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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 811-8322
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State Street Research Securities 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: 04/30/05
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Date of reporting period: 05/01/04 - 10/31/04
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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.
[LOGO] STATE STREET RESEARCH
{GRAPHIC]
Large-Cap Analyst Fund
October 31, 2004
Semiannual Report to Shareholders
Table of Contents
3 Performance Discussion
4 About Your Fund Expenses
5 Portfolio Holdings
7 Financial Statements
11 Financial Highlights
13 Trustees and Officers
FROM THE CHAIRMAN
State Street Research
The U.S. economy grew at a solid pace during the six-month period ended October
31, 2004. Gross Domestic Product (GDP), a common measure of economic growth,
rose at a pace of more than 3.5% for the first half of 2004. Preliminary
estimates for the second half of the year suggest that the pace of growth
remained on solid ground.
Consumer confidence wavered early in the period as the number of new jobs added
to the economy fell below expectations. When the job picture brightened in April
and May, consumer confidence tracked higher. More than one million jobs were
added to the U.S. economy in the spring, and the quality of new jobs improved,
as reported by the U.S. Labor Department. However, caution returned on
disappointing jobs reports in July and August and consumer confidence pulled
back and continued to decline through the end of the period.
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 continued to rise,
making it easier for companies to increase spending, especially on information
technology, electronic equipment and new jobs. However, business spending fell
short of expectations, given the maturation of the economic cycle.
As the period wore on, it became clear that the days of record-low short-term
interest rates were coming to an end. In June, the Federal Reserve Board raised
the federal funds rate from 1.0% to 1.25%. The Fed subsequently raised this key
short-term interest rate to 1.5% in August and then to 1.75% in September. These
increases had little or no impact on the financial markets because they had been
widely anticipated and because the Fed has signaled that it will take a measured
approach to raising rates as the economic recovery matures.
Stocks Stumble as Bonds Edge Higher
After a relatively positive start to the calendar year, a host of worries
stopped the major stock market indexes in their tracks. Investors grew more
cautious about interest rates, rising energy prices, the threat of terrorist
attacks and the outcome of the presidential election and stocks retreated until
the last months of the reporting period. Value stocks held up considerably
better than growth stocks, although growth turned the corner near the end of the
period. The energy sector was the stock market's strongest performer.
High-yield bonds continued to lead the bond market. Most other sectors of the
bond market eked out solid returns as the yield on the benchmark 10-year U.S.
Treasury bond moved lower in the final months of the period. (Yields and bond
prices move in opposite directions.)
Looking Ahead
Any time the financial markets deliver substandard returns, it is disheartening
for investors. However, the seeds of a new market rally are often sown in
periods of weakness. With a diversified portfolio and a long-term perspective on
the markets, it is easier to weather periods of volatility--and more likely that
you may reap the potential benefits in better times. We urge you to talk to your
investment professional about your investment plan. And we look forward to
helping you achieve your long-term financial goals.
Sincerely,
/s/ RICHARD S. DAVIS
Richard S. Davis
Chairman
October 31, 2004
2
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PERFORMANCE
- ------------------------
Discussion as of October 31, 2004
How State Street Research Large-Cap Analyst Fund Performed State Street Research
Large-Cap Analyst Fund (Class A shares, without sales charge) returned 2.96% for
the six-month period ended October 31, 2004. That was slightly less than the
return of the Russell 1000[RegTM] Index, which was 3.04% over the same period.
However, the fund outperformed the Lipper Large-Cap Core Funds Average, which
returned 1.21% for the period.
- -------------------------------------------------------------------------------
Performance
- -------------------------------------------------------------------------------
Fund average annual total return as of 10/31/04
(does not reflect sales charge)
Life of Fund
1 Year 5 Years (3/11/98)
Class A 9.82% -0.32% 3.29%
- ------------------------------------------------------------
Class B(1) 9.13% -1.05% 2.53%
- ------------------------------------------------------------
Class B (closed) 11.86% -0.33% 3.09%
- ------------------------------------------------------------
Class C 9.11% -1.03% 2.55%
- ------------------------------------------------------------
Class S 10.23% -0.08% 3.54%
- ------------------------------------------------------------
Fund average annual total return as of 9/30/04
(at maximum applicable sales charge)
Life of Fund
1 Year 5 Years (3/11/98)
Class A 8.07% -0.01% 2.22%
- ------------------------------------------------------------
Class B(1) 8.90% 0.08% 2.38%
- ------------------------------------------------------------
Class B (closed) 11.74% 0.78% 2.94%
- ------------------------------------------------------------
Class C 12.87% 0.47% 2.41%
- ------------------------------------------------------------
Class S 15.16% 1.44% 3.40%
- ------------------------------------------------------------
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.
Average annual total return at maximum applicable sales charge reflects a
maximum 5.75% Class A share front-end sales charge, or 5% Class B(1) or 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.
Performance results for the fund are increased by the voluntary reduction of
fund fees and expenses; without subsidization, performance would have been
lower.
The Russell 1000 Index measures the performance of the 1,000 largest securities
in the Russell 3000[RegTM] Index (an unmanaged index of the 3,000 largest
publicly traded U.S. companies). The index is unmanaged and does not take
transaction charges into consideration. It is not possible to invest directly in
an index.
The Lipper Large-Cap Core Funds Average shows the performance of a category of
mutual funds with similar goals. The Lipper average shows you how well the fund
has done compared to competing funds.
- --------------------------------------------------------------------------------
Reasons for the Fund's Performance
In choppy market conditions, the Large-Cap Analyst portfolio performed in line
with the Russell 1000 Index. Good stock selection in the health care, energy and
consumer staples sectors drove returns over the period.
Additionally, our bottom-up process led to an above-benchmark position in the
best-performing energy sector, helping to compensate for select disappointments
in producer durables and financial services.
Oil prices approached $50/bbl during the period, bolstering the returns of
energy-related securities. As a result, the integrated oils and other energy
sectors were the top-performing sectors within both the index and the portfolio.
In this environment, the portfolio's investments in coal- and oil-producing
stocks delivered solid returns.
The fund's positioning amid health care names also benefited returns during the
period. Our pharmaceutical holdings tended to outperform their benchmark
counterparts as the fund was able to avoid some of the weakest names.
Specifically, our decision to underweight Merck helped returns as shares of the
drugmaker hit an eight-year low after the company announced the withdrawal of
its arthritis drug and painkiller, Vioxx.
Stock selection within both the financial services and producer durables sectors
hurt fund performance as positions in names such as multi-line insurer American
International Group and power supply device maker American Power Conversion
suffered during the period. Our lack of exposure to real estate investment
trusts (REITs) in the financial services sector also had a negative impact on
the fund's performance.
Looking Ahead
The portfolio's sector weights are maintained within stated limits around the
benchmark's sector weights. Investment decisions are made primarily at the
individual security and industry levels. While the market environment of the
last several months has been erratic, trading more on "macro" than
company-specific fundamentals, the portfolio has been well positioned to
outperform its benchmark regardless of market direction.
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 large-company stocks in
general are out of favor. The fund's policy of remaining invested in all sectors
of the Russell 1000 Index means that its performance may be affected by
sector-wide downturns.
- --------------------------------------------------------------------------------
Summary Portfolio Schedule
- --------------------------------------------------------------------------------
Industries % of Fund Net Assets
Financial Services 21.8%
- --------------------------------------------------------------------------------
Consumer Discretionary 15.7%
- --------------------------------------------------------------------------------
Technology 14.3%
- --------------------------------------------------------------------------------
Health Care 12.3%
- --------------------------------------------------------------------------------
Utilities 8.1%
- --------------------------------------------------------------------------------
Other 6.5%
- --------------------------------------------------------------------------------
Consumer Staples 6.4%
- --------------------------------------------------------------------------------
Materials & Processing 4.6%
- --------------------------------------------------------------------------------
Integrated Oils 4.1%
- --------------------------------------------------------------------------------
Other Energy 4.1%
- --------------------------------------------------------------------------------
Producer Durables 1.5%
- --------------------------------------------------------------------------------
Automobiles & Transportation 0.6%
- --------------------------------------------------------------------------------
Total 100.0%
- --------------------------------------------------------------------------------
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 Large-Cap Analyst Fund 3
About Your Fund Expenses
As a fund shareholder, you incur two types of costs: (1) Transaction costs,
which include sales charges, and (2) ongoing expenses, which include management
fees, service/distribution fees (12b-l) and "other" expenses. The examples below
illustrate the ongoing cost in dollars of investing in the fund and allow you to
compare these costs with the expenses of other funds. The examples are based on
a $1,000 investment at the beginning of the period and held for the entire
period from April 30, 2004, to October 31, 2004.
Actual Fund Return is based on the fund's actual return and expenses. To
estimate the ongoing expenses you paid during the entire period shown, simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number shown for your
fund under the column "Expenses Paid during the Period".
Hypothetical 5% Return is based on the fund's actual expense ratio and an
assumed rate of 5% per year before expenses. Please note that the return used is
not the fund's actual return; therefore, this information may not be used to
estimate your actual ending balance and expenses paid during the period. To
compare your fund's ongoing expenses with those of other funds, simply compare
this 5% hypothetical example with the 5% hypothetical examples shown in the
shareholder reports of other funds.
- --------------------------------------------------------------------------------
Beginning Ending Expenses
Account Account Paid Annualized
Six months ended Value Value during Expense
10/31/04 4/30/04 10/31/04 Period* Ratio
- --------------------------------------------------------------------------------
Actual Fund Return
- --------------------------------------------------------------------------------
Class A $1,000 $ 1,023.05 $ 6.57 1.30%
- --------------------------------------------------------------------------------
Class B(1) $1,000 $ 1,015.95 $10.08 2.00%
- --------------------------------------------------------------------------------
Class B (closed) $1,000 $ 1,027.75 $ 5.27 1.04%
- --------------------------------------------------------------------------------
Class C $1,000 $ 1,015.90 $10.08 2.00%
- --------------------------------------------------------------------------------
Class S $1,000 $ 1,026.04 $ 5.07 1.00%
- --------------------------------------------------------------------------------
Hypothetical 5% Return
- --------------------------------------------------------------------------------
Class A $1,000 $ 1,018.50 $ 6.56 1.30%
- --------------------------------------------------------------------------------
Class B(1) $1,000 $ 1,015.00 $10.08 2.00%
- --------------------------------------------------------------------------------
Class B (closed) $1,000 $ 1,019.80 $ 5.25 1.04%
- --------------------------------------------------------------------------------
Class C $1,000 $ 1,015.00 $10.08 2.00%
- --------------------------------------------------------------------------------
Class S $1,000 $ 1,020.00 $ 5.05 1.00%
- --------------------------------------------------------------------------------
* Expenses are equal to the fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by the number of days in
the period and then divided by the number of days in the year.
- --------------------------------------------------------------------------------
Please note that the expenses shown in the table are meant to highlight and help
you compare ongoing costs only and do not reflect transactional expenses such as
sales charges, which would result in higher total expenses. It should also be
noted that, for certain funds, expenses have been subsidized or reduced through
expense offset arrangements, which reduces costs for shareholders. Generally,
the fund expects that the expense subsidy or expense offset arrangement will
continue although there is no guarantee that it will. Please see the fund's
prospectus for more information.
4
- ---------------
PORTFOLIO
- ---------------
Holdings
October 31, 2004 (unaudited)
Issuer Shares Value
- --------------------------------------------------------------------------------
Common Stocks 100.0%
Automobiles & Transportation 0.6%
Railroads 0.6%
Union Pacific Corp.* ..................... 5,100 $ 321,147
-----------
Total Automobiles & Transportation .......................... 321,147
-----------
Consumer Discretionary 15.7%
Casinos/Gambling, Hotel/Motel 0.8%
International Game Technology Inc. ....... 12,800 422,912
-----------
Commercial Services 1.4%
Cendant Corp. ............................ 12,600 259,434
InterActiveCorp.* ........................ 23,000 497,260
-----------
756,694
-----------
Communications, Media & Entertainment 0.5%
Univision Communications Inc. Cl. A*...... 9,200 284,832
-----------
Consumer Electronics 1.8%
Electronic Arts Inc.* .................... 5,700 256,044
Yahoo! Inc.* ............................. 18,500 669,515
-----------
925,559
-----------
Printing & Publishing 1.6%
News Corp. Ltd. ADR^ ..................... 25,900 835,534
-----------
Restaurants 1.2%
McDonald's Corp. ......................... 22,300 650,045
-----------
Retail 7.4%
Bed Bath & Beyond Inc.* .................. 13,800 562,902
Best Buy Company Inc. .................... 9,200 544,824
Federated Department Stores Inc. ......... 8,300 418,735
Home Depot Inc. .......................... 24,700 1,014,676
Kohl's Corp.* ............................ 7,600 385,776
Lowe's Cos. Inc. ......................... 5,500 309,540
Wal-Mart Stores Inc. ..................... 12,400 668,608
-----------
3,905,061
-----------
Textile Apparel Manufacturers 1.0%
Coach Inc.* .............................. 11,200 522,256
-----------
Total Consumer Discretionary ................................ 8,302,893
-----------
Consumer Staples 6.4%
Beverages 1.9%
Anheuser-Busch Cos. Inc. ................. 6,300 314,685
PepsiCo Inc. ............................. 13,810 684,700
-----------
999,385
-----------
Drug & Grocery Store Chains 1.1%
CVS Corp. ................................ 13,100 569,326
-----------
Foods 0.5%
Kellogg Co. .............................. 6,800 292,400
-----------
Household Products 2.0%
Clorox Co. ............................... 6,100 333,060
Procter & Gamble Co. ..................... 13,800 706,284
-----------
1,039,344
-----------
Tobacco 0.9%
Altria Group Inc. ........................ 9,500 460,370
-----------
Total Consumer Staples ...................................... 3,360,825
-----------
Issuer Shares Value
- --------------------------------------------------------------------------------
Financial Services 21.8%
Banks & Savings & Loan 7.9%
Bank of America Corp. .................... 21,100 $ 945,069
Bank of New York Co. Inc. ................ 18,700 607,002
Goldman Sachs Group Inc. ................. 3,600 354,168
J.P. Morgan Chase & Co. .................. 21,170 817,162
North Fork Bancorp Inc. .................. 10,200 449,820
Wachovia Corp. ........................... 10,200 501,942
Wells Fargo & Co. ........................ 8,200 489,704
-----------
4,164,867
-----------
Financial Data Processing Services & Systems 1.9%
Checkfree Corp.* ......................... 10,000 310,000
DST Systems Inc.* ........................ 8,900 399,165
First Data Corp. ......................... 7,900 326,112
-----------
1,035,277
-----------
Insurance 3.7%
AFLAC Inc. ............................... 6,600 236,808
Allstate Corp. ........................... 5,500 264,495
American International Group Inc. ........ 17,400 1,056,354
Hartford Financial Services
Group Inc. ............................. 6,700 391,816
-----------
1,949,473
-----------
Miscellaneous Financial 7.5%
Ambac Financial Group Inc. ............... 3,600 281,016
American Express Co. ..................... 16,300 865,041
Citigroup Inc. ........................... 29,900 1,326,663
Federal Home Loan Mortgage Corp........... 7,700 512,820
Federal National Mortgage
Association ............................ 3,700 259,555
MBNA Corp. ............................... 12,600 322,938
Morgan Stanley Inc. ...................... 7,900 403,611
-----------
3,971,644
-----------
Securities Brokerage & Services 0.8%
Lehman Brothers Holdings Inc. ............ 4,900 402,535
-----------
Total Financial Services .............................. 11,523,796
-----------
Health Care 12.3%
Drugs & Biotechnology 8.3%
Amgen Inc.* .............................. 9,200 522,560
AstraZeneca plc ADR* ..................... 8,900 366,680
Biogen Idec Inc.* ........................ 4,350 252,996
Biovail Corp.* ........................... 14,500 271,440
Charles River Laboratories
International, Inc.* ................... 5,500 257,345
Genentech Inc.* .......................... 5,600 254,968
IVAX Corp.* .............................. 13,550 245,255
Merck & Company Inc. ..................... 12,800 400,768
Novartis AG ADR .......................... 26,500 1,272,265
Pfizer Inc. .............................. 5,885 170,370
Sanofi Aventis ADR ....................... 11,000 401,500
-----------
4,416,147
-----------
Health Care Services 2.0%
Caremark Rx Inc.* ........................ 13,900 416,583
Medico Health Solutions Inc.* ............ 10,100 342,491
WellPoint Health Networks Inc. Cl. A*..... 2,900 283,214
-----------
1,042,288
-----------
Hospital Supply 2.0%
Boston Scientific Corp.* ................. 7,800 275,340
Guidant Corp. ............................ 6,600 439,692
Medtronic Inc. ........................... 6,600 337,326
-----------
1,052,358
-----------
Total Health Care ...................................... 6,510,793
-----------
The notes are an integral part of the financial statements.
State Street Research Large-Cap Analyst Fund 5
Issuer Shares Value
- --------------------------------------------------------------------------------
Integrated Oils 4.1%
Integrated International 4.1%
Exxon Mobil Corp. ......................... 31,800 $ 1,565,196
Total Fina SA ADR ......................... 5,500 573,540
-----------
Total Integrated Oils ..................................... 2,138,736
-----------
Materials & Processing 4.6%
Chemicals 2.9%
Dow Chemical Co. .......................... 17,300 777,462
E.I. du Pont de Nemours & Co. ............. 6,300 270,081
Sherwin Williams Co. ...................... 11,800 504,096
-----------
1,551,639
-----------
Containers & Packaging 0.6%
Sealed Air Corp.* ......................... 6,000 297,240
-----------
Diversified Manufacturing 0.6%
Olin Corp. ................................ 15,900 297,330
-----------
Paper & Forest Products 0.5%
International Paper Co. ................... 6,600 254,166
-----------
Total Materials & Processing .............................. 2,400,375
-----------
Other 6.5%
Multi-Sector 6.5%
General Electric Co. ...................... 56,400 1,924,368
Honeywell International Inc. .............. 25,400 855,472
ITT Industries Inc. ....................... 8,100 657,234
-----------
Total Other ............................................... 3,437,074
-----------
Other Energy 4.1%
Miscellaneous Energy 1.0%
Consol Energy Inc.^ ....................... 7,600 269,040
Peabody Energy Corp. ...................... 4,000 255,120
-----------
524,160
-----------
Oil & Gas Producers 1.9%
EOG Resources Inc. ........................ 15,100 1,005,056
-----------
Oil Well Equipment & Services 1.2%
Hyrdril Co.* .............................. 7,400 325,526
Noble Corp.* .............................. 7,200 328,896
-----------
654,422
-----------
Total Other Energy ........................................ 2,183,638
-----------
Producer Durables 1.5%
Machinery 1.0%
Illinois Tool Works Inc. .................. 5,400 498,312
-----------
Production Technology Equipment 0.5%
Applied Materials Inc.* ................... 16,600 267,260
-----------
Total Producer Durables ................................... 765,572
-----------
Technology 14.3%
Communications Technology 2.6%
Cisco Systems Inc.* ....................... 35,900 689,639
Motorola Inc. ............................. 17,200 296,872
Scientific-Atlanta Inc. ................... 13,500 369,765
-----------
1,356,276
-----------
Computer Software 4.5%
Microsoft Corp. ........................... 69,600 1,948,104
Oracle Corp.* ............................. 35,900 454,494
-----------
2,402,598
-----------
Computer Technology 4.9%
Dell Inc.* ................................ 20,400 715,224
EMC Corp.* ................................ 20,000 257,400
Hewlett Packard Co. ....................... 17,800 332,148
IBM Corp.* ................................ 8,900 798,775
Nvidia Inc.* .............................. 25,300 366,091
Sandisk Corp.* ............................ 6,300 132,306
-----------
2,601,944
-----------
Issuer Shares Value
- --------------------------------------------------------------------------------
Electronics: Semiconductors/Components 2.3%
Broadcom Corp. Cl. A* ..................... 4,900 $ 132,508
Intel Corp. ............................... 23,200 516,432
Linear Technology Corp. ................... 3,500 132,689
Maxim Integrated Products Inc. ............ 9,800 431,102
-----------
1,212,731
-----------
Total Technology .......................................... 7,573,549
-----------
Utilities 8.1%
Cable Television & Radio 2.1%
Comcast Corp.* ............................ 37,900 1,118,050
-----------
Electrical 1.6%
Entergy Corp. ............................. 4,500 294,120
Exelon Corp.* ............................. 14,300 566,566
-----------
860,686
-----------
Telecommunications 4.4%
Nextel Communications Inc. Cl. A* ......... 24,100 638,409
SBC Communications Inc. ................... 29,700 750,222
Sprint Corp. .............................. 26,000 544,700
Verizon Communications Inc. ............... 10,000 391,000
-----------
2,324,331
-----------
Total Utilities ........................................... 4,303,067
-----------
Total Common Stocks (Cost $48,516,504) .................... 52,821,465
-----------
Short-Term Investments 2.1%
State Street Navigator Securities
Lending Prime Portfolio ................. 1,125,298 1,125,298
-----------
Total Short-Term Investments (Cost $1,125,298) ............ 1,125,298
-----------
Maturity Amount of
Coupon Rate Date Principal
- ------------------------------------------------------------
Commercial Paper 1.1%
International Lease
Finance Corp.,
1.76% ........... 11/05/2004 $300,000 299,942
UBS Finance Inc.,
1.77% ........... 11/02/2004 300,000 299,985
-----------
Total Commercial Paper (Cost $599,927) ..... 599,927
-----------
% of
Net Assets
- ----------------------------------------------------------------------
Summary of Portfolio Assets
Investments (Cost $50,241,729)......... 103.2% 54,546,690
Other Assets, Less Liabilities ........ (3.2%) (1,718,326)
----- ------------
Net Assets ............................ 100.0% $ 52,828,364
===== ============
KEY TO SYMBOLS
* Denotes a security which has not paid a dividend during the last year.
^ All or a portion of this security is being held on loan. As of
October 31, 2004, the value of securities loaned was $1,086,874.
ADR Stands for American Depositary Receipt.
Federal Income Tax Information
At October 31, 2004, the net unrealized appreciation of investments
based on cost for federal income tax purposes of $50,452,437 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there is an excess of value over
tax cost $ 5,271,015
Aggregate gross unrealized depreciation for all
investments in which there is an excess of tax cost
over value (1,176,762)
------------
$ 4,094,253
============
6 The notes are an integral part of the financial statements.
- -------------
FINANCIAL
- -------------
Statements
Statement of Assets and Liabilities
- --------------------------------------------------------------------------------
October 31, 2004 (unaudited)
Assets
Investments, at value (cost $50,241,729) (Note 1)............. $54,546,690
Receivable for securities sold ............................... 980,332
Dividends receivable ......................................... 51,140
Receivable from distributor .................................. 39,396
Receivable for fund shares sold .............................. 32,947
Other assets ................................................. 45,204
-----------
55,695,709
-----------
Liabilities
Payable for securities purchased ............................. 1,337,843
Payable for collateral received on securities loaned ......... 1,125,298
Payable to custodian ......................................... 111,620
Accrued transfer agent and shareholder services .............. 75,297
Payable for fund shares redeemed ............................. 32,397
Accrued management fee ....................................... 27,427
Accrued trustees' fees ....................................... 17,672
Accrued distribution and service fees ........................ 17,529
Accrued administration fee ................................... 2,972
Other accrued expenses ....................................... 119,290
-----------
2,867,345
-----------
Net Assets ................................................... $52,828,364
===========
Net Assets consist of:
Undistributed net investment income ......................... $ 160,809
Unrealized appreciation of investments ...................... 4,304,961
Accumulated net realized loss ............................... (6,551,694)
Paid in capital ............................................. 54,914,288
-----------
$52,828,364
===========
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 $34,073,181 3,154,614 $10.80*
B(1) $ 7,944,560 773,052 $10.28**
B $ 8,046,338 755,114 $10.66**
C $ 1,066,882 103,593 $10.30**
S $ 1,697,403 154,872 $10.96
* Maximum offering price per share = $11.46 ($10.80 [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 October 31, 2004 (unaudited)
Investment Income
Dividends, net of foreign taxes of $2,072 (Note 1) ........... $ 342,901
Interest (Note 1) ............................................ 2,834
Securities lending income (Note 1) ........................... 2,238
----------
347,973
----------
Expenses
Management fee (Note 2) ...................................... 170,028
Transfer agent and shareholder services (Note 2) ............. 69,447
Distribution and services fees - Class A (Note 5) ............ 50,299
Distribution and service fees - Class B(1) (Note 5) .......... 38,123
Distribution and service fees - Class B (Note 5) ............. 1,668
Distribution and service fees - Class C (Note 5) ............. 5,350
Administration fee (Note 2) .................................. 54,770
Custodian fee ................................................ 49,140
Registration fees ............................................ 28,350
Reports to shareholders ...................................... 24,948
Legal fees ................................................... 17,162
Audit fee .................................................... 12,726
Trustees' fees (Note 2) ...................................... 10,362
Miscellaneous ................................................ 28,045
----------
560,418
Expenses borne by the distributor (Note 3) ................... (209,139)
----------
351,279
----------
(3,306)
Reimbursement of distribution fees (Note 5) .................. 9,197
----------
Net investment income ........................................ 5,891
----------
Realized and Unrealized Gain on
Investments
Net realized gain on investments (Notes 1 and 4) ............. 1,190,429
Change in unrealized appreciation of investments ............. 342,954
----------
Net gain on investments ...................................... 1,533,383
----------
Net increase in net assets resulting from operations ......... $1,539,274
==========
The notes are an integral part of the financial statements.
State Street Research Large-Cap Analyst Fund 7
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
Six months ended
October 31, 2004 Year ended
(unaudited) April 30, 2004
------------------------------------
Increase (Decrease) In Net Assets
Operations:
Net investment income ............. $ 5,891 $ 164,390
Net realized gain on
investments ..................... 1,190,429 7,053,307
Change in unrealized
appreciation of investments ..... 342,954 2,029,732
----------- -----------
Net increase resulting
from operations ................. 1,539,274 9,247,429
----------- -----------
Dividend from net investment income:
Class A ......................... -- (50,020)
Class S ......................... -- (6,414)
----------- -----------
-- (56,434)
----------- -----------
Net increase (decrease) from
fund share transactions
(Note 7) ........................ (579,645) 6,699,133
----------- -----------
Total increase in net assets ...... 959,629 15,890,128
Net Assets
Beginning of period ............... 51,868,735 35,978,607
----------- -----------
End of period (including
undistributed net investment
income of $160,809 and
$154,918, respectively) ......... $52,828,364 $51,868,735
=========== ===========
Notes to Unaudited Financial Statements
- --------------------------------------------------------------------------------
October 31, 2004
Note 1
State Street Research Large-Cap Analyst Fund is a series of State Street
Research Securities 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 Trust presently
consists of two separate funds: State Street Research Large-Cap Analyst Fund and
State Street Research Legacy Fund.
The fund seeks to provide long-term growth of capital. In seeking to achieve its
investment objective, the fund invests at least 80% of net asset in large-cap
stocks and convertible securities of U.S. and foreign companies. The fund
considers large-cap companies to be those with market capitalizations within the
range of the Russell 1000 Index (an index of the 1,000 largest publicly traded
U.S. companies) and of other U.S. and foreign companies of comparable size.
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. For the period May 1,
2004 through September 30, 2004, the annual service and distribution fees paid
by Class B shares had been voluntarily reduced to 0.00%. For the period from
October 1, 2004, through October 31, 2004, the service and distribution fees
paid by Class B shares are 0.25%. 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. Income, expenses (other than service and distribution fees), and
realized and unrealized gains or losses on investments are allocated to each
class of shares based on its relative net assets. 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. In the event that the market
quotations for a portfolio instrument are not deemed to be readily available,
the Adviser's Valuation Committee determines the fair value for such portfolio
instrument. The fair
8 The notes are an integral part of the financial statements.
Notes (continued)
- --------------------------------------------------------------------------------
value of any such portfolio instruments are determined based upon a
consideration of all available facts and information. The fair valuation of a
restricted portfolio instrument reflects the inherent worth of the portfolio
instrument, without regard to the restrictive feature, adjusted for any
diminution in value resulting from the restrictive feature. The Adviser and the
custodian also monitor domestic and foreign markets and news information for any
developing events that may have an impact on the valuation of portfolio
instruments. Such monitoring includes general market news and financial market
information sources currently utilized in making investment decisions, trading
and investment personnel located abroad, foreign regional brokers, and/or
foreign custodians. The value assigned to these securities is based upon
available information at the time, and does not necessarily represent the amount
which might ultimately be realized upon sale.
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. As part of the custodian contract
between the custodian bank and the fund, the custodian bank has a lien on the
securities of the fund to the extent permitted by the fund's investment
restriction to cover any advances made by the custodian bank for the settlement
of securities purchased by the fund. At October 31, 2004, the payable to the
custodian bank of $111,620 represents the amount due for cash advance for the
settlement of securities purchased.
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 to 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.
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 April 30, 2004, the fund had a capital loss carryforward of $7,516,820
available, to the extent provided in regulations, to offset future capital
gains, if any, which expires on April 30, 2011.
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 October
31, 2004, the value of the securities loaned and the value of collateral were
$1,086,874 and $1,125,298 (consisting entirely of cash collateral invested in
State Street Navigator Securities Lending Prime Portfolio), respectively. The
collateral was marked to market the next business day and made equal to at least
100% of the current market value of the loaned securities and accrued interest.
During the six months ended October 31, 2004, income from securities lending
amounted to $2,238.
Note 2
The Trust and the Adviser have entered into an agreement under which the Adviser
earns monthly fees at an annual rate of 0.65% of fund 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 October 31, 2004, the fees pursuant to such
agreement amounted to $170,028.
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 October 31, 2004, the amount of such expenses allocated to
the fund was $26,999.
The fees of the Trustees not currently affiliated with the Adviser amounted to
$10,362 during the six months ended October 31, 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 October 31, 2004, the amount of such expenses
was $54,770.
Note 3
The Distributor and its affiliates may from time to time and in varying amounts
voluntarily assume some portion of fees and expenses relating to the fund. For
the six months ended October 31, 2004, the amount of such expenses assumed by
the Distributor and its affiliates was $209,139.
Note 4
For the six months ended October 31, 2004, purchases and sales of securities,
exclusive of short-term obligations, aggregated $24,585,148, and $25,016,882,
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), 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. The
fund pays annual distribution fees of 0.75% of average daily net assets for
Class B(1), Class B and Class C shares. For the period May 1, 2004 through
September 30, 2004, the annual service and distribution fees paid by Class B
shares had been voluntarily reduced to 0.00%. For the period from October 1,
2004, through October 31, 2004, the service and distribution fees paid by Class
B shares are 0.25%. 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 October 31, 2004, fees pursuant to such plans amounted
to $50,299, $38,123, $1,668 and $5,350 for Class A, Class B(1), Class B and
Class C shares, respectively. 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. As of
October 31, 2004, there were $705,597, $86,797 and $438,681 for Class A, Class B
and Class C shares, respectively, of unreimbursed distribution and shareholder
servicing related expenses to be carried forward to future plan years. For Class
B(1) shares, the payments compensate the distributor for services and
expenditures incurred under the plan, and none of the payments are returnable to
the fund. During the six months ended
State Street Research Large-Cap Analyst Fund 9
October 31, 2004, the Distributor reimbursed a total of $9,197 to Class B shares
of the fund reflecting the estimated excess of payments received over costs
incurred under the plan. This amount is shown as "Reimbursement of distribution
fees" in the Statement of Operations.
The fund has been informed that the Distributor and MetLife Securities, Inc., a
wholly owned subsidiary of MetLife, earned initial sales charges aggregating
$18,218 and $77,052, respectively, on sales of Class A shares of the fund during
the six months ended October 31, 2004, and that MetLife Securities, Inc. earned
commissions aggregating $56,683 and $762 on sales of Class B(1) and Class C
shares, respectively, and the Distributor collected contingent deferred sales
charges aggregating $8,702, $1,198 and $188 on redemptions of Class B(1), Class
B and Class C shares, respectively, during the same period.
Note 6
MetLife announced that it has entered into an agreement to sell the Adviser as
part of a larger transaction to sell MetLife's asset management business to
BlackRock, Inc. ("BlackRock"). The acquisition by BlackRock of MetLife's asset
management business is expected to occur in the first quarter of 2005. At the
time of the closing, the advisory agreement between the fund and the Adviser and
the distribution agreement between the fund and the distributor will be
terminated. BlackRock Advisors, Inc. and BlackRock Distributors, Inc.,
wholly-owned subsidiaries of BlackRock, will serve as investment adviser and
distributor, respectively.
A Special Meeting of Shareholders of the fund has been tentatively scheduled for
December 27, 2004. At this meeting, shareholders of the fund will be asked to
consider and approve a plan of reorganization between the fund and the BlackRock
Select Equity Portfolio. If the proposed reorganization is approved by
shareholders of the fund, the BlackRock Select Equity Portfolio would acquire
substantially all of the assets and liabilities of the fund. In exchange,
shareholders of the fund would receive shares of the BlackRock Select Equity
Portfolio with an aggregate value equivalent to the aggregate net asset value of
their fund shares at the time of the transaction. If the proposed reorganization
is not approved by shareholders of the fund, the Board of Trustees will need to
consider other alternatives relating to the management and operations of the
fund, including without limitations, seeking an alternative investment adviser
for the fund or seeking shareholder approval to liquidate the fund.*
*The foregoing is not an offer to sell, nor a solicitation of an offer to buy,
shares of any fund, nor is it a solicitation of any proxy.
Note 7
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
October 31, 2004 Year ended
(unaudited) April 30, 2004
-------------------------------------------------------------
Class A Shares Amount Shares Amount
- --------------------------------------------------------------------------------------------------------------------------------
Shares sold 326,995 $ 3,451,694 1,460,047 $ 14,326,166
Issued upon reinvestment of dividends from net investment income -- -- 4,820 49,361
Shares redeemed (292,192) (3,102,515) (788,343) (7,783,284)
----------- ------------- ----------- ------------
Net increase 34,803 $ 349,179 676,524 $ 6,592,243
=========== ============= =========== ============
Class B(1) Shares Amount Shares Amount
- --------------------------------------------------------------------------------------------------------------------------------
Shares sold 92,660 $ 931,446 243,721 $ 2,331,099
Shares redeemed (78,464) (788,966) (144,904) (1,102,824)
----------- ------------- ----------- ------------
Net increase 14,196 $ 142,480 98,817 $ 1,228,275
=========== ============= =========== ============
Class B Shares Amount Shares Amount
- --------------------------------------------------------------------------------------------------------------------------------
Shares sold 27,184 $ 284,440 35,528 $ 331,885
Shares redeemed (95,586) (995,427) (199,372) (1,922,441)
----------- ------------- ----------- ------------
Net decrease (68,402) $ (710,987) (163,844) $ (1,590,556)
=========== ============= =========== ============
Class C Shares Amount Shares Amount
- --------------------------------------------------------------------------------------------------------------------------------
Shares sold 7,491 $ 75,774 31,883 $ 310,024
Shares redeemed (19,605) (196,154) (21,414) (200,459)
----------- ------------- ----------- ------------
Net increase (decrease) (12,114) $ (120,380) 10,469 $ 109,565
=========== ============= =========== ============
Class S Shares Amount Shares Amount
- --------------------------------------------------------------------------------------------------------------------------------
Shares sold 37,803 $ 404,252 129,850 $ 1,254,196
Issued upon reinvestment of dividends from net investment income -- -- 619 6,414
Shares redeemed (59,645) (644,189) (92,976) (901,004)
----------- ------------- ----------- ------------
Net increase (decrease) (21,842) $ (239,937) 37,493 $ 359,606
=========== ============= =========== ============
10
- -----------
FINANCIAL
- -----------
Highlights
For a share outstanding throughout each period: Class A
-----------------------------------------------------------------------
Six months ended Years ended April 30
October 31, 2004 ----------------------------------------------------
(unaudited)(a) 2004(a) 2003(a) 2002(a)(e) 2001(a)(e) 2000(a)(e)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ($) 10.49 8.48 9.83 11.48 13.70 11.73
------ ------ ------ ------ ------ ------
Net investment income (loss) ($)* 0.00 0.01 0.02 (0.01) (0.04) (0.04)
Net realized and unrealized gain (loss) on investments ($) 0.31 2.02 (1.37) (1.64) (1.22) 2.20
------ ------ ------ ------ ------ ------
Total from investment operations ($) 0.31 2.03 (1.35) (1.65) (1.26) 2.16
------ ------ ------ ------ ------ ------
Dividend from net investment income ($) -- (0.02) -- -- -- --
Distributions from capital gains ($) -- -- -- -- (0.96) (0.19)
------ ------ ------ ------ ------ ------
Total distributions ($) -- (0.02) -- -- (0.96) (0.19)
Net asset value, end of period ($) 10.80 10.49 8.48 9.83 11.48 13.70
====== ====== ====== ====== ====== ======
Total return (%)(b) 2.96(c) 23.90 (13.73) (14.37) (9.65) 18.57
Ratios/Supplemental Data:
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period ($ thousands) 34,073 32,726 20,711 30,401 24,452 26,704
Expense ratio (%)* 1.30(d) 1.31 1.30 1.32 1.34 1.27
Expense ratio after expense reductions (%)* 1.30(d) 1.30 1.30 1.30 1.30 1.25
Ratio of net investment income (loss) to average net assets (%)* 0.05(d) 0.14 0.18 (0.11) (0.29) (0.29)
Portfolio turnover rate (%) 46.79 109.07 101.21 87.28 84.75 106.12
*Reflects voluntary reduction of expenses of these amounts (%) 0.80(d) 0.92 1.02 (0.84) 0.67 0.61
Class B(1)
-----------------------------------------------------------------------
Six months ended Years ended April 30
October 31, 2004 ----------------------------------------------------
(unaudited)(a) 2004(a) 2003(a) 2002(a)(e) 2001(a)(e) 2000(a)(e)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ($) 10.02 8.14 9.52 11.19 13.46 11.63
------ ------ ------ ------ ------ ------
Net investment loss ($)* (0.03) (0.05) (0.04) (0.08) (0.12) (0.13)
Net realized and unrealized gain (loss) on investments ($) 0.29 1.93 (1.34) (1.59) (1.19) 2.15
------ ------ ------ ------ ------ ------
Total from investment operations ($) 0.26 1.88 (1.38) (1.67) (1.31) 2.02
------ ------ ------ ------ ------ ------
Distributions from capital gains ($) -- -- -- -- (0.96) (0.19)
------ ------ ------ ------ ------ ------
Total distributions ($) -- -- -- -- (0.96) (0.19)
------ ------ ------ ------ ------ ------
Net asset value, end of period ($) 10.28 10.02 8.14 9.52 11.19 13.46
====== ====== ====== ====== ====== ======
Total return (%)(b) 2.59(c) 23.10 (14.50) (14.92) (10.23) 17.52
Ratios/Supplemental Data:
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period ($ thousands) 7,945 7,601 5,126 7,471 8,113 6,847
Expense ratio (%)* 2.00(d) 2.01 2.00 2.02 2.04 2.02
Expense ratio after expense reductions (%)* 2.00(d) 2.00 2.00 2.00 2.00 2.00
Ratio of net investment loss to average net assets (%)* (0.65)(d) (0.56) (0.52) (0.80) (0.99) (1.05)
Portfolio turnover rate (%) 46.79 109.07 101.21 87.28 84.75 106.12
*Reflects voluntary reduction of expenses of these amounts (%) 0.80(d) 0.93 1.03 0.87 0.67 0.61
Class B
--------------------------------------------------------------------------
Six months ended Years ended April 30
October 31, 2004 -------------------------------------------------------
(unaudited)(a)(f) 2004(a)(f) 2003(a) 2002(a)(e) 2001(a)(e) 2000(a)(e)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ($) 10.32 8.19 9.52 11.19 13.47 11.63
----- ----- ----- ------ ------ ------
Net investment income (loss) ($)* 0.03 0.18 0.01 (0.08) (0.12) (0.13)
Net realized and unrealized gain (loss) on investments ($) 0.31 1.95 (1.34) (1.59) (1.20) 2.16
----- ----- ----- ------ ------ ------
Total from investment operations ($) 0.34 2.13 (1.33) (1.67) (1.32) 2.03
----- ----- ----- ------ ------ ------
Distributions from capital gains ($) -- -- -- -- (0.96) (0.19)
----- ----- ----- ------ ------ ------
Total distributions ($) -- -- -- -- (0.96) (0.19)
----- ----- ----- ------ ------ ------
Net asset value, end of period ($) 10.66 10.32 8.19 9.52 11.19 13.47
===== ===== ===== ====== ====== ======
Total return (%)(b) 3.29(c) 26.01 (13.97) (14.92) (10.30) 17.61
Ratios/Supplemental Data:
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period ($ thousands) 8,046 8,502 8,089 12,576 17,054 21,267
Expense ratio (%)* 1.04(d) 1.01 1.33 2.02 2.04 2.02
Expense ratio after expense reductions (%)* 1.04(d) 1.00 1.33 2.00 2.00 2.00
Ratio of net investment income (loss) to average net
assets (%)* 0.54(d) 1.85 0.08 (0.79) (1.00) (1.04)
Portfolio turnover rate (%) 46.79 109.07 101.21 87.28 84.75 106.12
*Reflects voluntary reduction of expenses of these
amounts (%) 0.80(d) 0.94 1.02 0.89 0.67 0.61
State Street Research Large-Cap Analyst Fund 11
Class C
-----------------------------------------------------------------------
Six months ended Years ended April 30
October 31, 2004 ----------------------------------------------------
(unaudited)(a) 2004(a) 2003(a) 2002(a)(e) 2001(a)(e) 2000(a)(e)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ($) 10.04 8.15 9.53 11.20 13.48 11.63
----- ------ ------ ------ ------ ------
Net investment loss ($)* (0.03) (0.05) (0.04) (0.08) (0.12) (0.13)
Net realized and unrealized gain (loss) on investments ($) 0.29 1.94 (1.34) (1.59) (1.20) 2.17
----- ------ ------ ------ ------ ------
Total from investment operations ($) 0.26 1.89 (1.38) (1.67) (1.32) 2.04
----- ------ ------ ------ ------ ------
Distributions from capital gains ($) -- -- -- -- (0.96) (0.19)
----- ------ ------ ------ ------ ------
Total distributions ($) -- -- -- -- (0.96) (0.19)
----- ------ ------ ------ ------ ------
Net asset value, end of period ($) 10.30 10.04 8.15 9.53 11.20 13.48
===== ====== ====== ====== ====== ======
Total return (%)(b) 2.59(c) 23.19 (14.48) (14.91) (10.28) 17.70
Ratios/Supplemental Data:
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period ($ thousands) 1,067 1,161 858 2,068 2,576 5,393
Expense ratio (%)* 2.00(d) 2.01 2.00 2.02 2.04 2.02
Expense ratio after expense reductions (%)* 2.00(d) 2.00 2.00 2.00 2.00 2.00
Ratio of net investment loss to average net assets (%)* (0.64)(d) (0.56) (0.51) (0.79) (1.00) (1.08)
Portfolio turnover rate (%) 46.79 109.07 101.21 87.28 84.75 106.12
*Reflects voluntary reduction of expenses of these amounts (%) 0.80(d) 0.93 1.00 0.88 0.67 0.61
Class S
-----------------------------------------------------------------------
Six months ended Years ended April 30
October 31, 2004 ----------------------------------------------------
(unaudited)(a) 2004(a) 2003(a) 2002(a)(e) 2001(a)(e) 2000(a)(e)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ($) 10.63 8.58 9.95 11.58 13.77 11.76
----- ------ ------ ------ ------ ------
Net investment income (loss) ($)* 0.02 0.04 0.04 0.02 0.00 (0.00)
Net realized and unrealized gain (loss) on investments ($) 0.31 2.05 (1.41) (1.65) (1.23) 2.20
----- ------ ------ ------ ------ ------
Total from investment operations ($) 0.33 2.09 (1.37) (1.63) (1.23) 2.20
----- ------ ------ ------ ------ ------
Dividend from net investment income ($) -- (0.04) -- -- -- --
----- ------ ------ ------ ------ ------
Distributions from capital gains ($) -- -- -- -- (0.96) (0.19)
----- ------ ------ ------ ------ ------
Total distributions ($) -- (0.04) -- -- (0.96) (0.19)
===== ====== ====== ====== ====== ======
Net asset value, end of period ($) 10.96 10.63 8.58 9.95 11.58 13.77
Total return (%)(b) 3.10(c) 24.36 (13.77) (14.08) (9.38) 18.87
Ratios/Supplemental Data:
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period ($ thousands) 1,697 1,878 1,195 6,476 6,980 6,895
Expense ratio (%)* 1.00(d) 1.01 1.00 1.02 1.04 1.02
Expense ratio after expense reductions (%)* 1.00(d) 1.00 1.00 1.00 1.00 1.00
Ratio of net investment income (loss) to average net assets (%)* 0.35(d) 0.44 0.52 0.20 0.01 (0.04)
Portfolio turnover rate (%) 46.79 109.07 101.21 87.28 84.75 106.12
*Reflects voluntary reduction of expenses of these amounts (%) 0.80(d) 0.93 0.99 0.87 0.67 0.61
(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
voluntarily assumed a portion of the fund's expenses.
(c) Not annualized
(d) Annualized
(e) Audited by other auditors
(f) During the periods ended April 30, 2004 and October 31, 2004, the
Distributor reimbursed Class B shares of the fund the estimated excess of
payments received over costs incurred under the 12b-1 plan. The effect of
this reimbursement was to increase net investment income per share $0.14 and
$0.01, respectively, increase the total return 1.40% and 0.09%, respectively
and increase the ratio of net investment income to average net assets 1.40%
and 0.22%, respectively.
12
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TRUSTEES AND OFFICERS
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State Street Research Securities 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 the Board, Chief 18 Avaya Inc.
(58) 1999 Executive Officer and President, PictureTel
Corporation (video conferencing systems)
- ------------------------------------------------------------------------------------------------------------------------------------
Peter S. Drotch Trustee Since Retired; formerly Partner, 18 First Marblehead
(62) 2004 PricewaterhouseCoopers LLP Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
Steve A. Garban Trustee Since Retired; formerly Senior Vice President for 52 Metropolitan
(67) 1997 Finance and Operations and Treasurer, The Series Fund, Inc.
Pennsylvania State University and Metropolitan
Series Fund II
- ------------------------------------------------------------------------------------------------------------------------------------
Susan M. Phillips Trustee Since Dean, School of Business and Public Management, 18 The Kroger Co.
(60) 1999 George Washington University; formerly a member
of the Board of Governors of the Federal Reserve
System; and Chairman and Commissioner of the
Commodity Futures Trading Commission
- ------------------------------------------------------------------------------------------------------------------------------------
Toby Rosenblatt Trustee Since President, Founders Investments Ltd. (investments); 52 A.P. Pharma, Inc.;
(66) 1994 President, Pacific Four Investments (investments); Metropolitan
formerly President, The Glen Ellen Company Series Fund, Inc.;
(private investment firm) and Metropolitan
Series Fund II
- ------------------------------------------------------------------------------------------------------------------------------------
Michael S. Trustee Since Jay W. Forrester Professor of Management 52 Metropolitan
Scott Morton (67) 1994 (Emeritus), Sloan School of Management, Series Fund, Inc.
Massachusetts Institute of Technology and Metropolitan
Series Fund II
====================================================================================================================================
Interested Trustees
Richard S. Davis(+) Trustee Since Chairman of the Board, President and Chief 18 None
(59) 2000 Executive Officer of State Street Research &
Management Company; formerly Senior Vice
President, Fixed Income Investments, Metropolitan
Life Insurance Company
====================================================================================================================================
Officers
Edward Dowd Vice Since Vice President of State Street Research & 6 None
(37) President 2003 Management Company, formerly Vice President,
Independence Investment LLC and equity research
associate, Donaldson, Lufkin and Jenrette
- ------------------------------------------------------------------------------------------------------------------------------------
C. Kim Goodwin Vice Since Managing Director and Chief Investment Officer - 17 Akamai
(45) President 2002 Equities of State Street Research & Management Technologies, Inc.
Company; formerly Chief Investment Officer -
U.S. Growth Equities, American Century
- ------------------------------------------------------------------------------------------------------------------------------------
Jeffrey Lindsey Vice Since Managing Director of State Street Research & 6 None
(42) President 2003 Management Company, formerly Managing Director and
Senior Vice President, Putnam Investments
- ------------------------------------------------------------------------------------------------------------------------------------
John S. Lombardo Vice Since Managing Director, Chief Financial Officer 18 None
(50) President 2001 and Director of StateStreet Research & Management
Company; formerly Executive Vice President, State
Street Research & Management Company; and Senior
Vice President, Product and Financial Management,
MetLife Auto & Home
- ------------------------------------------------------------------------------------------------------------------------------------
Denis J. Walsh III Vice Since Managing Director of State Street Research & 2 None
(44) President 2003 Management Company; formerly Senior Research
Analyst, Fleet Investment Advisors
Douglas A. Romich Treasurer Since Senior Vice President and Treasurer of State 18 None
(47) 2001 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 adviser and all
series of Metropolitan Series Fund, Inc. and Metropolitan Series Fund II.
The primary adviser to Metropolitan Series Fund, Inc. and Metropolitan
Series Fund II is MetLife Advisers, LLC, which has retained State Street
Research & Management Company as sub-adviser 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.
State Street Research Large-Cap Analyst Fund 13
--------------
[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
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.
- --------------------------------------------------------------------------------
Investors should carefully consider the
fund's investment objective, risks,
charges and expenses before investing. [GRAPHIC]
The fund's prospectus contains more for Excellence in
complete information on these and other Shareholder Communications
matters. A prospectus for any State
Street Research fund is available [GRAPHIC]
through your financial professional, by for Excellence in Service
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.
OverView
For more information on the products and services we offer, refer to OverView,
our quarterly shareholder newsletter.
Webcasts
For a professional perspective on the markets, the economy and timely investment
topics, tune in to a State Street Research webcast by visiting our website at
www.ssrfunds.com.
Complete
Fund Listing For a list of our funds, visit our website at www.ssrfunds.com
under Research Our Funds. for Excellence in Shareholder Communications for
Excellence in Service
This report must be accompanied or preceded by a current prospectus. When used
as sales material after December 31, 2004, this report must be accompanied by a
current Quarterly Performance Update.
"State Street Research Proxy Voting Policies and Procedures"--which describes
how we vote proxies relating to portfolio securities--is available upon request,
free of charge, by calling the State Street Research Service Center toll-free at
1-87-SSR-FUNDS (1-877-773-8637) or by accessing the U.S. Securities and Exchange
Commission website at www.sec.gov.
The DALBAR awards recognize quality shareholder service and quality shareholder
communications, and should not be considered a rating of fund performance. The
survey included mutual fund complexes that volunteered or were otherwise
selected to participate and was not industrywide.
Member NASD, SIPC
(C)2004 State Street Research Investment Services, Inc.
One Financial Center
Boston, MA 02111-2690
www.ssrfunds.com
CONTROL NUMBER:(exp1205)SSR-LD LCA-2885-1204
<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 Securities Trust
By: /s/ Richard S. Davis
------------------------------------------------------
Richard S. Davis, President, Chairman and
Chief Executive Officer
Principal Executive Officer
Date January 5, 2005
------------------------------------------------------
<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 January 5, 2005
------------------------
By: /s/ Douglas A. Romich
------------------------------------------------------
Douglas A. Romich, Treasurer
Principal Financial Officer
Date January 5, 2005
------------------------