
Six months ended
June 30, 2004 Year ended
(unaudited) December 31, 2003
----------------------------------------------------------
Class A Shares Amount Shares Amount
- ----------------------------------------------------------------------------------------------------------------------------
Shares sold 4,766,392 $ 44,291,032 11,468,717 $ 88,009,193
Issued upon reinvestment of dividend from net investment income 44,501 413,075 -- --
Shares redeemed (4,606,810) (42,711,483) (19,334,342) (145,675,277)
---------- ------------ ----------- -------------
Net increase (decrease) 204,083 $ 1,992,624 (7,865,625) $ (57,666,084)
========== ============ =========== =============
Class B(1) Shares Amount Shares Amount
- ----------------------------------------------------------------------------------------------------------------------------
Shares sold 1,093,248 $ 9,679,709 2,971,390 $ 22,284,050
Shares redeemed (2,747,251) (24,259,876) (6,814,102) (49,569,001)
---------- ------------ ----------- -------------
Net decrease (1,654,003) $(14,580,167) (3,842,712) $ (27,284,951)
========== ============ =========== =============
Class B Shares Amount Shares Amount
- ----------------------------------------------------------------------------------------------------------------------------
Shares sold 69,234 $ 634,998 521,526 $ 3,987,610
Issued upon reinvestment of dividend from net investment income 83,707 762,583 -- --
Shares redeemed (6,149,915) (56,165,905) (10,778,170) (81,546,511)
---------- ------------ ----------- -------------
Net decrease (5,996,974) $(54,768,324) (10,256,644) $ (77,558,901)
========== ============ =========== =============
Class C Shares Amount Shares Amount
- ----------------------------------------------------------------------------------------------------------------------------
Shares sold 64,096 $ 570,788 202,046 $ 1,546,464
Shares redeemed (448,487) (3,975,733) (1,292,549) (9,623,519)
---------- ------------ ----------- -------------
Net decrease (384,391) $ (3,404,945) (1,090,503) $ (8,077,055)
========== ============ =========== =============
Class S Shares Amount Shares Amount
- ----------------------------------------------------------------------------------------------------------------------------
Shares sold 295,781 $ 2,808,456 1,107,804 $ 8,683,091
Issued upon reinvestment of dividend from net investment income 98,100 922,150 131,922 923,795
Shares redeemed (3,480,538) (32,770,547) (7,917,272) (62,795,305)
---------- ------------ ----------- -------------
Net decrease (3,086,657) $(29,039,941) (6,677,546) $ (53,188,419)
========== ============ =========== =============
State Street Research Investment Trust 9
FINANCIAL
Highlights
Class A
------------------------------------------------------------------------
Six months ended Years ended December 31
June 30, 2004 ----------------------------------------------------
(unaudited)(a)(f) 2003(a) 2002(a)(e) 2001(a)(e) 2000(a)(e) 1999(a)(e)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ($) 9.18 7.07 9.70 11.98 14.01 12.36
------- ------- ------- ------- ------- -------
Net investment income (loss) ($) 0.00 0.01 0.01 (0.01) (0.00) 0.02
Net realized and unrealized gain (loss) on investments ($) 0.26 2.10 (2.64) (2.20) (0.78) 2.37
------- ------- ------- ------- ------- -------
Total from investment operations ($) 0.26 2.11 (2.63) (2.21) (0.78) 2.39
------- ------- ------- ------- ------- -------
Dividends from net investment income ($) (0.01) -- -- -- -- (0.01)
Distributions from capital gains ($) -- -- -- (0.07) (1.25) (0.73)
------- ------- ------- ------- ------- -------
Total distributions ($) (0.01) -- -- (0.07) (1.25) (0.74)
------- ------- ------- ------- ------- -------
Net asset value, end of period ($) 9.43 9.18 7.07 9.70 11.98 14.01
======= ======= ======= ======= ======= =======
Total return (%)(b) 2.82(c) 29.84 (27.11) (18.44) (5.90) 19.75
Ratios/Supplemental Data
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period ($ thousands) 438,460 424,723 382,598 654,911 846,485 802,359
Expense ratio (%) 1.16(d) 1.21 1.11 1.11 0.94 0.93
Expense ratio after expense reductions (%) 1.16(d) 1.21 1.10 1.10 0.93 0.92
Ratio of net investment income (loss) to average net assets (%) 0.10(d) 0.16 0.16 (0.06) (0.02) 0.14
Portfolio turnover rate (%) 42.06 66.48 75.46 105.61 86.64 71.45
Class B(1)
------------------------------------------------------------------------
Six months ended Years ended December 31
June 30, 2004 ----------------------------------------------------
(unaudited)(a)(f) 2003(a) 2002(a)(e) 2001(a)(e) 2000(a)(e) 1999(a)(e)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ($) 8.76 6.79 9.40 11.68 13.79 12.25
------- ------- ------- ------- ------- -------
Net investment loss ($) (0.03) (0.04) (0.04) (0.08) (0.10) (0.09)
Net realized and unrealized gain (loss) on investments ($) 0.25 2.01 (2.57) (2.13) (0.76) 2.36
------- ------- ------- ------- ------- -------
Total from investment operations ($) 0.22 1.97 (2.61) (2.21) (0.86) 2.27
------- ------- ------- ------- ------- -------
Distributions from capital gains ($) -- -- -- (0.07) (1.25) (0.73)
------- ------- ------- ------- ------- -------
Total distributions ($) -- -- -- (0.07) (1.25) (0.73)
------- ------- ------- ------- ------- -------
Net asset value, end of period ($) 8.98 8.76 6.79 9.40 11.68 13.79
======= ======= ======= ======= ======= =======
Total return (%)(b) 2.51(c) 29.01 (27.77) 18.92 (6.58) 18.91
Ratios/Supplemental Data:
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period ($ thousands) 264,405 272,369 237,325 402,415 473,407 298,303
Expense ratio (%) 1.86(d) 1.91 1.81 1.81 1.66 1.68
Expense ratio after expense reductions (%) 1.86(d) 1.91 1.80 1.80 1.65 1.67
Ratio of net investment loss to average net assets (%) (0.60)(d) (0.54) (0.54) (0.76) (0.73) (0.68)
Portfolio turnover rate (%) 42.06 66.48 75.46 105.61 86.64 71.45
Class B
------------------------------------------------------------------------
Six months ended Years ended December 31
June 30, 2004 ----------------------------------------------------
(unaudited)(a)(f) 2003(a) 2002(a)(e) 2001 (a)(e) 2000(a)(e) 1999(a)(e)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ($) 9.03 6.91 9.48 11.75 13.80 12.25
------- ------- ------- ------- ------- ---------
Net investment income (loss) ($) 0.02 0.04 0.01 (0.04) (0.04) (0.06)
Net realized and unrealized gain (loss) on investments ($) 0.25 2.08 (2.58) (2.16) (0.76) 2.34
------- ------- ------- ------- ------- ---------
Total from investment operations ($) 0.27 2.12 (2.57) (2.20) (0.80) 2.28
------- ------- ------- ------- ------- ---------
Dividends from net investment income (0.03) -- -- -- -- --
Distributions from capital gains ($) -- -- -- (0.07) (1.25) (0.73)
------- ------- ------- ------- ------- ---------
Total distributions ($) (0.03) -- -- (0.07) (1.25) (0.73)
------- ------- ------- ------- ------- ---------
Net asset value, end of period ($) 9.27 9.03 6.91 9.48 11.75 13.80
======= ======= ======= ======= ======= =========
Total return (%)(b) 3.07(c) 30.68 (27.11) (18.72) (6.14) 18.99
Ratios/Supplemental Data:
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period ($ thousands) 204,988 253,829 264,947 549,661 887,018 1,070,608
Expense ratio (%) 0.86(d) 0.91 1.13 1.49 1.23 1.54
Expense ratio after expense reductions (%) 0.86(d) 0.91 1.12 1.48 1.22 1.53
Ratio of net investment income (loss) to average net assets (%) 0.39(d) 0.47 0.08 (0.43) (0.31) (0.46)
Portfolio turnover rate (%) 42.06 66.48 75.46 105.61 86.64 71.45
10
Class C
------------------------------------------------------------------------
Six months ended Years ended December 31
June 30, 2004 ----------------------------------------------------
(unaudited)(a)(f) 2003(a) 2002(a)(e) 2001(a)(e) 2000(a)(e) 1999(a)(e)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ($) 8.79 6.82 9.43 11.72 13.83 12.29
------ ------ ------ ------ ------ ------
Net investment loss ($) (0.03) (0.04) (0.04) (0.08) (0.10) (0.08)
Net realized and unrealized gain (loss) on investments ($) 0.25 2.01 (2.57) (2.14) (0.76) 2.35
------ ------ ------ ------ ------ ------
Total from investment operations ($) 0.22 1.97 (2.61) (2.22) (0.86) 2.27
------ ------ ------ ------ ------ ------
Distributions from capital gains ($) -- -- -- (0.07) (1.25) (0.73)
------ ------ ------ ------ ------ ------
Total distributions ($) -- -- -- (0.07) (1.25) (0.73)
------ ------ ------ ------ ------ ------
Net asset value, end of period ($) 9.01 8.79 6.82 9.43 11.72 13.83
====== ====== ====== ====== ====== ======
Total return (%)(b) 2.50(c) 28.89 (27.68) (18.94) (6.56) 18.85
Ratios/Supplemental Data:
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period ($ thousands) 28,432 31,112 31,558 64,297 92,373 90,977
Expense ratio (%) 1.86(d) 1.91 1.81 1.81 1.66 1.68
Expense ratio after expense reductions (%) 1.86(d) 1.91 1.80 1.80 1.65 1.67
Ratio of net investment loss to average net assets (%) (0.60)(d) (0.54) (0.55) (0.76) (0.73) (0.62)
Portfolio turnover rate (%) 42.06 66.48 75.46 105.61 86.64 71.45
Class S
------------------------------------------------------------------------
Six months ended Years ended December 31
June 30, 2004 ----------------------------------------------------
(unaudited)(a)(f) 2003(a) 2002(a)(e) 2001(a)(e) 2000(a)(e) 1999(a)(e)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ($) 9.32 7.19 9.84 12.10 14.10 12.42
------- ------- ------- ------- --------- ---------
Net investment income ($) 0.02 0.04 0.04 0.03 0.04 0.05
Net realized and unrealized gain (loss) on investments
and foreign currency ($) 0.26 2.12 (2.69) (2.22) (0.79) 2.38
------- ------- ------- ------- --------- ---------
Total from investment operations ($) 0.28 2.16 (2.65) (2.19) (0.75) 2.43
------- ------- ------- ------- --------- ---------
Dividends from net investment income ($) (0.03) (0.03) -- -- -- (0.02)
Distributions from capital gains ($) -- -- -- (0.07) (1.25) (0.73)
------- ------- ------- ------- --------- ---------
Total distributions ($) (0.03) (0.03) -- (0.07) (1.25) (0.75)
------- ------- ------- ------- --------- ---------
Net asset value, end of period ($) 9.57 9.32 7.19 9.84 12.10 14.10
======= ======= ======= ======= ========= =========
Total return (%)(b) 3.03(c) 30.16 (26.93) (18.09) (5.64) 20.01
Ratios/Supplemental Data:
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period ($ thousands) 544,868 559,410 479,275 753,064 1,006,378 1,527,727
Expense ratio (%) 0.86(d) 0.91 0.81 0.81 0.66 0.68
Expense ratio after expense reductions (%) 0.86(d) 0.91 0.80 0.80 0.65 0.67
Ratio of net investment income to average net assets (%) 0.39(d) 0.46 0.46 0.24 0.26 0.39
Portfolio turnover rate (%) 42.06 66.48 75.46 105.61 86.64 71.45
(a) Per-share figures have been calculated using the average shares method.
(b) Does not reflect any front-end or contingent deferred sales charges.
(c) Not annualized
(d) Annualized
(e) Audited by other auditors
(f) During the six months ended June 30, 2004, the distributor made restitution
payments to the fund as part of a settlement with NASD. These payments had
no effect on net realized gain on investments per share.
State Street Research Investment Trust 11
- ---------------------
TRUSTEES AND OFFICERS
- ---------------------
State Street Research Master Investment Trust
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 19 Avaya Inc.
(58) 1999 the Board, Chief Executive
Officer and President,
PictureTel Corporation (video
conferencing systems)
- ------------------------------------------------------------------------------------------------------------------------------------
Peter S. Drotch Trustee Since Retired, formerly Partner 19 First Marblehead Corp.
(62) 2004 PricewaterhouseCoopers LLP
- ------------------------------------------------------------------------------------------------------------------------------------
Steve A. Garban Trustee Since Retired; formerly Senior Vice 53 Metropolitan Series Fund,
(66) 1997 President for Finance and Inc.; and Metropolitan
Operations and Treasurer, The Series Fund II
Pennsylvania State University
- ------------------------------------------------------------------------------------------------------------------------------------
Susan M. Phillips Trustee Since Dean, School of Business and 19 The Kroger Co.
(59) 1998 Public 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 53 A.P. Pharma, Inc.;
(65) 1990 Investments Ltd. Metropolitan Series Fund,
(investments); President, Inc.; and Metropolitan
Pacific Four Investments Series Fund II
(investments); formerly
President, The Glen Ellen
Company (private investment
firm)
- ------------------------------------------------------------------------------------------------------------------------------------
Michael S. Trustee Since Jay W. Forrester Professor of 53 Metropolitan Series Fund,
Scott Morton (67) 1989 Management, Sloan School of Inc.; and Metropolitan
Management, Massachusetts Series Fund II
Institute of Technology
====================================================================================================================================
Interested Trustees
Richard S. Davis(+) Trustee Since Chairman of the Board, 19 None
(58) 2000 President and Chief 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 18 None
(45) President 2002 Investment 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 19 None
(49) President 2001 Financial Officer 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
- ------------------------------------------------------------------------------------------------------------------------------------
Gregory S. Markel Vice Since Senior Vice President of State 1 None
(40) President 2002 Street Research & Management
Company; formerly, Vice
President, State Street
Research & Management Company
- ------------------------------------------------------------------------------------------------------------------------------------
John T. Wilson (41) Vice Since Managing Director of State 1 None
President 1996 Street Research & Management
Company; formerly, Senior Vice
President of State Street
Research & Management Company
- ------------------------------------------------------------------------------------------------------------------------------------
Douglas A. Romich Treasurer Since Senior Vice President and 19 None
(47) 2001 Treasurer of State Street
Research & Management Company;
formerly Vice President and
Assistant Treasurer, State
Street Research & Management
Company
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 serves as sole investment advisor and all
series of Metropolitan Series Fund, Inc. and Metropolitan Series Fund II.
The primary advisor to Metropolitan Series Fund, Inc. and Metropolitan
Series Fund II is MetLife Advisers, LLC, which has retained State Street
Research & Management Company as sub-advisor to certain series of
Metropolitan Series Fund, Inc.
(+) 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.
12
[LOGO] STATE STREET RESEARCH ------------
PRSRT STD
One Financial Center U.S. POSTAGE
Boston, MA 02111-2690 PAID
PERMIT #6
HUDSON, MA
------------
- --------------------------------------------------------------------------------
New accounts, mutual fund purchases,
exchanges and account information
Internet www.ssrfunds.com
E-mail info@ssrfunds.com
Phone 1-87-SSR-FUNDS (1-877-773-8637),
toll-free, 7 days a week, 24 hours a day
Hearing-impaired: 1-800-676-7876
Chinese- and Spanish-speaking: 1-888-638-3193
Fax 1-617-737-9722 (request confirmation number
first from the Service Center by calling 1-877-773-8637)
Mail State Street Research Service Center
P.O. Box 8408, Boston, MA 02266-8408
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[LOGO]
for Excellence in
Shareholder Communications
[LOGO]
for Excellence in Service
Investors should carefully consider the fund's investment objective,
risks, charges and expenses before investing. The fund's prospectus
contains more complete information on these and other matters.
A prospectus for any State Street Research fund is available through
your financial professional, by calling toll-free 1-87-SSR-FUNDS
(1-877-773-8637) or by visiting our website at www.ssrfunds.com.
Please read the prospectus carefully before investing.
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CONTROL NUMBER:(exp0805)SSR-LD IT-2189-0804
<Page>
FORM N-CSR(2 OF 3)
ITEM 2: CODE OF ETHICS
Not applicable for the reporting period.
ITEM 3: AUDIT COMMITTEE FINANCIAL EXPERT
Not applicable for the reporting period.
ITEM 4: (PRINCIPAL ACCOUNTANT FEES AND SERVICES)
Not applicable for the reporting period.
ITEM 5: AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable.
ITEM 6: SCHEDULE OF INVESTMENTS
Not applicable.
ITEM 7: DISCLOSURE OF PROXY VOTING POLICIES & PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES:
Not applicable.
ITEM 8: PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS
Not applicable.
ITEM 9: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Governance Committee will consider nominees recommended by
shareholders. Shareholders may submit recommendations to the attention
of the Secretary of the Trust, State Street Research & Management
Company, One Financial Center, 30th Floor, Boston, MA 02111.
ITEM 10: CONTROLS AND PROCEDURES
(a) The Registrant's principal executive and principal financial officers
have concluded, based on their evaluation of the Registrant's disclosure
controls and procedures as of a date within 90 days of the filing date
of this report, that the Registrant's disclosure controls and procedures
are reasonably designed to ensure that information required to be
disclosed by the Registrant on Form N-CSR is recorded, processed,
summarized and reported within the required time periods and that
information required to be disclosed by the Registrant in the reports
that it files or submits on Form N-CSR is accumulated and communicated
to the Registrant's management, including its principal executive and
principal financial officers, as appropriate to allow timely decisions
regarding required disclosure.
(b) There were no changes in the Registrant's internal control over financial
reporting during the Registrant's second fiscal half-year that have
materially affected, or are reasonably likely to materially affect, the
internal control over financial reporting.
ITEM 11: EXHIBITS
(a)(1) Code of Ethics required to be disclosed under Item 2 of Form
N-CSR attached hereto as Exhibit 99.CODE ETH
(a)(2) Certification for each principal executive and principal
financial officer of the Registrant required by Rule 30a-2(a)
under the Investment Company Act of 1940, as amended
(17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.302CERT
(b) Certification required by Rule 30a-2(b) under the Investment
Company Act of 1940, as amended (17 CFR 270.30a-2(b)) attached
hereto as Exhibit 99.906CERT
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 Investment Trust
By: /s/ Richard S. Davis
------------------------------------------------------
Richard S. Davis, President, Chairman and
Chief Executive Officer
Principal Executive Officer
Date August 27, 2004
------------------------------------------------------
<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 August 27, 2004
------------------------
By: /s/ Douglas A. Romich
------------------------------------------------------
Douglas A. Romich, Treasurer
Principal Financial Officer
Date August 27, 2004
------------------------