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: 811-10183
MET INVESTORS SERIES TRUST
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(Exact name of registrant as specified in charter)
5 Park Plaza, Suite 1900
Irvine, CA 92614
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(Address of principal executive offices)(Zip code)
(Name and Address of Agent for Service) Copy to:
Elizabeth M. Forget
President Robert N. Hickey, Esq.
Met Investors Series Trust Sullivan & Worcester LLP
5 Park Plaza, Suite 1900 1666 K Street, N.W.
Irvine, CA 92614 Washington, D.C. 20006
Registrant's telephone number, including area code: (800) 848-3854
Date of fiscal year end: December 31
Date of reporting period: June 30, 2007
ITEM 1: REPORT TO SHAREHOLDERS.
MET INVESTORS SERIES TRUST
Batterymarch Growth
and Income Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
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BATTERYMARCH GROWTH AND INCOME PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY BATTERYMARCH FINANCIAL MANAGEMENT, INC.
LETTER TO POLICYHOLDERS
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PERFORMANCE
During the six month period ending June 30, 2007, the Batterymarch Growth and
Income Portfolio returned 8.04% versus 6.96% for the S&P 500(R) Index.
YOUR PORTFOLIO
For the period, the portfolio performance exceeded the S&P 500(R) Index
benchmark, benefiting from positive stock selection for the period, led by
selection in the transportation and financials--real estate sectors. Selection
in services & distribution was also strong. Stock selection in health care was
the greatest detractor. The impact of relative sector weightings was
essentially neutral.
Our stock selection model performed well for the period, with all of the
dimensions having positive top-to-bottom quintile spreads on an equal weighted
basis. The technical dimension led in the first quarter, while the earnings
growth and expectations dimensions led in the second quarter.
As of June 30, 2007, your Portfolio remained broadly diversified and
attractively valued compared with the benchmark, with a lower 12-month forward
price-to-earnings ratio and a strong two-year forward earnings growth rate.
Looking forward, your Portfolio is focused on stocks that rank attractively
relative to their peers across the dimensions of our stock selection model.
MARKET ENVIRONMENT
After a positive start to the year, markets globally suffered a correction
towards the end of February, sparked by a sharp one-day decline in local China
A shares. The downturn was exacerbated within the U.S. by sub-prime lending
concerns, with initial reaction centered on the stocks of mortgage lenders. The
second quarter began with benign economic data and strong corporate earnings
until news headlines, involving spikes in bond yields, hedge fund bailouts and
declining home sales, reawakened investors to economic risks. Still, consumer
spending remained stable, industrial growth continued and monetary policy
makers appeared satisfied with the current balance between currency stability
and economic growth. Merger and acquisition activity in the U.S. continued at a
high level, reflecting the global environment.
The leading sectors within the benchmark for the period were energy services,
materials and energy as oil process climbed. The only sectors posting negative
returns for the six-month period were financials--banks and financials--real
estate as sub-prime mortgage lending continued to worry investors.
OUTLOOK
Economic growth has moderated, and the Fed continues to monitor signs of
inflationary pressure. The consensus outlook for the U.S. economy therefore
remains mostly upbeat, having weathered much of the recent uncertainty. Our
portfolios are positioned for continued global growth that is not dependent on
the U.S. consumer as the primary source of demand.
INVESTMENT RESEARCH UPDATE
During the period, we completed research on ways to glean additional
information from corporate earnings announcements. As a result, we have
implemented a new Decayed 4-Day Relative Return factor within the expectations
dimension of our stock selection model. Decayed 4-Day Relative Return
encapsulates earnings information by calculating four-day relative returns
surrounding a company's earnings release. Share-price movement in the days
after an earnings announcement reflects not only earnings data, but also
insights about corporate guidance and future revenues.
We also completed research that furthers our ability to capture shifts in the
distribution of analyst opinions over time so that we can better understand and
exploit changes in market sentiment. As a result, we enhanced the Estimate
Diffusion Factor within our expectations dimension: we added a second
calculation for this factor that allows us to have a more complete picture of
the distribution of estimates and improves stock count, information ratio and
alpha spreads in peer groups where this factor is applied.
TEAM MANAGED
Yu-Nien (Charles) Ko, CFA, is a Co-Director and Senior Portfolio Manager with
the Batterymarch U.S. Investment team. Mr. Ko joined Batterymarch in 2000 as a
quantitative analyst and was promoted to portfolio manager in 2003 and
co-director and senior portfolio manager of the U.S. investment team in 2006.
Mr. Ko has seven years of investment experience.
Stephen A. Lanzendorf, CFA is a Co-Director and Senior Portfolio Manager with
the Batterymarch U.S. investment team. He joined Batterymarch in 2006. An
experienced quantitative strategist, Mr. Lanzendorf previously held
responsibilities at Independence Investments and the Colonial Group. He is a
member of the Chicago Quantitative Alliance and the Boston Security Analysts
Society. Mr. Lanzendorf has 22 years of investment experience.
The views expressed above are those of the subadvisory firm and are subject to
change based on market and other conditions, and no forecast can be guaranteed.
Information about the Portfolio's holdings, asset allocation, industry
allocation or country diversification is historical and is not an indication of
future composition which will vary.
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1
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BATTERYMARCH GROWTH AND INCOME PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY BATTERYMARCH FINANCIAL MANAGEMENT, INC.
LETTER TO POLICYHOLDERS (CONTINUED)
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TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Exxon Mobil Corp. 3.21%
-------------------------------------------
Citigroup, Inc. 2.64%
-------------------------------------------
Wal-Mart Stores, Inc. 2.12%
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AT&T, Inc. 2.12%
-------------------------------------------
American International Group, Inc. 1.94%
-------------------------------------------
JPMorgan Chase & Co. 1.69%
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Pfizer, Inc. 1.61%
-------------------------------------------
International Business Machines Corp. 1.61%
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General Electric Co. 1.49%
-------------------------------------------
Bank of America Corp. 1.46%
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PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
[CHART]
Consumer Discretionary 7.4%
Consumer Staples 8.9%
Energy 12.0%
Financials 21.0%
Health Care 13.5%
Industrials 10.4%
Information Technology 14.5%
Materials 3.3%
Telecommunication Services 4.7%
Utilities 3.2%
Cash 1.0%
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2
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BATTERYMARCH GROWTH AND INCOME PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY BATTERYMARCH FINANCIAL MANAGEMENT, INC.
LETTER TO POLICYHOLDERS (CONTINUED)
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BATTERYMARCH GROWTH AND INCOME PORTFOLIO MANAGED BY
BATTERYMARCH FINANCIAL MANAGEMENT, INC. VS. S&P 500(R) INDEX/1/
Growth Based on $10,000+
[CHART]
Batterymarch Growth S&P 500(R)
and Income Portfolio Index/1/
-------------------- ----------
12/31/1996 $10,000 $10,000
12/31/1997 13,152 13,336
12/31/1998 16,931 16,747
12/31/1999 20,610 20,271
12/30/2000 18,027 18,424
12/31/2001 15,166 16,234
12/31/2002 11,868 12,646
12/31/2003 14,975 16,273
12/30/2004 16,624 18,044
12/31/2005 17,374 18,931
12/31/2006 19,840 21,922
6/30/2007 21,435 23,448
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Average Annual Return/2/
(for the period ended 6/30/07)
-------------------------------------------------------------
Since
1 Year 3 Year 5 Year 10 Year Inception/3/
-------------------------------------------------------------
Batterymarch
Growth and Income
- -- Portfolio--Class A 20.90% 11.43% 9.93% 6.00% 9.45%
-------------------------------------------------------------
- - - S&P 500(R) Index/1/ 20.59% 11.68% 10.71% 7.13% 12.54%
-------------------------------------------------------------
+The chart reflects the performance of Class A shares of the Portfolio. This is
currently the only active Class in the Portfolio.
/1/The S&P 500(R) Index is an unmanaged index consisting of 500 stocks chosen
for market size, liquidity, and industry group representation. It is a
market-value weighted index (stock price times number of shares outstanding),
with each stock's weight in the Index proportionate to its market value. The
Index does not include fees or expenses and is not available for direct
investment.
/2/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gains distributions.
/3/Inception of Class A shares is 5/16/83. Index returns are based on an
inception date of 5/16/83. On May 1, 2006, the assets of The Travelers Growth
and Income Stock Account for Variable Annuities were transferred to the
Portfolio. The historical performance prior to this period is the performance
of the Portfolio's predecessor insurance company separate account managed by an
entity which became an affiliate of the Advisor in December 2005 using the same
investment objective and similar investment strategies as the Portfolio. The
separate account's performance reflects all expenses including Contract charges
since such charges were not separately stated from other account expenses.
Subsequent to May 1, 2006, the Portfolio's performance will not reflect
Contract charges. If Contract charges had been excluded from the performance
calculations, the performance numbers would have been higher. Prior to May 1,
2006, the Portfolio was not registered under the Investment Company Act of 1940
("1940 Act") and was not subject to certain investment limitations,
diversification requirements, and other restrictions imposed by the 1940 Act
and the Internal Revenue Code, which, if applicable, may have adversely
affected its performance.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
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3
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
BATTERYMARCH GROWTH AND INCOME PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,080.40 $3.35
Hypothetical (5% return before expenses) 1,000.00 1,021.57 3.26
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.65%
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period).
4
MET INVESTORS SERIES TRUST
BATTERYMARCH GROWTH AND INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
---------------------------------------------------------------------
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
---------------------------------------------------------------------
COMMON STOCKS - 99.0%
AEROSPACE & DEFENSE - 3.8%
Boeing Co. (The)............................. 44,591 $ 4,287,871
General Dynamics Corp........................ 28,616 2,238,344
Lockheed Martin Corp......................... 28,163 2,650,983
Northrop Grumman Corp........................ 32,948 2,565,661
Raytheon Co.................................. 59,752 3,220,035
United Technologies Corp..................... 52,581 3,729,570
------------
18,692,464
------------
AIR FREIGHT & LOGISTICS - 0.9%
FedEx Corp................................... 18,800 2,086,236
Ryder System, Inc............................ 24,900 1,339,620
United Parcel Service, Inc. - Class B........ 12,110 884,030
------------
4,309,886
------------
AUTOMOBILES - 0.1%
Avis Budget Group, Inc.*..................... 20,000 568,600
------------
BANKS - 3.2%
Bank of America Corp......................... 144,372 7,058,347
Bank of New York Co., Inc.................... 39,525 1,637,916
Credicorp, Ltd............................... 13,200 807,444
U.S. Bancorp................................. 29,079 958,153
Wachovia Corp................................ 33,923 1,738,554
Wells Fargo & Co............................. 99,444 3,497,445
------------
15,697,859
------------
BEVERAGES - 1.5%
Anheuser-Busch Cos., Inc..................... 12,900 672,864
Coca-Cola Co................................. 32,000 1,673,920
Molson Coors Brewing Co. - Class B........... 35,885 3,317,927
PepsiCo, Inc................................. 28,092 1,821,766
------------
7,486,477
------------
BIOTECHNOLOGY - 0.7%
Amgen, Inc.*................................. 31,841 1,760,489
Gilead Sciences, Inc.*....................... 15,226 590,312
Invitrogen Corp.*............................ 12,900 951,375
------------
3,302,176
------------
CHEMICALS - 1.5%
Albemarle Corp............................... 34,500 1,329,285
Dow Chemical Co. (The)....................... 58,017 2,565,512
E.I. du Pont de Nemours & Co................. 32,096 1,631,760
Methanex Corp................................ 64,200 1,613,988
------------
7,140,545
------------
COMMERCIAL SERVICES & SUPPLIES - 0.6%
Brink's Co. (The)(a)......................... 34,300 2,122,827
R. R. Donnelley & Sons Co.................... 16,000 696,160
------------
2,818,987
------------
------------------------------------------------------------------------
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT & SERVICES - 2.7%
Cisco Systems, Inc.*............................ 218,124 $ 6,074,753
Harris Corp..................................... 96,770 5,278,804
Motorola, Inc................................... 40,505 716,939
QUALCOMM, Inc................................... 27,352 1,186,803
------------
13,257,299
------------
COMPUTERS & PERIPHERALS - 4.2%
Apple, Inc.*.................................... 15,062 1,838,166
Dell, Inc.*..................................... 39,704 1,133,549
EMC Corp.*...................................... 35,409 640,903
Hewlett-Packard Co.............................. 146,246 6,525,497
International Business Machines Corp.(a)........ 74,243 7,814,076
Sun Microsystems, Inc.*......................... 41,300 217,238
Western Digital Corp.*.......................... 110,300 2,134,305
------------
20,303,734
------------
CONTAINERS & PACKAGING - 0.6%
Pactiv Corp.*................................... 87,100 2,777,619
------------
ELECTRIC UTILITIES - 2.8%
Edison International............................ 21,600 1,212,192
Exelon Corp..................................... 11,160 810,216
FirstEnergy Corp................................ 57,932 3,749,938
Northeast Utilities............................. 15,600 442,416
NSTAR(a)........................................ 49,000 1,590,050
PG&E Corp....................................... 47,400 2,147,220
Public Service Enterprise Group, Inc............ 19,460 1,708,199
Reliant Energy, Inc.*........................... 66,700 1,797,565
TXU Corp........................................ 91 6,124
------------
13,463,920
------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 1.1%
Acuity Brands, Inc.............................. 15,400 928,312
Emerson Electric Co............................. 42,100 1,970,280
Vishay Intertechnology, Inc.*................... 115,200 1,822,464
Xerox Corp.*.................................... 26,600 491,568
------------
5,212,624
------------
ENERGY EQUIPMENT & SERVICES - 1.5%
Cameron International Corp.*.................... 52,300 3,737,881
GlobalSantaFe Corp.(a).......................... 23,500 1,697,875
Schlumberger, Ltd............................... 19,886 1,689,117
------------
7,124,873
------------
FINANCIAL - DIVERSIFIED - 9.4%
American Express Co............................. 19,800 1,211,364
Ameriprise Financial, Inc....................... 14,300 909,051
Citigroup, Inc.................................. 249,185 12,780,699
Fannie Mae...................................... 16,134 1,054,034
Federated Investors, Inc. - Class B............. 69,800 2,675,434
First Marblehead Corp. (The)(a)................. 17,550 678,132
Freddie Mac..................................... 9,519 577,803
Goldman Sachs Group, Inc. (The)................. 17,931 3,886,544
See notes to financial statements
5
MET INVESTORS SERIES TRUST
BATTERYMARCH GROWTH AND INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
--------------------------------------------------------------------------
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
--------------------------------------------------------------------------
FINANCIAL - DIVERSIFIED - CONTINUED
JPMorgan Chase & Co............................... 169,013 $ 8,188,680
Lehman Brothers Holdings, Inc..................... 27,532 2,051,685
Merrill Lynch & Co., Inc.......................... 35,262 2,947,198
Morgan Stanley.................................... 19,412 1,628,279
Prudential Financial, Inc......................... 24,836 2,414,804
Raymond James Financial, Inc.(a).................. 134,100 4,143,690
Washington Mutual, Inc.(a)........................ 15,300 652,392
------------
45,799,789
------------
FOOD & DRUG RETAILING - 0.5%
Safeway, Inc...................................... 70,160 2,387,545
------------
FOOD PRODUCTS - 1.2%
Archer-Daniels-Midland Co......................... 60,400 1,998,636
Tyson Foods, Inc. - Class A....................... 166,450 3,835,008
------------
5,833,644
------------
FOOD RETAILERS - 0.6%
Kroger Co. (The).................................. 96,800 2,722,984
------------
HEALTH CARE EQUIPMENT & SUPPLIES - 1.8%
Applera Corp...................................... 97,900 2,989,866
Edwards Lifesciences Corp.*....................... 14,800 730,232
Johnson & Johnson................................. 62,904 3,876,144
Medtronic, Inc.................................... 19,600 1,016,456
------------
8,612,698
------------
HEALTH CARE PROVIDERS & SERVICES - 3.8%
Aetna, Inc........................................ 55,688 2,750,987
Cardinal Health, Inc.............................. 7,281 514,330
Humana, Inc.*..................................... 46,206 2,814,407
McKesson Corp..................................... 87,600 5,224,464
UnitedHealth Group, Inc........................... 85,135 4,353,804
WellPoint, Inc.*.................................. 34,043 2,717,653
------------
18,375,645
------------
HOTELS, RESTAURANTS & LEISURE - 0.6%
Brinker International, Inc........................ 16,700 488,809
Carnival Corp..................................... 32,300 1,575,271
McDonald's Corp................................... 20,858 1,058,752
------------
3,122,832
------------
HOUSEHOLD DURABLES - 0.1%
NVR, Inc.*(a)..................................... 728 494,858
------------
HOUSEHOLD PRODUCTS - 1.3%
Procter & Gamble Co. (The)........................ 105,072 6,429,356
------------
INDUSTRIAL - DIVERSIFIED - 2.5%
3M Co............................................. 12,161 1,055,453
General Electric Co............................... 188,314 7,208,660
Honeywell International, Inc...................... 43,566 2,451,894
Tyco International, Ltd........................... 39,829 1,345,822
------------
12,061,829
------------
-----------------------------------------------------------------------------
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
-----------------------------------------------------------------------------
INSURANCE - 6.6%
Allstate Corp. (The).............................. 33,000 $ 2,029,830
American International Group, Inc................. 134,258 9,402,088
Chubb Corp. (The)................................. 56,660 3,067,572
Hartford Financial Services Group, Inc. (The)..... 19,167 1,888,141
Loews Corp........................................ 53,255 2,714,940
Manulife Financial Corp........................... 173,600 6,478,752
PartnerRe, Ltd.(a)................................ 12,800 992,000
Principal Financial Group, Inc.................... 44,000 2,564,760
Travelers Cos., Inc. (The)........................ 42,300 2,263,050
W.R. Berkley Corp................................. 17,600 572,704
------------
31,973,837
------------
INTERNET SOFTWARE & SERVICES - 0.7%
eBay, Inc.*....................................... 23,047 741,653
Google, Inc. - Class A*........................... 4,000 2,093,520
Yahoo!, Inc.*..................................... 22,524 611,076
------------
3,446,249
------------
IT CONSULTING & SERVICES - 0.5%
Electronic Data Systems Corp...................... 85,950 2,383,394
------------
MACHINERY - 0.7%
Caterpillar, Inc.................................. 40,000 3,132,000
Parker Hannifin Corp.............................. 5,394 528,127
------------
3,660,127
------------
MEDIA - 2.7%
Citadel Broadcasting Corp.(a)..................... 1 8
Comcast Corp. - Class A*.......................... 111,900 3,146,628
EchoStar Communications Corp.*.................... 31,100 1,348,807
Meredith Corp..................................... 12,400 763,840
News Corp. - Class A.............................. 48,736 1,033,691
Time Warner, Inc.................................. 183,235 3,855,264
Walt Disney Co. (The)............................. 90,280 3,082,159
------------
13,230,397
------------
METALS & MINING - 1.2%
Alcan, Inc........................................ 14,800 1,203,240
Alcoa, Inc........................................ 20,200 818,706
Commercial Metals Co.............................. 56,100 1,894,497
Reliance Steel & Aluminum Co...................... 36,600 2,059,116
------------
5,975,559
------------
OIL & GAS - 10.9%
Apache Corp....................................... 17,500 1,427,825
Chesapeake Energy Corp.(a)........................ 15,100 522,460
Chevron Corp...................................... 69,999 5,896,716
ConocoPhillips.................................... 82,658 6,488,653
Devon Energy Corp................................. 25,602 2,004,380
Exxon Mobil Corp.................................. 185,709 15,577,271
Halliburton Co.................................... 64,516 2,225,802
Marathon Oil Corp................................. 52,132 3,125,835
See notes to financial statements
6
MET INVESTORS SERIES TRUST
BATTERYMARCH GROWTH AND INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-----------------------------------------------------------------------------
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
-----------------------------------------------------------------------------
OIL & GAS - CONTINUED
Murphy Oil Corp................................... 14,300 $ 849,992
Occidental Petroleum Corp......................... 20,986 1,214,669
Petro-Canada...................................... 59,100 3,141,756
Superior Energy Services, Inc.*................... 28,000 1,117,760
Tidewater, Inc.(a)................................ 30,000 2,126,400
Transocean, Inc.*(a).............................. 22,700 2,405,746
UGI Corp.......................................... 75,700 2,065,096
Valero Energy Corp................................ 37,873 2,797,300
------------
52,987,661
------------
PERSONAL PRODUCTS - 0.7%
Estee Lauder Companies, Inc. - Class A(a)......... 57,400 2,612,274
NBTY, Inc.*(a).................................... 19,800 855,360
------------
3,467,634
------------
PHARMACEUTICALS - 7.3%
Abbott Laboratories............................... 25,359 1,357,975
Biovail Corp...................................... 19,100 485,522
Cephalon, Inc.*(a)................................ 31,900 2,564,441
Eli Lilly & Co.................................... 18,726 1,046,409
Endo Pharmaceuticals Holdings, Inc.*.............. 34,100 1,167,243
Forest Laboratories, Inc.*........................ 67,540 3,083,201
King Pharmaceuticals, Inc.*....................... 201,000 4,112,460
Merck & Co., Inc.................................. 66,780 3,325,644
Mylan Laboratories, Inc.(a)....................... 164,300 2,988,617
Pfizer, Inc....................................... 305,725 7,817,388
Schering-Plough Corp.............................. 26,364 802,520
Sepracor, Inc.*................................... 35,000 1,435,700
Watson Pharmaceuticals, Inc.*..................... 113,100 3,679,143
Wyeth............................................. 23,251 1,333,212
------------
35,199,475
------------
REAL ESTATE - 1.8%
Annaly Mortgage Management, Inc. (REIT)........... 112,100 1,616,482
CB Richard Ellis Group, Inc. - Class A*........... 84,200 3,073,300
Host Hotels & Resorts, Inc. (REIT)................ 3,020 69,822
Jones Lang LaSalle, Inc........................... 27,500 3,121,250
KKR Financial Holdings LLC(a)..................... 28,080 699,473
------------
8,580,327
------------
RETAIL - MULTILINE - 4.0%
Costco Wholesale Corp.(a)......................... 8,027 469,740
J.C. Penney Co., Inc.............................. 62,400 4,516,512
Kohl's Corp.*..................................... 7,900 561,137
Target Corp....................................... 55,087 3,503,533
Wal-Mart Stores, Inc.............................. 213,840 10,287,843
------------
19,338,765
------------
-----------------------------------------------------------------------------
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
-----------------------------------------------------------------------------
RETAIL - SPECIALTY - 2.2%
American Eagle Outfitters, Inc.................... 86,139 $ 2,210,326
Home Depot, Inc. (The)............................ 73,428 2,889,392
Lowe's Cos., Inc.................................. 26,649 817,858
NIKE, Inc. - Class B.............................. 78,990 4,604,327
------------
10,521,903
------------
ROAD & RAIL - 1.2%
Burlington Northern Santa Fe Corp................. 25,087 2,135,907
CSX Corp.......................................... 37,016 1,668,681
Union Pacific Corp................................ 15,800 1,819,370
------------
5,623,958
------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS - 2.6%
ASML Holding N.V.*(a)............................. 77,850 2,136,982
Integrated Device Technology, Inc.*............... 34,500 526,815
Intel Corp........................................ 283,699 6,740,688
KLA-Tencor Corp................................... 5,900 324,205
Linear Technology Corp.(a)........................ 50,500 1,827,090
Texas Instruments, Inc............................ 24,574 924,720
------------
12,480,500
------------
SOFTWARE - 3.2%
BMC Software, Inc.*............................... 88,105 2,669,582
Compuware Corp.*(a)............................... 106,300 1,260,718
Intuit, Inc.*..................................... 59,454 1,788,376
Microsoft Corp.................................... 235,635 6,944,163
Oracle Corp.*..................................... 94,000 1,852,740
Sybase, Inc.*(a).................................. 49,572 1,184,275
------------
15,699,854
------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 4.8%
AT&T, Inc......................................... 247,333 10,264,320
Corning, Inc.*.................................... 26,964 688,930
Qwest Communications International, Inc.*(a)...... 452,600 4,390,220
Sprint Nextel Corp................................ 46,051 953,716
Telephone & Data Systems, Inc..................... 9,600 600,672
Verizon Communications, Inc....................... 158,640 6,531,209
------------
23,429,067
------------
TOBACCO - 0.9%
Altria Group, Inc................................. 59,925 4,203,140
------------
Total Common Stocks
(Cost $407,264,496) 480,200,090
------------
See notes to financial statements
7
MET INVESTORS SERIES TRUST
BATTERYMARCH GROWTH AND INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
------------------------------------------------------------------------------
PAR VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------------------------
SHORT-TERM INVESTMENT - 1.3%
State Street Bank & Trust Co.,
Repurchase Agreement dated 06/29/07 at 3.400%
to be repurchased at $6,121,734 on 07/02/07
collateralized by $6,255,000 FHLB at 5.750% due
06/07/12 with a value of $6,247,181.
(Cost -$6,120,000).............................. $6,120,000 $ 6,120,000
------------
TOTAL INVESTMENTS - 100.3%
(Cost $413,384,496) 486,320,090
Other Assets and Liabilities (net) - (0.3)% (1,504,615)
------------
TOTAL NET ASSETS - 100.0% $484,815,475
============
PORTFOLIO FOOTNOTES:
* Non-income producing security.
(a) A portion or all of the security was held on loan. As of June 30, 2007, the
market value of the securities loaned was $39,947,695 and the collateral
received consisted of cash in the amount of $28,316,627 and securities in
the amount of $12,581,685.
FHLB - Federal Home Loan Bank
REIT - Real Estate Investment Trust
See notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
BATTERYMARCH GROWTH AND INCOME PORTFOLIO
ASSETS
Investments, at value (Note 2)* $480,200,090
Repurchase Agreement 6,120,000
Cash 861
Collateral for securities on loan 40,898,312
Receivable for investments sold 282,877
Dividends receivable 406,218
Interest receivable 578
Receivable from investment manager (Note 3) 10,390
------------
Total assets 527,919,326
------------
LIABILITIES
Payables for:
Investments purchased 1,555,222
Trust shares redeemed 310,025
Collateral for securities on loan 40,898,312
Investment advisory fee payable (Note 3) 263,305
Administration fee payable 5,777
Custodian and accounting fees payable 32,910
Accrued expenses 38,300
------------
Total liabilities 43,103,851
------------
NET ASSETS $484,815,475
============
NET ASSETS REPRESENTED BY:
Paid in surplus $374,436,267
Accumulated net realized gain 34,705,008
Unrealized appreciation on investments and foreign currency 72,935,736
Undistributed net investment income 2,738,464
------------
Total $484,815,475
============
NET ASSETS
Class A $484,815,475
============
CAPITAL SHARES OUTSTANDING
Class A 21,491,072
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 22.56
============
- -------------------------------------------------------------------------------------
* Investments at cost, excluding Repurchase Agreements $407,264,496
See notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
BATTERYMARCH GROWTH AND INCOME PORTFOLIO
INVESTMENT INCOME:
Dividends (1) $ 4,196,133
Interest (2) 72,673
-----------
Total investment income 4,268,806
-----------
EXPENSES:
Investment advisory fee (Note 3) 1,564,107
Administration fees 18,636
Custody and accounting fees 15,940
Transfer agent fees 2,158
Audit 12,061
Legal 7,309
Trustee fees and expenses 7,667
Shareholder reporting 15,645
Insurance 10,610
Other 1,139
-----------
Total expenses 1,655,272
Less fees waived and expenses reimbursed by the manager (33,762)
Less broker commission recapture (54,548)
-----------
Net expenses 1,566,962
-----------
Net investment income 2,701,844
-----------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY:
Net realized gain (loss) on:
Investments 38,319,156
Foreign currency (29)
-----------
Net realized gain on investments and foreign currency 38,319,127
-----------
Net change in unrealized appreciation (depreciation) on:
Investments (3,584,255)
Foreign currency 406
-----------
Net change in unrealized depreciation on investments and
foreign currency (3,583,849)
-----------
Net realized and change in unrealized gain on investments and
foreign currency 34,735,278
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $37,437,122
===========
- --------------------------------------------------------------------------------------
(1)Dividend income is net withholding taxes of: $ 16,343
(2)Interest income includes securities lending income of: 19,431
See notes to financial statements
10
MET INVESTORS SERIES TRUST
STATEMENT OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
BATTERYMARCH GROWTH AND INCOME PORTFOLIO
Period Ended Period Ended
June 30, 2007 December 31,
(Unaudited) 2006*
------------- ------------
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income $ 2,701,844 $ 4,165,772
Net realized gain on investments and foreign currency 38,319,127 28,678,079
Net change in unrealized appreciation (depreciation) on
investments and foreign currency (3,583,849) 6,747,025
------------ ------------
Net increase in net assets resulting from operations 37,437,122 39,590,876
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (4,128,223) --
From net realized gains
Class A (32,293,127) --
------------ ------------
Net decrease in net assets resulting from distributions (36,421,350) --
------------ ------------
CAPITAL SHARE TRANSACTIONS (NOTES 4 AND 8):
Proceeds from shares sold
Class A 13,129 679,679
Net asset value of shares issued through acquisition
Class A -- 491,658,847
Net asset value of shares issued through dividend reinvestment
Class A 36,421,350 --
Cost of shares repurchased
Class A (35,623,095) (48,941,083)
------------ ------------
Net increase in net assets from capital share transactions 811,384 443,397,443
------------ ------------
TOTAL INCREASE IN NET ASSETS 1,827,156 482,988,319
Net assets at beginning of period 482,988,319 --
------------ ------------
Net assets at end of period $484,815,475 $482,988,319
============ ============
Net assets at end of period includes undistributed net investment
income $ 2,738,464 $ 4,164,843
============ ============
* For the period 05/01/2006 (Commencement of Operations) through 12/31/2006.
See notes to financial statements
11
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE PERIOD ENDED:
CLASS A
BATTERYMARCH GROWTH AND INCOME PORTFOLIO --------------------------
FOR THE PERIOD FOR THE PERIOD
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
(UNAUDITED) 2006(B)
-------------- --------------
NET ASSET VALUE, BEGINNING OF PERIOD.................................... $22.56 $20.73
------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................... 0.13(a) 0.19(a)
Net Realized/Unrealized Gain on Investments............................. 1.65 1.64
------ ------
Total from Investment Operations........................................ 1.78 1.83
------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................... (0.20) --
Distributions from Net Realized Capital Gains........................... (1.58) --
------ ------
Total Distributions..................................................... (1.78) --
------ ------
NET ASSET VALUE, END OF PERIOD.......................................... $22.56 $22.56
====== ======
TOTAL RETURN 8.04% 8.83%
Ratio of Expenses to Average Net Assets................................. 0.65%* 0.65%*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates 0.69%* 0.72%*
Ratio of Net Investment Income to Average Net Assets.................... 1.12%* 1.32%*
Portfolio Turnover Rate................................................. 41.0% 63.6%
Net Assets, End of Period (in millions)................................. $484.8 $483.0
* Annualized
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--05/01/2006.
See notes to financial statements
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is Batterymarch Growth and Income Portfolio,
which is diversified. Shares in the Trust are not offered directly to the
general public and are currently available only to separate accounts
established by certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A Shares are offered
by the Portfolio. Class B and E Shares are not currently offered by the
Portfolio included in this report. Shares of each Class of the Portfolio
represent an equal pro rata interest in the Portfolio and generally give the
shareholder the same voting, dividend, liquidation, and other rights.
Investment income, realized and unrealized capital gains and losses, the common
expenses of the Portfolio and certain Portfolio-level expense reductions, if
any, are allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the Portfolio. Each class of
shares differs in its respective distribution expenses and certain other
class-specific expense reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Trust's Valuation
Committee. The Valuation Committee will regularly monitor and review the
services provided by the pricing service to the Portfolios and periodically
report to the Board on the pricing services' performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date. The value of the
security so purchased is subject to market fluctuations during this period. The
Portfolio segregates assets having an aggregate value at least equal to the
amount of the when issued or delayed delivery purchase commitments until
payment is made.
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. SECURITIES LENDING - The Portfolio may lend its securities to certain
qualified brokers who borrow securities in order to complete certain
transactions. By lending its investment securities, the Portfolio attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term of the loan would
accrue to the account of the Portfolio. Risks of delay in recovery of the
securities or even loss of rights in the collateral may occur should the
borrower of the securities fail financially. Risks may also arise to the extent
that the value of the collateral decreases below the value of the securities
loaned.
Upon entering into a securities lending transaction, the Portfolio receives
cash or other securities as collateral in an amount equal to or exceeding 102%
of the current market value of the loaned securities. Any cash received as
collateral is generally invested by State Street Bank and Trust Company ("State
Street"), acting in its capacity as securities lending agent (the "Agent"), in
the State Street Navigator Securities Lending Prime Portfolio which is a money
market fund registered under the 1940 Act. A portion of the dividends received
on the collateral is rebated to the borrower of the securities and the
remainder is split between the Agent and the Portfolio. On loans collateralized
by cash, the cash collateral is invested in a money market fund or short term
securities. A portion of the income generated upon investment of the collateral
is remitted to the Borrowers and the remainder is allocated between the fund
and the lending agent. On loans collateralized by U.S. Treasuries, a fee is
received from the Borrower and is allocated between the fund and the lending
agent.
G. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
H. FOREIGN CURRENCY TRANSLATION - The books and records of the Portfolio are
maintained in U.S. dollars. Foreign currencies, investments and other assets
and liabilities are translated into U.S. dollars on a daily basis using
prevailing exchange rates. Purchases and sales of securities are translated at
the rates of exchange prevailing when such securities were acquired or sold.
Income is translated at rates of exchange prevailing when interest is accrued
or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in
forward foreign currency contracts, sales of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities
transactions, and the difference between the amounts of dividends, interest,
and foreign withholding taxes recorded on the Portfolio's books, and the U.S.
dollar equivalent of the amounts actually
14
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
received or paid. Net unrealized foreign exchange gains and losses arise from
changes in the value of assets and liabilities other than investments in
securities at fiscal year end, from changes in the exchange rates of foreign
currency held, and from changes in the contract value of forward foreign
currency contracts.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with Batterymarch Financial Management, Inc., (the "Adviser") for investment
advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- --------------------------
Batterymarch Growth and Income Portfolio $1,564,107 0.65% First $500 Million
0.55% $500 Million to $1 Billion
0.50% $1 Billion to $1.5 Billion
0.45% $1.5 Billion to $2 Billion
0.40% Over $2 Billion
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement for the Portfolio is
permanent. Pursuant to that Expense Limitation Agreement, the Manager has
agreed to waive or limit its fees and to assume other expenses so that the
total annual operating expenses of the Portfolio other than interest, taxes,
brokerage commissions, other expenditures which are capitalized in accordance
with accounting principles generally accepted in the United States of America,
other extraordinary expenses not incurred in the ordinary course of the
Portfolio's business, but including amounts payable pursuant to a plan adopted
in accordance with Rule 12b-1 under the 1940 Act are limited to the following
respective expense ratios as a percentage of the Portfolio's average daily net
assets:
Maximum Expense Ratio
under current Expense Expenses
Limitation Agreement Reimbursed in
--------------------- ----------------
Portfolio Class A Class B Class E 2006 2007
- --------- ------- ------- ------- -------- -------
Batterymarch Growth and Income Portfolio 0.65% 0.90%* 0.80%* $225,909 $33,762
* Classes not offered during the period.
Expense limitation for Class A, on a permanent basis, is 0.65% on first $500
million of assets, 0.55% on next $500 million of assets, 0.50% on next $500
million of assets, 0.45% on next $500 million of assets, and 0.40% on assets
over $2 billion.
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratios as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
15
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
The amount waived and expenses reimbursed for the period ended June 30, 2007 is
shown as investment advisory fee waiver in the Statement of Operations of the
Portfolio.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued
in Connection Shares Issued Net Increase
Beginning Shares with Acquisition Through Dividend Shares in Shares Ending
Shares Sold (Note 8) Reinvestment Repurchased Outstanding Shares
- - ---------- ------ ---------------- ---------------- ----------- ------------ ----------
Batterymarch Growth and Income
Portfolio
Class A
06/30/2007 21,406,745 572 -- 1,642,821 (1,559,066) 84,327 21,491,072
05/01/2006-12/31/2006 -- 29,112 23,717,262 -- (2,339,629) 21,406,745 21,406,745
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
Batterymarch Growth and Income Portfolio $-- $196,728,355 $-- $223,210,118
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
- --------- ------------ ------------ -------------- --------------
Batterymarch Growth and Income Portfolio $413,384,496 $78,463,587 $(5,527,993) $72,935,594
6. SECURITY LENDING
As of June 30, 2007, the Portfolio had loaned securities which were
collateralized by short-term investments. The value of securities on loan and
the value of the related collateral were as follows:
Value of Value of
Securities Collateral
----------- -----------
Batterymarch Growth and Income Portfolio $39,947,695 $40,898,312
16
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
7. DISTRIBUTIONS TO SHAREHOLDERS
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
------------- ------------- ------------ ------------------ ------------
Batterymarch Growth and Income Portfolio $7,582,742 $28,838,582 $72,942,112 $-- $109,363,436
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
8. ACQUISITIONS
On May 1, 2006, Batterymarch Growth and Income Portfolio (the "Batterymarch
Portfolio") commenced operations after acquiring all of the net assets of The
Travelers Growth and Income Stock Account for Variable Annuities (the
"Travelers Account") pursuant to a plan of reorganization approved by the
Travelers Account unit holders on April 27, 2006. In a tax-free transaction,
the Travelers Account contributed net assets of $491,658,847, including
unrealized gains of $69,772,560, in exchange for 23,717,262 Class A shares of
the Batterymarch Portfolio.
9. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
10. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
17
MET INVESTORS SERIES TRUST
Batterymarch Mid-Cap
Stock Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
BATTERYMARCH MID-CAP STOCK PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY BATTERYMARCH FINANCIAL MANAGEMENT, INC.
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
PERFORMANCE
During the six month period ending June 30, 2007, the Batterymarch Mid-Cap
Stock Portfolio returned 13.82% versus 11.98% for the S&P MidCap 400(R) Index.
YOUR PORTFOLIO
Your Portfolio outperformed the benchmark for the period, benefiting from
positive stock selection, led by energy, financials--real estate and
energy-services. Selection in the services & distribution sector was the
greatest detractor. The impact of sector allocation was essentially neutral.
Our stock selection model performed well for the period, with all of the
dimensions having positive top-to-bottom quintile spreads on an equal weighted
basis. The technical dimension led in the first quarter, while the earnings
growth and expectations dimensions led in the second quarter.
As of June 30, 2007, your Portfolio remained broadly diversified and
attractively valued compared with the benchmark, with a lower 12-month forward
price-to-earnings ratio and a strong two-year forward earnings growth rate.
Looking forward, your portfolio is focused on stocks that rank attractively
relative to their peers across the dimensions of our stock selection model.
MARKET ENVIRONMENT
After a positive start to the year, markets globally suffered a correction
towards the end of February, sparked by a sharp one-day decline in local China
A shares. The downturn was exacerbated within the U.S. by sub-prime lending
concerns, with initial reaction centered on the stocks of mortgage lenders.
Consumer spending remained stable, industrial growth continued and monetary
policy makers appeared satisfied with the current balance between currency
stability and economic growth. Merger and acquisition activity in the U.S.
continued at a high level, reflecting the global environment. Mid-cap stocks
outperformed large cap stocks for this period, with the S&P 400 at 5.8% vs the
S&P 500 at 0.6% in the second quarter. Large cap stocks benefited more from
this global exposure and outpaced mid-cap stocks in the second quarter while
still lagging year-to-date. For the first six months of the year, the S&P 400
returned 12.0% vs. the S&P 500 at 6.7%.
The leading sectors within the benchmark for the period were energy services,
industrials and materials. The only sectors posting negative returns for the
six-month period were financials--real estate as sub-prime mortgage lending
continued to worry investors, and consumer cyclicals.
OUTLOOK
Economic growth has moderated, and the Fed continues to monitor signs of
inflationary pressure. The consensus outlook for the U.S. economy therefore
remains mostly upbeat, having weathered much of the recent uncertainty. Our
portfolios are positioned for continued global growth that is not dependent on
the U.S. consumer as the primary source of demand.
INVESTMENT RESEARCH UPDATE
During the period, we completed research on ways to glean additional
information from corporate earnings announcements. As a result, we have
implemented a new Decayed 4-Day Relative Return factor within the expectations
dimension of our stock selection model. Decayed 4-Day Relative Return
encapsulates earnings information by calculating four-day relative returns
surrounding a company's earnings release. Share-price movement in the days
after an earnings announcement reflects not only earnings data, but also
insights about corporate guidance and future revenues.
We also completed research that furthers our ability to capture shifts in the
distribution of analyst opinions over time so that we can better understand and
exploit changes in market sentiment. As a result, we enhanced the Estimate
Diffusion Factor within our expectations dimension: we added a second
calculation for this factor that allows us to have a more complete picture of
the distribution of estimates and improves stock count, information ratio and
alpha spreads in peer groups where this factor is applied.
TEAM MANAGED
Yu-Nien (Charles) Ko, CFA, is a Co-Director and Senior Portfolio Manager with
the Batterymarch U.S. Investment team. Mr. Ko joined Batterymarch in 2000 as a
quantitative analyst and was promoted to portfolio manager in 2003 and
co-director and senior portfolio manager of the U.S. investment team in 2006.
Mr. Ko has seven years of investment experience
Stephen A. Lanzendorf, CFA is a Co-Director and Senior Portfolio Manager with
the Batterymarch U.S. investment team. He joined Batterymarch in 2006. An
experienced quantitative strategist, Mr. Lanzendorf previously held
responsibilities at Independence Investments and the Colonial Group. He is a
member of the Chicago Quantitative Alliance and the Boston Security Analysts
Society. Mr. Lanzendorf has 22 years of investment experience.
The views expressed above are those of the subadvisory firm and are subject to
change based on market and other conditions, and no forecast can be guaranteed.
Information about the Portfolio's holdings, asset allocation, industry
allocation or country diversification is historical and is not an indication of
future composition which will vary.
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
BATTERYMARCH MID-CAP STOCK PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY BATTERYMARCH FINANCIAL MANAGEMENT, INC.
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
------------------------------------
Harris Corp. 1.88%
------------------------------------
Health Net, Inc. 1.65%
------------------------------------
CommScope, Inc. 1.41%
------------------------------------
Tidewater, Inc. 1.40%
------------------------------------
Holly Corp. 1.37%
------------------------------------
Precision Castparts Corp. 1.37%
------------------------------------
Pride International, Inc. 1.30%
------------------------------------
Republic Services, Inc. 1.28%
------------------------------------
W.R. Berkley Corp. 1.27%
------------------------------------
Manpower, Inc. 1.24%
------------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
[CHART]
Basic Materials 5.8%
Communications 5.9%
Cyclical 9.2%
Non-Cyclical 23.2%
Energy 12.0%
Financials 12.8%
Industrials 19.2%
Technology 5.6%
Utilities 6.3%
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
BATTERYMARCH MID-CAP STOCK PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY BATTERYMARCH FINANCIAL MANAGEMENT, INC.
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
BATTERYMARCH MID-CAP STOCK PORTFOLIO MANAGED BY
BATTERYMARCH FINANCIAL MANAGEMENT, INC. VS. S&P MIDCAP 400(R) INDEX/1/
Growth Based on $10,000+
[CHART]
S&P Midcap Batterymarch Mid-Cap
400(R) Index/1/ Stock Portfolio
--------------- --------------------
4/1/1997 $10,000 $10,000
12/31/1997 13,425 13,438
12/31/1998 15,989 15,710
12/31/1999 18,343 17,827
12/31/2000 21,555 20,788
12/31/2001 21,424 19,951
12/31/2002 18,316 17,094
12/31/2003 24,838 22,994
12/31/2004 28,931 26,777
12/31/2005 32,563 30,103
3/31/2006 35,047 32,174
6/30/2006 33,947 31,190
9/30/2006 36,320 29,961
12/31/2006 35,928 31,810
6/30/2007 40,232 36,206
------------------------------------------------------------
Average Annual Return/2/
(for the period ended 6/30/07)
------------------------------------------------------------
Since
1 Year 3 Year 5 Year 10 Year Inception/3/
------------------------------------------------------------
Batterymarch
Mid-Cap Stock
- -- Portfolio--Class A 16.09% 13.87% 13.41% 12.22% 13.31%
------------------------------------------------------------
S&P MidCap 400(R)
- - - Index/1/ 18.51% 15.15% 14.17% 13.37% 14.55%
------------------------------------------------------------
+The chart reflects the performance of Class A shares of the Portfolio. This is
currently the only active Class in the Portfolio.
/1/The S&P MidCap 400(R) Index is a capitalization-weighted index which
measures the performance of the mid-range sector of the U.S. stock market. The
Index does not include fees or expenses and is not available for direct
investment.
/2/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gains distributions.
/3/Inception of Class A shares is 04/01/1997. Index returns are based on an
inception date of 3/31/1997.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
3
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
BATTERYMARCH MID-CAP STOCK PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,138.20 $4.08
Hypothetical (5% return before expenses) 1,000.00 1,020.98 3.86
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.77%
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period).
4
MET INVESTORS SERIES TRUST
BATTERYMARCH MID-CAP STOCK PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
------------------------------------------------------------------
COMMON STOCKS - 99.7%
AEROSPACE & DEFENSE - 0.2%
Goodrich Corp............................ 5,400 $ 321,624
-------------
AIR FREIGHT & LOGISTICS - 0.6%
Ryder System, Inc........................ 17,103 920,141
-------------
AIRLINES - 0.6%
Continental Airlines, Inc. - Class B*.... 28,200 955,134
-------------
AUTO COMPONENTS - 0.9%
Johnson Controls, Inc.................... 12,620 1,461,017
-------------
BANKS - 1.2%
Credicorp, Ltd........................... 13,100 801,327
Zions Bancorporation..................... 14,265 1,097,121
-------------
1,898,448
-------------
BEVERAGES - 1.0%
Molson Coors Brewing Co. - Class B....... 17,500 1,618,050
-------------
BIOTECHNOLOGY - 1.0%
Charles River Laboratories International,
Inc.*.................................. 31,034 1,601,975
-------------
CHEMICALS - 4.2%
Airgas, Inc.............................. 11,152 534,181
Albemarle Corp........................... 25,000 963,250
Celanese Corp............................ 45,700 1,772,246
CF Industries Holdings, Inc.............. 17,000 1,018,130
Methanex Corp............................ 28,300 711,462
Nalco Holding Co......................... 40,400 1,108,980
OM Group, Inc.*.......................... 15,200 804,384
-------------
6,912,633
-------------
COMMERCIAL SERVICES & SUPPLIES - 10.0%
ABM Industries, Inc...................... 8,350 215,513
Allied Waste Industries, Inc.*........... 100,880 1,357,845
Deluxe Corp.............................. 29,700 1,206,117
Dun & Bradstreet Corp. (The)............. 16,350 1,683,723
Herman Miller, Inc....................... 28,000 884,800
ITT Educational Services, Inc.*.......... 5,900 692,542
Kelly Services, Inc...................... 8,350 229,291
Korn/Ferry International*................ 61,096 1,604,381
Manpower, Inc............................ 22,095 2,038,043
MPS Group, Inc.*(a)...................... 107,612 1,438,772
Republic Services, Inc................... 68,914 2,111,525
Robert Half International, Inc........... 8,400 306,600
Sotheby's(a)............................. 35,600 1,638,312
United Rentals, Inc.*(a)................. 29,900 972,946
-------------
16,380,410
-------------
COMMUNICATIONS EQUIPMENT & SERVICES - 3.7%
Andrew Corp.*............................ 51,500 743,660
CommScope, Inc.*(a)...................... 39,663 2,314,336
Harris Corp.............................. 56,684 3,092,112
-------------
6,150,108
-------------
-------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
-------------------------------------------------------------
CONSTRUCTION MATERIALS - 0.7%
Martin Marietta Materials, Inc.(a).. 7,400 $ 1,198,948
-------------
CONTAINERS & PACKAGING - 1.8%
Pactiv Corp.*....................... 19,200 612,288
Sealed Air Corp.(a)................. 38,500 1,194,270
Sonoco Products Co.................. 26,283 1,125,175
-------------
2,931,733
-------------
EDUCATION - 0.6%
DeVry, Inc.......................... 30,800 1,047,816
-------------
ELECTRIC UTILITIES - 3.8%
CMS Energy Corp.(a)................. 47,050 809,260
El Paso Electric Co.*(a)............ 18,865 463,324
Northeast Utilities................. 31,900 904,684
OGE Energy Corp..................... 45,480 1,666,842
Pepco Holdings, Inc................. 52,900 1,491,780
Puget Energy, Inc................... 12,595 304,547
Sierra Pacific Resources*........... 31,219 548,206
-------------
6,188,643
-------------
ELECTRONIC EQUIPMENT & INSTRUMENTS -
4.3%
Arrow Electronics, Inc.*............ 42,700 1,640,961
Avnet, Inc.*........................ 51,320 2,034,325
Benchmark Electronics, Inc.*(a)..... 7,800 176,436
Dolby Laboratories, Inc.*........... 25,000 885,250
Flextronics International, Ltd.*.... 14,900 160,920
Vishay Intertechnology, Inc.*....... 70,600 1,116,892
Xilinx, Inc......................... 40,480 1,083,649
-------------
7,098,433
-------------
ENERGY EQUIPMENT & SERVICES - 3.6%
Atmos Energy Corp................... 19,800 595,188
Cameron International Corp.*........ 25,740 1,839,638
Energen Corp........................ 20,000 1,098,800
Global Industries, Ltd.*............ 22,900 614,178
Grant Prideco, Inc.*................ 12,900 694,407
National-Oilwell Varco, Inc.*....... 10,600 1,104,944
-------------
5,947,155
-------------
FINANCIAL - DIVERSIFIED - 0.8%
Raymond James Financial, Inc........ 44,600 1,378,140
-------------
FOOD PRODUCTS - 1.9%
Herbalife, Ltd.(a).................. 21,900 868,335
Hormel Foods Corp................... 35,950 1,342,733
Tyson Foods, Inc. - Class A......... 37,200 857,088
-------------
3,068,156
-------------
GAS UTILITIES - 0.7%
MDU Resources Group, Inc.(a)........ 11,150 312,646
New Jersey Resources Corp.(a)....... 16,712 852,646
-------------
1,165,292
-------------
See notes to financial statements
5
MET INVESTORS SERIES TRUST
BATTERYMARCH MID-CAP STOCK PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
----------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
----------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES -
2.4%
Dade Behring Holdings, Inc............. 14,292 $ 759,191
Edwards Lifesciences Corp.*............ 15,750 777,105
Hillenbrand Industries, Inc.(a)........ 22,650 1,472,250
West Pharmaceutical Services, Inc.(a).. 20,810 981,192
-------------
3,989,738
-------------
HEALTH CARE PROVIDERS & SERVICES - 5.3%
Coventry Health Care, Inc.*............ 26,110 1,505,242
Health Net, Inc.*...................... 51,448 2,716,454
Humana, Inc.*.......................... 31,535 1,920,797
McKesson Corp.......................... 14,200 846,888
WellCare Health Plans, Inc.*(a)........ 19,150 1,733,266
-------------
8,722,647
-------------
HOTELS, RESTAURANTS & LEISURE - 1.3%
Bob Evans Farms, Inc.(a)............... 29,869 1,100,673
Ruby Tuesday, Inc.(a).................. 37,100 976,843
-------------
2,077,516
-------------
HOUSEHOLD DURABLES - 1.1%
Mohawk Industries, Inc.*(a)............ 11,400 1,149,006
Stanley Works (The)(a)................. 11,000 667,700
-------------
1,816,706
-------------
INDUSTRIAL - DIVERSIFIED - 0.5%
Harsco Corp............................ 16,000 832,000
-------------
INDUSTRIAL CONGLOMERATES - 0.6%
Ceradyne, Inc.*(a)..................... 3,000 221,880
Roper Industries, Inc.................. 14,868 848,963
-------------
1,070,843
-------------
INSURANCE - 8.3%
American Financial Group, Inc.(a)...... 56,076 1,914,995
Arch Capital Group, Ltd.*.............. 18,765 1,361,213
Aspen Insurance Holdings, Ltd.......... 30,600 858,942
Assurant, Inc.......................... 26,100 1,537,812
Axis Capital Holdings, Ltd............. 21,100 857,715
CNA Financial Corp..................... 19,600 934,724
Delphi Financial Group - Class A(a).... 21,100 882,402
Endurance Specialty Holdings, Ltd.(a).. 37,600 1,505,504
W.R. Berkley Corp...................... 64,121 2,086,497
XL Capital, Ltd. - Class A(a).......... 20,726 1,746,995
-------------
13,686,799
-------------
MACHINERY - 4.9%
Cummins, Inc........................... 16,212 1,640,816
Manitowoc Co., Inc. (The).............. 23,700 1,905,006
Pall Corp.............................. 20,400 938,196
Parker Hannifin Corp................... 11,190 1,095,613
SPX Corp............................... 11,880 1,043,183
Terex Corp.*........................... 18,100 1,471,530
-------------
8,094,344
-------------
---------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
---------------------------------------------------------------------
MEDIA - 0.4%
Shaw Communications, Inc. - Class B...... 15,900 $ 668,436
-------------
METALS & MINING - 4.5%
Cleveland-Cliffs, Inc.(a)................ 11,900 924,273
Commercial Metals Co..................... 39,200 1,323,784
Precision Castparts Corp................. 18,520 2,247,587
Reliance Steel & Aluminum Co............. 24,500 1,378,370
Southern Copper Corp.(a)................. 10,718 1,010,279
Steel Dynamics, Inc...................... 10,800 452,628
-------------
7,336,921
-------------
OIL & GAS - 10.2%
Frontier Oil Corp........................ 40,970 1,793,257
Helmerich & Payne, Inc................... 26,100 924,462
Holly Corp............................... 30,450 2,259,085
Noble Energy, Inc........................ 27,365 1,707,302
Pride International, Inc.*............... 57,225 2,143,649
Tesoro Corp.............................. 24,675 1,410,176
Tidewater, Inc.(a)....................... 32,403 2,296,725
UGI Corp................................. 45,900 1,252,152
Unit Corp.*.............................. 12,400 780,084
W-H Energy Services, Inc.*............... 12,400 767,684
Western Refining, Inc.(a)................ 24,700 1,427,660
-------------
16,762,236
-------------
PERSONAL PRODUCTS - 1.5%
Estee Lauder Companies, Inc. - Class A(a) 21,300 969,363
NBTY, Inc.*.............................. 33,300 1,438,560
-------------
2,407,923
-------------
PHARMACEUTICALS - 2.6%
Cephalon, Inc.*(a)....................... 21,600 1,736,424
King Pharmaceuticals, Inc.*(a)........... 65,600 1,342,176
Sepracor, Inc.*.......................... 30,400 1,247,008
-------------
4,325,608
-------------
REAL ESTATE - 2.5%
CB Richard Ellis Group, Inc. - Class A*.. 40,497 1,478,140
FelCor Lodging Trust, Inc. (REIT)(a)..... 33,100 861,593
Hospitality Properties Trust (REIT)...... 18,289 758,811
Jones Lang LaSalle, Inc.................. 8,720 989,720
-------------
4,088,264
-------------
RETAIL - MULTILINE - 0.8%
J.C. Penney Co., Inc..................... 18,700 1,353,506
-------------
RETAIL - SPECIALTY - 4.4%
Advance Auto Parts, Inc.................. 12,360 500,951
American Eagle Outfitters, Inc........... 16,202 415,743
Charming Shoppes, Inc.*(a)............... 48,600 526,338
Dollar Tree Stores, Inc.*................ 23,533 1,024,862
Men's Wearhouse, Inc. (The).............. 15,300 781,371
Nordstrom, Inc........................... 11,400 582,768
Payless ShoeSource, Inc.*................ 26,450 834,498
See notes to financial statements
6
MET INVESTORS SERIES TRUST
BATTERYMARCH MID-CAP STOCK PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-----------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
-----------------------------------------------------------------
RETAIL - SPECIALTY - CONTINUED
Ross Stores, Inc........................ 33,645 $ 1,036,266
TJX Cos., Inc. (The).................... 54,100 1,487,750
-------------
7,190,547
-------------
ROAD & RAIL - 0.7%
CSX Corp................................ 27,286 1,230,053
-------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS - 3.3%
Brooks Automation, Inc.*(a)............. 34,620 628,353
Integrated Device Technology, Inc.*..... 54,550 832,979
International Rectifier Corp.*.......... 35,100 1,307,826
Lam Research Corp.*..................... 11,730 602,922
Novellus Systems, Inc.*(a).............. 35,600 1,009,972
ON Semiconductor Corp.*(a).............. 102,000 1,093,440
-------------
5,475,492
-------------
SOFTWARE - 0.6%
Cognos, Inc.*(a)........................ 8,550 339,179
Compuware Corp.*(a)..................... 49,400 585,884
-------------
925,063
-------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 0.9%
Qwest Communications International,
Inc.*(a).............................. 58,000 562,600
RF Micro Devices, Inc.*(a).............. 55,125 343,980
Telephone & Data Systems, Inc........... 8,400 525,588
-------------
1,432,168
-------------
TELECOMMUNICATION SERVICES - WIRELESS - 0.8%
Millicom International Cellular S.A.*(a) 14,800 1,356,272
-------------
TOBACCO - 0.5%
Universal Corp.(a)...................... 13,650 831,558
-------------
Total Common Stocks
(Cost $139,703,696) 163,918,496
-------------
----------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
----------------------------------------------------------------------
SHORT-TERM INVESTMENT - 0.7%
State Street Bank & Trust Co.,
Repurchase Agreement dated 06/29/07 at
2.550% to be repurchased at $1,215,258
on 07/02/07 collateralized by $1,220,000
FHLB at 5.150% due 08/15/07 with a
value of $1,242,875.
(Cost - $1,215,000)...................... $ 1,215,000 $ 1,215,000
-------------
TOTAL INVESTMENTS - 100.4%
(Cost $140,918,696) 165,133,496
-------------
Other Assets and Liabilities (net) - (0.4)% (665,697)
-------------
TOTAL NET ASSETS - 100.0% $ 164,467,799
=============
PORTFOLIO FOOTNOTES:
* Non-income producing security.
(a) A portion or all of the security was held on loan. As of June 30, 2007 the
market value of the securities loaned was $32,037,921 and the collateral
received consisted of cash in the amount of $31,806,661 and securities in
the amount of $990,450.
FHLB - Federal Home Loan Bank
REIT - Real Estate Investment Trust
See notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
BATTERYMARCH MID-CAP STOCK PORTFOLIO
ASSETS
Investments, at value (Note 2)* $163,918,496
Repurchase Agreement 1,215,000
Cash 961
Collateral for securities on loan 32,797,111
Receivable for investments sold 143,998
Receivable for Trust shares sold 49,565
Dividends receivable 90,228
Interest receivable 172
------------
Total assets 198,215,531
------------
LIABILITIES
Payables for:
Trust shares redeemed 754,709
Collateral for securities on loan 32,797,111
Investment advisory fee payable (Note 3) 95,659
Administration fee payable 2,347
Custodian and accounting fees payable 36,186
Accrued expenses 61,720
------------
Total liabilities 33,747,732
------------
NET ASSETS $164,467,799
============
NET ASSETS REPRESENTED BY:
Paid in surplus $126,606,800
Accumulated net realized gain 13,167,948
Unrealized appreciation on investments and foreign currency 24,214,804
Undistributed net investment income 478,247
------------
Total $164,467,799
============
NET ASSETS
Class A $164,467,799
============
CAPITAL SHARES OUTSTANDING
Class A 8,486,499
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 19.38
============
- -----------------------------------------------------------------------------
*Investments at cost, excluding Repurchase Agreements $139,703,696
See notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
BATTERYMARCH MID-CAP STOCK PORTFOLIO
INVESTMENT INCOME:
Dividends (1) $ 961,432
Interest (2) 34,040
-----------
Total investment income 995,472
-----------
EXPENSES:
Investment advisory fee (Note 3) 578,460
Administration fees 7,586
Deferred expense reimbursement 1,833
Custody and accounting fees 15,488
Transfer agent fees 2,459
Audit 12,043
Legal 7,153
Trustee fees and expenses 2,595
Shareholder reporting 13,175
Insurance 3,792
Other 1,192
-----------
Total expenses 645,776
Less broker commission recapture (10,287)
-----------
Net expenses 635,489
-----------
Net investment income 359,983
-----------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain on:
Investments 13,272,181
Foreign currency 84
-----------
Net realized gain on investments and foreign currency 13,272,265
-----------
Net change in unrealized appreciation on:
Investments 7,836,131
Foreign currency 14
-----------
Net change in unrealized appreciation on investments and foreign currency 7,836,145
-----------
Net realized and change in unrealized gain on investments and foreign currency 21,108,410
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $21,468,393
===========
- ---------------------------------------------------------------------------------------------------
(1)Dividend income is net withholding taxes of: $ 1,127
(2)Interest income includes securities lending income of: 23,699
See notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
BATTERYMARCH MID-CAP STOCK PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 359,983 $ 665,057
Net realized gain on investments, futures contracts and foreign
currency 13,272,265 19,941,890
Net change in unrealized appreciation (depreciation) on
investments and foreign currency 7,836,145 (8,708,563)
------------ ------------
Net increase in net assets resulting from operations 21,468,393 11,898,384
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (503,556) (1,174,440)
From net realized gains
Class A (20,077,851) (35,038,269)
------------ ------------
Net decrease in net assets resulting from distributions (20,581,407) (36,212,709)
------------ ------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class A 3,527,555 9,835,078
Net asset value of shares issued through dividend reinvestment
Class A 20,581,407 36,212,709
Cost of shares repurchased
Class A (29,001,852) (60,207,276)
------------ ------------
Net decrease in net assets from capital share transactions (4,892,890) (14,159,489)
------------ ------------
TOTAL DECREASE IN NET ASSETS (4,005,904) (38,473,814)
Net assets at beginning of period 168,473,703 206,947,517
------------ ------------
Net assets at end of period $164,467,799 $168,473,703
============ ============
Net assets at end of period includes undistributed net investment
income $ 478,247 $ 621,820
============ ============
See notes to financial statements
10
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
BATTERYMARCH MID-CAP STOCK PORTFOLIO --------------
FOR THE PERIOD
ENDED
JUNE 30, 2007
(UNAUDITED)
--------------
NET ASSET VALUE, BEGINNING OF PERIOD............................ $19.43
------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income........................................... 0.04 (a)
Net Realized/Unrealized Gain (Loss) on Investments.............. 2.55
------
Total from Investment Operations................................ 2.59
------
LESS DISTRIBUTIONS
Dividends from Net Investment Income............................ (0.06)
Distributions from Net Realized Capital Gains................... (2.58)
------
Total Distributions............................................. (2.64)
------
NET ASSET VALUE, END OF PERIOD.................................. $19.38
======
TOTAL RETURN 13.82%
Ratio of Expenses to Average Net Assets......................... 0.77%*
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates....................................................... 0.78%*
Ratio of Net Investment Income to Average Net Assets............ 0.44%*
Portfolio Turnover Rate......................................... 55.0%
Net Assets, End of Period (in millions)......................... $164.5
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS A
BATTERYMARCH MID-CAP STOCK PORTFOLIO -------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31,
------------------------------------------------
2006 2005 2004++ 2003++ 2002++
------ ------ ------ ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD............................ $21.96 $19.76 $17.49 $13.11 $ 15.41
------ ------ ------ ------ -------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income........................................... 0.07 (a) 0.14 (a) 0.05 (a) 0.05 0.03
Net Realized/Unrealized Gain (Loss) on Investments.............. 1.32 2.29 2.82 (a) 4.38 (2.23)
------ ------ ------ ------ -------
Total from Investment Operations................................ 1.39 2.43 2.87 4.43 (2.20)
------ ------ ------ ------ -------
LESS DISTRIBUTIONS
Dividends from Net Investment Income............................ (0.13) -- (0.05) (0.05) (0.08)
Distributions from Net Realized Capital Gains................... (3.79) (0.23) (0.55) -- (0.02)
------ ------ ------ ------ -------
Total Distributions............................................. (3.92) (0.23) (0.60) (0.05) (0.10)
------ ------ ------ ------ -------
NET ASSET VALUE, END OF PERIOD.................................. $19.43 $21.96 $19.76 $17.49 $ 13.11
====== ====== ====== ====== =======
TOTAL RETURN 5.67% 12.42% 16.45% 33.75% (14.32)%
Ratio of Expenses to Average Net Assets......................... 0.81% 0.82% 0.80%(b) 0.82% 0.85 %
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates....................................................... 0.84% 0.82% 0.82% 0.82% 0.85 %
Ratio of Net Investment Income to Average Net Assets............ 0.35% 0.68% 0.28% 0.38% 0.23 %
Portfolio Turnover Rate......................................... 142.2% 116.0% 91.0% 61.0% 67.0 %
Net Assets, End of Period (in millions)......................... $168.5 $207.0 $198.0 $165.0 $ 111.0
* Annualized
(a) Per share amounts based on average shares outstanding during the period.
(b) The investment manager waived a portion of its management fee for the year
++ Audited by other Independent Registered Public Accounting Firm.
See notes to financial statements
11
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is Batterymarch Mid-Cap Stock Portfolio,
which is diversified. Shares in the Trust are not offered directly to the
general public and are currently available only to separate accounts
established by certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A Shares are offered
by the Portfolio. Class B and E Shares are not currently offered by the
Portfolio included in this report. Shares of each Class of the Portfolio
represent an equal pro rata interest in the Portfolio and generally give the
shareholder the same voting, dividend, liquidation, and other rights.
Investment income, realized and unrealized capital gains and losses, the common
expenses of the Portfolio and certain Portfolio-level expense reductions, if
any, are allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the Portfolio. Each class of
shares differs in its respective distribution expenses and certain other
class-specific expense reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date. The value of the
security so purchased is subject to market fluctuations during this period. The
Portfolio segregates assets having an aggregate value at least equal to the
amount of the when issued or delayed delivery purchase commitments until
payment is made.
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. SECURITIES LENDING - The Portfolio may lend its securities to certain
qualified brokers who borrow securities in order to complete certain
transactions. By lending its investment securities, the Portfolio attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term of the loan would
accrue to the account of the Portfolio. Risks of delay in recovery of the
securities or even loss of rights in the collateral may occur should the
borrower of the securities fail financially. Risks may also arise to the extent
that the value of the collateral decreases below the value of the securities
loaned.
Upon entering into a securities lending transaction, the Portfolio receives
cash or other securities as collateral in an amount equal to or exceeding 102%
of the current market value of the loaned securities. Any cash received as
collateral is generally invested by State Street Bank and Trust Company ("State
Street"), acting in its capacity as securities lending agent (the "Agent"), in
the State Street Navigator Securities Lending Prime Portfolio which is a money
market fund registered under the 1940 Act. A portion of the dividends received
on the collateral is rebated to the borrower of the securities and the
remainder is split between the Agent and the Portfolio. On loans collateralized
by cash, the cash collateral is invested in a money market fund or short term
securities. A portion of the income generated upon investment of the collateral
is remitted to the Borrowers and the remainder is allocated between the fund
and the lending agent. On loans collateralized by U.S. Treasuries, a fee is
received from the Borrower and is allocated between the fund and the lending
agent.
G. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
H. DIRECTED BROKERAGE AGREEMENT - The Trust has entered into a directed
brokerage arrangement with State Street Global Markets ("SSGM"). Under this
arrangement, the Portfolio directs certain trades to SSGM in return for a
recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to
each Portfolio are shown separately as an expense reduction on the Statement of
Operations of the Portfolio.
I. FOREIGN CURRENCY TRANSLATION - The books and records of the Portfolio are
maintained in U.S. dollars. Foreign currencies, investments and other assets
and liabilities are translated into U.S. dollars on a daily basis using
prevailing exchange rates. Purchases and sales of securities are translated at
the rates of exchange prevailing when such securities were acquired or sold.
Income is translated at rates of exchange prevailing when interest is accrued
or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Reported net realized foreign exchange gains or losses arise from activity in
forward foreign currency contracts, sales of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities
transactions, and the difference between the amounts of dividends, interest,
and foreign withholding taxes recorded on the Portfolio's books, and the U.S.
dollar equivalent of the amounts actually received or paid. Net unrealized
foreign exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at fiscal year end, from
changes in the exchange rates of foreign currency held, and from changes in the
contract value of forward foreign currency contracts.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with Batterymarch Financial Management, Inc., (the "Adviser") for investment
advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- --------------------
Batterymarch Mid-Cap Stock Portfolio $578,460 0.70% All
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Maximum Expense Ratio
under current Expense
Limitation Agreement
-----------------------
Portfolio Class A Class B Class E
--------- ------- ------- -------
Batterymarch Mid-Cap Stock Portfolio 0.95% 1.20%* 1.10%*
* Classes not offered during the period.
The following amounts were repaid to the Manager during the period ended June
30, 2007.
Batterymarch Mid-Cap Stock Portfolio $1,833
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratio as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
14
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
The amount waived and expenses reimbursed for the period ended June 30, 2007 is
shown as investment advisory fee waiver in the Statement of Operations of the
Portfolio.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued
Through Net Decrease
Beginning Shares Dividend Shares in Shares Ending
Shares Sold Reinvestment Repurchased Outstanding Shares
--------- ------- ------------- ----------- ------------ ---------
Batterymarch Mid-Cap Stock Portfolio
Class A
06/30/2007 8,672,542 179,502 1,098,847 (1,464,392) (186,043) 8,486,499
12/31/2006 9,425,641 474,125 1,795,375 (3,022,599) (753,099) 8,672,542
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
Batterymarch Mid-Cap Stock Portfolio $-- $91,090,822 $-- $116,068,223
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross Net
Income Tax Unrealized Unrealized Unrealized
Portfolio Cost Appreciation Depreciation Appreciation
- --------- ------------ ------------ ------------ ------------
Batterymarch Mid-Cap Stock Portfolio $140,918,696 $27,230,284 $(3,015,484) $24,214,800
6. SECURITY LENDING
As of June 30, 2007, the Portfolio had loaned securities which were
collateralized by short term investments. The value of securities on loan and
the value of the related collateral were as follows:
Value of Value of
Securities Collateral
----------- -----------
Batterymarch Mid-Cap Stock Portfolio $32,037,921 $32,797,111
15
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
7. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
--------------- ---------------------- ----------------------
2006 2005 2006 2005 2006 2005
---------- ---- ----------- ---------- ----------- ----------
Batterymarch Mid-Cap Stock Portfolio $8,859,151 $-- $27,353,558 $2,217,847 $36,212,709 $2,217,847
As of December 31, 2006, the components of distributable earnings on a federal
income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
------------- ------------- ------------ ------------------ -----------
Batterymarch Mid-Cap Stock Portfolio $621,820 $20,004,438 $16,347,756 $-- $36,974,014
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
8. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
9. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
16
MET INVESTORS SERIES TRUST
BlackRock
High Yield Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
BLACKROCK HIGH YIELD PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY BLACKROCK FINANCIAL MANAGEMENT, INC.
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
FIXED INCOME MARKET
The Federal Reserve Board (Fed) continued to pause in its monetary tightening
campaign during the past six months, keeping the target federal funds rate at
5.25%. The Fed previously had raised the target rate in 17 increments of 25
basis points (0.25%) between June 2004 and June 2006. In the statement that
accompanied its news release following the May 28 meeting, the Federal Open
Market Committee (FOMC) again expressed its concern that "inflation will fail
to moderate as expected." The FOMC made clear that "future policy adjustments
will depend on the evolution of the outlook for both inflation and economic
growth, as implied by incoming information."
The U.S. Treasury yield curve began the six-month period slightly inverted
(i.e., short-term yields were higher than long-term rates). At December 31,
2006, the two-year U.S. Treasury note yielded 4.82% versus 4.71% for the
10-year note. However, the yield curve normalized during the period as the rise
in long-term yields considerably outpaced that in the shorter segment of the
curve. At the end of the period, the two- and 10-year Treasuries yielded 4.87%
and 5.03%, respectively.
The investment-grade sector of the fixed income market experienced some
volatility during the period amid an environment of generally rising interest
rates and weakness in the subprime mortgage market.
The below-investment-grade sector was one of the best-performing fixed income
areas during this period. As in other sectors, concerns over rising Treasury
yields, subprime mortgage market turmoil, and heavy leveraged buyout activity
led to periods of increased volatility. However, fundamentals remained strong
in the high yield market and spreads finished lower. Benign conditions such as
good liquidity, historically low default rates, and a favorable supply of new
issues helped to spur the sector and attract investors. For the six-month
period, the Lehman Brothers U.S. Corporate High Yield 2% Issuer Cap Index
returned 2.96% versus the 0.98% return of the broad-market Lehman Brothers
Aggregate Bond Index/1/.
PORTFOLIO REVIEW
For the period, the Portfolio's relative performance continued to benefit from
its overweight exposure to lower-tier credits, particularly B-rated, CCC-rated
and C-rated issues, as these segments of the market posted the strongest
returns. Security selection in BB-rated issues was also a positive for the
Portfolio. The Portfolio's overweights in the media-non cable and wireless
sectors benefited performance for the period, while underweight exposures in
supermarkets and healthcare were detractors.
- --------
/1/ The Lehman Brothers Aggregate Bond Index represents securities that are
U.S. domestic, taxable, non-convertible and dollar denominated. The Index
covers the investment grade fixed rate bond market, with index components for
government and corporate securities, mortgage pass-through securities, and
asset-backed securities. The Index does not include fees or expenses and is not
available for direct investment.
At June 30, 2007, the Portfolio continued to hold an overweight in lower-rated
issues (B, CCC and C) as we expect that continued historically low default
rates and relatively strong fundamentals will help to support prices of the
underlying issues. The larger sector overweights in the Portfolio were in the
wireless, media-non cable, retail and chemicals sectors, and the larger sector
underweights were in automotive, food and supermarkets.
JEFF GARY
SCOTT AMERO
Portfolio Managers
BLACKROCK FINANCIAL MANAGEMENT, INC.
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
----------------------------------------------------------------------
Freeport McMoRan Copper & Gold, Inc. (8.375%, due 04/01/17) 2.14%
----------------------------------------------------------------------
NRG Energy, Inc. (7.375%, due 02/01/16) 1.30%
----------------------------------------------------------------------
Nielsen Finance LLC/Nielsen Finance Co.
(10.000%, due 08/01/14) 1.19%
----------------------------------------------------------------------
MetroPCS Wireless, Inc. (9.250%, due 11/01/14) 1.19%
----------------------------------------------------------------------
Charter Communications (10.250%, due 09/15/10) 1.17%
----------------------------------------------------------------------
Idearc, Inc. (8.000%, due 11/15/16) 1.17%
----------------------------------------------------------------------
Intelsat Bermuda, Ltd. (11.250%, due 06/15/16) 1.17%
----------------------------------------------------------------------
Qwest Corp. (8.875%, due 03/15/12) 1.16%
----------------------------------------------------------------------
Tenet Healthcare Corp. (6.500%, due 06/01/12) 1.12%
----------------------------------------------------------------------
TL Acquisitions, Inc. (10.500%, due 01/15/15) 1.05%
----------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
BLACKROCK HIGH YIELD PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY BLACKROCK FINANCIAL MANAGEMENT, INC.
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
BLACKROCK HIGH YIELD PORTFOLIO MANAGED BY
BLACKROCK FINANCIAL MANAGEMENT, INC. VS.
LEHMAN BROTHERS U.S. CORPORATE HIGH YIELD 2% ISSUER CAP INDEX/1/
Growth Based on $10,000+
[CHART]
Lehman Brothers U.S.
Corporate High Yield BlackRock High
2% Issuer Cap Index/1/ Yield Portfolio
---------------------- ---------------
12/31/1996 10,000 10,000
12/31/1997 11,276 11,185
12/31/1998 11,487 11,469
12/31/1999 11,761 11,554
12/31/2000 11,072 10,706
12/31/2001 11,808 11,146
12/31/2002 11,642 11,414
12/31/2003 16,343 14,102
12/31/2004 18,162 15,366
12/31/2005 18,660 15,776
12/31/2006 20,789 17,325
6/30/2007 21,563 18,359
--------------------------------------------------------------
Average Annual Return/2/
(for the period ended 6/30/07)
--------------------------------------------------------------
--------------------------------------------------------------
Since
1 Year 3 Year 5 Year 10 Year Inception/3/
--------------------------------------------------------------
BlackRock High Yield
- -- Portfolio--Class A 10.37% 7.91% 10.35% 5.92% 6.80%
--------------------------------------------------------------
Lehman Brothers
U.S. Corporate High
Yield 2% Issuer Cap
- - - Index/1/ 11.22% 8.70% 11.60% 6.34% 6.96%
--------------------------------------------------------------
+The chart reflects the performance of Class A shares of the Portfolio. This is
currently the only active Class in the Portfolio.
/1/The Lehman Brothers U.S. Corporate High Yield 2% Issuer Cap Index is
composed of fixed rate non-investment grade debt with at least one year
remaining to maturity that are dollar-denominated, nonconvertible and have an
outstanding par value of at least $100 million. The Index does not include fees
or expenses and is not available for direct investment.
/2/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gains distributions.
/3/Inception of Class A shares is 08/30/1996. Index returns are based on an
inception date of 8/31/1996.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
2
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
BLACKROCK HIGH YIELD PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,032.00 $3.78
Hypothetical (5% return before expenses) 1,000.00 1,021.08 3.76
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.75%
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period).
3
MET INVESTORS SERIES TRUST
BLACKROCK HIGH YIELD PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-----------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-----------------------------------------------------------------------
DOMESTIC BONDS & DEBT SECURITIES - 86.6%
AEROSPACE & DEFENSE - 1.3%
DRS Technologies, Inc.
6.625%, due 02/01/16.................... $ 390,000 $ 378,300
7.625%, due 02/01/18(a)................. 400,000 406,000
L-3 Communications Corp.
5.875%, due 01/15/15.................... 1,610,000 1,501,325
6.375%, due 10/15/15.................... 1,150,000 1,092,500
Sequa Corp. 9.000%, due 08/01/09......... 250,000 259,375
Standard Aero Holdings, Inc.
8.250%, due 09/01/14................... 295,000 315,650
TransDigm Group, Inc.
7.750%, due 07/15/14 (144A)(b)......... 255,000 258,825
Vought Aircraft Industries, Inc.
8.000%, due 07/15/11(a)................ 540,000 540,000
-------------
4,751,975
-------------
AIR FREIGHT & LOGISTICS - 0.2%
Hawker Beechcraft Acquisition Co.
8.500%, due 04/01/15 (144A)(b).......... 130,000 134,550
8.875%, due 04/01/15 (144A)(b).......... 200,000 206,500
9.750%, due 04/01/17 (144A)(a)(b)....... 240,000 251,400
-------------
592,450
-------------
APPAREL & TEXTILES - 0.2%
Levi Strauss & Co.
12.250%, due 12/15/12................... 225,000 244,688
9.750%, due 01/15/15(a)................. 575,000 618,125
8.875%, due 04/01/16(a)................. 40,000 41,200
-------------
904,013
-------------
ASSET-BACKED SECURITIES - 0.1%
GMAC LLC 6.875%, due 08/28/12............ 450,000 440,263
-------------
AUTO COMPONENTS - 1.5%
American Tire Distributors Holdings, Inc.
10.750%, due 04/01/13(a)............... 150,000 153,750
ArvinMeritor, Inc.
8.125%, due 09/15/15(a)................ 1,180,000 1,149,025
Cooper-Standard Automotive, Inc.
7.000%, due 12/15/12(a)................ 325,000 306,313
Goodyear Tire & Rubber Co. (The)
9.135%, due 12/01/09 (144A)(b)(c)....... 50,000 50,188
7.857%, due 08/15/11.................... 45,000 46,125
8.625%, due 12/01/11 (144A)(b).......... 335,000 354,262
9.000%, due 07/01/15(a)................. 1,909,000 2,066,492
4.000%, due 06/15/34.................... 80,000 233,500
Keystone Automotive Operations, Inc.
9.750%, due 11/01/13(a)................ 470,000 411,250
Lear Corp. 8.750%, due 12/01/16.......... 290,000 277,675
Metaldyne Corp.
10.000%, due 11/01/13(a)............... 40,000 42,600
-----------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-----------------------------------------------------------------
AUTO COMPONENTS - CONTINUED
Stanadyne Corp., Series 1
10.000%, due 08/15/14............ $ 250,000 $ 265,625
Stanadyne Holdings, Inc.
0.000%/12.000%, due 02/15/15(d).. 125,000 104,375
Titan International, Inc.
8.000%, due 01/15/12............. 110,000 113,575
-------------
5,574,755
-------------
AUTOMOBILES - 0.3%
Asbury Automotive Group, Inc.
7.625%, due 03/15/17 (144A)(b)... 880,000 871,200
Sensata Technologies BV
8.000%, due 05/01/14............. 105,000 101,850
-------------
973,050
-------------
AUTOMOTIVE LOANS - 2.8%
Ford Capital BV
9.500%, due 06/01/10............. 430,000 438,600
Ford Motor Credit Co.
5.800%, due 01/12/09.............. 310,000 303,552
5.700%, due 01/15/10.............. 50,000 47,795
8.105%, due 01/13/12(c)........... 3,460,000 3,454,464
Ford Motor Credit Co. LLC
10.610%, due 06/15/11(c).......... 676,000 730,836
7.800%, due 06/01/12.............. 3,000,000 2,924,629
General Motors Acceptance Corp.
6.750%, due 12/01/14(a)........... 700,000 671,315
8.000%, due 11/01/31(a)........... 1,995,000 2,045,563
-------------
10,616,754
-------------
BANKS - 0.1%
ATF Capital BV 9.250%, due 02/21/14
(144A)(b)........................ 100,000 106,750
TuranAlem Finance BV
8.250%, due 01/22/37 (144A)(b)... 160,000 154,400
-------------
261,150
-------------
BEVERAGES - 0.0%
Beverages & More, Inc.
9.250%, due 03/01/12 (144A)(b)... 80,000 81,400
-------------
BUILDING MATERIALS - 1.3%
Ainsworth Lumber Co., Ltd.
9.110%, due 10/01/10(a)(c)........ 230,000 192,625
7.250%, due 10/01/12(a)........... 125,000 96,875
CPG International I, Inc.
10.500%, due 07/01/13(a)......... 755,000 777,650
Goodman Global Holding Co., Inc.
8.360%, due 06/15/12(c)........... 72,000 72,720
7.875%, due 12/15/12(a)........... 650,000 646,750
Nortek, Inc. 8.500%, due 09/01/14.. 2,430,000 2,326,725
See notes to financial statements
4
MET INVESTORS SERIES TRUST
BLACKROCK HIGH YIELD PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-----------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-----------------------------------------------------------------
BUILDING MATERIALS - CONTINUED
NSG Holdings LLC
7.750%, due 12/15/25 (144A)(b)...... $ 200,000 $ 203,000
Texas Industries, Inc.
7.250%, due 07/15/13................ 550,000 554,125
-------------
4,870,470
-------------
BUSINESS SERVICES - 1.0%
Affinion Group, Inc.
10.125%, due 10/15/13................ 480,000 514,800
11.500%, due 10/15/15................ 210,000 227,850
RH Donnelley Corp.
10.875%, due 12/15/12................ 275,000 293,906
6.875%, due 01/15/13(a).............. 2,800,000 2,667,000
8.875%, due 01/15/16................. 140,000 146,300
-------------
3,849,856
-------------
CHEMICALS - 3.2%
American Pacific Corp.
9.000%, due 02/01/15 (144A)(b)...... 150,000 151,313
Equistar Chemicals LP/Equistar Funding
Corp. 10.125%, due 09/01/08......... 143,000 149,435
Huntsman International LLC
7.875%, due 11/15/14 (144A)(b)...... 1,395,000 1,492,650
Ineos Group Holdings Plc
8.500%, due 02/15/16
(144A)(a)(b)........................ 1,625,000 1,596,562
Innophos, Inc. 8.875%, due 08/15/14... 2,275,000 2,366,000
Lyondell Chemical Co.
10.500%, due 06/01/13(a)............. 205,000 222,425
8.000%, due 09/15/14................. 3,130,000 3,231,725
Macdermid, Inc.
9.500%, due 04/15/17 (144A)(b)...... 1,660,000 1,676,600
Nova Chemicals Corp.
8.484%, due 11/15/13(c)............. 1,140,000 1,145,700
Rockwood Specialties Group, Inc.
7.625%, due 11/15/14................ 50,000 70,808
Terra Capital, Inc.
7.000%, due 02/01/17................ 180,000 174,600
-------------
12,277,818
-------------
COMMERCIAL SERVICES & SUPPLIES - 1.3%
ARAMARK Corp. 8.856%,
due 02/01/15 (144A)(b)(c)........... 60,000 61,200
Ashtead Capital, Inc. 9.000%,
due 08/15/16 (144A)(b).............. 202,000 212,605
Ashtead Holdings Plc 8.625%,
due 08/01/15 (144A)(b).............. 75,000 76,875
Avis Budget Car Rental LLC/Avis Budget
Finance, Inc.
7.750%, due 05/15/16................ 400,000 408,000
------------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES - CONTINUED
DI Finance/DynCorp International, Series B
9.500%, due 02/15/13(a)................. $ 2,445,000 $ 2,613,094
FTI Consulting, Inc.
7.750%, due 10/01/16.................... 400,000 410,000
iPayment, Inc.
9.750%, due 05/15/14(a)................. 310,000 311,550
Mobile Services Group, Inc.
9.750%, due 08/01/14 (144A)(b).......... 75,000 80,250
Quebecor World, Inc.
9.750%, due 01/15/15 (144A)(b).......... 120,000 122,100
Service Corp. International
7.875%, due 02/01/13..................... 60,000 61,421
7.625%, due 10/01/18(a).................. 115,000 117,013
United Rentals North America, Inc.
7.750%, due 11/15/13.................... 200,000 201,250
Viant Holdings, Inc.
10.125%, due 07/15/17 (144A)(b)......... 236,000 238,360
-------------
4,913,718
-------------
COMPUTERS & PERIPHERALS - 0.0%
Seagate Technology HDD Holdings
6.800%, due 10/01/16.................... 95,000 91,675
-------------
CONSTRUCTION & ENGINEERING - 0.8%
Esco Corp. 8.625%, due 12/15/13
(144A)(b)............................... 140,000 147,700
Sunstate Equipment Co. LLC
10.500%, due 04/01/13 (144A)(b)......... 2,670,000 2,763,450
-------------
2,911,150
-------------
CONTAINERS & PACKAGING - 2.1%
Ball Corp. 6.625%, due 03/15/18(a)........ 175,000 168,438
Berry Plastics Holding Corp.
8.875%, due 09/15/14..................... 3,335,000 3,393,362
9.235%, due 09/15/14(a)(c)............... 115,000 116,725
Graphic Packaging International Corp.
9.500%, due 08/15/13(a)................. 2,015,000 2,103,156
Owens Brockway Glass Container, Inc.
8.875%, due 02/15/09..................... 505,000 516,363
7.750%, due 05/15/11..................... 300,000 309,375
Pregis Corp. 12.375%, due 10/15/13........ 320,000 361,600
Russell-Stanley Holdings, Inc.
9.000%, due 11/30/08*
(144A)(b)(e)(f)(g)(h)................... 18,258 0
Smurfit-Stone Container Enterprises, Inc.
8.000%, due 03/15/17.................... 855,000 833,625
-------------
7,802,644
-------------
ELECTRIC SERVICES - 0.3%
Midwest Generation LLC
8.560%, due 01/02/16.................... 1,076,892 1,148,909
-------------
See notes to financial statements
5
MET INVESTORS SERIES TRUST
BLACKROCK HIGH YIELD PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------------
ELECTRIC UTILITIES - 5.1%
AES Corp. (The)
8.875%, due 02/15/11.................. $ 50,000 $ 52,938
9.000%, due 05/15/15 (144A)(b)........ 110,000 117,012
AES Ironwood LLC
8.857%, due 11/30/25................. 1,345,196 1,499,894
AES Red Oak LLC
8.540%, due 11/30/19.................. 877,616 960,990
Series B 9.200%, due 11/30/29......... 650,000 770,250
Edison Mission Energy
7.500%, due 06/15/13.................. 60,000 59,700
7.750%, due 06/15/16.................. 720,000 720,000
7.000%, due 05/15/17 (144A)(b)........ 1,900,000 1,800,250
Elwood Energy LLC
8.159%, due 07/05/26................. 1,494,635 1,577,232
FPL Energy National Wind
6.125%, due 03/25/19 (144A)(b)....... 109,518 106,940
Mirant Americas Generation LLC
8.300%, due 05/01/11................. 700,000 726,250
Mirant Mid Atlantic LLC
9.125%, due 06/30/17................. 98,398 111,251
Mirant North America LLC
7.375%, due 12/31/13................. 1,560,000 1,602,900
NRG Energy, Inc.
7.250%, due 02/01/14.................. 245,000 246,225
7.375%, due 02/01/16-01/15/17......... 5,140,000 5,166,019
Orion Power Holdings, Inc.
12.000%, due 05/01/10................ 575,000 652,625
Reliant Energy, Inc.
6.750%, due 12/15/14................. 1,500,000 1,537,500
Tenaska Alabama Partners LP
7.000%, due 06/30/21 (144A)(b)....... 1,427,922 1,468,229
TXU Corp. 6.550%, due 11/15/34......... 20,000 16,276
-------------
19,192,481
-------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 1.9%
Belden Cdt, Inc.
7.000%, due 03/15/17 (144A)(b)....... 160,000 158,400
NXP BV/NXP Funding LLC
8.106%, due 10/15/13(c)............... 1,850,000 1,861,562
7.875%, due 10/15/14.................. 225,000 222,750
9.500%, due 10/15/15(a)............... 2,625,000 2,598,750
Sanmina-SCI Corp.
6.750%, due 03/01/13(a)............... 15,000 13,725
8.125%, due 03/01/16(a)............... 1,170,000 1,093,950
Spansion, Inc. 8.485%, due 06/01/13
(144A)(b)(c)......................... 950,000 952,375
Superior Essex Communications LLC/Essex
Group, Inc. 9.000%, due 04/15/12..... 195,000 199,875
-------------
7,101,387
-------------
-------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-------------------------------------------------------------------
ENERGY - 0.9%
Kinder Morgan Finance Co.
5.700%, due 01/05/16.................. $ 2,000,000 $ 1,846,374
Northwest Pipeline Corp.
7.000%, due 06/15/16.................. 60,000 62,850
SemGroup LP
8.750%, due 11/15/15 (144A)(b)........ 740,000 747,400
Williams Cos., Inc.
7.125%, due 09/01/11.................. 850,000 875,500
-------------
3,532,124
-------------
ENERGY EQUIPMENT & SERVICES - 0.0%
Hornbeck Offshore Services, Inc.
6.125%, due 12/01/14.................. 180,000 165,600
-------------
ENTERTAINMENT & LEISURE - 1.2%
American Casino & Entertainment
Properties LLC
7.850%, due 02/01/12.................. 225,000 232,313
Fontainebleau Las Vegas Holdings LLC/
Fontainebleau Las Vegas Capital Corp.
10.250%, due 06/15/15 (144A)(b)....... 1,900,000 1,881,000
Great Canadian Gaming Corp.
7.250%, due 02/15/15 (144A)(b)........ 850,000 850,000
Penn National Gaming, Inc.
6.750%, due 03/01/15.................. 250,000 257,500
Shingle Springs Tribal Gaming Authority
9.375%, due 06/15/15 (144A)(b)........ 520,000 527,150
Virgin River Casino Corp.
9.000%, due 01/15/12(a)............... 200,000 205,000
Waterford Gaming LLC
8.625%, due 09/15/12 (144A)(b)........ 413,000 432,617
-------------
4,385,580
-------------
ENVIRONMENTAL SERVICES - 1.5%
Aleris International, Inc.
9.000%, due 12/15/14 (144A)(b)........ 3,600,000 3,636,000
Allied Waste North America, Inc.
9.250%, due 09/01/12................... 83,000 87,254
7.875%, due 04/15/13(a)................ 1,700,000 1,727,625
6.125%, due 02/15/14(a)................ 225,000 212,625
-------------
5,663,504
-------------
FINANCIAL - DIVERSIFIED - 3.7%
AAC Group Holding Corp.
14.750%, due 10/01/12
(144A)(a)(b).......................... 3,085 3,401
Arch Western Financial LLC
6.750%, due 07/01/13.................. 750,000 723,750
BMS Holdings, Inc. 12.400%, due 02/15/12
(144A)(b)(c).......................... 965,000 962,587
Britannia Bulk Plc
11.000%, due 12/01/11(a).............. 80,000 82,000
See notes to financial statements
6
MET INVESTORS SERIES TRUST
BLACKROCK HIGH YIELD PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
--------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------------
FINANCIAL - DIVERSIFIED - CONTINUED
CCM Merger, Inc.
8.000%, due 08/01/13 (144A)(b)......... $ 920,000 $ 920,000
El Paso Performance-Linked Trust
7.750%, due 07/15/11 (144A)(b)......... 50,000 51,750
GrafTech Finance, Inc.
10.250%, due 02/15/12(a)............... 87,000 91,568
Hexion U.S. Finance Corp./Hexion Nova
Scotia Finance ULC
9.750%, due 11/15/14.................... 945,000 982,800
9.860%, due 11/15/14(c)................. 1,075,000 1,112,625
Leucadia National Corp.
7.125%, due 03/15/17 (144A)(b)......... 1,000,000 975,000
Local TV Finance LLC
9.250%, due 06/15/15 (144A)(b)......... 220,000 218,900
Momentive Performance Materials, Inc.
9.750%, due 12/01/14 (144A)(b).......... 95,000 96,425
10.125%, due 12/01/14 (144A)(b)......... 3,360,000 3,385,200
Nalco Finance Holdings, Inc.
0.000%/9.000%, due 02/01/14(a)(d)...... 216,000 197,640
Petroplus Finance, Ltd.
7.000%, due 05/01/17 (144A)(b)......... 1,000,000 967,500
PNA Intermediate Holding Corp.
12.360%, due 02/15/13
(144A)(b)(c)........................... 1,010,000 1,025,150
Snoqualmie Entertainment Authority
9.150%, due 02/01/14
(144A)(b)(c)........................... 165,000 167,475
Southern Star Central Corp.
6.750%, due 03/01/16................... 50,000 49,500
Wimar Opco LLC
9.625%, due 12/15/14 (144A)(b)......... 1,470,000 1,422,225
Wind Acquisition Holdings Finance
12.609%, due 12/21/11.................. 443,622 456,931
-------------
13,892,427
-------------
FOOD & DRUG RETAILING - 0.8%
General Nutrition Centers, Inc.
9.796%, due 03/15/14
(144A)(a)(b)(c)....................... 2,430,000 2,357,100
10.750%, due 03/15/15 (144A)(b)......... 350,000 348,250
Swift & Co. 12.500%, due 01/01/10(a)..... 155,000 164,074
-------------
2,869,424
-------------
FOOD PRODUCTS - 0.3%
B&G Foods, Inc. 8.000%, due 10/01/11..... 225,000 226,125
Nutro Products, Inc. 9.370%, due 10/15/13
(144A)(b)(c)........................... 120,000 127,272
Smithfield Foods, Inc.
7.750%, due 07/01/17(a)................ 950,000 957,125
-------------
1,310,522
-------------
-----------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-----------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES - 1.0%
Cooper Cos., Inc. (The)
7.125%, due 02/15/15 (144A)(b)............ $ 1,460,000 $ 1,452,700
Leiner Health Products, Inc.
11.000%, due 06/01/12(a).................. 570,000 541,500
PTS Acquisition Corp.
9.500%, due 04/15/15 (144A)(b)............ 150,000 148,125
Safety Products Holdings, Inc.
11.750%, due 01/01/12(f).................. 308,495 325,462
Universal Hospital Services, Inc............
8.500%, due 06/01/15 (144A)(b)............. 250,000 248,750
8.759%, due 06/01/15 (144A)(b)(c).......... 230,000 231,150
Vanguard Health Holding Co. II
9.000%, due 10/01/14...................... 620,000 616,900
VWR International, Inc.
8.000%, due 04/15/14(a)................... 250,000 267,654
-------------
3,832,241
-------------
HEALTH CARE PROVIDERS & SERVICES - 3.1%
Accellent, Inc. 10.500%, due 12/01/13....... 435,000 433,913
Bio-Rad Laboratories, Inc.
6.125%, due 12/15/14...................... 225,000 212,625
Community Health Systems, Inc.
8.875%, due 07/15/15 (144A)(b)............ 3,540,000 3,606,375
Tenet Healthcare Corp.
6.500%, due 06/01/12(a).................... 4,680,000 4,223,700
7.375%, due 02/01/13(a).................... 275,000 249,906
9.875%, due 07/01/14(a).................... 1,490,000 1,482,550
9.250%, due 02/01/15(a).................... 55,000 52,525
Triad Hospitals, Inc.
7.000%, due 11/15/13...................... 550,000 579,534
United Surgical Partners International, Inc.
8.875%, due 05/01/17 (144A)(b)............ 1,080,000 1,088,100
-------------
11,929,228
-------------
HOTELS, RESTAURANTS & LEISURE - 2.5%
Boyd Gaming Corp.
6.750%, due 04/15/14(a)................... 725,000 714,125
Caesars Entertainment, Inc.
7.875%, due 03/15/10(a).................... 275,000 282,920
8.125%, due 05/15/11(a).................... 130,000 136,338
Gaylord Entertainment Co.
6.750%, due 11/15/14...................... 175,000 172,812
Harrah's Operating Co., Inc.
5.750%, due 10/01/17...................... 2,920,000 2,340,237
Landry's Restaurants, Inc.
7.500%, due 12/15/14...................... 1,000,000 975,000
Mandalay Resort Group
9.500%, due 08/01/08....................... 125,000 129,375
8.500%, due 09/15/10....................... 10,000 10,513
See notes to financial statements
7
MET INVESTORS SERIES TRUST
BLACKROCK HIGH YIELD PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
--------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE - CONTINUED
10.250%, due 08/01/07................... $ 550,000 $ 552,062
9.375%, due 02/15/10.................... 18,000 19,080
MGM MIRAGE, Inc.
8.375%, due 02/01/11(a)................ 270,000 277,425
Pinnacle Entertainment, Inc.
7.500%, due 06/15/15 (144A)(b)......... 1,020,000 989,400
River Rock Entertainment Authority
9.750%, due 11/01/11................... 45,000 47,475
Station Casinos, Inc.
6.000%, due 04/01/12.................... 570,000 538,650
6.500%, due 02/01/14.................... 375,000 333,750
7.750%, due 08/15/16.................... 360,000 358,200
6.625%, due 03/15/18.................... 25,000 21,625
Wynn Las Vegas LLC/Wynn Las Vegas Capital
6.625%, due 12/01/14................... 1,725,000 1,671,094
-------------
9,570,081
-------------
HOUSEHOLD DURABLES - 0.0%
American Greetings
7.375%, due 06/01/16................... 40,000 40,600
-------------
HOUSEHOLD PRODUCTS - 0.4%
Glenoit Corp.*
11.000%, due 04/15/07(e)(g)(h)......... 50,000 0
Jarden Corp. 7.500%, due 05/01/17(a)..... 1,655,000 1,642,587
-------------
1,642,587
-------------
INDUSTRIAL - DIVERSIFIED - 1.5%
Harland Clarke Holdings Corp.
9.500%, due 05/15/15
(144A)(a)(b).......................... 60,000 57,750
10.106%, due 05/15/15
(144A)(a)(b)(c)....................... 50,000 48,375
Hexcel Corp. 6.750%, due 02/01/15........ 1,445,000 1,408,875
Norcross Safety Products LLC/Norcoss
Capital Co., Series B
9.875%, due 08/15/11................... 250,000 263,750
RBS Global, Inc./Rexnord Corp.
9.500%, due 08/01/14.................... 3,340,000 3,440,200
11.750%, due 08/01/16(a)................ 270,000 291,600
8.875%, due 09/01/16.................... 130,000 130,975
-------------
5,641,525
-------------
INSURANCE - 0.0%
USI Holdings Corp. 9.230%, due 11/15/14
(144A)(b)(c)........................... 80,000 80,000
-------------
LEISURE EQUIPMENT & PRODUCTS - 0.1%
Riddell Bell Holdings
8.375%, due 10/01/12(a)................ 115,000 113,850
Travelport LLC
9.875%, due 09/01/14.................... 55,000 58,506
---------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
---------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS - CONTINUED
9.985%, due 09/01/14(c).................. $ 55,000 $ 56,788
-------------
229,144
-------------
MACHINERY - 0.1%
American Railcar Industries, Inc.
7.500%, due 03/01/14.................... 220,000 220,000
Clark Material Handling Company, Series D*
10.750%, due 11/15/06(e)(g)(h).......... 150,000 0
Terex Corp. 7.375%, due 01/15/14.......... 205,000 206,025
-------------
426,025
-------------
MEDIA - 11.1%
Bonten Media Acquisition Co.
9.000%, due 06/01/15 (144A)(b).......... 450,000 455,625
Cablevision Systems Corp., Series B
9.820%, due 04/01/09(c)................. 3,150,000 3,307,500
CanWest Media, Inc.
8.000%, due 09/15/12.................... 890,000 887,775
CCH I Holdings LLC
9.920%, due 04/01/14(a)................. 110,000 102,300
CCH I LLC/CCH I Capital Corp.
11.000%, due 10/01/15................... 556,000 583,105
CCH II LLC, Series B
10.250%, due 09/15/10................... 1,515,000 1,588,856
CCH II LLC/CCH II Capital Corp.
10.250%, due 10/01/13(a)................ 351,000 377,325
Charter Communications
10.250%, due 09/15/10................... 4,235,000 4,446,750
Charter Communications Holdings LLC/
Charter Communications Holdings
Capital Corp. 8.375%, due 04/30/14
(144A)(a)(b)............................ 550,000 562,375
CMP Susquehanna Corp.
10.125%, due 05/15/14 (144A)(b)......... 1,525,000 1,532,625
CSC Holdings, Inc., Series B
7.625%, due 04/01/11.................... 1,010,000 1,007,475
DirecTV Holdings LLC/DirecTV Financing
Co. 8.375%, due 03/15/13................ 436,000 458,345
EchoStar DBS Corp.
7.000%, due 10/01/13..................... 445,000 440,550
6.625%, due 10/01/14..................... 2,175,000 2,082,563
7.125%, due 02/01/16..................... 2,190,000 2,151,675
Idearc, Inc. 8.000%, due 11/15/16......... 4,365,000 4,430,475
Impress Holdings BV
8.481%, due 09/15/13
(144A)(b)(c)............................ 2,160,000 2,220,996
Network Communications, Inc.
10.750%, due 12/01/13................... 275,000 288,750
Nielsen Finance LLC/Nielsen Finance Co.
10.000%, due 08/01/14 (144A)(b).......... 4,250,000 4,515,625
See notes to financial statements
8
MET INVESTORS SERIES TRUST
BLACKROCK HIGH YIELD PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
--------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------------
MEDIA - CONTINUED
0.000%/12.500%, due 08/01/16
(144A)(a)(b)(d)....................... $ 140,000 $ 99,400
Primedia, Inc. 8.000%, due 05/15/13...... 600,000 634,500
Quebecor Media, Inc.
7.750%, due 03/15/16................... 835,000 851,700
Rainbow National Services LLC
8.750%, due 09/01/12 (144A)(b).......... 210,000 219,450
10.375%, due 09/01/14 (144A)(b)......... 2,125,000 2,342,813
TL Acquisitions, Inc.
10.500%, due 01/15/15 (144A)(b)........ 4,100,000 3,992,375
Umbrella Acquisition, Inc.
9.750%, due 03/15/15 (144A)(a)(b)...... 1,160,000 1,151,300
Videotron 6.375%, due 12/15/15........... 175,000 167,125
Young Broadcasting, Inc.
10.000%, due 03/01/11.................. 1,200,000 1,200,000
-------------
42,099,353
-------------
METALS & MINING - 3.2%
AK Steel Corp. 7.750%, due 06/15/12...... 1,605,000 1,613,025
Alpha Natural Resources LLC/Alpha Natural
Resources Capital Corp.
10.000%, due 06/01/12.................. 140,000 148,400
Blaze Recycling & Metals LLC / Blaze
Finance Corp. 10.875%, due 07/15/12
(144A)(b).............................. 250,000 256,250
California Steel Industries, Inc.
6.125%, due 03/15/14(a)................ 130,000 121,550
FMG Finance Property Ltd.
9.360%, due 09/01/11 (144A)(a)(b)(c)... 700,000 745,500
Freeport McMoRan Copper & Gold, Inc.
8.564%, due 04/01/15(c)................. 420,000 441,000
8.375%, due 04/01/17.................... 7,560,000 8,089,200
Novelis, Inc. 7.250%, due 02/15/15....... 355,000 366,094
Russel Metals, Inc.
6.375%, due 03/01/14(a)................ 230,000 221,950
-------------
12,002,969
-------------
OIL & GAS - 3.2%
Cimarex Energy Co.
7.125%, due 05/01/17................... 1,480,000 1,450,400
Colorado Interstate Gas Co.
6.800%, due 11/15/15................... 710,000 733,725
Compton Petroleum Finance Corp.
7.625%, due 12/01/13(a)................ 1,900,000 1,885,750
El Paso Corp.
6.700%, due 02/15/27.................... 62,930 58,821
8.050%, due 10/15/30.................... 150,000 158,327
Foundation Pennsylvania Coal Co.
7.250%, due 08/01/14................... 950,000 946,437
----------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
----------------------------------------------------------------
OIL & GAS - CONTINUED
Grant Prideco, Inc.
6.125%, due 08/15/15............... $ 75,000 $ 71,438
KCS Energy, Inc. 7.125%, due 04/01/12 430,000 426,775
North American Energy Partners, Inc.
8.750%, due 12/01/11............... 835,000 847,525
PetroHawk Energy Corp.
9.125%, due 07/15/13............... 235,000 249,687
Pride International, Inc.
7.375%, due 07/15/14............... 755,000 760,662
Range Resources Corp.
7.375%, due 07/15/13................ 950,000 964,250
6.375%, due 03/15/15(a)............. 200,000 190,500
Tennessee Gas Pipeline Co.
7.500%, due 04/01/17(a)............ 150,000 162,156
Transcontinental Gas Pipe Line Corp.
8.875%, due 07/15/12................ 1,245,000 1,400,625
6.400%, due 04/15/16................ 125,000 125,938
Whiting Petroleum Corp.
7.250%, due 05/01/12- 05/01/13..... 1,150,000 1,098,250
Williams Companies, Inc.
7.625%, due 07/15/19(a)............. 210,000 222,600
7.875%, due 09/01/21................ 425,000 459,000
-------------
12,212,866
-------------
OIL & GAS EXPLORATION & PRODUCTION - 4.7%
Chaparral Energy, Inc.
8.500%, due 12/01/15............... 1,150,000 1,129,875
Chesapeake Energy Corp.
6.375%, due 06/15/15................ 1,000,000 958,750
6.250%, due 01/15/18................ 655,000 614,881
6.875%, due 11/15/20................ 400,000 385,000
CIE Generale de Geophysique SA
7.750%, due 05/15/17............... 2,470,000 2,513,225
Compagnie Generale de Geophysique SA
7.500%, due 05/15/15............... 130,000 130,650
Denbury Resources, Inc.
7.500%, due 04/01/13................ 200,000 201,000
7.500%, due 12/15/15(a)............. 1,090,000 1,092,725
Encore Acquisition Co.
6.000%, due 07/15/15............... 370,000 328,375
EXCO Resources, Inc.
7.250%, due 01/15/11............... 745,000 745,000
Forest Oil Corp. 7.250%, due 06/15/19
(144A)(a)(b)....................... 1,400,000 1,365,000
Newfield Exploration Co.
6.625%, due 09/01/14............... 125,000 121,250
OPTI Canada, Inc.
8.250%, due 12/15/14 (144A)(b)..... 2,625,000 2,677,500
Range Resources Corp.
7.500%, due 05/15/16(a)............ 75,000 76,313
See notes to financial statements
9
MET INVESTORS SERIES TRUST
BLACKROCK HIGH YIELD PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
--------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------------
OIL & GAS EXPLORATION & PRODUCTION - CONTINUED
Sabine Pass LNG LP 7.500%, due 11/30/16
(144A)(b).............................. $ 1,785,000 $ 1,780,537
Stone Energy Corp. 8.106%, due 07/15/10
(144A)(b)(c)........................... 1,240,000 1,246,200
Swift Energy Co. 7.125%, due 06/01/17.... 1,400,000 1,340,500
Tesoro Corp. 6.500%, due 06/01/17
(144A)(b).............................. 1,100,000 1,080,750
-------------
17,787,531
-------------
PAPER & FOREST PRODUCTS - 2.8%
Abitibi-Consolidated, Inc.
6.000%, due 06/20/13(a)................ 365,000 303,862
Boise Cascade LLC
7.125%, due 10/15/14(a)................ 775,000 740,125
Bowater Canada Finance
7.950%, due 11/15/11(a)................ 1,025,000 969,906
Bowater, Inc. 8.360%, due 03/15/10(c).... 240,000 238,800
Cascades, Inc. 7.250%, due 02/15/13...... 1,400,000 1,368,500
Domtar, Inc.
7.875%, due 10/15/11.................... 170,000 174,888
7.125%, due 08/15/15(a)................. 1,000,000 973,750
Jefferson Smurfit Corp.
8.250%, due 10/01/12................... 175,000 174,563
NewPage Corp.
10.000%, due 05/01/12(a)................ 2,450,000 2,658,250
11.606%, due 05/01/12(c)................ 345,000 377,775
12.000%, due 05/01/13(a)................ 630,000 691,425
Verso Paper Holdings LLC/Verson Paper,
Inc.
9.125%, due 08/01/14 (144A)(b).......... 700,000 726,250
11.375%, due 08/01/16 (144A)(a)(b)...... 1,190,000 1,276,275
-------------
10,674,369
-------------
PHARMACEUTICALS - 0.5%
Angiotech Pharmaceuticals, Inc. Senior
Notes 9.110%, due 12/01/13(a)(c)....... 1,710,000 1,769,850
-------------
PUBLISHING - 0.5%
Dex Media West, Series B
9.875%, due 08/15/13................... 488,000 524,600
Dex Media, Inc.
0.000%/9.000%, due 11/15/13(d).......... 225,000 212,906
8.000%, due 11/15/13.................... 625,000 637,500
PRIMEDIA, Inc. 8.875%, due 05/15/11...... 550,000 567,875
-------------
1,942,881
-------------
REAL ESTATE - 1.8%
American Real Estate Partners LP/American
Real Estate Finance Corp.
7.125%, due 02/15/13 (144A)(b).......... 950,000 921,500
7.125%, due 02/15/13.................... 250,000 242,500
---------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
---------------------------------------------------------------------
REAL ESTATE - CONTINUED
Ashton Woods USA LLC/Ashton Woods
Finance Co. 9.500%, due 10/01/15..... $ 230,000 $ 213,900
Realogy Corp.
10.500%, due 04/15/14
(144A)(a)(b)........................ 3,530,000 3,371,150
11.000%, due 04/15/14
(144A)(a)(b)........................ 440,000 415,800
12.375%, due 04/15/15
(144A)(a)(b)........................ 810,000 741,150
Ventas Realty LP/Ventas Capital Corp.
6.625%, due 10/15/14.................. 250,000 247,812
7.125%, due 06/01/15.................. 125,000 126,563
6.500%, due 06/01/16(a)............... 210,000 205,800
6.750%, due 04/01/17(a)............... 205,000 203,462
-------------
6,689,637
-------------
RETAIL - MULTILINE - 3.9%
AutoNation, Inc.
7.356%, due 04/15/13(c)............... 985,000 987,462
7.000%, due 04/15/14(a)............... 115,000 114,138
Buffets, Inc. 12.500%, due 11/01/14
(144A)(a)(b)......................... 470,000 452,375
Burlington Coat Factory Warehouse Corp.
11.125%, due 04/15/14(a)............. 230,000 225,400
Claire's Stores, Inc.
9.250%, due 06/01/15
(144A)(a)(b)........................ 270,000 257,850
9.625%, due 06/01/15
(144A)(a)(b)........................ 690,000 641,700
10.500%, due 06/01/17
(144A)(a)(b)........................ 270,000 247,725
Michaels Stores, Inc.
10.000%, due 11/01/14
(144A)(a)(b)........................ 200,000 206,000
11.375%, due 11/01/16
(144A)(a)(b)........................ 3,410,000 3,580,500
Neiman Marcus Group, Inc. (The)
9.000%, due 10/15/15................. 825,000 886,875
Rite Aid Corp.
9.375%, due 12/15/15 (144A)(b)........ 600,000 579,000
7.500%, due 03/01/17.................. 2,230,000 2,163,100
Sally Holdings LLC
9.250%, due 11/15/14 (144A)(b)........ 500,000 503,750
10.500%, due 11/15/16
(144A)(a)(b)........................ 1,765,000 1,782,650
United Auto Group, Inc.
7.750%, due 12/15/16................. 1,260,000 1,260,000
Yankee Acquisition Corp.
8.500%, due 02/15/15.................. 60,000 58,500
See notes to financial statements
10
MET INVESTORS SERIES TRUST
BLACKROCK HIGH YIELD PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
----------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
----------------------------------------------------------------
RETAIL - MULTILINE - CONTINUED
9.750%, due 02/15/17(a)............. $ 1,030,000 $ 1,001,675
-------------
14,948,700
-------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS - 1.6%
Amkor Technology, Inc.
7.750%, due 05/15/13................ 90,000 86,962
9.250%, due 06/01/16(a)............. 1,610,000 1,666,350
Freescale Semiconductor, Inc.
8.875%, due 12/15/14 (144A)(b)...... 345,000 331,200
9.125%, due 12/15/14 (144A)(b)...... 3,470,000 3,279,150
9.235%, due 12/15/14
(144A)(b)(c)...................... 35,000 33,950
Hynix Semiconductor, Inc.
7.875%, due 06/27/17 (144A)(b)..... 630,000 626,850
-------------
6,024,462
-------------
SOFTWARE - 0.4%
SunGard Data Systems, Inc.
9.125%, due 08/15/13................ 545,000 560,669
10.250%, due 08/15/15............... 990,000 1,051,875
-------------
1,612,544
-------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 9.0%
BCM Ireland Preferred Equity, Ltd.
11.061%, due 02/15/17.............. 147,255 200,575
Citizens Communications Co.
6.250%, due 01/15/13............... 525,000 505,969
Cricket Communications, Inc.
9.375%, due 11/01/14............... 3,820,000 3,963,250
Digicel Group Ltd.
8.875%, due 01/15/15
(144A)(a)(b)...................... 140,000 137,550
9.125%, due 01/15/15
(144A)(a)(b)...................... 2,580,000 2,550,975
Dobson Cellular Systems, Inc.
8.375%, due 11/01/11............... 600,000 630,000
Hawaiian Telcom Communications, Inc.
12.500%, due 05/01/15(a)........... 455,000 518,700
Inmarsat Finance II Plc
0.000%/10.375%, due 11/15/12(d).... 100,000 95,875
Intelsat Bermuda, Ltd.
8.872%, due 01/15/15(c)............. 185,000 189,856
9.250%, due 06/15/16................ 395,000 421,662
11.250%, due 06/15/16............... 3,930,000 4,421,250
Intelsat Intermediate
0.000%/9.250%, due 02/01/15(d)..... 540,000 446,850
Intelsat Subsidiary Holding Co., Ltd.
8.625%, due 01/15/15............... 175,000 180,250
Nordic Telephone Holdings Co.
8.875%, due 05/01/16 (144A)(b)..... 445,000 473,925
-------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-------------------------------------------------------------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - CONTINUED
Nortel Networks, Ltd.
9.606%, due 07/15/11
(144A)(b)(c).......................... $ 1,785,000 $ 1,907,719
PanAmSat Corp. 9.000%, due 08/15/14..... 338,000 354,055
Qwest Communications International, Inc.
7.500%, due 02/15/14(a)................ 95,000 96,663
7.500%, due 02/15/14................... 390,000 396,825
Qwest Corp.
8.875%, due 03/15/12................... 4,075,000 4,411,187
7.500%, due 10/01/14................... 30,000 30,900
6.875%, due 09/15/33(a)................ 785,000 739,862
7.125%, due 11/15/43................... 200,000 189,000
Shaw Communications, Inc.
7.250%, due 04/06/11(a)............... 375,000 388,125
Virgin Media Finance Plc
9.125%, due 08/15/16.................. 250,000 263,125
West Corp.
9.500%, due 10/15/14................... 2,500,000 2,575,000
11.000%, due 10/15/16(a)............... 3,330,000 3,496,500
Wind Acquisition Finance S.A.
10.750%, due 12/01/15 (144A)(b)....... 600,000 691,500
Windstream Corp.
8.625%, due 08/01/16.................. 3,640,000 3,867,500
-------------
34,144,648
-------------
TELECOMMUNICATION SERVICES - WIRELESS - 3.0%
Centennial Communications Corp.
10.000%, due 01/01/13(a)............... 200,000 215,500
11.099%, due 01/01/13(c)............... 125,000 131,250
8.125%, due 02/01/14(a)................ 2,100,000 2,157,750
Cincinnati Bell, Inc.
7.250%, due 07/15/13.................. 695,000 715,850
iPCS, Inc. 7.480%, due 05/01/13
(144A)(b)(c).......................... 1,880,000 1,889,400
MetroPCS Wireless, Inc.
9.250%, due 11/01/14 (144A)(b)........ 4,335,000 4,497,562
Rural Cellular Corp.
9.875%, due 02/01/10................... 165,000 173,250
8.250%, due 03/15/12................... 1,635,000 1,679,963
-------------
11,460,525
-------------
TEXTILES, APPAREL & LUXURY GOODS - 0.0%
Pillowtex Corp.
9.000%, due 12/15/49(e)(h)............ 175,000 0
-------------
TRANSPORTATION - 0.3%
Holt Group, Inc.*
9.750%, due 01/15/06(e)(g)(h)......... 100,000 0
Navios Maritime Holdings, Inc.
9.500%, due 12/15/14 (144A)(b)........ 180,000 191,700
See notes to financial statements
11
MET INVESTORS SERIES TRUST
BLACKROCK HIGH YIELD PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
--------------------------------------------------------------------
SECURITY SHARES/PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------------
TRANSPORTATION - CONTINUED
St. Acquisition Corp.
13.107%, due 05/15/15
(144A)(b)(c)....................... $ 210,000 $ 199,500
12.500%, due 05/15/17 (144A)(b)...... 590,000 563,450
-------------
954,650
-------------
Total Domestic Bonds & Debt Securities
(Cost $331,956,323) 327,891,515
-------------
CONVERTIBLE BONDS - 0.2%
FOOD PRODUCTS - 0.0%
Archer-Daniels-Midland Co.
0.875%, due 02/15/14(a)............. 50,000 47,750
-------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS - 0.1%
Cypress Semiconductor Corp. 1.000%,
due 09/15/09 (144A)(a)(b)........... 80,000 88,800
-------------
TELECOMMUNICATION SERVICES-DIVERSIFIED - 0.1%
FiberTower Corp. 9.000%, due 11/15/12
(144A)(b)........................... 170,000 189,763
NTL Cable Plc 8.750%, due 04/15/14.... 175,000 247,829
-------------
437,592
-------------
Total Convertible Bonds
(Cost $542,771) 574,142
-------------
COMMON STOCKS - 0.0%
CHEMICALS - 0.0%
General Chemical Industrial Products,
Inc.(e)(h).......................... 45 0
-------------
CONTAINERS & PACKAGING - 0.0%
Russell-Stanley Holdings, Inc.(e)(h).. 2,000 0
-------------
MEDIA - 0.0%
Cebridge Connections Holdings(e)(h)... 7,460 67,140
Virgin Media, Inc.(a)................. 1,775 43,257
-------------
110,397
-------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 0.0%
Viatel Holding Bermuda, Ltd.*......... 1,237 44
-------------
Total Common Stocks
(Cost $833,905)..................... 110,441
-------------
PREFERRED STOCKS - 0.1%
OIL & GAS EXPLORATION & PRODUCTION - 0.1%
Exco Resources, Inc................... 53 530,000
-------------
Total Preferred Stocks
(Cost $530,000) 530,000
-------------
-----------------------------------------------------------------------
SECURITY SHARES/PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-----------------------------------------------------------------------
WARRANTS - 0.0%
CHEMICALS - 0.0%
General Chemical Industrial Products, Inc.,
Series A(e)(h)........................... 26 $ 0
General Chemical Industrial Products, Inc.,
Series B(e)(h)........................... 19 0
-------------
0
-------------
COMMERCIAL SERVICES & SUPPLIES - 0.0%
MDP Acquisitions Plc Corp.(144A)(b)........ 100 13,094
-------------
ELECTRONICS - 0.0%
Viasystems Group, Inc.(e)(h)............... 9,411 0
-------------
LEISURE EQUIPMENT & PRODUCTS - 0.0%
AMF Bowling Worldwide, Inc.(e)(h).......... 901 0
-------------
MEDIA - 0.0%
Advanstar Holdings Corp.................... 75 6,750
XM Satellite Radio Holdings,
Inc. - Class A*.......................... 125 156
-------------
6,906
-------------
METALS & MINING - 0.0%
ACP Holding Co.* (144A)(b)................. 30,652 37,548
-------------
Total Warrants
(Cost $246,993) 57,548
-------------
SHORT - TERM INVESTMENTS - 14.0%
Federal Home Loan Bank
2.400%, due 07/02/07(i).................. $ 52,700,000 52,692,973
State Street Bank & Trust Co., Repurchase
Agreement dated 06/29/07 at 1.500% to
be repurchased at $340,043 on
07/02/07 collateralized by $370,000
FHLMC 5.625% due 11/23/35 with a
value of $346,828........................ 340,000 340,000
-------------
Total Short-Term Investments
(Cost $53,032,973) 53,032,973
-------------
TOTAL INVESTMENTS - 100.9%
(Cost $387,142,965) 382,196,619
Other Assets and Liabilities (net) - (0.9)% (3,509,947)
-------------
TOTAL NET ASSETS - 100.0% $ 378,686,672
=============
PORTFOLIO FOOTNOTES:
* Non-income producing security.
(a) A portion or all of the security was held on loan. As of June 30, 2007, the
market value of the securities loaned was $69,155,565 and the collateral
received consisted of cash in the amount of $70,597,270.
See notes to financial statements
12
MET INVESTORS SERIES TRUST
BLACKROCK HIGH YIELD PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
(b) Securities that may be resold to "qualified institutional buyers" under
Rule 144A or securities offered pursuant to Section 4(2) of the Securities
Act of 1933, as amended. These securities have been determined to be liquid
under the guidelines established by the Board of Trustees. These securities
represent in the aggregate $104,600,106 of net assets.
(c) Variable or floating rate security. The stated rate represents the rate at
June 30, 2007.
(d) Security is a "step up" bond where coupon increases or steps up at a
predetermined date. Rates shown are current coupon and next coupon rate
when security steps up.
(e) Illiquid securities representing in the aggregate 0.02% of net assets.
(f) Payment-in-kind security for which part of the income earned may be paid as
additional principal.
(g) Security is in default and/or issuer is in bankruptcy.
(h) Security is valued in good faith at fair value by or under the direction of
the Board of Directors.
(i) Zero coupon bond - Interest rate represents current yield to maturity.
FHLMC - Federal Home Loan Mortgage Corporation
The following table summarizes the credit composition of the portfolio holdings
of the BlackRock High Yield Portfolio at June 30, 2007 based upon quality
ratings issued by Standard & Poor's. For Securities not rated by Standard &
Poor's, the equivalent Moody's rating is used.
PERCENT OF
PORTFOLIO COMPOSITION BY CREDIT QUALITY PORTFOLIO
--------------------------------------------------
A 0.02%
BBB/Baa 1.63
BB/Ba 23.46
B 49.28
Below B 23.82
Equities/Other 1.79
------
Total: 100.00%
======
See notes to financial statements
13
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
BLACKROCK HIGH YIELD PORTFOLIO
ASSETS
Investments, at value (Note 2)* $381,856,619
Repurchase Agreement 340,000
Cash 367,495
Cash denominated in foreign currencies** 147
Collateral for securities on loan 70,597,270
Receivable for investments sold 1,193,261
Receivable for Trust shares sold 300,710
Interest receivable 6,417,674
------------
Total assets 461,073,176
------------
LIABILITIES
Payables for:
Investments purchased 11,236,572
Trust shares redeemed 237,557
Unrealized depreciation on forward currency contracts (Note 8) 672
Collateral for securities on loan 70,597,270
Investment advisory fee payable (Note 3) 219,714
Administration fee payable 4,409
Custodian and accounting fees payable 37,756
Accrued expenses 52,554
------------
Total liabilities 82,386,504
------------
NET ASSETS $378,686,672
============
NET ASSETS REPRESENTED BY:
Paid in surplus $390,454,289
Accumulated net realized loss (10,835,832)
Unrealized depreciation on investments and foreign currency (4,946,839)
Undistributed net investment income 4,015,054
------------
Total $378,686,672
============
NET ASSETS
Class A $378,686,672
============
CAPITAL SHARES OUTSTANDING
Class A 45,740,331
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 8.28
============
- --------------------------------------------------------------------------------------
* Investments at cost, excluding Repurchase Agreements $386,802,965
**Cost of cash denominated in foreign currencies 146
See notes to financial statements
14
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
BLACKROCK HIGH YIELD PORTFOLIO
INVESTMENT INCOME:
Dividends (1) $ 9,909
Interest (2) 6,556,936
------------
Total investment income 6,566,845
------------
EXPENSES:
Investment advisory fee (Note 3) 523,478
Administration fees 7,505
Deferred expense reimbursement 24,994
Custody and accounting fees 50,700
Transfer agent fees 2,824
Audit 13,139
Legal 12,222
Trustee fees and expenses 4,215
Shareholder reporting 11,548
Insurance 1,752
Other 1,098
------------
Total expenses 653,475
------------
Net investment income 5,913,370
------------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY:
Net realized gain (loss) on:
Investments 2,623,432
Foreign currency (2,273)
------------
Net realized gain on investments and foreign currency 2,621,159
------------
Net change in unrealized depreciation on:
Investments (10,000,650)
Foreign currency (707)
------------
Net change in unrealized depreciation on investments and foreign
currency (10,001,357)
------------
Net realized and change in unrealized loss on investments and
foreign currency (7,380,198)
------------
NET DECREASE IN NET ASSETS FROM OPERATIONS $ (1,466,828)
============
- ---------------------------------------------------------------------------------------
(1)Dividend income is net withholding taxes of: $ 3,144
(2)Interest income includes securities lending income of: 24,467
See notes to financial statements
15
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
BLACKROCK HIGH YIELD PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 5,913,370 $ 5,803,516
Net realized gain on investments and foreign currency 2,621,159 324,006
Net change in unrealized appreciation (depreciation) on investments (10,001,357) 1,259,587
------------ ------------
Net increase (decrease) in net assets resulting from operations (1,466,828) 7,387,109
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (7,871,993) (6,446,629)
------------ ------------
Net decrease in net assets resulting from distributions (7,871,993) (6,446,629)
------------ ------------
CAPITAL SHARE TRANSACTIONS (NOTES 4 AND 9):
Proceeds from shares sold
Class A 217,774,255 7,639,361
Net asset value of shares issued through acquisition
Class A 100,788,917 --
Net asset value of shares issued through dividend reinvestment
Class A 7,871,993 6,446,629
Cost of shares repurchased
Class A (15,923,241) (21,516,716)
------------ ------------
Net increase (decrease) in net assets from capital share transactions 310,511,924 (7,430,726)
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 301,173,103 (6,490,246)
Net assets at beginning of period 77,513,569 84,003,815
------------ ------------
Net assets at end of period $378,686,672 $ 77,513,569
============ ============
Net assets at end of period includes undistributed net investment income $ 4,015,054 $ 5,973,677
============ ============
See notes to financial statements
16
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS A
BLACKROCK HIGH YIELD PORTFOLIO ----------------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 -------------------------------------------
(UNAUDITED) 2006 2005 2004++ 2003++
-------------- ------ ------ ------ ------
NET ASSET VALUE, BEGINNING OF PERIOD............................ $ 8.92 $ 8.84 $ 8.62 $ 8.41 $ 7.37
------ ------ ------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income........................................... 0.29 (a) 0.63 (a) 0.63 (a) 0.64 0.65 (a)
Net Realized/Unrealized Gain (Loss) on Investments.............. 0.01 0.19 (0.41) 0.23 1.00 (a)
------ ------ ------ ------ ------
Total from Investment Operations................................ 0.30 0.82 0.22 0.87 1.65
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income............................ (0.94) (0.74) -- (0.66) (0.61)
Distributions from Net Realized Capital Gains................... -- -- -- -- --
------ ------ ------ ------ ------
Total Distributions............................................. (0.94) (0.74) -- (0.66) (0.61)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD.................................. $ 8.28 $ 8.92 $ 8.84 $ 8.62 $ 8.41
====== ====== ====== ====== ======
TOTAL RETURN 3.20% 9.81% 2.55% 10.38% 22.39%
Ratio of Expenses to Average Net Assets......................... 0.75%* 0.93% 0.87% 0.83%(b) 0.90%
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates....................................................... 0.75%* 0.96% 0.87% 0.87% 0.90%
Ratio of Net Investment Income to Average Net Assets............ 6.80%* 7.34% 7.28% 7.42% 7.93%
Portfolio Turnover Rate......................................... 44.5% 88.9% 36.0% 38.0% 57.0%
Net Assets, End of Period (in millions)......................... $378.7 $ 77.5 $ 84.0 $ 87.0 $ 76.0
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
BLACKROCK HIGH YIELD PORTFOLIO -------
-------
2002++
------
NET ASSET VALUE, BEGINNING OF PERIOD............................ $ 8.55
------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income........................................... 0.74 (a)
Net Realized/Unrealized Gain (Loss) on Investments.............. (0.46)(a)
------
Total from Investment Operations................................ 0.28
------
LESS DISTRIBUTIONS
Dividends from Net Investment Income............................ (1.46)
Distributions from Net Realized Capital Gains................... --
------
Total Distributions............................................. (1.46)
------
NET ASSET VALUE, END OF PERIOD.................................. $ 7.37
======
TOTAL RETURN 3.72%
Ratio of Expenses to Average Net Assets......................... 0.89%
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates....................................................... 0.89%
Ratio of Net Investment Income to Average Net Assets............ 9.09%
Portfolio Turnover Rate......................................... 58.0%
Net Assets, End of Period (in millions)......................... $ 48.0
* Annualized
(a) Per share amounts based on average shares outstanding during the period.
(b) The Investment Manager waived a portion of its management fee for the year.
++ Audited by other Independent Registered Public Accounting Firm.
See notes to financial statements
17
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is BlackRock High Yield Portfolio, which is
diversified. Shares in the Trust are not offered directly to the general public
and are currently available only to separate accounts established by certain
affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A Shares are offered
by the Portfolio. Class B and E Shares are not currently offered by the
Portfolio included in this report. Shares of each Class of the Portfolio
represent an equal pro rata interest in the Portfolio and generally give the
shareholder the same voting, dividend, liquidation, and other rights.
Investment income, realized and unrealized capital gains and losses, the common
expenses of the Portfolio and certain Portfolio-level expense reductions, if
any, are allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the Portfolio. Each class of
shares differs in its respective distribution expenses and certain other
class-specific expense reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
18
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date. The value of the
security so purchased is subject to market fluctuations during this period. The
Portfolio segregates assets having an aggregate value at least equal to the
amount of the when issued or delayed delivery purchase commitments until
payment is made.
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
The Portfolio utilizes the provisions of the federal income tax laws that
provide for the carryforward of capital losses for eight years, offsetting such
losses against any future net realized capital gains. At December 31, 2006, the
accumulated capital loss carryforwards and expiration dates by the Portfolio
were as follows:
Expiring Expiring Expiring Expiring
Portfolio Total 12/31/2009 12/31/2010 12/31/2011 12/31/2013
- --------- ----------- ---------- ---------- ---------- ----------
BlackRock High Yield Portfolio $13,235,077 $4,592,238 $6,217,956 $1,599,086 $825,797
On May 1, 2006, the Federated High Yield Portfolio, a series of The Travelers
Series Trust, was reorganized into the Federated High Yield Portfolio, a series
of Met Investors Series Trust. The Portfolio acquired capital losses of
$13,291,427. The losses incurred by the Portfolio are subject to an annual
limitation of $3,740,137.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. FORWARD FOREIGN CURRENCY CONTRACTS - The Portfolio may enter into forward
foreign currency contracts to hedge their portfolio holdings against future
movements in certain foreign currency exchange rates. A forward currency
contract is a commitment to purchase or sell a foreign currency at a future
date at a set price. The forward currency contracts are valued at the forward
rate and are marked-to-market daily. The change in market value is recorded by
the Portfolio as an unrealized gain or loss. When the contract is closed, the
Portfolio recognizes a realized gain or loss equal to the difference between
the value of the contract at the time it was opened and the value at the time
it was closed.
The use of forward foreign currency contracts does not eliminate fluctuations
in the underlying prices of the securities of the Portfolio, but it does
establish a rate of exchange that can be achieved in the future. Although
forward foreign currency contracts to sell limit the risk of loss due to a
decline in the value of the currency holdings, they also limit any potential
gain that might result should the value of the currency increase. In addition,
the Portfolio could be exposed to risks if the counterparties to the contracts
are unable to meet the terms of the contracts.
G. FOREIGN CURRENCY TRANSLATION - The books and records of the Portfolio are
maintained in U.S. dollars. Foreign currencies, investments and other assets
and liabilities are translated into U.S. dollars on a daily basis using
prevailing exchange rates. Purchases and sales of securities are translated at
the rates of exchange prevailing when such securities were acquired or sold.
Income is translated at rates of exchange prevailing when interest is accrued
or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in
forward foreign currency contracts, sales of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities
transactions, and the difference between the amounts of dividends, interest,
and foreign withholding taxes recorded on the Portfolio's books, and the U.S.
dollar equivalent of the amounts actually received or paid. Net
19
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
unrealized foreign exchange gains and losses arise from changes in the value of
assets and liabilities other than investments in securities at fiscal year end,
from changes in the exchange rates of foreign currency held, and from changes
in the contract value of forward foreign currency contracts.
H. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
I. SECURITIES LENDING - The Portfolio may lend its securities to certain
qualified brokers who borrow securities in order to complete certain
transactions. By lending its investment securities, the Portfolio attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term of the loan would
accrue to the account of the Portfolio. Risks of delay in recovery of the
securities or even loss of rights in the collateral may occur should the
borrower of the securities fail financially. Risks may also arise to the extent
that the value of collateral decreases below the value of the securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives
cash or other securities as collateral in an amount equal to or exceeding 102%
of the current market value of the loaned securities. Any cash received as
collateral is generally invested by State Street Bank and Trust Company ("State
Street"), acting in its capacity as securities lending agent (the "Agent"), in
the State Street Navigator Securities Lending Prime Portfolio which is a money
market fund registered under the 1940 Act. A portion of the dividends received
on the collateral is rebated to the borrower of the securities and the
remainder is split between the Agent and the Portfolio. On loans collateralized
by cash, the cash collateral is invested in a money market fund or short term
securities. A portion of the income generated upon investment of the collateral
is remitted to the Borrowers and the remainder is allocated between the fund
and the lending agent. On loans collateralized by U.S. Treasuries, a fee is
received from the Borrower and is allocated between the fund and the lending
agent.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with BlackRock Financial Management, Inc., (the "Adviser") for investment
advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- --------------------
BlackRock High Yield Portfolio $523,478 0.60% ALL
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the
20
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
ordinary course of the Portfolio's business, but including amounts payable
pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act are
limited to the following respective expense ratios as a percentage of the
Portfolio's average daily net assets:
Maximum Expense Ratio
under current Expense
Limitation Agreement
---------------------
Portfolio Class A Class B Class E
--------- ------- ------- -------
BlackRock High Yield Portfolio 0.95% 1.20%* 1.10%*
* Classes not offered during the period.
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to
reimbursement by the Portfolio to the extent that the charge does not cause the
expenses in such subsequent year to exceed the Maximum Expense Ratio as stated
above. The Portfolio is not obligated to repay any expense paid by the Manager
more than five years after the end of the fiscal year in which such expense was
incurred.
The following amounts were repaid to the Manager during the period ended June
30, 2007.
BlackRock High Yield Portfolio $24,994
All prior subsidies have been repaid to the Manager.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to
activities primarily intended to result in the sale of Class B and Class E
Shares. However, under Class B and Class E Distribution Agreements, payments to
the Distributor for activities pursuant to the Class B Distribution Plan and
Class E Distribution Plan are currently limited to payments at an annual rate
equal to 0.25% and 0.15% of average daily net assets of the Portfolio
attributable to its Class B and Class E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued
in Connection Shares Issued
with Through Net Decrease
Beginning Shares Acquisition Dividend Shares in Shares Ending
Shares Sold (Note 9) Reinvestment Repurchased Outstanding Shares
- - --------- ---------- ------------- ------------- ----------- ------------ ----------
BlackRock High Yield Portfolio
Class A
06/30/2007 8,693,022 27,450,126 10,512,242 940,501 (1,855,560) 37,047,309 45,740,331
12/31/2006 9,506,138 881,620 -- 772,051 (2,466,787) (813,116) 8,693,022
21
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
- - --------------- -------------- --------------- --------------
BlackRock High Yield Portfolio $-- $239,824,975 $-- $71,589,958
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Depreciation
- --------- ------------ ------------ -------------- --------------
BlackRock High Yield Portfolio $387,142,965 $3,059,089 $(8,005,435) $(4,946,346)
6. SECURITY LENDING
As of June 30, 2007, the Portfolio had loaned securities which were
collateralized by short-term investments. The value of securities on loan and
the value of the related collateral were as follows:
Value of Value of
Securities Collateral
- ----------- -----------
BlackRock High Yield Portfolio $69,155,565 $70,597,270
7. FORWARD FOREIGN CURRENCY CONTRACTS
Open forward foreign currency contracts at June 30, 2007, were as follows:
Forward Foreign Currency Contracts to Sell:
Value at Net Unrealized
Settlement Date Contracts to Deliver June 30, 2007 In Exchange for U.S. $ Depreciation
- --------------- -------------------- ------------- ---------------------- --------------
7/18/2007 140,000 EUR $189,388 $188,716 ($672)
-----
($672)
=====
EUR - Euro
8. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
--------------- ---------------------- ---------------
2006 2005 2006 2005 2006 2005
- ---------- ---- ---- ---- ---------- ----
BlackRock High Yield Portfolio $6,446,629 $-- $-- $-- $6,446,629 $--
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
- - ------------- ------------- ------------ ------------------ -----------
BlackRock High Yield Portfolio $5,973,886 $-- $1,295,076 $(13,235,077) $(5,966,115)
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
22
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
9. ACQUISITION
On April 30, 2007, BlackRock High Yield Portfolio ("BlackRock"), a series of
Met Investors Series Trust, acquired all the net assets of Western Asset
Management High Yield Bond Portfolio ("Western"), a series of Metropolitan
Series Fund, Inc., pursuant to a plan of reorganization approved by Western
shareholders on April 24, 2007. The acquisition was accomplished by a tax-free
exchange of 10,512,242 Class A shares of Western (valued at $100.8 Million) in
exchange for the 12,027,317 Class A shares of BlackRock outstanding on
April 27, 2007. Western Class A net assets at that date ($100.8 Million),
including $3,537,529 of unrealized appreciation and approximately $1,258,595 of
accumulated net realized gains, were combined with those of BlackRock Class A.
The aggregate Class A net assets of BlackRock and Western immediately before
the acquisition were $78,433,253 and $100,788,917, respectively. The aggregate
Class A net assets of BlackRock immediately after the acquisition were
$179,222,170.
10. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
11. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
23
MET INVESTORS SERIES TRUST
BlackRock
Large-Cap Core Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
BLACKROCK LARGE-CAP CORE PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY BLACKROCK ADVISORS, LLC
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
ECONOMIC OVERVIEW & OUTLOOK
U.S. equity markets generally gained ground in the first six months of 2007.
The broad-market S&P 500(R) Index/1/ rose 6.28%. Shares of large-cap growth
stocks outperformed large-cap value stocks, with the Russell 1000(R) Growth
Index/2/ gaining 8.13% versus the 6.23% return of the Russell 1000(R) Value
Index/3/ for the period.
Slow economic growth and credit-related problems such as the ongoing subprime
lending issue and some high-profile losses in the hedge fund industry do have
the potential to increase financial stresses in the months ahead. While such
strains would unsettle the equity and corporate bond markets, we do not believe
they will mark the end of the liquidity-driven bull market in "riskier" assets.
The financial environment has become more turbulent, but not to the point that
it poses a major challenge to economic stability or to the ongoing bull market
in stocks. Our overarching equity-related comment from the beginning of the
year was that stock markets would experience a "reasonably constructive" year,
and this view has not changed. In our interpretation, "constructive" means an
up year and "reasonably" means less so than last year and with more volatility
along the way. Year-to-date, returns for equities have been quite good, but
have come with some disruptive bumps along the way. Looking ahead, we believe
stock prices to finish the year higher than where they were at quarter-end, but
the overall pace of gains is likely to be slower in the second half of the year.
From a big picture perspective, the economic and financial environment remains
in remarkably good shape, given the various events of recent years. For
example, the global economy is enjoying its
- --------
/1/ The S&P 500(R) Index is an unmanaged index consisting of 500 stocks chosen
for market size, liquidity, and industry group representation. It is a
market-value weighted index (stock price times number of shares outstanding),
with each stock's weight in the Index proportionate to its market value. The
Index does not include fees or expenses and is not available for direct
investment.
/2/ The Russell 1000(R) Growth Index is an unmanaged index that measures the
performance of those Russell 1000 companies with higher price-to-book ratios
and higher forecasted growth values. The Index does not include fees or
expenses and is not available for direct investment.
/3/ The Russell 1000(R) Value Index is an unmanaged index which measures the
performance of those Russell 1000(R) Index companies with lower price-to-book
ratios and lower forecasted growth values. The Index does not include fees or
expenses and is not available for direct investment.
/4/ The Russell 1000(R) Index is an unmanaged Index which measures the
performance of the 1,000 largest companies in the Russell 3000 Index, which
represents approximately 92% of the total market capitalization of the Russell
3000 Index. As of latest reconstitution, the average market capitalization was
approximately $16.3 billion; the median market capitalization was approximately
$6.1 billion. The smallest company in the index had an approximate market
capitalization of $2.5 billion. The Index does not include fees and expenses
and is not available for direct investment.
strongest run of growth in three decades, yet inflation is low; the equity bull
market is in its fifth year, yet valuations are reasonable in most regions; the
U.S. housing bubble has burst, yet there has been little impact on employment
and consumer spending. The favorable environment owes a lot to the bullish
effects of globalization, technological innovations and market reforms.
Importantly, these are long-term structural, and not cyclical, developments.
The equity market may struggle in the near term if credit market turmoil
worsens, but we do not believe that a bear market is in the cards.
PORTFOLIO OVERVIEW
During the period, BlackRock Large-Cap Portfolio a series of the Metropolitan
Series Fund, Inc. was merged into the BlackRock Large-Cap Core Portfolio of the
Met Investors Series Trust.
For the six-month period ended June 30, 2007, the Class A shares of the
BlackRock Large-Cap Core Portfolio returned 5.97%, compared to its benchmark,
the Russell 1000(R) Index/4/, which returned 7.18%.
The Portfolio held overweight positions relative to the benchmark in
information technology, consumer discretionary, energy, healthcare and, to a
lesser degree, materials. There were underweights in the financials, utilities,
telecommunication services, consumer staples and industrials sectors.
The Portfolio's performance in comparison to that of the benchmark was hindered
by stock selection and an overweight position in the consumer discretionary
sector; stock selection in information technology, industrials and consumer
staples; underweight positions in telecommunication services, utilities and
industrials; and overweights in healthcare and industrials. Portfolio
performance benefited, however, from stock selection and an overweight position
in the energy sector; stock selection and an underweight in financials; and
stock selection in healthcare and materials.
The investment objective of the BlackRock Large-Cap Core Portfolio is to seek
long-term growth of capital through investments primarily in a diversified
portfolio of equity securities of large-cap companies located in the United
States. The Portfolio uses an investment approach that blends growth and value.
ROBERT C. DOLL
Portfolio Manager
BLACKROCK ADVISORS, LLC
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
BLACKROCK LARGE-CAP CORE PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY BLACKROCK ADVISORS, LLC
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
- -------------------------------------------------------------------------------
Exxon Mobil Corp. 4.10%
- -------------------------------------------------------------------------------
Microsoft Corp. 2.64%
- -------------------------------------------------------------------------------
Chevron Corp. 2.23%
- -------------------------------------------------------------------------------
Pfizer, Inc. 2.20%
- -------------------------------------------------------------------------------
Cisco Systems, Inc. 2.14%
- -------------------------------------------------------------------------------
JPMorgan Chase & Co. 2.07%
- -------------------------------------------------------------------------------
International Business Machines Corp. 2.04%
- -------------------------------------------------------------------------------
American International Group, Inc. 2.00%
- -------------------------------------------------------------------------------
Hewlett-Packard Co. 1.86%
- -------------------------------------------------------------------------------
General Electric Co. 1.66%
- -------------------------------------------------------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
[CHART]
Basic Materials 5.5%
Communications 10.2%
Cyclical 12.3%
Non-Cyclical 19.2%
Energy 14.4%
Financials 13.6%
Industrials 8.4%
Technology 16.4%
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
BLACKROCK LARGE-CAP CORE PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY BLACKROCK ADVISORS, LLC
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
BLACKROCK LARGE-CAP CORE PORTFOLIO MANAGED BY
BLACKROCK ADVISORS, LLC VS. RUSSELL 1000(R) INDEX/1/
Growth Based on $10,000+
[CHART]
Russell 1000(R) BlackRock Large-Cap
Index/1/ Core Portfolio
--------------- -------------------
4/1/1998 $10,000 $10,000
12/31/1998 11,204 10,577
12/31/1999 13,547 12,720
12/31/2000 12,491 12,010
12/31/2001 10,936 9,313
12/31/2002 8,569 6,972
12/31/2003 11,130 8,447
12/31/2004 12,399 9,789
12/31/2005 13,176 10,967
3/31/2006 13,768 11,659
6/30/2006 13,539 11,265
9/30/2006 14,224 11,679
12/31/2006 15,213 12,529
6/30/2007 16,305 13,277
------------------------------------------------------------------------------
Average Annual Return/2/
(for the period ended 6/30/07)
------------------------------------------------------------------------------
Since Cumulative
1 Year 3 Year 5 Year Inception/3/ Return/4/
------------------------------------------------------------------------------
BlackRock Large-Cap
- -- Core Portfolio--Class A 17.87% 14.17% 10.88% 3.42% --
Class B -- -- -- -- 0.55%
Class E -- -- -- -- 0.55%
------------------------------------------------------------------------------
- - - Russell 1000(R) Index/1/ 20.43% 12.34% 11.33% 5.43% --
------------------------------------------------------------------------------
+The chart reflects the performance of Class A shares of the Portfolio.
/1/The Russell 1000(R) Index is an unmanaged index which measures the
performance of the 1,000 largest companies in the Russell 3000 Index, which
represents approximately 92% of the total market capitalization of the Russell
3000 Index. As of latest reconstitution, the average market capitalization was
approximately $16.3 billion; the median market capitalization was approximately
$6.1 billion. The smallest company in the index had an approximate market
capitalization of $2.5 billion. The Index does not include fees and expenses
and is not available for direct investment.
/2/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gains distributions.
/3/Inception of Class A shares is 3/23/1998. Inception of Class B and Class E
shares is 4/30/2007. Index returns are based on an inception date of 3/31/1998.
/4/"Cumulative Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
3
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD**
12/31/06 6/30/07 1/1/07-6/30/07
BLACKROCK LARGE-CAP CORE PORTFOLIO ------------- ------------- ---------------
Class A
Actual $1,000.00 $1,059.70 $3.22
Hypothetical (5% return before expenses) 1,000.00 1,021.67 3.16
- ------------------------------------------ ------------- ------------- ---------------
Class B*
Actual $1,000.00 $1,005.50 $1.43
Hypothetical (5% return before expenses) 1,000.00 1,007.07 1.43
- ------------------------------------------ ------------- ------------- ---------------
Class E*
Actual $1,000.00 $1,005.50 $1.26
Hypothetical (5% return before expenses) 1,000.00 1,007.24 1.26
- ------------------------------------------ ------------- ------------- ---------------
* Class Inception April 30, 2007.
** Expenses are equal to the Portfolio's annualized expense ratio of 0.63% ,
0.84% , and 0.74% for the Class A, Class B, and Class E, respectively,
multiplied by the average account value over the period, multiplied by 181/365,
62/365, and 62/365, respectively (to reflect the one-half year period).
4
MET INVESTORS SERIES TRUST
BLACKROCK LARGE-CAP CORE PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
----------------------------------------------------------------------------
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
----------------------------------------------------------------------------
COMMON STOCKS - 100.0%
AEROSPACE & DEFENSE - 1.5%
L-3 Communications Holdings, Inc.................. 58,900 $ 5,736,271
Lockheed Martin Corp.............................. 46,000 4,329,980
Raytheon Co....................................... 367,900 19,826,131
---------------
29,892,382
---------------
AIRLINES - 1.8%
AMR Corp.*(a)..................................... 661,800 17,438,430
Continental Airlines, Inc. - Class B*(a).......... 523,500 17,730,945
---------------
35,169,375
---------------
AUTO COMPONENTS - 0.3%
Goodyear Tire & Rubber Co. (The)*................. 191,000 6,639,160
---------------
AUTOMOBILES - 0.9%
Harley-Davidson, Inc.(a).......................... 301,000 17,942,610
---------------
BANKS - 0.4%
Bank of America Corp.............................. 160,000 7,822,400
---------------
BIOTECHNOLOGY - 0.8%
Biogen Idec, Inc.*................................ 300,000 16,050,000
---------------
CHEMICALS - 2.2%
Albemarle Corp.................................... 18,300 705,099
E.I. du Pont de Nemours & Co...................... 440,000 22,369,600
Lubrizol Corp..................................... 310,000 20,010,500
---------------
43,085,199
---------------
COMMERCIAL SERVICES & SUPPLIES - 1.5%
Ceridian Corp.*................................... 130,000 4,550,000
Convergys Corp.*.................................. 51,600 1,250,784
Quanta Services, Inc.*(a)......................... 210,000 6,440,700
R. R. Donnelley & Sons Co......................... 250,000 10,877,500
Republic Services, Inc............................ 100,000 3,064,000
Steelcase, Inc. - Class A(a)...................... 188,900 3,494,650
---------------
29,677,634
---------------
COMMUNICATIONS EQUIPMENT & SERVICES - 2.1%
Cisco Systems, Inc.*.............................. 1,510,000 42,053,500
---------------
COMPUTERS & PERIPHERALS - 7.4%
Apple, Inc.*...................................... 112,000 13,668,480
Dell, Inc.*....................................... 870,000 24,838,500
EMC Corp.*........................................ 1,370,000 24,797,000
Hewlett-Packard Co................................ 820,000 36,588,400
International Business Machines Corp.(a).......... 380,000 39,995,000
Lexmark International, Inc. - Class A*(a)......... 105,000 5,177,550
---------------
145,064,930
---------------
CONTAINERS & PACKAGING - 0.2%
Crown Holdings, Inc.*............................. 31,500 786,555
Owens-Illinois, Inc.*............................. 24,800 868,000
Packaging Corp. of America........................ 110,000 2,784,100
---------------
4,438,655
---------------
-----------------------------------------------------------------------------
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
-----------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 1.2%
Avnet, Inc.*...................................... 18,700 $ 741,268
Energizer Holdings, Inc.*......................... 138,500 13,794,600
Mettler Toledo International, Inc.*............... 7,800 744,978
Vishay Intertechnology, Inc.*(a).................. 480,000 7,593,600
Xerox Corp.*...................................... 47,100 870,408
---------------
23,744,854
---------------
ENERGY EQUIPMENT & SERVICES - 1.6%
ENSCO International, Inc.(a)...................... 340,000 20,743,400
Global Industries, Ltd.*.......................... 430,000 11,532,600
---------------
32,276,000
---------------
FINANCIAL - DIVERSIFIED - 8.7%
Bear Stearns Cos., Inc............................ 129,000 18,060,000
CIT Group, Inc.................................... 40,000 2,193,200
Citigroup, Inc.................................... 300,000 15,387,000
Goldman Sachs Group, Inc. (The)................... 145,300 31,493,775
Janus Capital Group, Inc.(a)...................... 30,700 854,688
JPMorgan Chase & Co............................... 840,000 40,698,000
Lehman Brothers Holdings, Inc..................... 330,000 24,591,600
Morgan Stanley.................................... 370,000 31,035,600
Prudential Financial, Inc......................... 68,000 6,611,640
---------------
170,925,503
---------------
FOOD PRODUCTS - 0.7%
Campbell Soup Co.................................. 343,000 13,311,830
Tyson Foods, Inc. - Class A(a).................... 36,800 847,872
---------------
14,159,702
---------------
FOOD RETAILERS - 0.6%
Kroger Co. (The).................................. 417,700 11,749,901
---------------
HEALTH CARE EQUIPMENT & SUPPLIES - 1.2%
Johnson & Johnson................................. 89,300 5,502,666
Kinetic Concepts, Inc.*(a)........................ 15,400 800,338
Waters Corp.*..................................... 193,200 11,468,352
Zimmer Holdings, Inc.*............................ 76,000 6,451,640
---------------
24,222,996
---------------
HEALTH CARE PROVIDERS & SERVICES - 6.7%
Aetna, Inc........................................ 470,000 23,218,000
AmerisourceBergen Corp............................ 41,800 2,067,846
Coventry Health Care, Inc.*....................... 277,543 16,000,354
Express Scripts, Inc.*............................ 460,000 23,004,600
Laboratory Corp. of America Holdings*(a).......... 43,000 3,365,180
McKesson Corp..................................... 229,000 13,657,560
Service Corporation International(a).............. 110,000 1,405,800
UnitedHealth Group, Inc........................... 560,000 28,638,400
WellPoint, Inc.*.................................. 254,600 20,324,718
---------------
131,682,458
---------------
HOMEBUILDERS - 0.4%
NVR, Inc.*(a)..................................... 10,900 7,409,275
---------------
See notes to financial statements
5
MET INVESTORS SERIES TRUST
BLACKROCK LARGE-CAP CORE PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
- ----------------------------------------------------------------------------
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
- ----------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE - 1.2%
Brinker International, Inc........................ 120,000 $ 3,512,400
McDonald's Corp................................... 387,800 19,684,728
---------------
23,197,128
---------------
HOUSEHOLD PRODUCTS - 0.3%
Procter & Gamble Co. (The)........................ 80,000 4,895,200
---------------
INDUSTRIAL - DIVERSIFIED - 3.1%
General Electric Co............................... 850,000 32,538,000
Honeywell International, Inc...................... 450,000 25,326,000
Roper Industries, Inc............................. 40,000 2,284,000
---------------
60,148,000
---------------
INSURANCE - 4.2%
American International Group, Inc................. 560,000 39,216,800
Chubb Corp. (The)................................. 251,000 13,589,140
CNA Financial Corp.(a)............................ 16,200 772,578
SAFECO Corp....................................... 33,300 2,073,258
Travelers Cos., Inc. (The)........................ 348,600 18,650,100
W.R. Berkley Corp................................. 218,500 7,109,990
---------------
81,411,866
---------------
INTERNET SOFTWARE & SERVICES - 2.8%
eBay, Inc.*....................................... 770,000 24,778,600
Juniper Networks, Inc.*........................... 860,000 21,646,200
McAfee, Inc.*..................................... 234,400 8,250,880
---------------
54,675,680
---------------
IT CONSULTING & SERVICES - 0.6%
Computer Sciences Corp.*.......................... 200,900 11,883,235
Electronic Data Systems Corp...................... 28,500 790,305
---------------
12,673,540
---------------
LEISURE EQUIPMENT & PRODUCTS - 0.1%
Hasbro, Inc.(a)................................... 67,900 2,132,739
Mattel, Inc....................................... 28,100 710,649
---------------
2,843,388
---------------
MACHINERY - 1.5%
AGCO Corp.*(a).................................... 110,000 4,775,100
Gardner Denver, Inc.*............................. 80,000 3,404,000
Terex Corp.*...................................... 250,000 20,325,000
---------------
28,504,100
---------------
MANUFACTURING - 0.2%
AMETEK, Inc....................................... 97,000 3,848,960
---------------
MEDIA - 4.6%
Citadel Broadcasting Corp.(a)..................... 21,001 135,456
DIRECTV Group, Inc. (The)*........................ 540,000 12,479,400
McGraw-Hill Cos., Inc. (The)...................... 280,000 19,062,400
Time Warner, Inc.................................. 1,375,000 28,930,000
Walt Disney Co. (The)............................. 846,800 28,909,752
---------------
89,517,008
---------------
- ----------------------------------------------------------------------------
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
- ----------------------------------------------------------------------------
METALS & MINING - 3.1%
Nucor Corp........................................ 322,000 $ 18,885,300
Southern Copper Corp.(a).......................... 230,000 21,679,800
United States Steel Corp.......................... 190,000 20,662,500
---------------
61,227,600
---------------
OIL & GAS - 12.8%
Chevron Corp...................................... 520,000 43,804,800
Exxon Mobil Corp.................................. 960,000 80,524,800
Marathon Oil Corp................................. 410,000 24,583,600
Noble Energy, Inc................................. 190,000 11,854,100
Sunoco, Inc....................................... 270,000 21,513,600
Tesoro Corp.(a)................................... 366,000 20,916,900
Tidewater, Inc.(a)................................ 312,000 22,114,560
Valero Energy Corp................................ 350,000 25,851,000
---------------
251,163,360
---------------
PAPER & FOREST PRODUCTS - 0.1%
International Paper Co.(a)........................ 70,000 2,733,500
---------------
PERSONAL PRODUCTS - 0.6%
Estee Lauder Companies, Inc. - Class A(a)......... 276,800 12,597,168
---------------
PHARMACEUTICALS - 7.9%
Eli Lilly & Co.................................... 377,900 21,117,052
Medco Health Solutions, Inc.*..................... 290,000 22,617,100
Merck & Co., Inc.................................. 650,000 32,370,000
Pfizer, Inc....................................... 1,685,700 43,103,349
Schering-Plough Corp.............................. 860,000 26,178,400
Sepracor, Inc.*(a)................................ 240,000 9,844,800
---------------
155,230,701
---------------
REAL ESTATE - 0.4%
CB Richard Ellis Group, Inc. - Class A*........... 190,000 6,935,000
---------------
RETAIL - MULTILINE - 2.2%
Family Dollar Stores, Inc.(a)..................... 23,900 820,248
J.C. Penney Co., Inc.............................. 258,000 18,674,040
Kohl's Corp.*..................................... 320,000 22,729,600
---------------
42,223,888
---------------
RETAIL - SPECIALTY - 4.0%
Abercrombie & Fitch Co. - Class A................. 40,000 2,919,200
American Eagle Outfitters, Inc.................... 612,799 15,724,423
AutoZone, Inc.*................................... 66,000 9,016,920
Dollar Tree Stores, Inc.*......................... 19,700 857,935
GameStop Corp. - Class A*......................... 350,000 13,685,000
NIKE, Inc. - Class B.............................. 410,000 23,898,900
Nordstrom, Inc.................................... 130,900 6,691,608
RadioShack Corp.(a)............................... 61,000 2,021,540
Ross Stores, Inc.................................. 122,500 3,773,000
---------------
78,588,526
---------------
See notes to financial statements
6
MET INVESTORS SERIES TRUST
BLACKROCK LARGE-CAP CORE PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
----------------------------------------------------------------------------
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
----------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS - 3.4%
Altera Corp....................................... 300,000 $ 6,639,000
Applied Materials, Inc............................ 1,150,000 22,850,500
Intersil Corp. - Class A.......................... 100,000 3,146,000
KLA-Tencor Corp.(a)............................... 400,000 21,980,000
Novellus Systems, Inc.*........................... 23,500 666,695
Teradyne, Inc.*(a)................................ 654,800 11,511,384
--------------
66,793,579
--------------
SOFTWARE - 4.7%
BMC Software, Inc.*............................... 24,900 754,470
Cadence Design Systems, Inc.*..................... 35,300 775,188
Compuware Corp.*(a)............................... 77,400 917,963
Microsoft Corp.................................... 1,760,000 51,867,200
Novell, Inc.*..................................... 850,000 6,621,500
Oracle Corp.*..................................... 1,540,000 30,353,400
Synopsys, Inc.*................................... 28,000 740,040
--------------
92,029,761
--------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 0.8%
AT&T, Inc......................................... 280,000 11,620,000
CenturyTel, Inc.(a)............................... 70,000 3,433,500
--------------
15,053,500
--------------
TEXTILES, APPAREL & LUXURY GOODS - 1.2%
Coach, Inc.*...................................... 340,000 16,112,600
Polo Ralph Lauren Corp............................ 78,000 7,652,580
--------------
23,765,180
--------------
Total Common Stocks
(Cost $1,681,230,326) 1,964,063,167
--------------
ESCROWED SHARES - 0.0%
ESC Seagate Technology(b) (Cost - $0)............. 27,200 27
--------------
TOTAL INVESTMENTS - 100.0% (Cost $1,681,230,326) 1,964,063,194
Other Assets and Liabilities (net) (0.0%) (473,466)
--------------
TOTAL NET ASSETS - 100.0% $1,963,589,728
==============
PORTFOLIO FOOTNOTES:
* Non-income producing security.
(a) A portion or all of the security was held on loan. As of June 30, 2007, the
market value of the securities loaned was $186,069,746 and the collateral
received consisted of cash in the amount of $140,457,800 and securities in
the amount of $49,939,076.
(b) Illiquid securities representing in the aggregate 0.000% of net assets.
See notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
BLACKROCK LARGE-CAP CORE PORTFOLIO
ASSETS
Investments, at value (Note 2)* $1,964,063,194
Cash 892,014
Collateral for securities on loan 190,396,876
Receivable for Trust shares sold 866,535
Dividends receivable 1,240,381
--------------
Total assets 2,157,459,000
--------------
LIABILITIES
Payables for:
Trust shares redeemed 2,113,223
Distribution and services fees--Class B 8,991
Distribution and services fees--Class E 21,777
Collateral for securities on loan 190,396,876
Investment advisory fee payable (Note 3) 935,437
Administration fee payable 21,292
Custodian and accounting fees payable 12,933
Accrued expenses 358,743
--------------
Total liabilities 193,869,272
--------------
NET ASSETS $1,963,589,728
==============
NET ASSETS REPRESENTED BY:
Paid in surplus $1,706,920,199
Accumulated net realized loss (29,898,784)
Unrealized appreciation on investments 282,832,868
Undistributed net investment income 3,735,445
--------------
Total $1,963,589,728
==============
NET ASSETS
Class A $1,745,835,718
==============
Class B 43,922,310
==============
Class E 173,831,700
==============
CAPITAL SHARES OUTSTANDING
Class A 157,503,639
==============
Class B 4,004,269
==============
Class E 15,772,618
==============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 11.08
==============
Class B 10.97
==============
Class E 11.02
==============
- -------------------------------------------------------------------
*Investments at cost $1,681,230,326
See notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
BLACKROCK LARGE-CAP CORE PORTFOLIO
INVESTMENT INCOME:
Dividends $ 6,306,030
Interest (1) 197,570
-------------
Total investment income 6,503,600
-------------
EXPENSES:
Investment advisory fee (Note 3) 2,263,566
Administration fees 25,970
Deferred expense reimbursement 82,236
Custody and accounting fees 17,847
Distribution fee--Class B 18,397
Distribution fee--Class E 45,163
Transfer agent fees 3,401
Audit 12,043
Legal 13,719
Trustee fees and expenses 4,215
Shareholder reporting 7,635
Insurance 2,891
Other 1,212
-------------
Total expenses 2,498,295
-------------
Net investment income 4,005,305
-------------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FUTURES CONTRACTS:
Net realized gain on:
Investments 32,154,055
Futures contracts 150,245
-------------
Net realized gain on investments and futures contracts 32,304,300
-------------
Net change in unrealized depreciation on:
Investments (150,620,855)
-------------
Net change in unrealized depreciation on investments (150,620,855)
-------------
Net realized and change in unrealized gain on investments and futures contracts (118,316,555)
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $(114,311,250)
=============
- ------------------------------------------------------------------------------------------------------
(1)Interest income includes securities lending income of: $ 103,876
See notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
BLACKROCK LARGE-CAP CORE PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
-------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 4,005,305 $ 634,072
Net realized gain on investments and futures contracts 32,304,300 13,328,838
Net change in unrealized appreciation (depreciation) on investments (150,620,855) 3,331,934
-------------- ------------
Net increase in net assets resulting from operations (114,311,250) 17,294,844
-------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (904,022) (289,946)
From net realized gains
Class A (7,875,932) (4,233,827)
-------------- ------------
Net decrease in net assets resulting from distributions (8,779,954) (4,523,773)
-------------- ------------
CAPITAL SHARE TRANSACTIONS (NOTES 4 AND 8):
Proceeds from shares sold
Class A 103,219,832 6,144,815
Class B 3,478,629 --
Class E 2,556,641 --
Net asset value of shares issued through acquisition and
reorganization
Class A 1,694,001,395 --
Class B 42,041,722 --
Class E 177,010,889 --
Net asset value of shares issued through dividend reinvestment
Class A 8,779,954 4,523,773
Class B -- --
Class E -- --
Cost of shares repurchased
Class A (66,904,316) (23,231,515)
Class B (1,807,429) --
Class E (6,733,234) --
-------------- ------------
Net increase (decrease) in net assets from capital share
transactions 1,955,644,083 (12,562,927)
-------------- ------------
TOTAL INCREASE IN NET ASSETS 1,832,552,879 208,144
Net assets at beginning of period 131,036,849 130,828,705
-------------- ------------
Net assets at end of period $1,963,589,728 $131,036,849
============== ============
Net assets at end of period includes undistributed net investment
income $ 3,735,445 $ 634,162
============== ============
See notes to financial statements
10
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
BLACKROCK LARGE-CAP CORE PORTFOLIO --------------------------
FOR THE PERIOD
ENDED
JUNE 30, 2007 ----------
(UNAUDITED) 2006
-------------- ------
NET ASSET VALUE, BEGINNING OF PERIOD........................ $ 11.20 $10.14
-------- ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income....................................... 0.06 (a) 0.05 (a)
Net Realized/Unrealized Gain (Loss) on Investments.......... 0.60 1.37
-------- ------
Total from Investment Operations............................ 0.66 1.42
-------- ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income........................ (0.08) (0.02)
Distributions from Net Realized Capital Gains............... (0.70) (0.34)
-------- ------
Total Distributions......................................... (0.78) (0.36)
-------- ------
NET ASSET VALUE, END OF PERIOD.............................. $ 11.08 $11.20
======== ======
TOTAL RETURN 5.97% 14.25%
Ratio of Expenses to Average Net Assets..................... 0.63%* 0.98%
Ratio of Expenses to Average Net Assets Before Reimbursement
and Rebates............................................... 0.63%* 1.04%
Ratio of Net Investment Income to Average Net Assets........ 1.05%* 0.48%
Portfolio Turnover Rate..................................... 41.4% 72.2%
Net Assets, End of Period (in millions)..................... $1,745.9 $131.0
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS A
BLACKROCK LARGE-CAP CORE PORTFOLIO ----------------------------------------
FOR THE YEARS ENDED DECEMBER 31,
----------------------------------------
2005 2004++ 2003++ 2002++
------ ------ ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD........................ $ 9.05 $ 7.85 $ 6.52 $ 8.77
------ ------ ------ -------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income....................................... 0.02(a) 0.04 0.05 (a) 0.03 (a)
Net Realized/Unrealized Gain (Loss) on Investments.......... 1.07 1.21 1.33 (a) (2.23)(a)
------ ------ ------ -------
Total from Investment Operations............................ 1.09 1.25 1.38 (2.20)
------ ------ ------ -------
LESS DISTRIBUTIONS
Dividends from Net Investment Income........................ -- (0.05) (0.05) (0.05)
Distributions from Net Realized Capital Gains............... -- -- -- --
------ ------ ------ -------
Total Distributions......................................... -- (0.05) (0.05) (0.05)
------ ------ ------ -------
NET ASSET VALUE, END OF PERIOD.............................. $10.14 $ 9.05 $ 7.85 $ 6.52
====== ====== ====== =======
TOTAL RETURN 12.04% 15.89% 21.16% (25.14)%
Ratio of Expenses to Average Net Assets..................... 0.91% 0.92%(b) 0.99% 0.94 %
Ratio of Expenses to Average Net Assets Before Reimbursement
and Rebates............................................... 0.91% 0.95% 0.99% 0.94 %
Ratio of Net Investment Income to Average Net Assets........ 0.23% 0.51% 0.67% 0.44 %
Portfolio Turnover Rate..................................... 79.0% 136.0% 182.0% 104.0 %
Net Assets, End of Period (in millions)..................... $131.0 $126.0 $115.0 $ 106.0
CLASS B
----------------
FOR THE PERIOD
ENDED
JUNE 30, 2007(C)
(UNAUDITED)
----------------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $10.91
------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................. 0.02(a)
Net Realized/Unrealized Gain on Investments........................... 0.04
------
Total from Investment Operations...................................... 0.06
------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. --
Distributions from Net Realized Capital Gains......................... --
------
Total Distributions................................................... --
------
NET ASSET VALUE, END OF PERIOD........................................ $10.97
TOTAL RETURN 0.55%
Ratio of Expenses to Average Net Assets............................... 0.84%*
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 0.84%*
Ratio of Net Investment Income to Average Net Assets.................. 0.86%*
Portfolio Turnover Rate............................................... 41.4%
Net Assets, End of Period (in millions)............................... $ 43.9
* Annualized
(a) Per share amounts based on average shares outstanding during the period.
(b) The investment manager waived a portion of its management fee for the year.
(c) Commencement of operations - 04/30/2007.
++ Audited by other Independent Registered Public Accounting Firm.
See notes to financial statements
11
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS E
BLACKROCK LARGE-CAP CORE PORTFOLIO ----------------
FOR THE PERIOD
ENDED
JUNE 30, 2007(B)
(UNAUDITED)
----------------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $10.96
------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................. 0.02(a)
Net Realized/Unrealized Gain on Investments........................... 0.04
------
Total from Investment Operations...................................... 0.06
------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. --
Distributions from Net Realized Capital Gains......................... --
------
Total Distributions................................................... --
------
NET ASSET VALUE, END OF PERIOD........................................ $11.02
======
TOTAL RETURN 0.55%
Ratio of Expenses to Average Net Assets............................... 0.74%*
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 0.74%*
Ratio of Net Investment Income to Average Net Assets.................. 0.97%*
Portfolio Turnover Rate............................................... 41.4%
Net Assets, End of Period (in millions)............................... $173.8
* Annualized
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations - 04/30/2007.
See notes to financial statements
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is BlackRock Large-Cap Core Portfolio, which
is diversified. Shares in the Trust are not offered directly to the general
public and are currently available only to separate accounts established by
certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A, B, and E Shares
are offered by the Portfolio. Shares of each Class of the Portfolio represent
an equal pro rata interest in the Portfolio and generally give the shareholder
the same voting, dividend, liquidation, and other rights. Investment income,
realized and unrealized capital gains and losses, the common expenses of the
Portfolio and certain Portfolio-level expense reductions, if any, are allocated
on a pro rata basis to each class based on the relative net assets of each
class to the total net assets of the Portfolio. Each class of shares differs in
its respective distribution expenses and certain other class-specific expense
reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date.
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The value of the security so purchased is subject to market fluctuations during
this period. The Portfolio segregates assets having an aggregate value at least
equal to the amount of the when issued or delayed delivery purchase commitments
until payment is made.
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
The Portfolio utilizes the provisions of the federal income tax laws that
provide for the carryforward of capital losses for eight years, offsetting such
losses against any future net realized capital gains. At December 31, 2006, the
accumulated capital loss carryforwards and expiration dates by the Portfolio
were as follows:
Expiring Expiring
Portfolio Total 12/31/2009 12/31/2010
--------- ----------- ----------- -----------
BlackRock Large-Cap Core Portfolio $61,967,454 $23,132,070 $38,835,384
On May 1, 2006, the BlackRock Large-Cap Core Portfolio, a series of The
Travelers Series Trust, was reorganized into the BlackRock Large-Cap Core
Portfolio, a series of Met Investors Series Trust. The Portfolio acquired
capital losses of $67,463,346. The losses incurred by the Portfolio are subject
to an annual limitation of $5,495,892.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. SECURITIES LENDING - The Portfolio may lend its securities to certain
qualified brokers who borrow securities in order to complete certain
transactions. By lending its investment securities, the Portfolio attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term of the loan would
accrue to the account of the Portfolio. Risks of delay in recovery of the
securities or even loss of rights in the collateral may occur should the
borrower of the securities fail financially. Risks may also arise to the extent
that the value of the collateral decreases below the value of the securities
loaned.
Upon entering into a securities lending transaction, the Portfolio receives
cash or other securities as collateral in an amount equal to or exceeding 102%
of the current market value of the loaned securities. Any cash received as
collateral is generally invested by State Street Bank and Trust Company ("State
Street"), acting in its capacity as securities lending agent (the "Agent"), in
the State Street Navigator Securities Lending Prime Portfolio which is a money
market fund registered under the 1940 Act. A portion of the dividends received
on the collateral is rebated to the borrower of the securities and the
remainder is split between the Agent and the Portfolio. On loans collateralized
by cash, the cash collateral is invested in a money market fund or short term
securities. A portion of the income generated upon investment of the collateral
is remitted to the Borrowers and the remainder is allocated between the fund
and the lending agent. On loans collateralized by U.S. Treasuries, a fee is
received from the Borrower and is allocated between the fund and the lending
agent.
G. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
14
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with BlackRock Advisors, LLC, (the "Adviser") for investment advisory services
in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- ----------------------------
BlackRock Large-Cap Core Portfolio $2,263,566 0.625% First $250 Million
0.60% $250 Million to $500 Million
0.575% $500 Million to $1 Billion
0.55% $1 Billion to $2 Billion
0.50% Over $2 Billion
Prior to April 30, 2007, the management fee for the Portfolio was 77.5 basis
points for the first $250 million, 75 basis points for next $250 million, 72.5
basis points for the next $500 million, 70 basis points for the next 1 Billion
and 65 basis points for assets over $2 Billion. The management fee earned for
the period January 1, 2007 through April 29, 2007 was $328,920.
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Maximum Expense Ratio
under current Expense
Limitation Agreement
----------------------
Portfolio Class A Class B Class E
--------- ------- ------- -------
BlackRock Large-Cap Core Portfolio 1.00% 1.25% 1.15%
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratio as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
15
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
The following amounts were repaid to the Manager during the period ended June
30, 2007.
BlackRock Large-Cap Core Portfolio $82,236
All prior subsidies have been repaid to the Manager.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Net Increase
Shares Issued in Shares Issued (Decrease)
Beginning Shares Connection with Through Dividend Shares in Shares Ending
Shares Sold Acquisition (Note 8) Reinvestment Repurchased Outstanding Shares
---------- --------- -------------------- ---------------- ----------- ------------ -----------
BlackRock Large-Cap Core
Portfolio
Class A
06/30/2007 11,700,658 9,304,459 141,681,409 801,090 (5,983,977) 145,802,981 157,503,639
12/31/2006 12,899,599 586,214 -- 429,200 (2,214,355) (1,198,941) 11,700,658
Class B
04/30/2007-06/30/2007 -- 312,972 3,854,420 -- (163,123) 4,004,269 4,004,269
Class E
04/30/2007-06/30/2007 -- 229,988 16,149,716 -- (607,086) 15,772,618 15,772,618
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
BlackRock Large-Cap Core Portfolio $-- $418,688,213 $-- $377,918,977
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
- --------- -------------- ------------ -------------- --------------
BlackRock Large-Cap Core Portfolio $1,681,230,326 $299,788,047 $(16,955,179) $282,832,868
16
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
6. SECURITY LENDING
As of June 30, 2007, the Portfolio had loaned securities which were
collateralized by short-term investments. The value of securities on loan and
the value of the related collateral were as follows:
Value of Value of
Securities Collateral
------------ ------------
BlackRock Large-Cap Core Portfolio $186,069,746 $190,396,876
7. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
--------------- ---------------------- ---------------
2006 2005 2006 2005 2006 2005
-------- ---- ---------- ---- ---------- ----
BlackRock Large-Cap Core Portfolio $289,946 $-- $4,233,827 $-- $4,523,773 $--
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
------------- ------------- ------------ ------------------ -------------
BlackRock Large-Cap Core Portfolio $634,162 $7,812,671 $22,867,570 $(61,967,454) $(30,653,051)
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
8. REORGANIZATIONS AND ACQUISITIONS
On April 30, 2007, BlackRock Large-Cap Core Portfolio Class A, pursuant to a
plan of reorganization approved by Portfolio shareholders on April 24, 2007,
was reorganized into Class E. The reorganization was accomplished by a tax-free
exchange of 12,032,251 Class A shares of the Portfolio (valued at $132.6
Million) in exchange for 12,098,670 Class E shares of the Portfolio. The
aggregate Class A net assets of the Portfolio immediately before the
reorganization were $132,601,424. The aggregate Class E net assets of the
Portfolio immediately after the reorganization were $132,601,424.
On April 30, 2007, BlackRock Large-Cap Core Portfolio ("Large-Cap Core"), a
series of Met Investors Series Trust, acquired all the net assets of BlackRock
Large Cap Portfolio ("Large Cap"), a series of Metropolitan Series Fund, Inc.,
pursuant to a plan of reorganization approved by Large Cap shareholders on
April 24, 2007. The acquisition was accomplished by a tax-free exchange of
141,681,409 Class A shares of Large-Cap Core (valued at $1,694.0 Million) in
exchange for the 52,108,993 Class A shares of Large Cap outstanding on April
27, 2007. The acquisition was accomplished by a tax-free exchange of 3,854,420
Class B shares of Large-Cap Core (valued at $42.0 Million) in exchange for the
1,306,346 Class B shares of Large Cap outstanding on April 27, 2007. The
acquisition was accomplished by a tax-free exchange of 4,051,046 Class E shares
of Large-Cap Core (valued at $44.4 Million) in exchange for the 1,375,039 Class
E shares of Large Cap outstanding on April 27, 2007. Large Cap Class A net
assets at that date ($1,694.0 Million), including $269,897,487 of unrealized
appreciation and approximately $1,412,393,377 of accumulated net realized
gains, were combined with those of Large-Cap Core Class A. Large Cap Class B
net assets at that date ($42.0 Million), including $3,852,581 of unrealized
appreciation and approximately $6,024,027 of accumulated net realized gains,
were combined with those of Large-Cap Core Class B. Large Cap Class E net
assets at that date ($44.4 Million), including $4,052,291 of unrealized
appreciation and approximately $12,215,542 of accumulated net realized gains,
were combined with those of Large-Cap Core Class E. The aggregate Class A net
assets of Large-Cap Core and Large Cap immediately before the acquisition were
$0 and $1,694,001,395, respectively. The aggregate Class A net assets of
Large-Cap Core immediately after the acquisition were $1,694,001,395. The
aggregate Class B net assets of Large-Cap Core and Large Cap immediately before
the acquisition were $10,000 and $42,041,722, respectively. The aggregate Class
B net assets of Large-Cap Core immediately after the acquisition were
$42,051,722. The aggregate Class E net assets of Large-Cap Core and Large Cap
immediately before the acquisition were $10,000 and $44,399,465, respectively.
The aggregate Class E net assets of Large-Cap Core immediately after the
acquisition were $44,409,465. The aggregate Class E net assets of Large-Cap
Core immediately after the reorganization and acquisition were $177,010,889.
9. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
17
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
10. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
18
MET INVESTORS SERIES TRUST
Cyclical Growth and Income
ETF Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
CYCLICAL GROWTH AND INCOME ETF PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY GALLATIN ASSET MANAGEMENT, INC.
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
MARKET OVERVIEW
Continuing the general trend of the past four years, financial markets
progressed markedly during the first half of 2007. Volatility returned to the
markets with episodic appearances over the past six months. Global markets
dropped sharply in February on fears of a slowdown in U.S. economic growth from
a subprime lending meltdown. Despite significant declines, markets recovered
sharply and ended the first quarter on a positive note. The advancement
continued during the second quarter as markets remained resilient and the Dow
and S&P 500(R) Index reached all-time highs. Year-to-date through June 30, the
S&P 500(R) Index returned 6.96%, the S&P MidCap 400(R) Index returned 11.9%,
and the S&P SmallCap 600(R) Index returned 8.6%. Energy was the best performing
sector across large-cap and mid-cap stocks, while materials dominated in
small-caps. Financials were the biggest laggard across all market
capitalizations. Foreign stocks, as measured by the MSCI EAFE(R) Index,
returned 10.7% in light of continued strong economic growth abroad. Bonds
underperformed equities with the Lehman Brothers Aggregate Bond Index/1/
returning 0.98%.
PORTFOLIO STRATEGIES
For the six-month period ended June 30, 2007, the Portfolio (Class B) returned
6.30%, outperforming both the S&P 500 and its blended benchmark which returned
6.96% and 5.70% respectively. From an asset class perspective, the Portfolio's
significant overweight to equities versus bonds relative to the blended
benchmark aided returns. The Portfolio maintained a weighting of close to 15%
in fixed-income exchange traded funds during the period, which was
substantially less than the 38% allocation to bonds in the blended benchmark.
This positioning greatly aided relative performance as equity markets posted
strong gains.
With regard to equity positioning, underweighting small-caps detracted from
performance as smaller capitalization stocks outperformed large-caps. The
Portfolio was void of small-cap exposure despite small-cap stocks representing
10% of the blended benchmark. We continue to find large-cap stocks attractive
and maintain a substantial overweight to this asset class relative to the
blended benchmark. Large-cap stocks have generated strong absolute returns
through the first half of 2007, aiding Portfolio returns, but have lagged mid-
and small-caps. The Portfolio maintained a benchmark weight of 5% to foreign
equities which aided absolute returns.
Within the large-cap portion of the Portfolio, sector allocation aided relative
performance. An underweight position in consumer discretionary accounted for
most of the relative outperformance as the sector lagged the S&P 500(R) Index
through the first half of the year. The Portfolio's overweight to health care
also aided relative performance. On the negative side, an underweight of
materials and overweight of consumer staples detracted from relative
performance.
- --------
/1/ The Lehman Brothers Aggregate Bond Index represents securities that are
U.S. domestic, taxable, non-convertible and dollar denominated. The Index
covers the investment grade fixed rate bond market, with index components for
government and corporate securities, mortgage pass-through securities, and
asset-backed securities. The Index does not include fees or expenses and is not
available for direct investment.
OUTLOOK
The rate of economic growth in the U.S. has slowed in recent quarters. We
believe we are moving through the low point of the cycle and expect growth to
gradually improve in coming quarters. From a cyclical viewpoint, we believe
this growth will be sufficient to support corporate profits and economic
expansion. Along with the outlook for corporate profits, we prefer large-cap
stocks based on their attractive valuation relative to smaller capitalization
stocks. With regard to sector allocation, we maintain an overweight to consumer
staples and healthcare as these non-cyclical sectors tend to perform well at
this point in the cycle. Continued exposure to domestic mid-cap and foreign
developed country stocks provides additional growth opportunities and portfolio
diversification. Our fixed-income focus is on high-quality, short- to
intermediate-maturity bonds. We see relatively attractive yields in these areas
of the fixed-income market.
MARK A. KELLER
Chief Investment Officer
GALLATIN ASSET MANAGEMENT, INC.
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
------------------------------------------------------------------
iShares S&P 500 Index Fund 22.07%
------------------------------------------------------------------
iShares S&P MidCap 400 Index Fund 10.02%
------------------------------------------------------------------
iShares GS $ InvesTop Corporate Bond Fund 8.65%
------------------------------------------------------------------
iShares Dow Jones U.S. Healthcare Sector Index Fund 7.89%
------------------------------------------------------------------
iShares MSCI EAFE Index Fund 5.07%
------------------------------------------------------------------
iShares Lehman 1-3 Year Treasury Bond Fund 5.01%
------------------------------------------------------------------
iShares Dow Jones U.S. Financial Sector Index Fund 4.42%
------------------------------------------------------------------
SPDR Trust Series 1 4.31%
------------------------------------------------------------------
iShares Dow Jones U.S. Consumer Goods Sector Index Fund 3.85%
------------------------------------------------------------------
iShares Dow Jones U.S. Technology Sector Index Fund 3.25%
------------------------------------------------------------------
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
CYCLICAL GROWTH AND INCOME ETF PORTFOLIO
FOR THE PERIOD ENDED 6/30/07
MANAGED BY GALLATIN ASSET MANAGEMENT, INC.
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
CYCLICAL GROWTH AND INCOME ETF PORTFOLIO MANAGED BY
GALLATIN ASSET MANAGEMENT, INC. VS. S&P 500(R) INDEX/1/ AND BLENDED BENCHMARK/2/
Growth Based on $10,000+
[CHART]
Cyclical Growth and S&P 500(R)
Income ETF Portfolio Index Blended Benchmark
-------------------- ---------- -----------------
10/1/2005 $10,000 $10,000 $10,000
12/31/2005 10,165 10,209 10,208
12/31/2006 11,357 11,823 11,438
6/30/2007 12,072 12,645 12,305
--------------------------------------------------------------
Average Annual Return/3/
(for the period ended 6/30/07)
--------------------------------------------------------------
Since
1 Year Inception/4/
--------------------------------------------------------------
Cyclical Growth and Income ETF
Portfolio--Class A 16.61% 11.57%
- -- Class B 16.44% 11.38%
Class E 16.45% 11.44%
--------------------------------------------------------------
- - - S&P 500(R) Index/1/ 20.59% 14.34%
--------------------------------------------------------------
- -- Blended Benchmark/2/ 16.87% 12.58%
--------------------------------------------------------------
+The chart reflects the performance of Class B shares of the Portfolio. The
performance of Class B shares will differ from that of the other classes
because of the difference in expenses paid by policyholders investing in the
different share classes.
/1/The S&P 500(R) Index is an unmanaged index consisting of 500 stocks chosen
for market size, liquidity, and industry group representation. It is a
market-value weighted index (stock price times number of shares outstanding),
with each stock's weight in the Index proportionate to its market value. The
Index does not include fees or expenses and is not available for direct
investment.
/2/The blended benchmark is comprised of 2% Merrill Lynch U.S. 3-Month Treasury
Bill Index, 10% Merrill Lynch Corporate/Government Master Index, 48% S&P 500(R)
Index, 15% S&P MidCap 400(R) Index, 15% S&P SmallCap 600(R) Index and 10%
Morgan Stanley Capital International Europe, Australia and Far East Index
("MSCI EAFE(R) Index").
The Merrill Lynch U.S. 3-Month Treasury Bill Index is composed of a single
90-Day Treasury bill issue, or potentially a seasoned 6-month or 1-year
Treasury bill issue, that is replaced on a monthly basis. The Index does not
include fees or expenses and is not available for direct investment.
The Merrill Lynch Corporate/Government Master Index is an indicator of the
performance of investment-grade domestic bonds, capturing close to $5 trillion
of outstanding debt. The Index does not include fees or expenses and is not
available for direct investment.
The S&P MidCap 400(R) Index is a capitalization-weighted index which measures
the performance of the mid-range sector of the U.S. stock market. The Index
does not include fees or expenses and is not available for direct investment.
The S&P SmallCap 600(R) Index is a capitalization-weighted index which measures
the performance of the small-cap range of the U.S. stock market. The Index does
not include fees or expenses and is not available for direct investment.
The MSCI EAFE(R) Index is a widely recognized unmanaged index which is an
aggregate of 15 individual country indices that collectively represent many of
the major markets of the world. An index does not include transaction costs
associated with buying and selling securities or any mutual fund expenses. The
Index does not include fees or expenses and is not available for direct
investment.
/3/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/4/Inception of Class B shares is 10/3/05. Inception of Class A and Class E
shares is 5/1/06. Index returns are based on an inception date of 9/30/05.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
2
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
CYCLICAL GROWTH AND INCOME ETF PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,063.90 $2.61
Hypothetical (5% return before expenses) 1,000.00 1,022.27 2.56
- ------------------------------------------ ------------- ------------- --------------
Class B
Actual $1,000.00 $1,063.00 $3.89
Hypothetical (5% return before expenses) 1,000.00 1,021.03 3.81
- ------------------------------------------ ------------- ------------- --------------
Class E
Actual $1,000.00 $1,063.90 $3.38
Hypothetical (5% return before expenses) 1,000.00 1,021.52 3.31
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.51%,
0.76%, and 0.66% for the Class A, Class B, and Class E, respectively,
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period).
3
MET INVESTORS SERIES TRUST
CYCLICAL GROWTH AND INCOME ETF PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
---------------------------------------------------------------------
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
---------------------------------------------------------------------
INVESTMENT COMPANY SECURITIES - 96.1%
iShares Dow Jones U.S. Consumer Goods Sector
Index Fund(a)............................... 139,871 $ 8,716,761
iShares Dow Jones U.S. Consumer Services
Sector Index Fund........................... 41,903 2,941,172
iShares Dow Jones U.S. Energy Sector Index
Fund(a)..................................... 21,100 2,529,679
iShares Dow Jones U.S. Financial Sector Index
Fund(a)..................................... 87,078 10,001,779
iShares Dow Jones U.S. Healthcare Sector Index
Fund(a)..................................... 256,692 17,858,062
iShares Dow Jones U.S. Industrial Sector Index
Fund(a)..................................... 87,077 6,403,643
iShares Dow Jones U.S. Technology Sector Index
Fund(a)..................................... 123,964 7,357,263
iShares Dow Jones U.S. Telecommunications
Sector Index Fund(a)........................ 142,640 4,808,394
iShares Dow Jones U.S. Utilities Sector Index
Fund........................................ 26,355 2,539,041
iShares GS $ InvesTop Corporate Bond Fund..... 187,105 19,574,925
iShares Lehman 1-3 Year Treasury Bond
Fund(a)..................................... 141,389 11,333,742
iShares Lehman 7-10 Year Treasury Bond
Fund(a)..................................... 38,600 3,130,074
iShares MSCI EAFE Index Fund(a)............... 141,912 11,465,070
iShares S&P 500 Index Fund(a)................. 331,835 49,944,486
iShares S&P MidCap 400 Index Fund(a).......... 253,933 22,671,138
SPDR Trust Series 1(a)........................ 64,900 9,762,907
Vanguard Consumer Discretionary
VIPERs(a)................................... 28,155 1,786,998
Vanguard Consumer Staples VIPERs.............. 93,165 6,268,141
Vanguard Energy VIPERs(a)..................... 56,550 5,718,902
Vanguard Financials VIPERs(a)................. 50,032 3,194,543
Vanguard Industrials VIPERs................... 67,145 4,957,987
Vanguard Information Technology IETF(a)....... 75,523 4,356,167
Vanguard Utilities ETF........................ 2,200 181,390
-------------
Total Investment Company Securities
(Cost $190,188,918) 217,502,264
-------------
---------------------------------------------------------------------
SHARES/
PAR VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
---------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 4.1%
Metropolitan Series Fund, Inc.: BlackRock
Money Market Portfolio**................. 3,230 $ 323,003
State Street Bank & Trust Co., Repurchase
Agreement dated 06/29/07 at 3.400% to
be repurchased at $9,011,553
collateralized by $9,895,000 FHLMC at
5.300% due 05/12/20 with a value of
$9,189,981............................... $9,009,000 9,009,000
-------------
Total Short-Term Investments
(Cost $9,332,003) 9,332,003
-------------
TOTAL INVESTMENTS - 100.2%
(Cost $199,520,921) 226,834,267
Other Assets and Liabilities (net) - (0.2)% (479,788)
-------------
TOTAL NET ASSETS - 100.0% $ 226,354,479
=============
PORTFOLIO FOOTNOTES:
(a) A portion or all of the security was held on loan. As of June 30, 2007, the
market value of the securities loaned was $56,509,798 and the collateral
received consisted of cash in the amount of $56,390,513 and securities in
the amount of $1,344,833.
** Affiliated Issuer. See Note 10 for additional information.
FHLMC - Federal Home Loan Mortgage Corporation
See notes to financial statements
4
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
CYCLICAL GROWTH AND INCOME ETF PORTFOLIO
ASSETS
Investments, at value (Note 2)* $217,825,267
Repurchase Agreement 9,009,000
Cash 813
Collateral for securities on loan 57,735,346
Receivable for investments sold 3,541
Receivable for Trust shares sold 37,379
Dividends receivable 289,693
Interest receivable 2,157
------------
Total assets 284,903,196
------------
LIABILITIES
Payables for:
Investments purchased 341,457
Trust shares redeemed 275,883
Distribution and services fees--Class B 46,213
Distribution and services fees--Class E 197
Collateral for securities on loan 57,735,346
Investment advisory fee payable (Note 3) 83,978
Administration fee payable 1,901
Custodian and accounting fees payable 26,716
Accrued expenses 37,026
------------
Total liabilities 58,548,717
------------
NET ASSETS $226,354,479
============
NET ASSETS REPRESENTED BY:
Paid in surplus $197,345,704
Accumulated net realized gain 610,522
Unrealized appreciation on investments 27,313,346
Undistributed net investment income 1,084,907
------------
Total $226,354,479
============
NET ASSETS
Class A $ 565,818
============
Class B 224,146,732
============
Class E 1,641,929
============
CAPITAL SHARES OUTSTANDING
Class A 47,783
============
Class B 18,954,913
============
Class E 138,847
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 11.84
============
Class B 11.83
============
Class E 11.83
============
- -------------------------------------------------------------------------------------
* Investments at cost, excluding Repurchase Agreements $190,511,921
See notes to financial statements
5
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
CYCLICAL GROWTH AND INCOME ETF PORTFOLIO
INVESTMENT INCOME:
Dividends from underlying portfolios $ 1,561,739
Interest (1) 319,174
Income earned from affiliated transactions 6,525
-----------
Total investment income 1,887,438
-----------
EXPENSES:
Investment advisory fee (Note 3) 482,469
Administration fees 11,901
Custody and accounting fees 10,891
Distribution fee--Class B 265,954
Distribution fee--Class E 985
Transfer agent fees 6,522
Audit 5,894
Legal 7,623
Trustee fees and expenses 7,787
Shareholder reporting 6,740
Insurance 4,598
Other 1,888
-----------
Total expenses 813,252
-----------
Net investment income 1,074,186
-----------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on:
Investments 663,422
-----------
Net realized gain on investments 663,422
-----------
Net change in unrealized appreciation on:
Investments 11,465,500
-----------
Net change in unrealized appreciation on investments 11,465,500
-----------
Net realized and change in unrealized gain on investments 12,128,922
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $13,203,108
===========
- -------------------------------------------------------------------------------------
(1)Interest income includes securities lending income of: $ 175,230
See notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
CYCLICAL GROWTH AND INCOME ETF PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 1,074,186 $ 2,865,743
Net realized gain on investments from underlying Portfolios 663,422 47,285
Net change in unrealized appreciation on investments 11,465,500 15,825,757
------------ ------------
Net increase in net assets resulting from operations 13,203,108 18,738,785
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (6) (2,042)
Class B (998) (2,834,756)
Class E (2) (13,252)
From net realized gains
Class A (31) --
Class B (15,948) (91,035)
Class E (98) --
------------ ------------
Net decrease in net assets resulting from distributions (17,083) (2,941,085)
------------ ------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class A 487,662 175,495
Class B 23,627,849 197,297,986
Class E 765,446 1,076,736
Net asset value of shares issued through dividend reinvestment
Class A 37 2,042
Class B 16,946 2,925,791
Class E 100 13,252
Cost of shares repurchased
Class A (96,932) (26,611)
Class B (16,192,291) (19,570,106)
Class E (255,206) (95,827)
------------ ------------
Net increase in net assets from capital share transactions 8,353,611 181,798,758
------------ ------------
TOTAL INCREASE IN NET ASSETS 21,539,636 197,596,458
Net assets at beginning of period 204,814,843 7,218,385
------------ ------------
Net assets at end of period $226,354,479 $204,814,843
============ ============
Net assets at end of period includes undistributed net investment
income $ 1,084,907 $ 11,728
============ ============
See notes to financial statements
7
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE PERIOD ENDED:
CLASS A
CYCLICAL GROWTH AND INCOME ETF PORTFOLIO -------------------------
FOR THE PERIOD FOR THE PERIOD
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
(UNAUDITED) 2006(B)
-------------- --------------
NET ASSET VALUE, BEGINNING OF PERIOD.................................... $11.13 $10.56
------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................... 0.08 (a) 0.25 (a)
Net Realized/Unrealized Gain on Investments............................. 0.63 0.47
------ ------
Total from Investment Operations........................................ 0.71 0.72
------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................... (0.00)+ (0.15)
Distributions from Net Realized Capital Gains........................... (0.00)+ --
------ ------
Total Distributions..................................................... (0.00)+ (0.15)
------ ------
NET ASSET VALUE, END OF PERIOD.......................................... $11.84 $11.13
====== ======
TOTAL RETURN 6.39% 6.81%
Ratio of Expenses to Average Net Assets................................. 0.51%* 0.56%*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates 0.51%* 0.66%*
Ratio of Net Investment Income to Average Net Assets.................... 1.37%* 3.42%*
Portfolio Turnover Rate................................................. 6.4% 23.2%
Net Assets, End of Period (in millions)................................. $ 0.6 $ 0.2
CLASS B
--------------------------------
FOR THE PERIOD FOR THE YEARS ENDED
ENDED DECEMBER 31,
JUNE 30, 2007 -----------------
(UNAUDITED) 2006 2005(C)
-------------- ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD.................................... $11.13 $10.11 $10.00
------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................... 0.06 (a) 0.17 (a) 0.09 (a)
Net Realized/Unrealized Gain on Investments............................. 0.64 1.02 0.08
------ ------ ------
Total from Investment Operations........................................ 0.70 1.19 0.17
------ ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................... (0.00)+ (0.16) (0.06)
Distributions from Net Realized Capital Gains........................... (0.00)+ (0.01) --
------ ------ ------
Total Distributions..................................................... (0.00)+ (0.17) (0.06)
------ ------ ------
NET ASSET VALUE, END OF PERIOD.......................................... $11.83 $11.13 $10.11
====== ====== ======
TOTAL RETURN 6.30% 11.73% 1.65%
Ratio of Expenses to Average Net Assets................................. 0.76%* 0.80% 0.80%*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates 0.76%* 0.84% 3.73%*
Ratio of Net Investment Income to Average Net Assets.................... 1.00%* 1.65% 3.31%*
Portfolio Turnover Rate................................................. 6.4% 23.2% 3.5%
Net Assets, End of Period (in millions)................................. $224.1 $203.6 $ 7.2
* Annualized
+ Rounds to less $0.005 per share
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--05/01/2006.
(c) Commencement of operations--10/03/2005.
See notes to financial statements
8
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE PERIOD ENDED:
CLASS E
CYCLICAL GROWTH AND INCOME ETF PORTFOLIO -------------------------
FOR THE PERIOD FOR THE PERIOD
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
(UNAUDITED) 2006(B)
-------------- --------------
NET ASSET VALUE, BEGINNING OF PERIOD.................................... $11.12 $10.56
------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................... 0.07 (a) 0.18 (a)
Net Realized/Unrealized Gain on Investments............................. 0.64 0.52
------ ------
Total from Investment Operations........................................ 0.71 0.70
------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................... (0.00)+ (0.14)
Distributions from Net Realized Capital Gains........................... (0.00)+ --
------ ------
Total Distributions..................................................... (0.00)+ (0.14)
------ ------
NET ASSET VALUE, END OF PERIOD.......................................... $11.83 $11.12
====== ======
TOTAL RETURN 6.39% 6.65%
Ratio of Expenses to Average Net Assets................................. 0.66%* 0.70%*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates 0.66%* 0.79%*
Ratio of Net Investment Income to Average Net Assets.................... 1.16%* 2.52%*
Portfolio Turnover Rate................................................. 6.4% 23.2%
Net Assets, End of Period (in millions)................................. $ 1.6 $ 1.1
* Annualized
+ Rounds to less $0.005 per share
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--05/01/2006.
See notes to financial statements
9
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is Cyclical Growth and Income ETF Portfolio,
which is diversified. Shares in the Trust are not offered directly to the
general public and are currently available only to separate accounts
established by certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A, B and E Shares are
offered by the Portfolio. Shares of each Class of the Portfolio represent an
equal pro rata interest in the Portfolio and generally give the shareholder the
same voting, dividend, liquidation, and other rights. Investment income,
realized and unrealized capital gains and losses, the common expenses of the
Portfolio and certain Portfolio-level expense reductions, if any, are allocated
on a pro rata basis to each class based on the relative net assets of each
class to the total net assets of the Portfolio. Each class of shares differs in
its respective distribution expenses and certain other class-specific expense
reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date. The value of the
security so purchased is subject to market fluctuations during this period. The
Portfolio segregates assets having an aggregate value at least equal to the
amount of the when issued or delayed delivery purchase commitments until
payment is made.
10
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. REPURCHASE AGREEMENT - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
G. SECURITIES LENDING - The Portfolio may lend its securities to certain
qualified brokers who borrow securities in order to complete certain
transactions. By lending its investment securities, the Portfolio attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term of the loan would
accrue to the account of the Portfolio. Risks of delay in recovery of the
securities or even loss of rights in the collateral may occur should the
borrower of the securities fail financially. Risks may also arise to the extent
that the value of the collateral decreases below the value of the securities
loaned.
Upon entering into a securities lending transaction, the Portfolio receives
cash or other securities as collateral in an amount equal to or exceeding 102%
of the current market value of the loaned securities. Any cash received as
collateral is generally invested by State Street Bank and Trust Company ("State
Street"), acting in its capacity as securities lending agent (the "Agent"), in
the State Street Navigator Securities Lending Prime Portfolio which is a money
market fund registered under the 1940 Act. A portion of the dividends received
on the collateral is rebated to the borrower of the securities and the
remainder is split between the Agent and the Portfolio. On loans collateralized
by cash, the cash collateral is invested in a money market fund or short term
securities. A portion of the income generated upon investment of the collateral
is remitted to the Borrowers and the remainder is allocated between the fund
and the lending agent. On loans collateralized by U.S. Treasuries, a fee is
received from the Borrower and is allocated between the fund and the lending
agent.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with Gallatin Asset Management, Inc., (the "Adviser") for investment advisory
services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
11
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- ----------------------------
Cyclical Growth and Income ETF Portfolio $482,469 0.45% First $300 Million
0.43% $300 Million to $600 Million
0.40% Over $600 Million
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Expenses Deferred in
- - --------------------
2005 2006 2007
- - Maximum Expense Ratio ------- ------- ----
under current Expense Subject to repayment
Limitation Agreement until December 31,
- - ---------------------- --------------------
Portfolio Class A Class B Class E 2010 2011 2012
- --------- ------- ------- ------- ------- ------- ----
Cyclical Growth and Income ETF Portfolio 0.55% 0.80% 0.70% $32,599 $62,444 $--
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to Reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratio as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued
Through Net Increase
Beginning Shares Dividend Shares in Shares Ending
Shares Sold Reinvestment Repurchased Outstanding Shares
---------- ---------- ------------- ----------- ------------ ----------
Cyclical Growth and Income ETF Portfolio
Class A
06/30/2007 13,931 42,209 3 (8,360) 33,852 47,783
05/01/2006-12/31/2006 -- 16,146 183 (2,398) 13,931 13,931
Class B
06/30/2007 18,301,821 2,053,792 1,450 (1,402,150) 653,092 18,954,913
12/31/2006 714,261 19,187,779 265,008 (1,865,227) 17,587,560 18,301,821
Class E
06/30/2007 94,581 66,403 8 (22,145) 44,266 138,847
05/01/2006-12/31/2006 -- 102,310 1,186 (8,915) 94,581 94,581
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
Cyclical Growth and Income ETF Portfolio $-- $18,029,213 $-- $13,210,379
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
- --------- ------------ ------------ -------------- --------------
Cyclical Growth and Income ETF Portfolio $199,520,921 $27,905,563 $(592,217) $27,313,346
6. SECURITY LENDING
As of June 30, 2007, the Portfolio had loaned securities which were
collateralized by short term investments. The value of securities on loan and
the value of the related collateral were as follows:
Value of Value of
Securities Collateral
----------- -----------
Cyclical Growth and Income ETF Portfolio $56,509,798 $57,735,346
7. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
------------------ ---------------------- ------------------
2006 2005 2006 2005 2006 2005
---- ---- ---- ---- ---------- -------
Cyclical Growth and Income ETF Portfolio $2,941,085 $39,258 $-- $-- $2,941,085 $39,258
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
- - ------------- ------------- ------------ ------------------ -----------
Cyclical Growth and Income ETF Portfolio $11,728 $16,062 $15,794,961 $-- $15,822,751
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
8. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
9. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
10. OTHER MATTERS
The Portfolio does not invest in the Underlying Portfolios for the purpose of
exercising management or control; however, investments by the Portfolio within
its principal investment strategies may represent a significant portion of an
Underlying Portfolio's net assets. At the end of the period, the Portfolio was
not the owner of record of 5% or more of the total outstanding shares of any
Underlying Portfolios.
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
14
MET INVESTORS SERIES TRUST
Cyclical Growth
ETF Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
CYCLICAL GROWTH ETF PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY GALLATIN ASSET MANAGEMENT, INC.
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
MARKET OVERVIEW
Continuing the general trend of the past four years, financial markets
progressed markedly during the first half of 2007. Volatility returned to the
markets with episodic appearances over the past six months. Global markets
dropped sharply in February on fears of a slowdown in U.S. economic growth from
a subprime lending meltdown. Despite significant declines, markets recovered
sharply and ended the first quarter on a positive note. The advancement
continued during the second quarter as markets remained resilient and the Dow
and S&P 500(R) Index reached all-time highs. Year-to-date through June 30, the
S&P 500(R) Index returned 6.96%, the S&P MidCap 400(R) Index returned 11.9%,
and the S&P SmallCap 600(R) Index returned 8.6%. Energy was the best performing
sector across large-cap and mid-cap stocks, while materials dominated in
small-caps. Financials were the biggest laggard across all market
capitalizations. Foreign stocks, as measured by the MSCI EAFE(R) Index,
returned 10.7% in light of continued strong economic growth abroad. Bonds
underperformed equities with the Lehman Brothers Aggregate Bond Index/1/
returning 0.98%.
PORTFOLIO STRATEGIES
For the six-month period ended June 30, 2007, the Portfolio (Class B) returned
7.73%, outperforming both the S&P 500 and its blended benchmark which returned
6.96% and 7.66% respectively. From an asset class perspective, overweighting
equities versus bonds relative to the blended benchmark aided Portfolio
returns. With regard to equity positioning, underweighting small-caps detracted
from performance as smaller capitalization stocks outperformed large-caps. The
Portfolio was void of small-cap exposure despite small-cap stocks representing
15% of the blended benchmark. We continue to find large-cap stocks attractive
and maintain a substantial overweight to this asset class relative to the
blended benchmark. Large-cap stocks have generated strong absolute returns
through the first half of 2007, aiding Portfolio returns, but have lagged mid-
and small-caps. The Portfolio maintained a benchmark weight of 10% to foreign
equities which aided absolute returns.
Within the large-cap portion of the Portfolio, sector allocation aided relative
performance. An underweight position in consumer discretionary accounted for
most of the relative outperformance as the sector lagged the S&P 500(R) Index
through the first half of the year. The Portfolio's overweight to health care
also aided relative performance. On the negative side, an underweight of
materials and overweight of consumer staples detracted from relative
performance.
OUTLOOK
The rate of economic growth in the U.S. has slowed in recent quarters. We
believe we are moving through the low point of the cycle and expect growth to
gradually improve in coming quarters. From a cyclical
- --------
/1/ The Lehman Brothers Aggregate Bond Index represents securities that are
U.S. domestic, taxable, non-convertible and dollar denominated. The Index
covers the investment grade fixed rate bond market, with index components for
government and corporate securities, mortgage pass-through securities and
asset-backed securities. The Index does not include fees or expenses and is not
available for direct investment. viewpoint, we believe this growth will be
sufficient to support corporate profits and economic expansion. Along with the
outlook for corporate profits, we prefer large-cap stocks based on their
attractive valuation relative to smaller capitalization stocks. With regard to
sector allocation, we maintain an overweight to consumer staples and healthcare
as these non-cyclical sectors tend to perform well at this point in the cycle.
Continued exposure to domestic mid-cap and foreign developed country stocks
provides additional growth opportunities and portfolio diversification.
MARK A. KELLER
Chief Investment Officer
GALLATIN ASSET MANAGEMENT, INC.
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
------------------------------------------------------------------
iShares S&P 500 Index Fund 21.25%
------------------------------------------------------------------
iShares S&P MidCap 400 Index Fund 15.03%
------------------------------------------------------------------
SPDR Trust Series 1 14.27%
------------------------------------------------------------------
iShares MSCI EAFE Index Fund 10.24%
------------------------------------------------------------------
iShares Dow Jones U.S. Healthcare Sector Index Fund 7.93%
------------------------------------------------------------------
iShares Dow Jones U.S. Financial Sector Index Fund 4.14%
------------------------------------------------------------------
iShares Dow Jones U.S. Consumer Goods Sector Index Fund 3.56%
------------------------------------------------------------------
Vanguard Consumer Staples VIPERs 3.15%
------------------------------------------------------------------
iShares Dow Jones U.S. Technology Sector Index Fund 2.83%
------------------------------------------------------------------
iShares Dow Jones U.S. Industrial Sector Index Fund 2.69%
------------------------------------------------------------------
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
CYCLICAL GROWTH ETF PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY GALLATIN ASSET MANAGEMENT, INC.
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
CYCLICAL GROWTH ETF PORTFOLIO MANAGED BY
GALLATIN ASSET MANAGEMENT, INC. VS. S&P 500(R) INDEX/1/ AND BLENDED BENCHMARK/2/
Growth Based on $10,000+
[CHART]
Cyclical Growth S&P 500(R) Blended
ETF Portfolio Index Benchmark
--------------- ---------- ---------
10/1/2005 $10,000 $10,000 $10,000
12/31/2005 10,204 10,209 10,231
12/31/2006 11,618 11,823 11,728
6/30/2007 12,516 12,645 12,723
----------------------------------------------------
Average Annual Return/3/
(for the period ended 6/30/07)
----------------------------------------------------
Since
1 Year Inception/4/
----------------------------------------------------
Cyclical Growth ETF
Portfolio--Class A 19.43% 13.36%
- -- Class B 19.07% 13.69%
Class E 19.18% 13.16%
----------------------------------------------------
- - - S&P 500(R) Index/1/ 20.59% 14.34%
----------------------------------------------------
- -- Blended Benchmark/2/ 19.42% 14.76%
----------------------------------------------------
+The chart reflects the performance of Class B shares of the Portfolio. The
Performance of Class B shares will differ from that of the other classes
because of the difference in expenses paid by policyholders investing in the
different share classes.
/1/The S&P 500(R) Index is an unmanaged index consisting of 500 stocks chosen
for market size, liquidity, and industry group representation. It is a
market-value weighted index (stock price times number of shares outstanding),
with each stock's weight in the Index proportionate to its market value. The
Index does not include fees or expenses and is not available for direct
investment.
/2/The blended benchmark is comprised of 2% Merrill Lynch U.S. 3-Month Treasury
Bill Index, 10% Merrill Lynch Corporate/Government Master Index, 48% S&P 500(R)
Index, 15% S&P MidCap 400(R) Index, 15% S&P SmallCap 600(R) Index and 10%
Morgan Stanley Capital International Europe, Australia and Far East Index
("MSCI EAFE(R) Index").
The Merrill Lynch U.S. 3-Month Treasury Bill Index is composed of a single
90-Day Treasury bill issue, or potentially a seasoned 6-month or 1-year
Treasury bill issue, that is replaced on a monthly basis. The Index does not
include fees or expenses and is not available for direct investment.
The Merrill Lynch Corporate/Government Master Index is an indicator of the
performance of investment-grade domestic bonds, capturing close to $5 trillion
of outstanding debt. The Index does not include fees or expenses and is not
available for direct investment.
The S&P MidCap 400(R) Index is a capitalization-weighted index which measures
the performance of the mid-range sector of the U.S. stock market. The Index
does not include fees or expenses and is not available for direct investment.
The S&P SmallCap 600(R) Index is a capitalization-weighted index which measures
the performance of the small-cap range of the U.S. stock market. The Index does
not include fees or expenses and is not available for direct investment.
The MSCI EAFE(R) Index is a widely recognized unmanaged index which is an
aggregate of 15 individual country indices that collectively represent many of
the major markets of the world. An index does not include transaction costs
associated with buying and selling securities or any mutual fund expenses. The
Index does not include fees or expenses and is not available for direct
investment.
/3/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/4/Inception of Class B shares is 10/3/05. Inception of Class A and Class E
shares is 5/1/06. Index returns are based on an inception date of 9/30/05.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
2
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
CYCLICAL GROWTH ETF PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,079.90 $2.58
Hypothetical (5% return before expenses) 1,000.00 1,022.32 2.51
- ------------------------------------------ ------------- ------------- --------------
Class B
Actual $1,000.00 $1,077.30 $3.86
Hypothetical (5% return before expenses) 1,000.00 1,021.08 3.76
- ------------------------------------------ ------------- ------------- --------------
Class E
Actual $1,000.00 $1,078.10 $3.35
Hypothetical (5% return before expenses) 1,000.00 1,021.57 3.26
- ------------------------------------------ ------------- ------------- --------------
** Expenses are equal to the Portfolio's annualized expense ratio of 0.50% ,
0.75% , and 0.65% for the Class A, Class B, and Class E, respectively,
multiplied by the average account value over the period, multiplied by 184/365
(to reflect the one-half year period).
3
MET INVESTORS SERIES TRUST
CYCLICAL GROWTH ETF PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
----------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
----------------------------------------------------------------------
INVESTMENT COMPANY SECURITIES - 98.0%
iShares Dow Jones U.S. Consumer Goods
Sector Index Fund.......................... 149,139 $ 9,294,342
iShares Dow Jones U.S. Consumer Services
Sector Index Fund.......................... 19,909 1,397,413
iShares Dow Jones U.S. Energy Sector Index
Fund(a).................................... 31,300 3,752,557
iShares Dow Jones U.S. Financial Sector Index
Fund(a).................................... 94,164 10,815,677
iShares Dow Jones U.S. Healthcare Sector
Index Fund(a).............................. 297,857 20,721,911
iShares Dow Jones U.S. Industrial Sector
Index Fund(a).............................. 95,609 7,031,086
iShares Dow Jones U.S. Technology Sector
Index Fund................................. 124,857 7,410,263
iShares Dow Jones U.S. Telecommunications
Sector Index Fund(a)....................... 164,318 5,539,160
iShares Dow Jones U.S. Utilities Sector Index
Fund....................................... 20,613 1,985,856
iShares MSCI EAFE Index Fund(a).............. 331,435 26,776,634
iShares S&P 500 Index Fund(a)................ 369,057 55,546,769
iShares S&P MidCap 400 Index Fund(a)......... 440,228 39,303,556
SPDR Trust Series 1(a)....................... 248,000 37,306,640
Vanguard Consumer Discretionary
VIPERs(a).................................. 45,355 2,878,682
Vanguard Consumer Staples VIPERs............. 122,286 8,227,402
Vanguard Energy VIPERs(a).................... 47,767 4,830,677
Vanguard Financials VIPERs................... 37,782 2,412,381
Vanguard Industrials VIPERs.................. 73,545 5,430,563
Vanguard Information Technology IETF(a)...... 80,623 4,650,334
Vanguard Utilities ETF....................... 11,300 931,685
-------------
Total Investment Company Securities
(Cost $216,756,985) 256,243,588
-------------
------------------------------------------------------------------------
SECURITY SHARES/PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 2.4%
Metropolitan Series Fund, Inc.: BlackRock
Money Market Portfolio**................. 4,378 $ 437,818
State Street Bank & Trust Co., Repurchase
Agreement dated 06/29/07 at 3.400%
to be repurchased at $5,876,665 on
07/02/07 collateralized by $6,455,000
FHLMC at 5.300% due 05/12/20 with a
value of $5,995,081...................... $ 5,875,000 5,875,000
-------------
Total Short-Term Investments
(Cost $6,312,818) 6,312,818
-------------
TOTAL INVESTMENTS - 100.4%
(Cost $223,069,803) 262,556,406
Other Assets and Liabilities (net) - (0.4)% (1,140,859)
-------------
TOTAL NET ASSETS - 100.0% $ 261,415,547
=============
PORTFOLIO FOOTNOTES:
(a) A portion or all of the security was held on loan. As of June 30, 2007, the
market value of the securities loaned was $63,441,243 and the collateral
received consisted of cash in the amount of $63,540,853 and securities in
the amount of $1,251,690.
** Affiliated Issuer. See Note 10 for additional information.
FHLMC - Federal Home Loan Mortgage Corporation
See notes to financial statements
4
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
CYCLICAL GROWTH ETF PORTFOLIO
ASSETS
Investments, at value (Note 2)* $256,681,406
Repurchase Agreement 5,875,000
Cash 709
Collateral for securities on loan 64,792,543
Receivable for investments sold 5,452
Receivable for Trust shares sold 9,146
Dividends receivable 431,083
Interest receivable 2,328
------------
Total assets 327,797,667
------------
LIABILITIES
Payables for:
Investments purchased 1,002,844
Trust shares redeemed 368,477
Distribution and services fees--Class B 53,193
Distribution and services fees--Class E 302
Collateral for securities on loan 64,792,543
Investment advisory fee payable (Note 3) 97,046
Administration fee payable 1,901
Custodian and accounting fees payable 26,970
Accrued expenses 38,844
------------
Total liabilities 66,382,120
------------
NET ASSETS $261,415,547
============
NET ASSETS REPRESENTED BY:
Paid in surplus $220,588,034
Accumulated net realized gain 693,736
Unrealized appreciation on investments 39,486,603
Undistributed net investment income 647,174
------------
Total $261,415,547
============
NET ASSETS
Class A $ 1,266,198
============
Class B 257,548,438
============
Class E 2,600,911
============
CAPITAL SHARES OUTSTANDING
Class A 102,980
============
Class B 20,984,798
============
Class E 211,756
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 12.30
============
Class B 12.27
============
Class E 12.28
============
- ------------------------------------------------------------------
*Investments at cost, excluding Repurchase Agreements $217,194,803
See notes to financial statements
5
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
CYCLICAL GROWTH ETF PORTFOLIO
INVESTMENT INCOME:
Dividends from underlying Portfolios $ 307,809
Interest (1) 1,260,553
Income earned from affiliated transactions 10,411
-----------
Total investment income 1,578,773
-----------
EXPENSES:
Investment advisory fee (Note 3) 560,073
Administration fees 11,901
Custody and accounting fees 10,334
Distribution fee--Class B 307,839
Distribution fee--Class E 1,413
Transfer agent fees 6,378
Audit 5,894
Legal 7,623
Trustee fees and expenses 7,787
Shareholder reporting 7,471
Insurance 5,301
Other 1,841
-----------
Total expenses 933,855
-----------
Net investment income 644,918
-----------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on:
Investments 718,573
-----------
Net realized gain on investments 718,573
-----------
Net change in unrealized appreciation on:
Investments 17,480,507
-----------
Net change in unrealized appreciation on investments 17,480,507
-----------
Net realized and change in unrealized gain on investments 18,199,080
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $18,843,998
===========
- -------------------------------------------------------------------------------------
(1)Interest income includes securities lending income of: $ 229,430
See notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
CYCLICAL GROWTH ETF PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 644,918 $ 2,375,903
Net realized gain on investments from underlying Portfolios 718,573 699,732
Net change in unrealized appreciation on investments 17,480,507 21,851,780
------------ ------------
Net increase in net assets resulting from operations 18,843,998 24,927,415
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A -- (2,798)
Class B -- (2,361,048)
Class E -- (12,002)
From net realized gains
Class A -- (584)
Class B -- (727,499)
Class E -- (2,627)
------------ ------------
Net decrease in net assets resulting from distributions -- (3,106,558)
------------ ------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class A 1,016,673 287,859
Class B 17,099,402 213,309,795
Class E 1,814,142 1,283,431
Net asset value of shares issued through dividend reinvestment
Class A -- 3,382
Class B -- 3,088,547
Class E -- 14,629
Cost of shares repurchased
Class A (76,181) (30,467)
Class B (13,500,780) (14,405,746)
Class E (576,328) (139,548)
------------ ------------
Net increase in net assets from capital share transactions 5,776,928 203,411,882
------------ ------------
TOTAL INCREASE IN NET ASSETS 24,620,926 225,232,739
Net assets at beginning of period 236,794,621 11,561,882
------------ ------------
Net assets at end of period $261,415,547 $236,794,621
============ ============
Net assets at end of period includes undistributed net investment income $ 647,174 $ 2,256
============ ============
See notes to financial statements
7
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE PERIOD ENDED:
CLASS A
CYCLICAL GROWTH ETF PORTFOLIO -------------------------
FOR THE PERIOD FOR THE PERIOD
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
(UNAUDITED) 2006(B)
-------------- --------------
NET ASSET VALUE, BEGINNING OF PERIOD.................................... $11.39 $10.76
------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................... 0.06 (a) 0.25 (a)
Net Realized/Unrealized Gain on Investments............................. 0.85 0.53
------ ------
Total from Investment Operations........................................ 0.91 0.78
------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................... -- (0.12)
Distributions from Net Realized Capital Gains........................... -- (0.03)
------ ------
Total Distributions..................................................... -- (0.15)
------ ------
NET ASSET VALUE, END OF PERIOD.......................................... $12.30 $11.39
====== ======
TOTAL RETURN 7.99% 7.20%
Ratio of Expenses to Average Net Assets................................. 0.50%* 0.57%*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates 0.50%* 0.63%*
Ratio of Net Investment Income to Average Net Assets.................... 1.02%* 3.33%*
Portfolio Turnover Rate................................................. 5.2% 27.7%
Net Assets, End of Period (in millions)................................. $ 1.3 $ 0.3
CLASS B
--------------------------------
FOR THE PERIOD FOR THE YEARS ENDED
ENDED DECEMBER 31,
JUNE 30, 2007 -----------------
(UNAUDITED) 2006 2005(C)
-------------- ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD.................................... $11.39 $10.14 $10.00
------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................... 0.03 (a) 0.13 (a) 0.10 (a)
Net Realized/Unrealized Gain on Investments............................. 0.85 1.28 0.10
------ ------ ------
Total from Investment Operations........................................ 0.88 1.41 0.20
------ ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................... -- (0.12) (0.06)
Distributions from Net Realized Capital Gains........................... -- (0.04) --
------ ------ ------
Total Distributions..................................................... -- (0.16) (0.06)
------ ------ ------
NET ASSET VALUE, END OF PERIOD.......................................... $12.27 $11.39 $10.14
====== ====== ======
TOTAL RETURN 7.73% 13.85% 2.04%
Ratio of Expenses to Average Net Assets................................. 0.75%* 0.80% 0.80%*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates 0.75%* 0.82% 2.59%*
Ratio of Net Investment Income to Average Net Assets.................... 0.52%* 1.21% 3.85%*
Portfolio Turnover Rate................................................. 5.2% 27.7% 6.2%
Net Assets, End of Period (in millions)................................. $257.5 $235.3 $ 11.6
* Annualized
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--05/01/2006.
(c) Commencement of operations--10/03/2005.
See notes to financial statements
8
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE PERIOD ENDED:
CLASS E
CYCLICAL GROWTH ETF PORTFOLIO -------------------------
FOR THE PERIOD FOR THE PERIOD
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
(UNAUDITED) 2006(B)
-------------- --------------
NET ASSET VALUE, BEGINNING OF PERIOD.................................... $11.39 $10.76
------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................... 0.04 (a) 0.18 (a)
Net Realized/Unrealized Gain on Investments............................. 0.85 0.60
------ ------
Total from Investment Operations........................................ 0.89 0.78
------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................... -- (0.12)
Distributions from Net Realized Capital Gains........................... -- (0.03)
------ ------
Total Distributions..................................................... -- (0.15)
------ ------
NET ASSET VALUE, END OF PERIOD.......................................... $12.28 $11.39
====== ======
TOTAL RETURN 7.81% 7.15%
Ratio of Expenses to Average Net Assets................................. 0.65%* 0.72%*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates 0.65%* 0.77%*
Ratio of Net Investment Income to Average Net Assets.................... 0.72%* 2.38%*
Portfolio Turnover Rate................................................. 5.2% 27.7%
Net Assets, End of Period (in millions)................................. $ 2.6 $ 1.2
* Annualized
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--05/01/2006.
See notes to financial statements
9
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is Cyclical Growth ETF Portfolio, which is
diversified. Shares in the Trust are not offered directly to the general public
and are currently available only to separate accounts established by certain
affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A, B and E Shares are
offered by the Portfolio. Shares of each Class of the Portfolio represent an
equal pro rata interest in the Portfolio and generally give the shareholder the
same voting, dividend, liquidation, and other rights. Investment income,
realized and unrealized capital gains and losses, the common expenses of the
Portfolio and certain Portfolio-level expense reductions, if any, are allocated
on a pro rata basis to each class based on the relative net assets of each
class to the total net assets of the Portfolio. Each class of shares differs in
its respective distribution expenses and certain other class-specific expense
reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date. The value of the
security so purchased is subject to market fluctuations during this period. The
Portfolio segregates assets having an aggregate value at least equal to the
amount of the when issued or delayed delivery purchase commitments until
payment is made.
10
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
G. SECURITIES LENDING - The Portfolio may lend its securities to certain
qualified brokers who borrow securities in order to complete certain
transactions. By lending its investment securities, the Portfolio attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term of the loan would
accrue to the account of the Portfolio. Risks of delay in recovery of the
securities or even loss of rights in the collateral may occur should the
borrower of the securities fail financially. Risks may also arise to the extent
that the value of the collateral decreases below the value of the securities
loaned.
Upon entering into a securities lending transaction, the Portfolio receives
cash or other securities as collateral in an amount equal to or exceeding 102%
of the current market value of the loaned securities. Any cash received as
collateral is generally invested by State Street Bank and Trust Company ("State
Street"), acting in its capacity as securities lending agent (the "Agent"), in
the State Street Navigator Securities Lending Prime Portfolio which is a money
market fund registered under the 1940 Act. A portion of the dividends received
on the collateral is rebated to the borrower of the securities and the
remainder is split between the Agent and the Portfolio. On loans collateralized
by cash, the cash collateral is invested in a money market fund or short term
securities. A portion of the income generated upon investment of the collateral
is remitted to the Borrowers and the remainder is allocated between the fund
and the lending agent. On loans collateralized by U.S. Treasuries, a fee is
received from the Borrower and is allocated between the fund and the lending
agent.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with Gallatin Asset Management, Inc., (the "Adviser") for investment advisory
services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- ----------------------------
Cyclical Growth ETF Portfolio $560,073 0.45% First $300 Million
0.43% $300 Million to $600 Million
0.40% Over $600 Million
11
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Expenses Deferred in
---------------------
2005 2006 2007
Maximum Expense Ratio ------- ------- -----
under current Expense Subject to repayment
Limitation Agreement until December 31,
---------------------- ---------------------
Portfolio Class A Class B Class E 2010 2011 2012
--------- ------- ------- ------- ------- ------- -----
Cyclical Growth ETF Portfolio 0.55% 0.80% 0.70% $32,115 $40,875 $--
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to Reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratio as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
Income earned
from affiliates
Number of Number of during the
shares, held at Shares purchased Shares sold shares held at period ended
Security Description December 31, 2006 during the period during the period June 30, 2007 June 30, 2007
- -------------------- ----------------- ----------------- ----------------- -------------- ---------------
Metropolitan Series
Fund Inc.:
BlackRock Money
Market Portfolio 373,669 212,916 148,767 437,818 $10,411
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued
Through Net Increase
Beginning Shares Dividend Shares in Shares Ending
Shares Sold Reinvestment Repurchased Outstanding Shares
---------- ---------- ------------- ----------- ------------ ----------
Cyclical Growth ETF Portfolio
Class A
06/30/2007 23,516 85,905 -- (6,441) 79,464 102,980
05/01/2006-12/31/2006 -- 25,933 295 (2,712) 23,516 23,516
Class B
06/30/2007 20,666,125 1,453,939 -- (1,135,266) 318,673 20,984,798
12/31/2006 1,139,989 20,602,852 272,650 (1,349,366) 19,526,136 20,666,125
Class E
06/30/2007 107,303 152,806 -- (48,353) 104,453 211,756
05/01/2006-12/31/2006 -- 118,978 1,278 (12,953) 107,303 107,303
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
Cyclical Growth ETF Portfolio $-- $18,727,530 $-- $12,677,093
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross Net
Income Tax Unrealized Unrealized Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
- --------- ------------ ------------ -------------- ------------
Cyclical Growth ETF Portfolio $223,069,803 $39,486,603 $-- $39,486,603
6. SECURITY LENDING
As of June 30, 2007, the Portfolio had loaned securities which were
collateralized by short term investments. The value of securities on loan and
the value of the related collateral were as follows:
Value of Value of
Securities Collateral
----------- -----------
Cyclical Growth ETF Portfolio $63,441,243 $64,792,543
7. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
------------------ ---------------------- ------------------
2006 2005 2006 2005 2006 2005
---- ---- ---- ---- ---------- -------
Cyclical Growth ETF Portfolio $3,106,558 $71,487 $-- $-- $3,106,558 $79,801
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
7. DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
- - ------------- ------------- ------------ ------------------ -----------
Cyclical Growth ETF Portfolio $2,256 $-- $21,981,258 $-- $21,983,514
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
8. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
9. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
10. OTHER MATTERS
The Portfolio does not invest in the Underlying Portfolios for the purpose of
exercising management or control; however, investments by the Portfolio within
its principal investment strategies may represent a significant portion of an
Underlying Portfolio's net assets. At the end of the period, the Portfolio was
not the owner of record of 5% or more of the total outstanding shares of any
Underlying Portfolios.
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
14
MET INVESTORS SERIES TRUST
Dreman Small-Cap
Value Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
DREMAN SMALL-CAP VALUE PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY DREMAN VALUE MANAGEMENT LLC
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
DREMAN SMALL-CAP VALUE PORTFOLIO
Except for a period of weakness in late February and early March, equity
markets were quite strong during the first six months of 2007. By the end of
May, most indices were at or near their all-time highs; markets were volatile
with no pronounced trend in June. The Russell 3000(R) Index/1/, which is
generally regarded as a good indicator of the broad stock market, returned
7.11% for the six-month period. The Small Cap Russell 2000(R) Index/2/ returned
6.45%. Within all capitalization categories, using the Russell growth and value
indices for measurement, growth stocks performed better than value stocks.
During the six month period ending June 30, 2007, the Portfolio returned 8.52%;
while the benchmark (the Russell 2000 Value Index/3/) returned 3.80%,
outperforming the Index by 497 basis points.
An important factor in the fund's strong performance was not owning some of the
worst performing issues in the financials sector, particularly mortgage
companies and real estate investment trusts. An underweight position in banks
was also positive. Holdings in the information technology sector contributed to
performance, particularly communications equipment manufacturers CommScope,
Inc. and Anixter International Inc. As in past periods, energy holdings
contributed to performance, especially Atwood Oceanics, Inc., Superior Energy
Services, Inc., Uranium Resources PLC, and OMI Corp., a marine shipper or
petroleum products that agreed to be acquired.
The major detractor from performance was not having a significant position in
the materials sector, which performed very well. At this late stage of an
economic expansion, we have difficulty finding good values among these highly
cyclical stocks. However, a position in Uranium Resources Plc, a uranium
exploration and development company focused in southern Tanzania, contributed
to performance.
Messrs. David N. Dreman, E. Clifton Hoover Jr., and Mark Roach have served as
the day-to-day portfolio managers of the portion of the Portfolio's assets
allocated to Dreman. Mr. Dreman has been part of the management team since the
Portfolio's inception in 2005.
Mr. Dreman is the founder, Chairman and Chief Investment Officer of Dreman
Value Management, LLC. Mr. Hoover has been a Managing Director of Large and
Small Cap products, and the co-Chief Investment Officer of Dreman Value
Management since December 2006.
Mr. Roach joined DVM in November 2006 as a Managing Director and Portfolio
Manager of Small and Mid Cap products.
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
----------------------------------------------
CommScope, Inc. 1.46%
----------------------------------------------
Nash Finch Co. 1.38%
----------------------------------------------
Parallel Petroleum Corp. 1.37%
----------------------------------------------
General Cable Corp. 1.32%
----------------------------------------------
Barnes Group, Inc. 1.28%
----------------------------------------------
Hornbeck Offshore Services, Inc. 1.21%
----------------------------------------------
Myers Industrials, Inc. 1.19%
----------------------------------------------
Sanderson Farms, Inc. 1.19%
----------------------------------------------
BE Aerospace, Inc. 1.18%
----------------------------------------------
Central European Distribution Corp. 1.18%
----------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
LOGO
- --------
/1/ The Russell 3000(R) Index is an unmanaged index that measures the
performance of the 3,000 largest U.S. companies based on total market
capitalization, which represents approximately 98% of the total investable U.S.
equity market. The Index does not include fees or expenses and is not available
for direct investment.
/2/ The Russell 2000(R) Index is an unmanaged index that measures the
performance of the 2,000 smallest U.S. companies in the Russell 3000(R) Index,
which represents approximately 10% of the total market capitalization of the
Russell 3000 Index. The Index does not include fees or expenses and is not
available for direct investment.
/3/ The Russell 2000(R) Value Index is an unmanaged index which measures the
performance of those Russell 2000 companies with lower price-to-book ratios and
lower forecasted growth values. The Index does not include fees or expenses and
is not available for direct investment.
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
DREMAN SMALL-CAP VALUE PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY DREMAN VALUE MANAGEMENT LLC
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
DREMAN SMALL-CAP VALUE PORTFOLIO MANAGED BY
DREMAN VALUE MANAGEMENT LLC VS. RUSSELL 2000(R) VALUE INDEX/1/
Growth Based on $10,000+
[CHART]
Dreman Small Cap Value Portfolio Russell 2000(R) Value Index
-------------------------------- ---------------------------
5/2/2005 $10,000 $10,000
12/31/2005 11,355 11,498
12/31/2006 14,107 14,199
6/30/2007 15,309 14,738
--------------------------------------------------------------
Average Annual Return/2/
(for the period ended 6/30/07)
--------------------------------------------------------------
1 Year Since Inception/3/
--------------------------------------------------------------
Dreman Small-Cap Value
- -- Portfolio--Class A 20.22% 21.74%
--------------------------------------------------------------
- - - Russell 2000(R) Value Index/1/ 16.05% 19.60%
--------------------------------------------------------------
+The chart reflects the performance of Class A shares of the Portfolio. This is
currently the only active Class in the Portfolio.
/1/The Russell 2000(R) Value Index is an unmanaged index which measures the
performance of those Russell 2000 companies with lower price-to-book ratios and
lower forecasted growth values. The Index does not include fees or expenses and
is not available for direct investment.
/2/"Average Annual Return" is calculated including reinvestment of all income
dividend and capital gains distributions.
/3/Inception of Class A shares is 05/02/2005. Index returns are based on an
inception date of 4/30/2005.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
2
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
DREMAN SMALL-CAP VALUE PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,085.20 $4.65
Hypothetical (5% return before expenses) 1,000.00 1,020.33 4.51
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.90%
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period).
3
MET INVESTORS SERIES TRUST
DREMAN SMALL-CAP VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
---------------------------------------------------------------------------
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
---------------------------------------------------------------------------
COMMON STOCKS - 90.5%
AEROSPACE & DEFENSE - 5.2%
Aeroflex, Inc.*(a)................................ 91,600 $ 1,297,972
Armor Holdings, Inc.*............................. 18,800 1,633,156
BE Aerospace, Inc.*(a)............................ 42,550 1,757,315
Curtiss-Wright Corp.(a)........................... 35,850 1,670,968
DRS Technologies, Inc.(a)......................... 23,450 1,342,982
-------------
7,702,393
-------------
AIR FREIGHT & LOGISTICS - 0.9%
ABX Air, Inc.*(a)................................. 161,600 1,302,496
-------------
AIRLINES - 0.6%
Alaska Air Group, Inc.*(a)........................ 32,600 908,236
-------------
BANKS - 7.5%
Boston Private Financial Holdings, Inc.(a)........ 45,950 1,234,677
Chittenden Corp.(a)............................... 43,350 1,515,082
Citizens Banking Corp.(a)......................... 56,400 1,032,120
City Holding Co.(a)............................... 32,900 1,261,057
Columbia Banking System, Inc.(a).................. 39,700 1,161,225
FirstMerit Corp.(a)............................... 56,400 1,180,452
MB Financial, Inc.(a)............................. 37,600 1,306,224
Sterling Financial Corp. of Spokane(a)............ 41,600 1,203,904
UCBH Holdings, Inc.(a)............................ 72,250 1,320,007
-------------
11,214,748
-------------
BUILDING PRODUCTS - 1.9%
Lennox International, Inc.(a)..................... 40,900 1,400,007
NCI Building Systems, Inc.*(a).................... 27,500 1,356,575
-------------
2,756,582
-------------
COMMERCIAL SERVICES & SUPPLIES - 3.4%
Ennis, Inc.(a).................................... 50,300 1,183,056
Fair Isaac Corp.(a)............................... 33,950 1,362,074
Kelly Services, Inc............................... 41,300 1,134,098
Nobel Learning Communities, Inc.*................. 8,078 117,777
Pediatrix Medical Group, Inc.*.................... 23,900 1,318,085
-------------
5,115,090
-------------
COMMUNICATIONS EQUIPMENT & SERVICES - 2.6%
Arris Group, Inc.*(a)............................. 93,850 1,650,822
CommScope, Inc.*.................................. 37,250 2,173,537
-------------
3,824,359
-------------
CONTAINERS & PACKAGING - 1.2%
Myers Industrials, Inc.(a)........................ 80,300 1,775,433
-------------
ELECTRIC UTILITIES - 2.5%
Allete, Inc....................................... 26,850 1,263,293
IDACORP, Inc.(a).................................. 39,700 1,271,988
Integrys Energy Group, Inc.(a).................... 24,200 1,227,666
-------------
3,762,947
-------------
------------------------------------------------------------------------
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 4.6%
Anixter International, Inc.*(a)................... 20,300 $ 1,526,763
General Cable Corp.*(a)........................... 26,050 1,973,287
Park Electrochemical Corp.(a)..................... 8,300 233,894
Regal-Beloit Corp.(a)............................. 29,250 1,361,295
Tektronix, Inc.................................... 16,800 566,832
Varian, Inc.*(a).................................. 22,800 1,250,124
-------------
6,912,195
-------------
ENERGY EQUIPMENT & SERVICES - 2.2%
Hercules Offshore, Inc.*(a)....................... 45,250 1,465,195
Hornbeck Offshore Services, Inc.*(a).............. 46,650 1,808,154
-------------
3,273,349
-------------
FINANCIAL - DIVERSIFIED - 3.5%
ASTA Funding, Inc.(a)............................. 37,250 1,431,517
Financial Federal Corp.(a)........................ 50,650 1,510,383
Friedman, Billings, Ramsey Group, Inc............. 140,300 766,038
Waddell & Reed Financial, Inc. - Class A(a)....... 57,800 1,503,378
-------------
5,211,316
-------------
FOOD & DRUG RETAILING - 4.3%
Central European Distribution Corp.*(a)........... 50,650 1,753,503
Nash Finch Co.(a)................................. 41,600 2,059,200
Ruddick Corp.(a).................................. 44,400 1,337,328
Weis Markets, Inc.(a)............................. 29,950 1,213,274
-------------
6,363,305
-------------
FOOD PRODUCTS - 5.0%
Del Monte Foods Co................................ 116,100 1,411,776
J.M. Smucker Co. (The)............................ 25,600 1,629,696
Pilgrim's Pride Corp.............................. 39,000 1,488,630
Ralcorp Holdings, Inc.*........................... 22,100 1,181,245
Sanderson Farms, Inc.(a).......................... 39,350 1,771,537
-------------
7,482,884
-------------
HEALTH CARE EQUIPMENT & SUPPLIES - 1.8%
Cooper Cos., Inc. (The)(a)........................ 27,850 1,484,962
Syneron Medical, Ltd.*(a)......................... 50,000 1,247,500
-------------
2,732,462
-------------
HEALTH CARE PROVIDERS & SERVICES - 4.5%
Amedisys, Inc.*(a)................................ 39,350 1,429,585
Amsurg Corp.*(a).................................. 53,800 1,298,732
Healthspring, Inc.*............................... 59,100 1,126,446
LifePoint Hospitals, Inc.*(a)..................... 35,700 1,380,876
Option Care, Inc.(a).............................. 94,750 1,459,150
-------------
6,694,789
-------------
HOTELS, RESTAURANTS & LEISURE - 0.7%
Ruby Tuesday, Inc.(a)............................. 40,900 1,076,897
-------------
HOUSEHOLD DURABLES - 0.8%
HNI Corp.(a)...................................... 27,500 1,127,500
-------------
See notes to financial statements
4
MET INVESTORS SERIES TRUST
DREMAN SMALL-CAP VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
---------------------------------------------------------------------------
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
---------------------------------------------------------------------------
INSURANCE - 6.6%
Argonaut Group, Inc.(a)........................... 38,350 $ 1,196,904
Endurance Specialty Holdings, Ltd................. 38,350 1,535,534
Hanover Insurance Group, Inc. (The)............... 29,250 1,427,107
IPC Holdings, Ltd.(a)............................. 45,950 1,483,725
Platinum Underwriters Holdings, Ltd.(a)........... 40,550 1,409,113
Safety Insurance Group, Inc.(a)................... 33,600 1,391,040
United Fire & Casualty Co.(a)..................... 39,000 1,379,820
-------------
9,823,243
-------------
LEISURE EQUIPMENT & PRODUCTS - 1.0%
K2, Inc.*(a)...................................... 102,400 1,555,456
-------------
MACHINERY - 2.3%
Barnes Group, Inc.(a)............................. 60,100 1,903,968
Kennametal, Inc................................... 19,250 1,579,078
-------------
3,483,046
-------------
METALS & MINING - 2.7%
Iamgold Corp...................................... 171,000 1,309,860
RTI International Metals, Inc.*................... 15,500 1,168,235
Uranium Resources, Inc.*(a)....................... 144,829 1,597,464
-------------
4,075,559
-------------
OIL & GAS - 7.8%
Atwood Oceanics, Inc.*(a)......................... 24,900 1,708,638
Delta Petroleum Corp.*(a)......................... 70,850 1,422,668
Parallel Petroleum Corp.*(a)...................... 92,950 2,035,605
Petrohawk Energy Corp.*(a)........................ 105,500 1,673,230
Petroquest Energy, Inc.*(a)....................... 120,500 1,752,070
St. Mary Land & Exploration Co.(a)................ 37,600 1,376,912
Superior Energy Services, Inc.*(a)................ 41,300 1,648,696
-------------
11,617,819
-------------
PERSONAL PRODUCTS - 1.1%
Helen of Troy, Ltd.*(a)........................... 59,350 1,602,450
-------------
PHARMACEUTICALS - 1.1%
Axcan Pharma, Inc.*(a)............................ 80,600 1,557,998
-------------
REAL ESTATE - 3.3%
American Financial Realty Trust (REIT)(a)......... 120,500 1,243,560
Ashford Hospitality Trust, Inc. (REIT)(a)......... 99,750 1,173,060
Highland Hospitality Corp. (REIT)................. 70,850 1,360,320
Medical Properties Trust, Inc. (REIT)(a).......... 87,950 1,163,579
-------------
4,940,519
-------------
RETAIL - SPECIALTY - 3.6%
Hanesbrands, Inc.*(a)............................. 52,800 1,427,184
Men's Wearhouse, Inc. (The)....................... 27,500 1,404,425
Penske Automotive Group, Inc...................... 61,100 1,300,819
Regis Corp.(a).................................... 32,200 1,231,650
-------------
5,364,078
-------------
ROAD & RAIL - 0.9%
GATX Corp.(a)..................................... 28,550 1,406,088
-------------
----------------------------------------------------------------------------
SHARES/PAR VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
----------------------------------------------------------------------------
SOFTWARE - 1.9%
Jack Henry & Associates, Inc.(a).................. 56,750 $ 1,461,313
Stec, Inc.*(a).................................... 218,300 1,403,669
-------------
2,864,982
-------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 1.9%
Alaska Communications Systems Group, Inc.(a)...... 86,050 1,363,032
Iowa Telecommunications Services, Inc.(a)......... 66,500 1,511,545
-------------
2,874,577
-------------
TEXTILES, APPAREL & LUXURY GOODS - 1.0%
Stride Rite Corp.(a).............................. 73,200 1,483,032
-------------
TOBACCO - 1.1%
Vector Group, Ltd.(a)............................. 70,500 1,588,365
-------------
TRADING COMPANIES & DISTRIBUTORS - 1.0%
Mueller Water Products, Inc.(a)................... 88,600 1,511,516
-------------
Total Common Stocks (Cost $121,889,968) 134,985,709
-------------
SHORT-TERM INVESTMENT - 9.4%
State Street Bank & Trust Co., Repurchase
Agreement dated 06/29/07 at 3.400% to be
repurchased at $13,932,947 on 07/02/07
collateralized by $14,230,000 FNMA at 2.115%
due 07/03/07 with a value of $14,212,213. (Cost
- $13,929,000).................................. $13,929,000 13,929,000
-------------
TOTAL INVESTMENTS - 99.9% (Cost $135,818,968) 148,914,709
Other Assets and Liabilities (net) - 0.1% 186,998
-------------
TOTAL NET ASSETS - 100.0% $ 149,101,707
=============
PORTFOLIO FOOTNOTES:
* Non-income producing security.
(a) A portion or all of the security was held on loan. As of June 30, 2007, the
market value of the securities loaned was $37,264,133 and the collateral
received consisted of cash in the amount of $38,202,344 and securities in
the amount of $3,928.
FNMA - Federal National Mortgage Association
REIT - Real Estate Investment Trust
See notes to financial statements
5
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
DREMAN SMALL-CAP VALUE PORTFOLIO
ASSETS
Investments, at value (Note 2)* $134,985,709
Repurchase Agreement 13,929,000
Cash 1,397
Collateral for securities on loan 38,206,272
Receivable for Trust shares sold 435,942
Dividends receivable 231,980
Interest receivable 2,631
------------
Total assets 187,792,931
------------
LIABILITIES
Payables for:
Investments purchased 177,966
Trust shares redeemed 128,852
Collateral for securities on loan 38,206,272
Investment advisory fee payable (Note 3) 94,222
Administration fee payable 2,042
Custodian and accounting fees payable 41,716
Accrued expenses 40,154
------------
Total liabilities 38,691,224
------------
NET ASSETS $149,101,707
============
NET ASSETS REPRESENTED BY:
Paid in surplus $133,132,888
Accumulated net realized gain 2,432,614
Unrealized appreciation on investments 13,095,741
Undistributed net investment income 440,464
------------
Total $149,101,707
============
NET ASSETS
Class A $149,101,707
============
CAPITAL SHARES OUTSTANDING
Class A 10,027,680
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 14.87
============
- -------------------------------------------------------------------------------------
* Investments at cost, excluding Repurchase Agreements $121,889,968
See notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
DREMAN SMALL-CAP VALUE PORTFOLIO
INVESTMENT INCOME:
Dividends $ 775,074
Interest (1) 174,744
-----------
Total investment income 949,818
-----------
EXPENSES:
Investment advisory fee (Note 3) 455,509
Administration fees 5,706
Custody and accounting fees 14,324
Transfer agent fees 6,665
Audit 12,043
Legal 7,135
Trustee fees and expenses 3,994
Shareholder reporting 807
Insurance 2,048
Other 1,123
-----------
Total expenses 509,354
-----------
Net investment income 440,464
-----------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY:
Net realized gain (loss) on:
Investments 2,482,656
Foreign currency (3)
-----------
Net realized gain on investments and foreign currency 2,482,653
-----------
Net change in unrealized appreciation on:
Investments 7,100,393
Foreign currency 3
-----------
Net change in unrealized appreciation on investments and foreign
currency 7,100,396
-----------
Net realized and change in unrealized gain on investments and
foreign currency 9,583,049
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $10,023,513
===========
- --------------------------------------------------------------------------------------
(1)Interest income includes securities lending income of: $ 21,098
See notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
DREMAN SMALL-CAP VALUE PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 440,464 $ 357,024
Net realized gain on investments and foreign currency 2,482,653 718,497
Net change in unrealized appreciation on investments and foreign currency 7,100,396 5,658,126
------------ -----------
Net increase in net assets resulting from operations 10,023,513 6,733,647
------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A -- (337,568)
From net realized gains
Class A (593,783) (222,249)
------------ -----------
Net decrease in net assets resulting from distributions (593,783) (559,817)
------------ -----------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class A 59,737,651 78,052,408
Net asset value of shares issued through dividend reinvestment
Class A 593,783 559,817
Cost of shares repurchased
Class A (4,226,325) (6,551,689)
------------ -----------
Net increase in net assets from capital share transactions 56,105,109 72,060,536
------------ -----------
TOTAL INCREASE IN NET ASSETS 65,534,839 78,234,366
Net assets at beginning of period 83,566,868 5,332,502
------------ -----------
Net assets at end of period $149,101,707 $83,566,868
============ ===========
Net assets at end of period includes undistributed net investment income $ 440,464 $ --
============ ===========
See notes to financial statements
8
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS A
DREMAN SMALL-CAP VALUE PORTFOLIO --------------------------------
FOR THE PERIOD FOR THE YEARS ENDED
ENDED DECEMBER 31,
JUNE 30, 2007 -----------------
(UNAUDITED) 2006 2005(B)
-------------- ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD.................................... $13.77 $11.20 $10.00
------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................... 0.06 (a) 0.13 (a) 0.07 (a)
Net Realized/Unrealized Gain on Investments............................. 1.11 2.57 1.30
------ ------ ------
Total from Investment Operations........................................ 1.17 2.70 1.37
------ ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................... -- (0.06) (0.05)
Distributions from Net Realized Capital Gains........................... (0.07) (0.07) (0.12)
------ ------ ------
Total Distributions..................................................... (0.07) (0.13) (0.17)
------ ------ ------
NET ASSET VALUE, END OF PERIOD.......................................... $14.87 $13.77 $11.20
====== ====== ======
TOTAL RETURN 8.52% 24.23% 13.56%
Ratio of Expenses to Average Net Assets................................. 0.90%* 1.10% 1.10%*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates 0.90%* 1.40% 3.83%*
Ratio of Net Investment Income to Average Net Assets.................... 0.78%* 0.99% 0.86%*
Portfolio Turnover Rate................................................. 3.4% 62.0% 55.0%
Net Assets, End of Period (in millions)................................. $149.1 $ 83.6 $ 5.0
* Annualized
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--05/02/2005.
See notes to financial statements
9
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is Dreman Small-Cap Value Portfolio, which is
diversified. Shares in the Trust are not offered directly to the general public
and are currently available only to separate accounts established by certain
affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A Shares are offered
by the Portfolio. Class B and E Shares are not currently offered by the
Portfolio included in this report. Shares of each Class of the Portfolio
represent an equal pro rata interest in the Portfolio and generally give the
shareholder the same voting, dividend, liquidation, and other rights.
Investment income, realized and unrealized capital gains and losses, the common
expenses of the Portfolio and certain Portfolio-level expense reductions, if
any, are allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the Portfolio. Each class of
shares differs in its respective distribution expenses and certain other
class-specific expense reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date.
10
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The value of the security so purchased is subject to market fluctuations during
this period. The Portfolio segregates assets having an aggregate value at least
equal to the amount of the when issued or delayed delivery purchase commitments
until payment is made.
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
G. SECURITIES LENDING - The Portfolio may lend its securities to certain
qualified brokers who borrow securities in order to complete certain
transactions. By lending its investment securities, the Portfolio attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term of the loan would
accrue to the account of the Portfolio. Risks of delay in recovery of the
securities or even loss of rights in the collateral may occur should the
borrower of the securities fail financially. Risks may also arise to the extent
that the value of the collateral decreases below the value of the securities
loaned.
Upon entering into a securities lending transaction, the Portfolio receives
cash or other securities as collateral in an amount equal to or exceeding 102%
of the current market value of the loaned securities. Any cash received as
collateral is generally invested by State Street Bank and Trust Company ("State
Street"), acting in its capacity as securities lending agent (the "Agent"), in
the State Street Navigator Securities Lending Prime Portfolio which is a money
market fund registered under the 1940 Act. A portion of the dividends received
on the collateral is rebated to the borrower of the securities and the
remainder is split between the Agent and the Portfolio. On loans collateralized
by cash, the cash collateral is invested in a money market fund or short term
securities. A portion of the income generated upon investment of the collateral
is remitted to the Borrowers and the remainder is allocated between the fund
and the lending agent. On loans collateralized by U.S. Treasuries, a fee is
received from the Borrower and is allocated between the fund and the lending
agent.
H. FOREIGN CURRENCY TRANSLATION - The books and records of the Portfolio are
maintained in U.S. dollars. Foreign currencies, investments and other assets
and liabilities are translated into U.S. dollars on a daily basis using
prevailing exchange rates. Purchases and sales of securities are translated at
the rates of exchange prevailing when such securities were acquired or sold.
Income is translated at rates of exchange prevailing when interest is accrued
or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in
forward foreign currency contracts, sales of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities
transactions, and the difference between the amounts of dividends, interest,
and foreign withholding taxes recorded on the Portfolio's books, and the U.S.
dollar equivalent of the amounts actually received or paid. Net unrealized
foreign exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at fiscal year end, from
changes in the exchange rates of foreign currency held, and from changes in the
contract value of forward foreign currency contracts.
11
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with Dreman Value Management LLC, (the "Adviser") for investment advisory
services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- ----------------------------
Dreman Small-Cap Value Portfolio $455,509 0.825% First $50 Million
0.80% $50 Million to $100 Million
0.775% $100 Million to $500 Million
0.75% $500 Million to $1 Billion
0.725% Over $1 Billion
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust. State Street Bank and Trust Company provided transfer
agency services to the Trust for the period January 1, 2007 through April 30,
2007.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Expenses Deferred in
--------------------
2006 2007
------- ----
Maximum Expense Ratio
under current Expense Subject to repayment
Limitation Agreement until December 31,
----------------------- --------------------
Portfolio Class A Class B Class E 2011 2012
--------- ------- ------- ------- ------- ----
Dreman Small-Cap Value Portfolio 1.10% 1.35%* 1.25%* $37,273 $--
*Classes not offered during the period.
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratio as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
annually up to 0.50% and 0.25% respectively of the average net assets of the
Portfolio attributable to its Class B and Class E shares in respect to
activities primarily intended to result in the sale of Class B and Class E
Shares. However, under Class B and Class E Distribution Agreements, payments to
the Distributor for activities pursuant to the Class B Distribution Plan and
Class E Distribution Plan are currently limited to payments at an annual rate
equal to 0.25% and 0.15% of average daily net assets of the Portfolio
attributable to its Class B and Class E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued
Through Net Increase
Beginning Shares Dividend Shares in Shares Ending
Shares Sold Reinvestment Repurchased Outstanding Shares
--------- --------- ------------- ----------- ------------ ----------
Dreman Small-Cap Value Portfolio
Class A
06/30/2007 6,067,821 4,214,389 41,698 (296,228) 3,959,859 10,027,680
12/31/2006 476,328 6,056,380 40,605 (505,492) 5,591,493 6,067,821
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
- - ------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
- - --------------- -------------- --------------- --------------
Dreman Small-Cap Value Portfolio $-- $4,622,303 $-- $3,607,395
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
- --------- ------------ ------------ -------------- --------------
Dreman Small-Cap Value Portfolio $135,818,968 $16,202,822 $(3,107,081) $13,095,741
6. SECURITY LENDING
As of June 30, 2007, the Portfolio had loaned securities which were
collateralized by short term investments. The value of securities on loan and
the value of the related collateral were as follows:
Value of Value of
Securities Collateral
- ----------- -----------
$37,264,133 $38,206,272
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
7. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Long-Term
Ordinary Income Capital Gain Total
- - ---------------- ------------ ----------------
2006 2005 2006 2005 2006 2005
- - -------- ------- ------- ---- -------- -------
Dreman Small-Cap Value Portfolio $477,589 $76,612 $82,228 $-- $559,817 $76,612
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
- - ------------- ------------- ------------ ------------------ ----------
Dreman Small-Cap Value Portfolio $553,513 $64,853 $5,920,721 $-- $6,539,087
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
8. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
9. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
14
MET INVESTORS SERIES TRUST
Goldman Sachs Mid-Cap
Value Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
GOLDMAN SACHS MID-CAP VALUE PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY GOLDMAN SACHS ASSET MANAGEMENT, L.P.
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
PERFORMANCE REVIEW
For the six month period ended June 30, 2007, the Goldman Sachs Mid-Cap Value
Portfolio Class A shares returned 9.84% versus 8.69% for its benchmark, the
Russell Midcap(R) Value Index./1/
MARKET REVIEW
The U.S. equity markets hit new highs during the reporting period. While the
equity markets finished the first half of the year in positive territory,
concerns related to subprime loans undercut investor optimism as markets closed
the quarter on a cautious note. Consistent with recent trends, leveraged buyout
and merger and acquisition (M&A) activity remained high as corporate and
private buyers sought attractive assets. On the economic front, the Federal
Reserve Board kept short-term interest rates steady while bond yields spiked
above 5% in June.
PORTFOLIO POSITIONING
During the six-month reporting period, the Goldman Sachs Mid-Cap Value
Portfolio generated positive returns and outperformed the returns of the
Russell Midcap(R) Value Index. The Portfolio's stocks in the energy and
healthcare sectors led performers while its holdings in the technology and
financials sectors detracted from results.
In the first six months of the year, a mix of successful stock picking and
favorable acquisition activity drove the Portfolio's relative gains. Several of
the Portfolio's Energy positions, such as EOG Resources, Inc. (1.4% of the
Portfolio) and Range Resources Corp. (3.1%), rebounded from last year's
weakness to lead performance year-to-date. We continue to favor Energy
companies with a mix of low cost structures, positive reserve trends and
disciplined management teams. The Portfolio also benefited from M&A activity as
MedImmune (0.0%) was acquired by AstraZeneca at a sizable premium. MedImmune
had long served as an example of what we considered a mis-priced company
despite its robust pipeline of products. We subsequently sold our stake after
the shares rose sharply on the news. Other holdings in the Portfolio that
contributed to positive returns included Supervalu, Inc. (2.0%) and PPL Corp.
(2.3%).
Several investments offset gains in the portfolio for the six-month reporting
period. In technology, shares of Seagate Technology (1.1%) declined as the
company faced aggressive competition and pricing pressures. While we managed to
avoid many of the sharp losses in the homebuilders sector, Lennar Corp. (0.6%)
was still hit by housing concerns. We think this turnaround story is still
attractive over the long term, but reduced the position to reflect near term
uncertainty. Elsewhere, KeyCorp (1.9%) and Webster Financial Corp.
- --------
/1/ The Russell Midcap(R) Value Index is an unmanaged index of common stock
prices that measures the performance of those Russell Midcap companies with
lower price-to-book ratios and lower forecasted growth values. The S&P 500(R)
Index is the Standard & Poor's 500 Composite Index of 500 stocks, an unmanaged
index of common stock prices. The Index figures do not reflect any deduction
for fees, expenses or taxes. It is not possible to invest directly in an
unmanaged index.
(1.2%) both experienced weakness as both companies lowered their near term
outlooks. We continue to view both stocks as attractive opportunities.
OUTLOOK
Many of our Portfolio's best performing stocks in 2007 have been companies
engaged in efforts to rationalize their cost structures, divest non-strategic
assets and generally improve returns on capital. As we move into the second
half, we will continue to seek similar opportunities as these programs of
internal change can show positive results in an uncertain market environment.
We believe the market will continue to see a healthy flow of private equity
investment into mid-cap companies, particularly those with the cash flow
characteristics we tend to favor.
TEAM MANAGED
The Portfolio is managed by a team headed by Eileen Rominger, Managing Director
and Chief Investment Officer--Value. Ms. Rominger joined Goldman Sachs in 1999.
From 1981-1999, Ms. Rominger worked at Oppenheimer Capital, most recently as a
senior portfolio manager.
The Portfolio invests primarily in mid-capitalization U.S. equity investments
and is subject to market risk so that the value of the securities in which it
invests may go up or down in response to the prospects of individual companies,
particular industry sectors and/or general economic conditions. The securities
of mid-capitalization companies involve greater risks than those associated
with larger, more established companies and may be subject to more abrupt or
erratic price movements.
This material is being provided at your specific request for informational
purposes only. Although every effort has been made to accurately reflect the
information contained herein, Goldman Sachs Asset Management, L.P. (together
with its affiliates, "GSAM") reserves the right to correct any errors or
omissions and does not make any representation or warranty (express or implied)
as to the accuracy, completeness or fairness of the information contained
herein.
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
GOLDMAN SACHS MID-CAP VALUE PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY GOLDMAN SACHS ASSET MANAGEMENT, L.P.
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
--------------------------------------
Range Resources Corp. 3.07%
--------------------------------------
Williams Cos., Inc. (The) 2.89%
--------------------------------------
Entergy Corp. 2.83%
--------------------------------------
PPL Corp. 2.30%
--------------------------------------
Johnson Controls, Inc. 2.04%
--------------------------------------
Ambac Financial Group, Inc. 2.02%
--------------------------------------
SUPERVALU, Inc. 2.02%
--------------------------------------
Keycorp 1.93%
--------------------------------------
Amphenol Corp.--Class A 1.87%
--------------------------------------
Edison International 1.75%
--------------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
[CHART]
Financials 27.8%
Utilities 13.4%
Industrials 12.9%
Energy 11.1%
Non-Cyclical 10.8%
Cyclical 8.2%
Technology 6.2%
Communications 5.4%
Basic Materials 4.2%
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
GOLDMAN SACHS MID-CAP VALUE PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY GOLDMAN SACHS ASSET MANAGEMENT, L.P.
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
GOLDMAN SACHS MID-CAP VALUE PORTFOLIO MANAGED BY
GOLDMAN SACHS ASSET MANAGEMENT, L.P. VS. RUSSELL MIDCAP(R) VALUE INDEX/1/
Growth Based on $10,000+
[CHART]
Goldman Sachs
Mid-Cap Value
Portfolio-Class A Russell Midcap(R)
Class B Value Index/1/
---------------------- --------------
4/30/2004 $10,000 $10,000
12/31/2004 12,098 12,262
12/31/2005 13,613 13,813
12/31/2006 15,750 16,605
6/30/2007 17,270 18,048
-----------------------------------------------------------------
Average Annual Return/2/
(for the period ended 6/30/07)
-----------------------------------------------------------------
1 Year 3 Year Since Inception/3/
-----------------------------------------------------------------
- -- Goldman Sachs Mid-Cap Value
Portfolio--Class A 21.74% 17.85% 19.08%
Class B 21.36% 17.55% 18.79%
-----------------------------------------------------------------
- - - Russell Midcap(R) Value Index/1/ 22.09% 19.32% 20.50%
-----------------------------------------------------------------
+The chart reflects the performance of Class A shares of the Portfolio. The
performance of Class A shares will differ from that of the Class B shares
because of the difference in expenses paid by policyholders investing in the
different share classes.
/1/The Russell Midcap(R) Value Index is an unmanaged index of common stock
prices which measures the performance of those Russell Midcap companies with
lower price-to-book ratios and lower forecasted growth values. The stocks are
also members of the Russell 1000 Value(R) Index. The Index does not include
fees or expenses and is not available for direct investment.
/2/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/3/Inception of the Class A and Class B shares is 5/1/04. Index returns are
based on an inception date of 4/30/04.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
3
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
GOLDMAN SACHS MID-CAP VALUE PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,098.40 $3.85
Hypothetical (5% return before expenses) 1,000.00 1,021.12 3.71
- ------------------------------------------ ------------- ------------- --------------
Class B
Actual $1,000.00 $1,096.50 $5.15
Hypothetical (5% return before expenses) 1,000.00 1,019.89 4.96
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.74% and
0.99% for the Class A and Class B, respectively, multiplied by the average
account value over the period, multiplied by 181/365 (to reflect the one-half
year period).
4
MET INVESTORS SERIES TRUST
GOLDMAN SACHS MID-CAP VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
----------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
----------------------------------------------------------
COMMON STOCKS - 97.2%
AEROSPACE & DEFENSE - 1.8%
Alliant Techsystems, Inc.*.......... 27,802 $ 2,756,568
Rockwell Collins, Inc............... 101,149 7,145,166
-------------
9,901,734
-------------
AIR FREIGHT & LOGISTICS - 0.3%
Ryder System, Inc................... 25,860 1,391,268
-------------
AIRLINES - 0.4%
Southwest Airlines Co............... 151,350 2,256,629
-------------
AUTO COMPONENTS - 3.1%
Autoliv, Inc........................ 3,386 192,562
Goodyear Tire & Rubber Co. (The)*(a) 86,000 2,989,360
Johnson Controls, Inc............... 97,325 11,267,315
Tenneco Automotive, Inc.*........... 75,980 2,662,339
-------------
17,111,576
-------------
AUTOMOBILES - 0.9%
Avis Budget Group, Inc.*............ 47,640 1,354,405
Ford Motor Co.(a)................... 378,980 3,569,992
-------------
4,924,397
-------------
BANKS - 8.0%
Astoria Financial Corp.............. 31,510 789,010
Commerce Bancorp, Inc.(a)........... 96,330 3,563,247
Commerce Bancshares, Inc.(a)........ 72,379 3,278,769
First Horizon National Corp.(a)..... 67,790 2,643,810
Hudson City Bancorp, Inc.(a)........ 184,918 2,259,698
Keycorp(a).......................... 311,896 10,707,390
M&T Bank Corp....................... 39,416 4,213,570
Northern Trust Corp................. 114,714 7,369,227
Webster Financial Corp.............. 160,834 6,862,787
Zions Bancorporation................ 35,197 2,707,001
-------------
44,394,509
-------------
BEVERAGES - 0.6%
Coca-Cola Enterprises, Inc.......... 84,310 2,023,440
Pepsi Bottling Group, Inc........... 38,906 1,310,354
-------------
3,333,794
-------------
BUILDING PRODUCTS - 1.1%
American Standard Cos., Inc......... 60,541 3,570,708
Lennox International, Inc........... 70,940 2,428,276
-------------
5,998,984
-------------
CHEMICALS - 2.6%
Air Products & Chemicals, Inc....... 32,852 2,640,315
Airgas, Inc......................... 94,669 4,534,645
Albemarle Corp...................... 35,261 1,358,606
Celanese Corp....................... 63,621 2,467,223
Chemtura Corp....................... 317,444 3,526,803
-------------
14,527,592
-------------
-----------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
-----------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES - 5.5%
Allied Waste Industries, Inc.*(a).... 618,075 $ 8,319,289
CheckFree Corp.*(a).................. 103,230 4,149,846
ChoicePoint, Inc.*................... 65,123 2,764,471
Domtar Corp.*........................ 247,250 2,759,310
H&R Block, Inc.(a)................... 305,369 7,136,474
Pitney Bowes, Inc.................... 23,360 1,093,715
Republic Services, Inc............... 136,095 4,169,951
-------------
30,393,056
-------------
COMPUTERS & PERIPHERALS - 1.3%
SanDisk Corp.*....................... 24,060 1,177,496
Seagate Technology................... 276,941 6,029,006
-------------
7,206,502
-------------
ELECTRIC UTILITIES - 12.7%
American Electric Power Co., Inc..... 72,550 3,267,652
CMS Energy Corp.(a).................. 91,136 1,567,539
Constellation Energy Group, Inc...... 17,510 1,526,347
DPL, Inc.(a)......................... 308,793 8,751,193
Edison International................. 172,649 9,689,062
Entergy Corp......................... 146,035 15,676,857
FirstEnergy Corp..................... 94,059 6,088,439
PG&E Corp............................ 159,994 7,247,728
PPL Corp............................. 271,529 12,704,842
Wisconsin Energy Corp................ 88,781 3,926,784
-------------
70,446,443
-------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 4.5%
Amphenol Corp. - Class A............. 290,846 10,368,660
Cooper Industries, Ltd. - Class A.... 131,304 7,496,145
PerkinElmer, Inc..................... 166,712 4,344,515
Xerox Corp.*......................... 144,370 2,667,958
-------------
24,877,278
-------------
ENERGY EQUIPMENT & SERVICES - 1.1%
Smith International, Inc............. 61,650 3,615,156
W-H Energy Services, Inc.*(a)........ 42,554 2,634,518
-------------
6,249,674
-------------
FINANCIAL - DIVERSIFIED - 3.1%
Bear Stearns Cos., Inc............... 50,016 7,002,240
CIT Group, Inc....................... 108,140 5,929,316
E*TRADE Financial Corp.*............. 63,368 1,399,799
Lazard, Ltd. - Class A(a)............ 35,907 1,616,893
Nuveen Investments, Inc. - Class A(a) 21,780 1,353,627
-------------
17,301,875
-------------
FOOD & DRUG RETAILING - 2.6%
Safeway, Inc......................... 101,690 3,460,511
SUPERVALU, Inc....................... 241,199 11,172,337
-------------
14,632,848
-------------
See notes to financial statements
5
MET INVESTORS SERIES TRUST
GOLDMAN SACHS MID-CAP VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
-------------------------------------------------------------------
FOOD PRODUCTS - 0.2%
Smithfield Foods, Inc.*(a).............. 36,037 $ 1,109,579
-------------
GAS UTILITIES - 0.2%
AGL Resources, Inc...................... 28,486 1,153,113
-------------
HEALTH CARE EQUIPMENT & SUPPLIES -1.3%
IMS Health, Inc......................... 215,573 6,926,360
-------------
HEALTH CARE PROVIDERS & SERVICES - 0.9%
Coventry Health Care, Inc.*............. 33,128 1,909,829
Health Net, Inc.*....................... 56,579 2,987,371
-------------
4,897,200
-------------
HOTELS, RESTAURANTS & LEISURE - 0.5%
Boyd Gaming Corp........................ 60,080 2,955,335
-------------
HOUSEHOLD DURABLES - 1.9%
Lennar Corp. - Class A(a)............... 85,897 3,140,394
Newell Rubbermaid, Inc.................. 257,352 7,573,870
-------------
10,714,264
-------------
HOUSEHOLD PRODUCTS - 2.3%
Clorox Co............................... 126,610 7,862,481
Fortune Brands, Inc..................... 57,110 4,704,151
-------------
12,566,632
-------------
INDUSTRIAL - DIVERSIFIED - 0.5%
Reynolds American, Inc.(a).............. 41,698 2,718,710
-------------
INSURANCE - 7.6%
Ambac Financial Group, Inc.............. 128,503 11,204,177
Assurant, Inc........................... 69,172 4,075,614
Everest Reinsurance Group, Ltd.......... 67,611 7,345,259
MGIC Investment Corp.(a)................ 38,526 2,190,588
PartnerRe, Ltd.(a)...................... 67,899 5,262,173
Philadelphia Consolidated Holding Corp.* 26,640 1,113,552
PMI Group, Inc. (The)................... 48,764 2,178,288
Radian Group, Inc....................... 21,428 1,157,112
RenaissanceRe Holdings, Ltd.(a)......... 41,487 2,571,779
UnumProvident Corp...................... 101,956 2,662,071
XL Capital, Ltd. - Class A.............. 30,100 2,537,129
-------------
42,297,742
-------------
INTERNET SOFTWARE & SERVICES - 0.5%
Monster Worldwide, Inc.*................ 66,550 2,735,205
-------------
IT CONSULTING & SERVICES - 0.6%
BearingPoint, Inc.*(a).................. 415,560 3,037,744
-------------
MACHINERY - 1.3%
Eaton Corp.............................. 44,290 4,118,970
Joy Global, Inc......................... 54,470 3,177,235
-------------
7,296,205
-------------
MEDIA - 0.8%
Charter Communications, Inc.*(a)........ 1,020,878 4,134,556
-------------
----------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
----------------------------------------------------------------
METALS & MINING - 1.7%
Commercial Metals Co...................... 117,942 $ 3,982,902
United States Steel Corp.................. 50,655 5,508,731
-------------
9,491,633
-------------
MULTI-UTILITIES - 0.1%
SCANA Corp.(a)............................ 14,980 573,584
-------------
OIL & GAS - 9.8%
EOG Resources, Inc........................ 107,753 7,872,434
Hess Corp................................. 66,700 3,932,632
Range Resources Corp...................... 454,773 17,013,058
Teekay Shipping Corp.(a).................. 13,990 810,161
Ultra Petroleum Corp.*.................... 96,874 5,351,320
Weatherford International, Ltd.*.......... 59,810 3,303,904
Williams Cos., Inc. (The)................. 506,635 16,019,799
-------------
54,303,308
-------------
REAL ESTATE - 8.2%
Apartment Investment & Management Co.
(REIT) - Class A........................ 163,257 8,231,418
Brandywine Realty Trust (REIT)(a)......... 121,048 3,459,552
DCT Industrial Trust Inc. (REIT)(a)....... 251,300 2,703,988
Developers Diversified Realty Corp. (REIT) 47,296 2,492,972
Equity Residential (REIT)................. 45,221 2,063,434
Highwoods Properties, Inc. (REIT)(a)...... 145,529 5,457,337
Liberty Property Trust (REIT)(a).......... 127,592 5,605,117
Mack-Cali Realty Corp. (REIT)............. 90,930 3,954,546
Pennsylvania Real Estate Investment Trust
(REIT).................................. 125,176 5,549,052
Vornado Realty Trust (REIT)............... 50,810 5,580,970
-------------
45,098,386
-------------
RETAIL - MULTILINE - 0.7%
J.C. Penney Co., Inc...................... 50,700 3,669,666
-------------
RETAIL - SPECIALTY - 0.7%
Ross Stores, Inc.......................... 72,651 2,237,651
Williams-Sonoma, Inc.(a).................. 48,805 1,541,262
-------------
3,778,913
-------------
ROAD & RAIL - 1.0%
Landstar System, Inc...................... 45,440 2,192,480
Norfolk Southern Corp..................... 60,015 3,154,989
-------------
5,347,469
-------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS - 1.2%
LSI Logic Corp.*(a)....................... 201,662 1,514,482
National Semiconductor Corp............... 49,870 1,409,825
Tessera Technologies, Inc.*(a)............ 89,948 3,647,391
-------------
6,571,698
-------------
SOFTWARE - 1.6%
Activision, Inc.*......................... 486,899 9,090,404
-------------
See notes to financial statements
6
MET INVESTORS SERIES TRUST
GOLDMAN SACHS MID-CAP VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
-------------------------------------------------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 3.0%
Cincinnati Bell, Inc.*........ 367,910 $ 2,126,520
Embarq Corp................... 137,337 8,703,045
Qwest Communications
International, Inc.*(a)..... 580,560 5,631,432
-------------
16,460,997
-------------
TELECOMMUNICATION SERVICES - WIRELESS - 0.7%
MetroPCS Communications, Inc.* 122,160 4,036,166
-------------
TOBACCO - 0.3%
Loews Corp. - Carolina Group.. 24,610 1,901,616
-------------
Total Common Stocks
(Cost $474,379,349)......... 537,814,644
-------------
------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------------
SHORT-TERM INVESTMENT - 2.1%
State Street Bank & Trust Co., Repurchase
Agreement dated 06/29/07 at 3.400% to
be repurchased at $11,681,309 on
07/02/07 collateralized by $12,725,000
FNMA at 4.375% due 10/15/15 with a
value of $11,913,781.
(Cost - $11,678,000)................... $11,678,000 $ 11,678,000
------------
TOTAL INVESTMENTS - 99.3%
(Cost $486,057,349) 549,492,644
Other Assets and Liabilities (net) - 0.7% 4,059,623
------------
TOTAL NET ASSETS - 100.0% $553,552,267
============
PORTFOLIO FOOTNOTES:
* Non-income producing security.
(a) A portion or all of the security was held on loan. As of June 30, 2007, the
market value of the securities loaned was $77,726,448 and the collateral
received consisted of cash in the amount of $79,199,324 and securities in
the amount of $503,507.
FNMA - Federal National Mortgage Association
REIT - Real Estate Investment Trust
See notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
GOLDMAN SACHS MID-CAP VALUE PORTFOLIO
ASSETS
Investments, at value (Note 2)* $537,814,644
Repurchase Agreement 11,678,000
Cash 464
Collateral for securities on loan 79,702,831
Receivable for investments sold 17,784,445
Receivable for Trust shares sold 679,559
Dividends receivable 636,934
Interest receivable 1,103
------------
Total assets 648,297,980
------------
LIABILITIES
Payables for:
Investments purchased 14,501,023
Trust shares redeemed 55,821
Distribution and services fees - Class B 46,009
Collateral for securities on loan 79,702,831
Investment advisory fee payable (Note 3) 326,238
Administration fee payable 6,281
Custodian and accounting fees payable 68,730
Accrued expenses 38,780
------------
Total liabilities 94,745,713
------------
NET ASSETS $553,552,267
============
NET ASSETS REPRESENTED BY:
Paid in surplus $450,338,196
Accumulated net realized gain 36,392,495
Unrealized appreciation on investments 63,435,295
Undistributed net investment income 3,386,281
------------
Total $553,552,267
============
NET ASSETS
Class A $330,590,084
============
Class B 222,962,183
============
CAPITAL SHARES OUTSTANDING
Class A 22,929,848
============
Class B 15,490,516
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 14.42
============
Class B 14.39
============
- ------------------------------------------------------------------
*Investments at cost, excluding Repurchase Agreements $474,379,349
See notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
GOLDMAN SACHS MID-CAP VALUE PORTFOLIO
INVESTMENT INCOME:
Dividends (1) $ 4,307,367
Interest (2) 248,698
-----------
Total investment income 4,556,065
-----------
EXPENSES:
Investment advisory fee (Note 3) 1,835,045
Administration fees 19,515
Custody and accounting fees 17,306
Distribution fee--Class B 260,685
Transfer agent fees 7,093
Audit 12,047
Legal 7,494
Trustee fees and expenses 4,915
Shareholder reporting 14,257
Insurance 3,178
Other 809
-----------
Total expenses 2,182,344
Less broker commission recapture (25,238)
-----------
Net expenses 2,157,106
-----------
Net investment income 2,398,959
-----------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS :
Net realized gain on:
Investments 37,597,737
-----------
Net realized gain on investments 37,597,737
-----------
Net change in unrealized appreciation on:
Investments 6,907,571
-----------
Net change in unrealized appreciation on investments 6,907,571
-----------
Net realized and change in unrealized gain on investments 44,505,308
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $46,904,267
===========
- --------------------------------------------------------------------------------------
(1)Dividend income is net withholding taxes of: $ 440
(2)Interest income includes securities lending income of: 33,798
See notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
GOLDMAN SACHS MID-CAP VALUE PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
------------- -------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 2,398,959 $ 4,078,700
Net realized gain on investments and futures contracts 37,597,737 43,867,229
Net change in unrealized appreciation on investments 6,907,571 19,185,634
------------ -------------
Net increase in net assets resulting from operations 46,904,267 67,131,563
------------ -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (2,067,602) --
Class B (1,022,440) --
From net realized gains
Class A (26,702,483) (2,754,489)
Class B (18,540,137) (1,319,310)
------------ -------------
Net decrease in net assets resulting from distributions (48,332,662) (4,073,799)
------------ -------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class A 43,378,445 88,625,938
Class B 34,345,363 49,714,087
Net asset value of shares issued through dividend reinvestment
Class A 28,770,085 2,754,489
Class B 19,562,577 1,319,310
Cost of shares repurchased
Class A (18,682,234) (138,418,953)
Class B (22,990,810) (18,565,085)
------------ -------------
Net increase (decrease) in net assets from capital share transactions 84,383,426 (14,570,214)
------------ -------------
TOTAL INCREASE IN NET ASSETS 82,955,031 48,487,550
Net assets at beginning of period 470,597,236 422,109,686
------------ -------------
Net assets at end of period $553,552,267 $ 470,597,236
============ =============
Net assets at end of period includes undistributed net investment income $ 3,386,281 $ 4,077,364
============ =============
See notes to financial statements
10
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS A
GOLDMAN SACHS MID-CAP VALUE PORTFOLIO -------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 ----------------------------
(UNAUDITED) 2006 2005 2004(B)
-------------- ------ ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD....................................... $14.43 $12.54 $11.94 $10.00
------ ------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income...................................................... 0.08 (a) 0.14 (a) 0.15 (a) 0.09 (a)
Net Realized/Unrealized Gain on Investments................................ 1.34 1.86 1.38 2.01
------ ------ ------ ------
Total from Investment Operations........................................... 1.42 2.00 1.53 2.10
------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income....................................... (0.10) -- (0.11) (0.05)
Distributions from Net Realized Capital Gains.............................. (1.33) (0.11) (0.82) (0.11)
------ ------ ------ ------
Total Distributions........................................................ (1.43) (0.11) (0.93) (0.16)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD............................................. $14.42 $14.43 $12.54 $11.94
====== ====== ====== ======
TOTAL RETURN 9.84% 16.02% 12.76% 20.98%
Ratio of Expenses to Average Net Assets.................................... 0.74%* 0.79% 0.79% 0.97%*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates... 0.75%* 0.81% 0.79% 0.98%*
Ratio of Net Investment Income to Average Net Assets....................... 1.04%* 1.02% 1.15% 1.19%*
Portfolio Turnover Rate.................................................... 37.1% 67.2% 51.4% 40.8%
Net Assets, End of Period (in millions).................................... $330.6 $277.9 $285.0 $126.0
CLASS B
-------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 ----------------------------
(UNAUDITED) 2006 2005 2004(B)
-------------- ------ ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD....................................... $14.40 $12.55 $11.95 $10.00
------ ------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income...................................................... 0.06 (a) 0.11 (a) 0.11 (a) 0.05 (a)
Net Realized/Unrealized Gain on Investments................................ 1.33 1.85 1.39 2.04
------ ------ ------ ------
Total from Investment Operations........................................... 1.39 1.96 1.50 2.09
------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income....................................... (0.07) -- (0.08) (0.03)
Distributions from Net Realized Capital Gains.............................. (1.33) (0.11) (0.82) (0.11)
------ ------ ------ ------
Total Distributions........................................................ (1.40) (0.11) (0.90) (0.14)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD............................................. $14.39 $14.40 $12.55 $11.95
====== ====== ====== ======
TOTAL RETURN 9.65% 15.69% 12.54% 20.85%
Ratio of Expenses to Average Net Assets.................................... 0.99%* 1.05% 1.03% 1.14%*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates... 1.00%* 1.07% 1.03% 1.14%*
Ratio of Net Investment Income to Average Net Assets....................... 0.80%* 0.83% 0.87% 0.71%*
Portfolio Turnover Rate.................................................... 37.1% 67.2% 51.4% 40.8%
Net Assets, End of Period (in millions).................................... $223.0 $192.6 $137.1 $104.0
* Annualized
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations 05/01/2004.
See notes to financial statements
11
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is Goldman Sachs Mid-Cap Value Portfolio,
which is diversified. Shares in the Trust are not offered directly to the
general public and are currently available only to separate accounts
established by certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A and B Shares are
offered by the Portfolio. Class E Shares are not currently offered by the
Portfolio included in this report. Shares of each Class of the Portfolio
represent an equal pro rata interest in the Portfolio and generally give the
shareholder the same voting, dividend, liquidation, and other rights.
Investment income, realized and unrealized capital gains and losses, the common
expenses of the Portfolio and certain Portfolio-level expense reductions, if
any, are allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the Portfolio. Each class of
shares differs in its respective distribution expenses and certain other
class-specific expense reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date.
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The value of the security so purchased is subject to market fluctuations during
this period. The Portfolio segregates assets having an aggregate value at least
equal to the amount of the when issued or delayed delivery purchase commitments
until payment is made.
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. SECURITIES LENDING - The Portfolio may lend its securities to certain
qualified brokers who borrow securities in order to complete certain
transactions. By lending its investment securities, the Portfolio attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term of the loan would
accrue to the account of the Portfolio. Risks of delay in recovery of the
securities or even loss of rights in the collateral may occur should the
borrower of the securities fail financially. Risks may also arise to the extent
that the value of the collateral decreases below the value of the securities
loaned.
Upon entering into a securities lending transaction, the Portfolio receives
cash or other securities as collateral in an amount equal to or exceeding 102%
of the current market value of the loaned securities. Any cash received as
collateral is generally invested by State Street Bank and Trust Company ("State
Street"), acting in its capacity as securities lending agent (the "Agent"), in
the State Street Navigator Securities Lending Prime Portfolio which is a money
market fund registered under the 1940 Act. A portion of the dividends received
on the collateral is rebated to the borrower of the securities and the
remainder is split between the Agent and the Portfolio. On loans collateralized
by cash, the cash collateral is invested in a money market fund or short term
securities. A portion of the income generated upon investment of the collateral
is remitted to the Borrowers and the remainder is allocated between the fund
and the lending agent. On loans collateralized by U.S. Treasuries, a fee is
received from the Borrower and is allocated between the fund and the lending
agent.
G. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
H. DIRECTED BROKERAGE AGREEMENT - The Trust has entered into a directed
brokerage arrangement with State Street Global Markets ("SSGM"). Under this
arrangement, the Portfolio directs certain trades to SSGM in return for a
recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to
each Portfolio are shown separately as an expense reduction on the Statement of
Operations of the Portfolio.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with Goldman Sachs Asset Management, L.P., (the "Adviser") for investment
advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- --------------------
Goldman Sachs Mid-Cap Value Portfolio $1,835,045 0.75% First $200 Million
0.70% Over $200 Million
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Maximum Expense Ratio
under current Expense
Limitation Agreement
---------------------
Portfolio Class A Class B Class E
--------- ------- ------- -------
Goldman Sachs Mid-Cap Value Portfolio 0.95% 1.20% 1.10%*
* Class not offered during the period.
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratio as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
The amount waived and expenses reimbursed for the period ended June 30, 2007 is
shown as investment advisory fee waiver in the Statement of Operations of the
Portfolio.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
During the period ended June 30, 2007 the Portfolio paid brokerage commissions
to affiliated brokers/dealers:
Portfolio Affiliate Commission
--------- --------- ----------
Goldman Sachs Mid-Cap Value Portfolio Goldman Sachs & Co. $10,003
14
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued Net Increase
Through (Decrease)
Beginning Shares Dividend Shares in Shares Ending
Shares Sold Reinvestment Repurchased Outstanding Shares
---------- --------- ------------- ----------- ------------ ----------
Goldman Sachs Mid-Cap Value Portfolio
Class A
06/30/2007 19,264,414 2,929,879 1,992,388 (1,256,833) 3,665,434 22,929,848
12/31/2006 22,724,830 6,697,703 207,416 (10,365,535) (3,460,416) 19,264,414
Class B
06/30/2007 13,383,082 2,319,367 1,356,628 (1,568,561) 2,107,434 15,490,516
12/31/2006 10,925,761 3,768,623 99,346 (1,410,648) 2,457,321 13,383,082
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
Goldman Sachs Mid-Cap Value Portfolio $-- $234,576,207 $-- $185,585,024
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
- --------- ------------ ------------ -------------- --------------
Goldman Sachs Mid-Cap Value Portfolio $486,057,349 $71,283,293 $(7,847,998) $63,435,295
6. SECURITY LENDING
As of June 30, 2007, the Portfolio had loaned securities which were
collateralized by short term investments. The value of securities on loan and
the value of the related collateral were as follows:
Value of Value of
Securities Collateral
----------- -----------
Goldman Sachs Mid-Cap Value Portfolio $77,726,448 $79,702,831
7. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
---------------------- --------------------- ----------------------
2006 2005 2006 2005 2006 2005
---------- ----------- ---------- ---------- ---------- -----------
Goldman Sachs Mid-Cap Value Portfolio $1,386,275 $19,958,326 $2,687,524 $8,787,001 $4,073,799 $28,745,327
15
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
7. DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
------------- ------------- ------------ ------------------ ------------
Goldman Sachs Mid-Cap Value Portfolio $13,979,514 $34,448,881 $56,214,981 $-- $104,643,376
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
8. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
9. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
16
MET INVESTORS SERIES TRUST
Harris Oakmark
International Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
HARRIS OAKMARK INTERNATIONAL PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY HARRIS ASSOCIATES L.P.
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
MARKET & ECONOMIC REVIEW:
CHINA, UNSAFE AT ANY SPEED?
We receive many questions as to why we remain uninvested in China, the world's
fastest growing major economy. Recall, we are long-term value investors,
seeking to invest in companies that are not only high quality but also sell at
low prices. Today the stocks of Chinese companies represent neither: they are
richly priced and low quality. Most major Chinese companies are still state
controlled, which means that politics will most certainly enter corporate
decision making. The state is directly involved in critical banking matters,
ranging from capital allocation to pricing to investment criteria, all of which
could lead to less than optimal results for foreign investors. Although the
lack of environmental regulations in China has helped it become a low cost
country for producing goods and has attracted manufacturers from all over the
world, its air, water, and soil have rapidly deteriorated. Additionally,
aggressive "entrepreneurs" have called into question the safety and quality of
much of what has been produced. Recently, pet food, toys, tooth paste, cough
syrup, and ATVs have been made either toxic by the addition of cheap materials
or unsafe by poor design. We believe that China will have to deal with these
issues, which will eventually affect the cost of production and possibly make
it a less competitive place to invest and produce. In our view the current pace
of environmental decay, if maintained, would be catastrophic not only for China
but also for the globe. It is true that there will be growth in China for as
far as the eye can see: strong growth in fixed capital, economic
liberalization, and some positive microeconomic fundamentals will lead to
productivity enhancement. However, this does not mean it is safe to invest in
Chinese stocks at today's prices, and we will continue to avoid these stocks
because of their inflated valuations, corporate governance issues and political
risk.
PERFORMANCE AT-A-GLANCE
At this time, we are quite enthused with the make-up of the portfolio, and we
believe it will continue to outperform in the long-term. We feel that risk is
being mispriced in global equity markets and that the undervalued and high
quality companies in our portfolios will eventually deliver strong performance.
Today's "dogs"--those stocks that have been a drag on portfolio return--often
turn into tomorrow's stars. We are quite confident that those securities that
have dampened performance will not only recover but will lead to solid absolute
and relative performance. For the six-months ending June 30, 2007 the MSCI
EAFE(R) Index returned 9.48% and the Portfolio slightly under-performed the
Index for the same period.
PORTFOLIO PERFORMANCE REVIEW:
For the six months ended June 30/th/ 2007 the largest contributors to the
Portfolio's performance were DAIMLERCHRYLSER, NIKKO CORDIAL CORP., BRITISH SKY
BROADCASTING ("BSKYB") and CADBURY SCHWEPPES.
DAIMLER, the top performer for the period returned 53%. Most of the stock
price's increase resulted from the announcement of the sale of 80% of the
Chrysler division to Cerberus. While Daimler AG will maintain 20% ownership in
Chrysler Holding LLC, it will be divested of the pension and health care
obligations.
NIKKO CORDIAL is a Japanese investment firm and the country's third largest
brokerage firm. We invested in Nikko towards the end of 2006 after the share
price had been hit exceptionally hard due to a relatively small accounting
scandal that raised the possibility of the stock being de-listed from the Tokyo
exchange. We believed that Nikko offered significantly higher return potential
because, in addition to the company's exceptionally strong franchise, the
Japanese investment sector presented huge growth opportunities. This
opportunity is the result of recent Japanese regulations that allow investors
to move savings from deposits that earned less than 1% to products and funds
offered by Nikko that could offer significantly higher returns. Additionally,
because those who were involved in the accounting scandal were fired, we
estimated that it was improbable that the stock would be de-listed. Our
hypotheses were mostly correct about the strength of Nikko's business and the
Japanese exchange's action, and we correctly assumed that Citigroup, who owned
approximately 5% of Nikko and runs a joint venture with them, would be
interested in bidding for the company. As a result, Nikko's share price
increased almost 25% in the first quarter. We did not, however, anticipate that
Nikko's management would seem more interested in pleasing Citigroup than in
serving the other 95% of its shareholders. Sadly, once Citigroup expressed
interest in buying the company, Nikko's management seemed to actively
discourage other interested parties. We have trimmed our position as a result
of the share price's massive appreciation, but our preference at this time
would be to remain Nikko shareholders given the unsatisfactory price that
Citigroup is offering.
BSKYB, the United Kingdom's number one pay-television operator, returned 27% in
the period. In addition to continued strong results in its pay-television
business, BskyB has made excellent progress in attracting both new and existing
customers to its recently launched broadband and telephony service.
Rounding out the top four was CADBURY SCHWEPPES, a UK-based confectionary and
beverage company. Most of the 26% increase in price followed the mid-March
announcement that a leading hedge fund had taken interest in 3% of issued share
capital, which generated market speculation that the company was a takeover
target. Bowing to pressure led by the new hedge fund activist, Cadbury
announced the spin-off of its North American beverage unit, the maker of
Dr. Pepper and 7 Up.
On the negative side, shares of Japanese security ROHM CO. lagged during the
period mostly due to an industry-wide weakness for semiconductor-related stocks.
OUTLOOK:
The strong global equity market of 2006 continued into the first six weeks of
2007. However, global markets began an abrupt sell-off in late February,
triggered by a 9% decline in the Chinese market. Despite all of the panicky
headlines, we view this as normal equity market behavior and continue to focus
on finding value--searching for high quality businesses that sell at attractive
prices. Market sell-offs actually help our quest because they provide us with
more investment opportunities. Keep in mind that we strongly believe that the
way to achieve investment success over time is to stay focused on the long
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
HARRIS OAKMARK INTERNATIONAL PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY HARRIS ASSOCIATES L.P.
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
term. We will continue to use periods of market volatility to try to enhance
the attractiveness of our portfolios.
Thank you for your continued confidence and support.
DAVID G. HERRO
ROBERT A. TAYLOR
Portfolio Managers
HARRIS ASSOCIATES L.P.
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
--------------------------------------------
UBS AG 4.02%
--------------------------------------------
GlaxoSmithKline Plc 3.77%
--------------------------------------------
HSBC Holdings Plc 3.35%
--------------------------------------------
Credit Suisse Group 3.34%
--------------------------------------------
Novartis AG 3.32%
--------------------------------------------
Samsung Electronics Co., Ltd. 3.31%
--------------------------------------------
SK Telecom Co., Ltd. 3.23%
--------------------------------------------
Daiwa Securities Group, Inc. 3.12%
--------------------------------------------
Rohm Co., Ltd. 3.09%
--------------------------------------------
Bayerische Motoren Werke (BMW) AG 2.96%
--------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
[CHART]
United Kingdom 28.9%
Switzerland 17.3%
Japan 14.8%
France 9.1%
Germany 9.0%
South Korea 8.8%
Netherlands 2.7%
Taiwan 2.3%
Spain 2.1%
Others 5.0%
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
HARRIS OAKMARK INTERNATIONAL PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY HARRIS ASSOCIATES L.P.
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
HARRIS OAKMARK INTERNATIONAL PORTFOLIO MANAGED BY
HARRIS ASSOCIATES L.P. VS. MSCI EAFE(R) INDEX/1/
Growth Based on $10,000+
[CHART]
Harris Oakmark
International Portfolio MSCI EAFE(R) Index
----------------------- ------------------
10/9/2001 $10,000 $10,000
12/31/2001 10,970 10,698
12/31/2002 8,986 9,023
12/31/2003 12,128 12,557
12/31/2004 14,616 15,156
12/31/2005 16,698 17,281
12/31/2006 21,515 21,923
6/30/2007 23,230 24,354
-------------------------------------------------------
Average Annual Return/2/
(for the period ended 6/30/07)
-------------------------------------------------------
Since
1 Year 3 Year 5 Year Inception/3/
-------------------------------------------------------
Harris Oakmark
International
Portfolio--Class A 25.05% 22.02% 17.55% 14.99%
- -- Class B 24.76% 21.70% 17.27% 15.86%
Class E 24.91% 21.82% 17.37% 15.78%
-------------------------------------------------------
- - - MSCI EAFE(R) Index/1/ 27.53% 22.75% 18.21% 16.74%
-------------------------------------------------------
+The chart reflects the performance of Class B shares of the Portfolio. The
performance of Class B shares will differ from that of the other Classes
because of the difference in expenses paid by policyholders investing in the
different share classes.
/1/The Morgan Stanley Capital International Europe, Australasia and Far East
Index ("MSCI EAFE(R) Index") is an unmanaged free float-adjusted market
capitalization index that is designed to measure developed market equity
performance, excluding the U.S. & Canada. The Index does not include fees or
expenses and is not available for direct investment.
/2/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/3/Inception of the Class A shares is 1/2/02. Inception of the Class B shares
is 10/9/01. Inception of the Class E shares is 4/01/02. Index returns are based
on an inception date of 10/9/01.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
3
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
HARRIS OAKMARK INTERNATIONAL PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,080.90 $4.23
Hypothetical (5% return before expenses) 1,000.00 1,020.73 4.11
- ------------------------------------------ ------------- ------------- --------------
Class B
Actual $1,000.00 $1,079.70 $5.52
Hypothetical (5% return before expenses) 1,000.00 1,019.49 5.36
- ------------------------------------------ ------------- ------------- --------------
Class E
Actual $1,000.00 $1,080.70 $5.00
Hypothetical (5% return before expenses) 1,000.00 1,019.98 4.86
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.82% ,
1.07% , and 0.97% for the Class A, Class B, and Class E, respectively,
multiplied by the average account value over the period multiplied by 181/365
(to reflect the one-half year period).
4
MET INVESTORS SERIES TRUST
HARRIS OAKMARK INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
-------------------------------------------------------------------
COMMON STOCKS - 95.6%
AUSTRALIA - 1.0%
Australia and New Zealand Banking Group,
Ltd................................... 703,000 $ 17,261,253
Telstra Corp., Ltd...................... 1,740,014 6,766,640
---------------
24,027,893
---------------
FRANCE - 8.7%
BNP Paribas(a).......................... 328,200 39,056,268
LVMH Moet Hennessy Louis Vuitton
S.A.(a)............................... 165,700 19,076,344
Neopost S.A.(a)......................... 70,100 10,240,490
Publicis Groupe(a)...................... 1,023,000 44,730,564
Sanofi-Aventis(a)....................... 279,535 22,547,084
Societe Television Francaise 1(a)....... 1,355,600 46,842,282
Vivendi(a).............................. 802,200 34,455,127
---------------
216,948,159
---------------
GERMANY - 8.6%
Allianz SE(a)........................... 57,300 13,412,480
Bayerische Motoren Werke (BMW)
AG(a)................................. 1,144,000 74,138,386
DaimlerChrysler AG(a)................... 785,800 72,472,667
Hannover Rueckversicherung AG(a)........ 694,500 33,615,993
Henkel KGaA............................. 462,000 21,999,970
---------------
215,639,496
---------------
HONG KONG - 0.5%
Giordano International, Ltd.(a)......... 27,930,000 13,767,302
---------------
IRELAND - 1.7%
Bank of Ireland......................... 2,080,000 42,102,208
---------------
ISRAEL - 0.2%
Orbotech, Ltd.*(a)...................... 265,000 5,914,800
---------------
ITALY - 0.5%
Bulgari S.p.A.(a)....................... 737,000 11,806,775
---------------
JAPAN - 14.1%
Daiwa Securities Group, Inc............. 7,368,000 78,063,974
Honda Motor Co., Ltd.(a)................ 1,068,800 38,859,136
Meitec Corp.(a)......................... 432,800 12,386,533
Nikko Cordial Corp.(a).................. 4,448,400 57,961,351
NTT DoCoMo, Inc......................... 9,050 14,280,768
Omron Corp.............................. 821,900 21,494,881
Rohm Co., Ltd.(a)....................... 874,498 77,425,906
Takeda Pharmaceutical Co., Ltd.......... 472,200 30,405,408
Uni-Charm Corp.(a)...................... 401,200 22,678,671
---------------
353,556,628
---------------
MEXICO - 0.6%
Grupo Televisa S.A. (ADR)............... 515,900 14,243,999
---------------
------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
------------------------------------------------------------------
NETHERLANDS - 2.6%
Akzo Nobel N.V......................... 230,000 $ 19,821,987
ASML Holding N.V.*..................... 29,900 823,068
Koninklijke (Royal) Philips Electronics
N.V.(a).............................. 1,046,000 44,293,935
---------------
64,938,990
---------------
SINGAPORE - 0.3%
United Overseas Bank, Ltd.............. 567,400 8,149,585
---------------
SOUTH KOREA - 8.4%
Kookmin Bank........................... 234,000 20,498,632
Lotte Chilsung Beverage Co., Ltd....... 16,930 21,782,945
Samsung Electronics Co., Ltd........... 135,400 82,719,448
SK Telecom Co., Ltd.................... 350,192 80,714,641
SK Telecom Co., Ltd. (ADR)(a).......... 167,200 4,572,920
---------------
210,288,586
---------------
SPAIN - 2.0%
Gestevision Telecinco S.A.(a).......... 1,802,500 51,082,683
---------------
SWITZERLAND - 16.6%
Adecco S.A.(a)......................... 953,600 73,451,703
Credit Suisse Group.................... 1,179,900 83,505,714
Givaudan S.A.(a)....................... 28,950 28,525,391
Nestle S.A............................. 120,500 45,669,073
Novartis AG(a)......................... 1,480,900 83,179,785
UBS AG................................. 1,685,500 100,543,574
---------------
414,875,240
---------------
TAIWAN - 2.2%
Chinatrust Financial Holding Co., Ltd.. 69,100,614 54,030,809
---------------
UNITED KINGDOM - 27.6%
British Sky Broadcasting Group Plc..... 5,710,200 73,108,377
Cadbury Schweppes Plc.................. 3,875,000 52,670,242
Compass Group Plc...................... 5,104,100 35,249,603
Diageo Plc............................. 3,229,400 67,014,300
G4S PLC................................ 1,014,100 4,263,845
GlaxoSmithKline Plc.................... 3,602,900 94,285,547
HSBC Holdings Plc...................... 4,577,300 83,785,676
Johnston Press Plc..................... 3,338,000 27,337,983
Lloyds TSB Group Plc................... 5,359,935 59,841,070
Schroders Plc.......................... 2,501,800 63,601,534
Signet Group Plc....................... 28,423,900 59,019,911
Trinity Mirror Plc..................... 4,501,900 47,324,633
Vodafone Group Plc..................... 3,953,375 13,289,311
Willis Group Holdings, Ltd.(a)......... 244,000 10,750,640
---------------
691,542,672
---------------
Total Common Stocks
(Cost $1,972,692,148) 2,392,915,825
---------------
See notes to financial statements
5
MET INVESTORS SERIES TRUST
HARRIS OAKMARK INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
---------------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
---------------------------------------------------------------------------
SHORT-TERM INVESTMENT - 4.7%
State Street Bank & Trust Co.,
Repurchase Agreement
dated 06/29/07 at 3.400% to be
repurchased at $117,235,207 on
07/02/07 collateralized by
119,550,000 FHLB at 5.250% due
06/10/11 with a value of
$119,550,000.
(Cost - $117,202,000).................... $117,202,000 $ 117,202,000
---------------
TOTAL INVESTMENTS - 100.3%
(Cost $2,089,894,148) 2,510,117,825
Other Assets and Liabilities (net) - (0.3)% (7,680,748)
---------------
TOTAL NET ASSETS - 100.0% $ 2,502,437,077
===============
PORTFOLIO FOOTNOTES:
* Non-income producing security.
(a) A portion or all of the security was held on loan. As of June 30, 2007, the
market value of the securities loaned was $492,828,295 and the collateral
received consisted of cash in the amount of $517,576,553.
ADR - American Depositary Receipt
FHLB - Federal Home Loan Bank
SUMMARY OF TOTAL FOREIGN SECURITIES BY INDUSTRY CLASSIFICATION 6/30/2007
PERCENT OF
INDUSTRY VALUE (000) NET ASSETS
---------------------------------------------------------------
Automobiles $ 185,470 7.4%
Banks 408,231 16.3%
Beverages 88,797 3.6%
Chemicals 48,347 1.9%
Commercial Services & Supplies 77,716 3.1%
Electronic Equipment & Instruments 104,836 4.2%
Financial - Diversified 300,170 12.0%
Food Products 98,339 3.9%
Hotels, Restaurants & Leisure 35,250 1.4%
Household Durables 44,294 1.8%
Household Products 44,679 1.8%
Insurance 57,779 2.3%
IT Consulting & Services 12,387 0.5%
Media 339,126 13.6%
Office Furnishing & Supplies 10,240 0.4%
Pharmaceuticals 230,418 9.2%
Retail - Specialty 72,787 2.9%
Semiconductor Equipment & Products 83,542 3.3%
Telecommunication Services - Diversified 6,767 0.3%
Telecommunication Services - Wireless 112,858 4.5%
Textiles, Apparel & Luxury Goods 30,883 1.2%
---------- ----
$2,392,916 95.6%
========== ====
See notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
HARRIS OAKMARK INTERNATIONAL PORTFOLIO
ASSETS
Investments, at value (Note 2)* $2,392,915,825
Repurchase Agreement 117,202,000
Cash 97
Cash denominated in foreign currencies** 1,025,228
Collateral for securities on loan 517,576,553
Receivable for investments sold 1,876,435
Receivable for Trust shares sold 3,068,113
Dividends receivable 5,913,196
Interest receivable 22,138
--------------
Total assets 3,039,599,585
--------------
LIABILITIES
Payables for:
Investments purchased 8,150,386
Trust shares redeemed 2,036,662
Unrealized depreciation on forward currency contracts (Note 8) 6,315,224
Distribution and services fees - Class B 200,583
Distribution and services fees - Class E 32,071
Collateral for securities on loan 517,576,553
Investment advisory fee payable (Note 3) 1,584,929
Administration fee payable 26,169
Custodian and accounting fees payable 1,082,426
Accrued expenses 157,505
--------------
Total liabilities 537,162,508
--------------
NET ASSETS $2,502,437,077
==============
NET ASSETS REPRESENTED BY:
Paid in surplus $1,918,676,678
Accumulated net realized gain 136,470,614
Unrealized appreciation on investments and foreign currency 413,918,314
Undistributed net investment income 33,371,471
--------------
Total $2,502,437,077
==============
NET ASSETS
Class A $1,273,696,850
==============
Class B 971,134,770
==============
Class E 257,605,457
==============
CAPITAL SHARES OUTSTANDING
Class A 67,631,755
==============
Class B 52,039,840
==============
Class E 13,770,281
==============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 18.83
==============
Class B 18.66
==============
Class E 18.71
==============
- ----------------------------------------------------------------------------------------
*Investments at cost, excluding Repurchase Agreements $1,972,692,148
**Cost of cash denominated in foreign currencies 1,023,637
See notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
HARRIS OAKMARK INTERNATIONAL PORTFOLIO
INVESTMENT INCOME:
Dividends (1) $ 41,528,933
Interest (2) 2,514,448
------------
Total investment income 44,043,381
------------
EXPENSES:
Investment advisory fee (Note 3) 8,924,237
Administration fees 81,832
Custody and accounting fees 330,527
Distribution fee--Class B 1,142,664
Distribution fee--Class E 181,265
Transfer agent fees 16,562
Audit 13,941
Legal 7,786
Trustee fees and expenses 7,963
Shareholder reporting 98,803
Insurance 12,815
Other 2,257
------------
Total expenses 10,820,652
------------
Net investment income 33,222,729
------------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain (loss) on:
Investments 149,293,394
Foreign currency (557,681)
------------
Net realized gain on investments and foreign currency 148,735,713
------------
Net change in unrealized appreciation (depreciation) on:
Investments 329,137
Foreign currency (6,336,885)
------------
Net change in unrealized depreciation on investments and foreign currency (6,007,748)
------------
Net realized and change in unrealized gain on investments and foreign currency 142,727,965
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $175,950,694
============
- ----------------------------------------------------------------------------------------------------
(1)Dividend income is net withholding taxes of: $ 4,234,557
(2)Interest income includes securities lending income of: 1,048,029
See notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
HARRIS OAKMARK INTERNATIONAL PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 33,222,729 $ 27,503,884
Net realized gain on investments, futures contracts and foreign
currency 148,735,713 261,501,326
Net change in unrealized appreciation (depreciation) on
investments and foreign currency (6,007,748) 146,146,782
-------------- --------------
Net increase in net assets resulting from operations 175,950,694 435,151,992
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (10,882,030) (21,989,815)
Class B (7,321,076) (16,803,330)
Class E (2,080,072) (4,021,461)
From net realized gains
Class A (93,372,055) (54,892,874)
Class B (73,417,491) (46,071,270)
Class E (19,394,021) (10,603,941)
-------------- --------------
Net decrease in net assets resulting from distributions (206,466,745) (154,382,691)
-------------- --------------
CAPITAL SHARE TRANSACTIONS (NOTES 4 AND 8):
Proceeds from shares sold
Class A 241,686,101 338,253,020
Class B 137,859,864 218,125,544
Class E 47,210,732 61,086,403
Net asset value of shares issued through acquisition
Class A -- 214,792,652
Class B -- --
Class E -- --
Net asset value of shares issued through dividend reinvestment
Class A 104,254,085 76,882,689
Class B 80,738,567 62,874,600
Class E 21,474,093 14,625,402
Cost of shares repurchased
Class A (93,983,851) (376,736,627)
Class B (91,822,785) (92,302,201)
Class E (28,717,651) (13,349,514)
-------------- --------------
Net increase in net assets from capital share transactions 418,699,155 504,251,968
-------------- --------------
TOTAL INCREASE IN NET ASSETS 388,183,104 785,021,269
Net assets at beginning of period 2,114,253,973 1,329,232,704
-------------- --------------
Net assets at end of period $2,502,437,077 $2,114,253,973
============== ==============
Net assets at end of period includes undistributed net investment
income $ 33,371,471 $ 20,431,920
============== ==============
See notes to financial statements
9
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
HARRIS OAKMARK INTERNATIONAL PORTFOLIO ----------------------------
FOR THE PERIOD
ENDED
JUNE 30, 2007 ------------
(UNAUDITED) 2006
-------------- --------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $ 19.03 $ 16.23
-------- --------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................. 0.29 (a) 0.31 (a)
Net Realized/Unrealized Gain (Loss) on Investments.................... 1.25 4.20
-------- --------
Total from Investment Operations...................................... 1.54 4.51
-------- --------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. (0.18) (0.49)
Distributions from Net Realized Capital Gains......................... (1.56) (1.22)
-------- --------
Total Distributions................................................... (1.74) (1.71)
-------- --------
NET ASSET VALUE, END OF PERIOD........................................ $ 18.83 $ 19.03
======== ========
TOTAL RETURN 8.09% 29.20%
Ratio of Expenses to Average Net Assets**............................. 0.82%* 0.97%
Ratio of Expenses to Average Net Assets After Broker Rebates**........ N/A N/A
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 0.82%* 0.98%
Ratio of Net Investment Income to Average Net Assets.................. 3.01%* 1.77%
Portfolio Turnover Rate............................................... 18.8% 45.9%
Net Assets, End of Period (in millions)............................... $1,273.7 $1,037.0
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS A
HARRIS OAKMARK INTERNATIONAL PORTFOLIO -----------------------------------------
FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------------
2005 2004 2003 2002(B)
------ ------ ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $14.36 $11.89 $ 8.89 $ 10.81
------ ------ ------ -------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................. 0.21 (a) 0.04 (a) 0.08 (a) 0.06 (a)
Net Realized/Unrealized Gain (Loss) on Investments.................... 1.87 2.43 3.06 (1.97)
------ ------ ------ -------
Total from Investment Operations...................................... 2.08 2.47 3.14 (1.91)
------ ------ ------ -------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. (0.02) (0.00)+ (0.11) (0.01)
Distributions from Net Realized Capital Gains......................... (0.19) -- (0.03) --
------ ------ ------ -------
Total Distributions................................................... (0.21) (0.00)+ (0.14) (0.01)
------ ------ ------ -------
NET ASSET VALUE, END OF PERIOD........................................ $16.23 $14.36 $11.89 $ 8.89
====== ====== ====== =======
TOTAL RETURN 14.48% 20.80% 35.36% (17.64)%
Ratio of Expenses to Average Net Assets**............................. 0.94% 1.04% 1.16% 1.10 %*
Ratio of Expenses to Average Net Assets After Broker Rebates**........ N/A N/A 1.15% 1.08 %*
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 0.96%(c) 1.03%(c) 1.21%(c) 2.49 %*
Ratio of Net Investment Income to Average Net Assets.................. 1.37% 0.32% 0.80% 0.68 %*
Portfolio Turnover Rate............................................... 11.5% 11.3% 22.1% 82.0 %
Net Assets, End of Period (in millions)............................... $644.5 $276.4 $8.4 $4.8
* Annualized
** Prior to 05/01/2003, broker rebates were excluded from the calculation of
the expense limitation.
+ Rounds to less than $0.005 per share.
N/A Not Applicable
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--01/02/2002.
(c) Excludes effect of Deferred Expense Reimbursement.
See notes to financial statements
10
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS B
HARRIS OAKMARK INTERNATIONAL PORTFOLIO ----------------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 -------------------------------------------
(UNAUDITED) 2006 2005 2004 2003
-------------- ------ ------ ------ ------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $18.87 $16.11 $14.27 $11.84 $ 8.87
------ ------ ------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................. 0.26 (a) 0.26 (a) 0.17 (a) 0.16(a) 0.02 (a)
Net Realized/Unrealized Gain (Loss) on Investments.................... 1.25 4.17 1.86 2.27 3.08
------ ------ ------ ------ ------
Total from Investment Operations...................................... 1.51 4.43 2.03 2.43 3.10
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. (0.16) (0.45) -- -- (0.10)
Distributions from Net Realized Capital Gains......................... (1.56) (1.22) (0.19) -- (0.03)
------ ------ ------ ------ ------
Total Distributions................................................... (1.72) (1.67) (0.19) -- (0.13)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD........................................ $18.66 $18.87 $16.11 $14.27 $11.84
====== ====== ====== ====== ======
TOTAL RETURN 7.97% 28.85% 14.24% 20.52% 34.96%
Ratio of Expenses to Average Net Assets**............................. 1.07%* 1.22% 1.19% 1.23% 1.43%
Ratio of Expenses to Average Net Assets After Broker Rebates**........ N/A N/A N/A N/A 1.43%
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 1.07%* 1.23% 1.20%(c) 1.22%(c) 1.33%(c)
Ratio of Net Investment Income to Average Net Assets.................. 2.73%* 1.49% 1.11% 1.27% 0.17%
Portfolio Turnover Rate............................................... 18.8% 45.9% 11.5% 11.3% 22.1%
Net Assets, End of Period (in millions)............................... $971.1 $856.2 $554.3 $483.9 $288.0
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
HARRIS OAKMARK INTERNATIONAL PORTFOLIO --------
--------
2002
-------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $ 10.84
-------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................. 0.01 (a)
Net Realized/Unrealized Gain (Loss) on Investments.................... (1.97)
-------
Total from Investment Operations...................................... (1.96)
-------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. (0.01)
Distributions from Net Realized Capital Gains......................... --
-------
Total Distributions................................................... (0.01)
-------
NET ASSET VALUE, END OF PERIOD........................................ $ 8.87
=======
TOTAL RETURN (18.09)%
Ratio of Expenses to Average Net Assets**............................. 1.35 %
Ratio of Expenses to Average Net Assets After Broker Rebates**........ 1.31 %
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 2.64 %
Ratio of Net Investment Income to Average Net Assets.................. 0.15 %
Portfolio Turnover Rate............................................... 82.0 %
Net Assets, End of Period (in millions)............................... $ 17.9
* Annualized
** Prior to 05/01/2003, broker rebates were excluded from the calculation of
the expense limitation.
+ Rounds to less than $0.005 per share.
N/A Not Applicable
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--01/02/2002.
(c) Excludes effect of Deferred Expense Reimbursement.
See notes to financial statements
11
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
HARRIS OAKMARK INTERNATIONAL PORTFOLIO -------------------------
FOR THE PERIOD
ENDED
JUNE 30, 2007 ----------
(UNAUDITED) 2006
-------------- ------
NET ASSET VALUE, BEGINNING OF PERIOD....................................... $18.91 $16.14
------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income (Loss)............................................... 0.27 (a) 0.27 (a)
Net Realized/Unrealized Gain (Loss) on Investments......................... 1.26 4.18
------ ------
Total from Investment Operations........................................... 1.53 4.45
------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income....................................... (0.17) (0.46)
Distributions from Net Realized Capital Gains.............................. (1.56) (1.22)
------ ------
Total Distributions........................................................ (1.73) (1.68)
------ ------
NET ASSET VALUE, END OF PERIOD............................................. $18.71 $18.91
====== ======
TOTAL RETURN 8.07% 28.98%
Ratio of Expenses to Average Net Assets**.................................. 0.97%* 1.13%
Ratio of Expenses to Average Net Assets After Broker Rebates**............. N/A N/A
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates... 0.97%* 1.13%
Ratio of Net Investment Income (Loss) to Average Net Assets................ 2.84%* 1.54%
Portfolio Turnover Rate.................................................... 18.8% 45.9%
Net Assets, End of Period (in millions).................................... $257.6 $221.0
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS E
HARRIS OAKMARK INTERNATIONAL PORTFOLIO -----------------------------------------
FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------------
2005 2004 2003 2002(B)
------ ------ ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD....................................... $14.30 $11.85 $ 8.87 $ 10.70
------ ------ ------ -------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income (Loss)............................................... 0.19 (a) 0.17(a) 0.03 (a) (0.01)(a)
Net Realized/Unrealized Gain (Loss) on Investments......................... 1.85 2.28 3.08 (1.81)
------ ------ ------ -------
Total from Investment Operations........................................... 2.04 2.45 3.11 (1.82)
------ ------ ------ -------
LESS DISTRIBUTIONS
Dividends from Net Investment Income....................................... (0.01) (0.00)+ (0.10) (0.01)
Distributions from Net Realized Capital Gains.............................. (0.19) -- (0.03) --
------ ------ ------ -------
Total Distributions........................................................ (0.20) (0.00)+ (0.13) (0.01)
------ ------ ------ -------
NET ASSET VALUE, END OF PERIOD............................................. $16.14 $14.30 $11.85 $ 8.87
====== ====== ====== =======
TOTAL RETURN 14.27% 20.69% 35.14% (16.99)%
Ratio of Expenses to Average Net Assets**.................................. 1.09% 1.14% 1.33% 1.25 %*
Ratio of Expenses to Average Net Assets After Broker Rebates**............. N/A N/A 1.33% 1.22 %*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates... 1.10%(c) 1.12%(c) 1.24%(c) 2.42 %
Ratio of Net Investment Income (Loss) to Average Net Assets................ 1.25% 1.31% 0.24% (0.16)%*
Portfolio Turnover Rate.................................................... 11.5% 11.3% 22.1% 82.0 %
Net Assets, End of Period (in millions).................................... $130.4 $75.5 $23.6 $1.5
* Annualized
** Prior to 05/01/2003, broker rebates were excluded from the calculation of
the expense limitation.
+ Rounds to less than $0.005 per share.
N/A Not Applicable
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--04/01/2002.
(c) Excludes effect of Deferred Expense Reimbursement.
See notes to financial statements
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is Harris Oakmark International Portfolio,
which is non-diversified. Shares in the Trust are not offered directly to the
general public and are currently available only to separate accounts
established by certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A, B and E Shares are
offered by the Portfolio. Shares of each Class of the Portfolio represent an
equal pro rata interest in the Portfolio and generally give the shareholder the
same voting, dividend, liquidation, and other rights. Investment income,
realized and unrealized capital gains and losses, the common expenses of the
Portfolio and certain Portfolio-level expense reductions, if any, are allocated
on a pro rata basis to each class based on the relative net assets of each
class to the total net assets of the Portfolio. Each class of shares differs in
its respective distribution expenses and certain other class-specific expense
reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date. The value of the
security so purchased is subject to market fluctuations during this period. The
Portfolio segregates assets having an aggregate value at least equal to the
amount of the when issued or delayed delivery purchase commitments until
payment is made.
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
The Portfolio utilizes the provisions of the federal income tax laws that
provide for the carryforward of capital losses for eight years, offsetting such
losses against any future net realized capital gains. At December 31, 2006, the
accumulated capital loss carryforwards and expiration dates by the Portfolio
were as follows:
Expiring Expiring
Portfolio Total 12/31/2009 12/31/2010
--------- ----------- ---------- ----------
Harris Oakmark International Portfolio $12,186,002 $4,729,888 $7,456,114
Harris Oakmark International Portfolio acquired losses of $17,613,489 in the
merger with TST-Mondrian International Stock Portfolio on May 1, 2006 which are
subject to an annual limitation of $8,141,230.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. FORWARD FOREIGN CURRENCY CONTRACTS - The Portfolio may enter into forward
foreign currency contracts to hedge their portfolio holdings against future
movements in certain foreign currency exchange rates. A forward currency
contract is a commitment to purchase or sell a foreign currency at a future
date at a set price. The forward currency contracts are valued at the forward
rate and are marked-to-market daily. The change in market value is recorded by
the Portfolio as an unrealized gain or loss. When the contract is closed, the
Portfolio recognizes a realized gain or loss equal to the difference between
the value of the contract at the time it was opened and the value at the time
it was closed.
The use of forward foreign currency contracts does not eliminate fluctuations
in the underlying prices of the securities of the Portfolio, but it does
establish a rate of exchange that can be achieved in the future. Although
forward foreign currency contracts to sell limit the risk of loss due to a
decline in the value of the currency holdings, they also limit any potential
gain that might result should the value of the currency increase. In addition,
the Portfolio could be exposed to risks if the counterparties to the contracts
are unable to meet the terms of the contracts.
G. SECURITIES LENDING - The Portfolio may lend its securities to certain
qualified brokers who borrow securities in order to complete certain
transactions. By lending its investment securities, the Portfolio attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term of the loan would
accrue to the account of the Portfolio. Risks of delay in recovery of the
securities or even loss of rights in the collateral may occur should the
borrower of the securities fail financially. Risks may also arise to the extent
that the value of the collateral decreases below the value of the securities
loaned.
Upon entering into a securities lending transaction, the Portfolio receives
cash or other securities as collateral in an amount equal to or exceeding 102%
of the current market value of the loaned securities. Any cash received as
collateral is generally invested by State Street Bank and Trust Company ("State
Street"), acting in its capacity as securities lending agent (the "Agent"), in
the State Street Navigator Securities Lending Prime Portfolio which is a money
market fund registered under the 1940 Act. A portion of the dividends received
on the collateral is rebated to the borrower of the securities and the
remainder is split between the Agent and the Portfolio. On loans collateralized
by cash, the cash collateral is invested in a money market fund or short term
securities. A portion of the income generated upon investment of the collateral
is remitted to the Borrowers and the remainder is allocated between the fund
and the lending agent. On loans collateralized by U.S. Treasuries, a fee is
received from the Borrower and is allocated between the fund and the lending
agent.
14
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
H. FOREIGN CURRENCY TRANSLATION - The books and records of the Portfolio are
maintained in U.S. dollars. Foreign currencies, investments and other assets
and liabilities are translated into U.S. dollars on a daily basis using
prevailing exchange rates. Purchases and sales of securities are translated at
the rates of exchange prevailing when such securities were acquired or sold.
Income is translated at rates of exchange prevailing when interest is accrued
or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in
forward foreign currency contracts, sales of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities
transactions, and the difference between the amounts of dividends, interest,
and foreign withholding taxes recorded on the Portfolio's books, and the U.S.
dollar equivalent of the amounts actually received or paid. Net unrealized
foreign exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at fiscal year end, from
changes in the exchange rates of foreign currency held, and from changes in the
contract value of forward foreign currency contracts.
I. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
J. DIRECTED BROKERAGE AGREEMENT - The Trust has entered into a directed
brokerage arrangement with State Street Global Markets ("SSGM"). Under this
arrangement, the Portfolio directs certain trades to SSGM in return for a
recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to
each Portfolio are shown separately as an expense reduction on the Statement of
Operations of the Portfolio.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with Harris Associates L.P., (the "Adviser") for investment advisory services
in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- --------------------------
Harris Oakmark International Portfolio $8,924,237 0.85% First $100 Million
0.80% $100 Million to $1 Billion
0.75% Over $1 Billion
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in
15
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
accordance with accounting principles generally accepted in the United States
of America, other extraordinary expenses not incurred in the ordinary course of
the Portfolio's business, but including amounts payable pursuant to a plan
adopted in accordance with Rule 12b-1 under the 1940 Act are limited to the
following respective expense ratios as a percentage of the Portfolio's average
daily net assets:
Maximum Expense Ratio
under current Expense
Limitation Agreement
----------------------
Portfolio Class A Class B Class E
--------- ------- ------- -------
Harris Oakmark International Portfolio 1.10% 1.35% 1.25%
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratios as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued Shares Issued
in Connection Through Net Increase
Beginning Shares with acquisition Dividend Shares in Shares Ending
Shares Sold (Note 8) Reinvestment Repurchased Outstanding Shares
- - ---------- ---------- ---------------- ------------- ----------- ------------ ----------
Harris Oakmark International Portfolio
Class A
06/30/2007 54,506,280 12,513,714 -- 5,519,009 (4,907,248) 13,125,475 67,631,755
12/31/2006 39,714,133 19,518,203 12,568,324 4,579,076 (21,873,456) 14,792,147 54,506,280
Class B
06/30/2007 45,384,721 7,186,916 -- 4,310,654 (4,842,451) 6,655,119 52,039,840
12/31/2006 34,414,998 12,663,723 -- 3,771,722 (5,465,722) 10,969,723 45,384,721
Class E
06/30/2007 11,689,149 2,453,242 -- 1,144,065 (1,516,175) 2,081,132 13,770,281
12/31/2006 8,076,776 3,533,053 -- 875,772 (796,452) 3,612,373 11,689,149
16
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
Harris Oakmark International Portfolio $-- $606,569,907 $-- $419,722,021
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
- --------- -------------- ------------ -------------- --------------
Harris Oakmark International Portfolio $2,089,894,148 $429,310,407 $(9,086,730) $420,223,677
6. SECURITY LENDING
As of June 30, 2007, the Portfolio had loaned securities which were
collateralized by short-term investments. The value of securities on loan and
the value of the related collateral were as follows:
Value of Value of
Securities Collateral
------------ ------------
Harris Oakmark International Portfolio $492,828,295 $517,576,553
7. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
---------------------- ------------------------ ------------------------
2006 2005 2006 2005 2006 2005
----------- ---------- ------------ ----------- ------------ -----------
Harris Oakmark International Portfolio $49,591,310 $6,157,521 $104,791,381 $10,199,548 $154,382,691 $16,357,069
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
------------- ------------- ------------ ------------------ ------------
Harris Oakmark International Portfolio $54,240,960 $152,225,693 $419,995,800 $(12,186,002) $614,276,451
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
8. FORWARD FOREIGN CURRENCY CONTRACTS
Forward Foreign Currency Contracts to Sell:
Value at In exchange Net Unrealized
Settlement Date Contracts to Deliver 06/30/2007 for U.S. $ Depreciation
--------------- -------------------- ------------ ------------ --------------
07/05/2007 32,480,000 GBP $ 65,152,372 $ 63,376,925 $(1,775,447)
07/18/2007 30,340,000 GBP 60,849,645 59,420,283 (1,429,362)
07/25/2007 32,070,000 GBP 64,313,598 63,649,329 (664,269)
10/05/2007 73,340,000 GBP 146,910,187 144,532,605 (2,377,582)
10/19/2007 56,650,000 GBP 113,445,042 113,376,478 (68,564)
-----------
$(6,315,224)
===========
17
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
9. ACQUISITIONS
On May 1, 2006, Harris Oakmark International Portfolio ("Harris Oakmark")
acquired all of the net assets of Mondrian International Stock Portfolio, a
series of The Travelers Series Trust ("Mondrian International"), pursuant to a
plan of reorganization approved by Mondrian International shareholders on March
14, 2006. The acquisition was accomplished by a tax-free exchange of 12,568,324
Class A shares of Harris Oakmark (valued at $214.8 million) in exchange for the
16,088,645 Class A shares of Mondrian International outstanding on April 28,
2006. Mondrian International Class A net assets at that date ($214.8 million),
including $44,877,012 of unrealized appreciation were combined with those of
Harris Oakmark Class A. The cost of securities acquired in the tax-free
exchange by Harris Oakmark from Mondrian International was $168,917,339. The
aggregate Class A net assets of Harris Oakmark and Mondrian International
immediately before the acquisition were $850,651,198 and $214,792,652,
respectively. The aggregate Class A net assets of Harris Oakmark immediately
after the acquisition were $1,065,443,850.
10. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
11. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that and there is no
impact to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
18
MET INVESTORS SERIES TRUST
Janus Forty Portfolio
(formerly Janus Capital Appreciation Portfolio)
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
JANUS FORTY PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY JANUS CAPITAL MANAGEMENT LLC
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
PERFORMANCE OVERVIEW
For the six months ended June 30, 2007, the Portfolio outperformed its
benchmark, the S&P 500(R) Index. The Portfolio posted a return of 10.63%, which
compared favorably to the 6.96% return of the benchmark.
PORTFOLIO ATTRIBUTION
Within the Portfolio, holdings within the technology and materials sectors
drove outperformance during the period. In terms of detractors, select consumer
discretionary names were the biggest laggards. Holdings within the telecomm and
financials sectors also weighed on performance.
SECTORS THAT CONTRIBUTED TO PERFORMANCE INCLUDED TECHNOLOGY AND MATERIALS
Within technology, Apple was the top contributor to performance during the
period. Apple gained ground as investors and consumers anxiously awaited the
arrival of the iPhone, which was launched in late June. Investors are sensing
that Apple's original estimate of 10 million phones sold in the first year is
conservative. More importantly, we continue to track market share gains in
desktop and laptop computers, which we think should increase with the launch of
Apple's next generation operating system. Given its recent strength, the stock
could be volatile now that the iPhone has launched. We trimmed the position
slightly but remain constructive on the outlook for the company.
Staying with technology, Research in Motion was also a top-five contributor for
the period, posting solid gains that were highlighted by the addition of
1.2 million new subscribers in its most recent quarter vs. 680,000 during the
same period last year. The company's mobile data service is now offered on over
270 carriers, and subscriber trends remain strong. We remain positive on the
potential of Research in Motion to double its subscriber base over the long
term from the current level of 9 million subscribers as the total addressable
market for mobile data devices continues to expand. Due to our continued
positive outlook for market share gains, we added to the position during the
period.
Within materials, high conviction holding Potash was another top contributor,
driven by realized price increases with important trading partners like India,
which follow previously announced price increases in Brazil and China. Due to
low inventories, pricing for potash should remain robust based on current high
demand trends. We added to the position based on our continued positive outlook
for the company.
SECTORS THAT DETRACTED FROM PERFORMANCE INCLUDED CONSUMER DISCRETIONARY AND
FINANCIALS
Within consumer discretionary, JC Penney declined during the time period after
running up in front of an analyst day it held during the most recent quarter.
Despite the pullback, we remain constructive on the name, viewing the company
as the best-positioned, moderately priced department store in the country. Also
within consumer discretionary, Melco PBL traded down in sympathy with the
decline in Asian markets, which impacted any company with direct exposure to
the Chinese economy. We trimmed the position but remain constructive on the
outlook for this gaming company and its position in the fast-growing Macau
gaming market.
Within financials, Bear Stearns declined during the time period, as it was
weighed down by sub-prime concerns and the bailout of two hedge funds that had
mortgage exposure. While this event helped to illustrate investor fears about
leverage in the system, we maintained exposure to the stock based on its
valuation.
INVESTMENT STRATEGY AND OUTLOOK
Global equity markets have been robust over the past 12 months. Therefore, it
is natural to become apprehensive about the short-term direction of the market
while we await operational confirmation of further economic growth that comes
with time. We believe that rates will remain steady and the Federal Reserve
will remain on the sidelines.
Regardless of the macro-economic climate, we remain focused on identifying
single-purpose business models that are selling compelling products into large
total addressable markets.
SCOTT SCHOELZEL
Portfolio Manager
JANUS CAPITAL MANAGEMENT LLC
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
JANUS FORTY PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY JANUS CAPITAL MANAGEMENT LLC
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
---------------------------------------------
Apple, Inc. 8.86%
---------------------------------------------
Research In Motion, Ltd. 5.23%
---------------------------------------------
Potash Corp. of Saskatchewan, Inc. 5.16%
---------------------------------------------
Wells Fargo & Co. 4.99%
---------------------------------------------
Goldman Sachs Group, Inc. (The) 4.36%
---------------------------------------------
Roche Holdings AG 3.85%
---------------------------------------------
Gilead Sciences, Inc. 3.71%
---------------------------------------------
Suncor Energy, Inc. 3.58%
---------------------------------------------
J.C. Penney Co., Inc. 3.44%
---------------------------------------------
ConocoPhillips 3.38%
---------------------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
[CHART]
Basic Materials 9.4%
Communications 11.1%
Cyclical 11.9%
Non-Cyclical 19.9%
Energy 16.3%
Financials 13.0%
Industrials 2.8%
Technology 15.6%
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
JANUS FORTY PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY JANUS CAPITAL MANAGEMENT LLC
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
JANUS FORTY PORTFOLIO MANAGED BY
JANUS CAPITAL MANAGEMENT LLC VS. S&P 500(R) INDEX/1/, AND RUSSELL 2000(R)
INDEX/2/
Growth Based on $10,000+
[CHART]
Janus Forty S&P 500(R) Russell 2000(R)
Portfolio Index/1/ Index/2/
----------- ---------- ---------------
12/31/1996 $10,000 $10,000 $10,000
12/31/1997 12,614 13,336 12,236
12/31/1998 20,388 17,147 11,924
12/31/1999 31,300 20,755 14,459
12/31/2000 24,451 18,864 14,022
12/31/2001 18,072 16,623 14,372
12/31/2002 13,538 12,950 11,428
12/31/2003 16,910 16,664 16,828
12/31/2004 20,212 18,477 19,913
12/31/2005 23,889 19,384 20,819
12/31/2006 24,625 22,444 24,643
6/30/2007 27,243 24,007 26,233
------------------------------------------------------------------------------
Average Annual Return/3/
(for the period ended 6/30/07)
------------------------------------------------------------------------------
Since Cumulative
1 Year 3 Year 5 Year 10 Year Inception/4/ Return/5/
------------------------------------------------------------------------------
Janus Forty
- -- Portfolio--Class A 23.98% 15.39% 12.24% 8.83% 13.24% --
Class B -- -- -- -- -- 3.77%
Class E -- -- -- -- -- 3.78%
------------------------------------------------------------------------------
- - - S&P 500(R) Index/1/ 20.59% 11.68% 10.71% 7.13% 13.87% --
------------------------------------------------------------------------------
Russell 2000(R)
- -- Index/2/ 16.43% 13.45% 13.88% 9.06% 12.44% --
------------------------------------------------------------------------------
+The chart reflects the performance of Class A shares of the Portfolio.
/1/The S&P 500(R) Index is an unmanaged index consisting of 500 stocks chosen
for market size, liquidity, and industry group representation. It is a
market-weighted index (stock price times number of shares outstanding), with
each stock's weight in the Index proportionate to its market value. The Index
does not include fees or expenses and is not available for direct investment.
/2/The Russell 2000(R) Index is an unmanaged index which measures the
performance of the 2,000 smallest companies in the Russell 3000(R) Index, which
represents approximately 8% of the total market capitalization of the Russell
3000(R) Index. As of the latest reconstitution, the average market
capitalization was approximately $898.3 million; the median market
capitalization was approximately $705.4 million. The largest company in the
Index had a market capitalization of $2.5 billion. The Index does not include
fees or expenses and is not available for direct investment.
/3/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gains distributions.
/4/Inception of Class A shares is 03/19/1982. Inception of Class B and Class E
shares is 04/28/2007. Index returns are based on an inception date of 3/31/1982.
/5/"Cumulative Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
3
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD**
12/31/06 6/30/07 1/1/07-6/30/07
JANUS FORTY PORTFOLIO ------------- ------------- ---------------
Class A
Actual $1,000.00 $1,083.70 $3.56
Hypothetical (5% return before expenses) 1,000.00 1,021.37 3.46
- ------------------------------------------ ------------- ------------- ---------------
Class B*
Actual $1,000.00 $1,037.70 $1.72
Hypothetical (5% return before expenses) 1,000.00 1,007.08 1.69
- ------------------------------------------ ------------- ------------- ---------------
Class E*
Actual $1,000.00 $1,037.70 $1.52
Hypothetical (5% return before expenses) 1,000.00 1,007.28 1.50
- ------------------------------------------ ------------- ------------- ---------------
* Class Inception April 28, 2007.
** Expenses are equal to the Portfolio's annualized expense ratio of 0.69%,
0.96%, and 0.85% for the Class A, Class B, and Class E, respectively,
multiplied by the average account value over the period, multiplied by 181/365,
64/365, and 64/365, respectively (to reflect the one-half year period).
4
MET INVESTORS SERIES TRUST
JANUS FORTY PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
---------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
---------------------------------------------------------------
COMMON STOCKS - 96.1%
BANKS - 5.0%
Wells Fargo & Co................... 1,403,775 $ 49,370,767
-------------
BIOTECHNOLOGY - 3.7%
Gilead Sciences, Inc.*............. 946,650 36,701,620
-------------
CHEMICALS - 9.1%
Monsanto Co........................ 324,085 21,888,701
Potash Corp. of Saskatchewan, Inc.. 655,165 51,083,215
Syngenta AG........................ 86,564 16,842,401
-------------
89,814,317
-------------
COMMUNICATIONS EQUIPMENT & SERVICES - 6.8%
QUALCOMM, Inc...................... 365,825 15,873,147
Research In Motion, Ltd.*.......... 258,640 51,725,413
-------------
67,598,560
-------------
COMPUTERS & PERIPHERALS - 8.8%
Apple, Inc.*....................... 718,215 87,650,959
-------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 1.6%
Sony Corp. (ADR)................... 306,135 15,726,155
-------------
FINANCIAL - DIVERSIFIED - 10.3%
Bear Stearns Cos., Inc.(a)......... 153,835 21,536,900
Goldman Sachs Group, Inc. (The).... 198,860 43,102,905
KKR Private Equity Investment LP
(144A)(b)........................ 172,002 3,870,045
Merrill Lynch & Co., Inc........... 66,365 5,546,787
Moody's Corp....................... 444,335 27,637,637
-------------
101,694,274
-------------
FOOD PRODUCTS - 1.6%
Bunge, Ltd.(a)..................... 191,835 16,210,057
-------------
HOTELS, RESTAURANTS & LEISURE - 4.7%
Boyd Gaming Corp................... 399,385 19,645,748
Harrah's Entertainment, Inc........ 245,535 20,934,314
Melco PBL Entertainment Macau, Ltd.
(ADR)*(a)........................ 441,185 5,541,284
-------------
46,121,346
-------------
INTERNET SOFTWARE & SERVICES - 5.4%
Akamai Technologies, Inc.*(a)...... 435,988 21,206,456
Google, Inc. - Class A*............ 61,280 32,072,727
-------------
53,279,183
-------------
MEDIA - 1.9%
Lamar Advertising Co. - Class A(a). 304,415 19,105,085
-------------
METALS & MINING - 2.7%
Precision Castparts Corp........... 221,270 26,853,327
-------------
OIL & GAS - 15.7%
Apache Corp........................ 138,210 11,276,554
ConocoPhillips..................... 425,885 33,431,973
Continental Resources, Inc.*....... 1,263,790 20,220,640
EOG Resources, Inc................. 156,555 11,437,908
------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
------------------------------------------------------------------
OIL & GAS - CONTINUED
Hess Corp................................ 240,840 $ 14,199,926
Occidental Petroleum Corp................ 254,015 14,702,388
Suncor Energy, Inc....................... 393,470 35,380,823
Valero Energy Corp....................... 196,815 14,536,756
-------------
155,186,968
-------------
PHARMACEUTICALS - 11.0%
Alcon, Inc............................... 172,570 23,281,419
Amylin Pharmaceuticals, Inc.*(a)......... 36,450 1,500,282
Celgene Corp.*(a)........................ 501,300 28,739,529
Genentech, Inc.*......................... 229,160 17,338,246
Roche Holdings AG........................ 215,296 38,110,972
-------------
108,970,448
-------------
RETAIL - MULTILINE - 3.4%
J.C. Penney Co., Inc.(a)................. 470,310 34,041,038
-------------
RETAIL - SPECIALTY - 1.8%
Abercrombie & Fitch Co. - Class A........ 240,275 17,535,269
-------------
SOFTWARE - 0.9%
Electronic Arts, Inc.*................... 187,410 8,868,241
-------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 1.7%
Time Warner Telecom, Inc. - Class A*(a).. 822,970 16,541,697
-------------
Total Common Stocks
(Cost $659,983,351) 951,269,311
-------------
TOTAL INVESTMENTS - 96.1%
(Cost $659,983,351) 951,269,311
-------------
Other Assets and Liabilities (net) - 3.9% 38,352,613
-------------
TOTAL NET ASSETS - 100.0% $ 989,621,924
=============
PORTFOLIO FOOTNOTES:
* Non-income producing security.
(a) A portion or all of the security was held on loan. As of June 30, 2007, the
market value of the securities loaned was $68,211,668 and the collateral
received consisted of cash in the amount of $69,828,195.
(b) Securities that may be resold to "qualified institutional buyers" under
Rule 144A or securities offered pursuant to Section 4(2) of the Securities
Act of 1933, as amended. These securities have been determined to be liquid
under the guidelines established by the Board of Trustees. These securities
represent in the aggregate $3,870,045 of net assets.
ADR - American Depositary Receipt
See notes to financial statements
5
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
JANUS FORTY PORTFOLIO
ASSETS
Investments, at value (Note 2)* $ 951,269,311
Cash denominated in foreign currencies** 799,346
Collateral for securities on loan 69,828,195
Receivable for investments sold 44,153,292
Receivable for Trust shares sold 91,759
Dividends receivable 128,815
--------------
Total assets 1,066,270,718
--------------
LIABILITIES
Due to bank 4,976,412
Payables for:
Trust shares redeemed 933,998
Distribution and services fees--Class B 200
Distribution and services fees--Class E 74
Collateral for securities on loan 69,828,195
Investment advisory fee payable (Note 3) 530,701
Administration fee payable 10,840
Custodian and accounting fees payable 122,387
Accrued expenses 245,987
--------------
Total liabilities 76,648,794
--------------
NET ASSETS $ 989,621,924
==============
NET ASSETS REPRESENTED BY:
Paid in surplus $ 939,049,810
Accumulated net realized loss (242,683,062)
Unrealized appreciation on investments and foreign currency 291,289,799
Undistributed net investment income 1,965,377
--------------
Total $ 989,621,924
==============
NET ASSETS
Class A $ 987,723,024
==============
Class B 1,230,403
==============
Class E 668,497
==============
CAPITAL SHARES OUTSTANDING
Class A 13,896,999
==============
Class B 17,876
==============
Class E 9,581
==============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 71.07
==============
Class B 68.83
==============
Class E 69.77
==============
- ----------------------------------------------------------------------------------------
* Investments at cost $ 659,983,351
**Cost of cash denominated in foreign currencies 795,522
See notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
JANUS FORTY PORTFOLIO
INVESTMENT INCOME:
Dividends (1) $ 4,685,074
Interest (2) 421,492
-----------
Total investment income 5,106,566
-----------
EXPENSES:
Investment advisory fee (Note 3) 3,161,114
Administration fees 35,737
Custody and accounting fees 63,639
Distribution fee--Class B 231
Distribution fee--Class E 95
Transfer agent fees 2,865
Audit 12,074
Legal 7,122
Trustee fees and expenses 4,248
Shareholder reporting 86,846
Insurance 21,756
Other 1,360
-----------
Total expenses 3,397,087
Less broker commission recapture (52,267)
-----------
Net expenses 3,344,820
-----------
Net investment income 1,761,746
-----------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain (loss) on:
Investments 52,136,384
Foreign currency (4,050)
-----------
Net realized gain on investments and foreign currency 52,132,334
-----------
Net change in unrealized appreciation on:
Investments 45,280,768
Foreign currency 3,319
-----------
Net change in unrealized appreciation on investments and foreign currency 45,284,087
-----------
Net realized and change in unrealized gain on investments and foreign currency 97,416,421
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $99,178,167
===========
- ---------------------------------------------------------------------------------------------------
(1)Dividend income is net withholding taxes of: $ 198,346
(2)Interest income includes securities lending income of: 79,381
See notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
JANUS FORTY PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
------------- --------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 1,761,746 $ 1,925,964
Net realized gain on investments and foreign currency 52,132,334 213,905,140
Net change in unrealized appreciation (depreciation) on investments and
foreign currency 45,284,087 (190,464,946)
------------- --------------
Net increase in net assets resulting from operations 99,178,167 25,366,158
------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (1,749,977)
From net realized losses
Class A (168,276,133) (40,759,161)
------------- --------------
Net decrease in net assets resulting from distributions (170,026,110) (40,759,161)
------------- --------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class A 5,205,415 11,746,522
Class B 1,442,553 --
Class E 751,486 --
Net asset value of shares issued through dividend reinvestment
Class A 170,026,110 40,759,161
Class B -- --
Class E -- --
Cost of shares repurchased
Class A (106,762,970) (184,271,031)
Class B (211,684) --
Class E (89,753) --
------------- --------------
Net increase (decrease) in net assets from capital share transactions 70,361,157 (131,765,348)
------------- --------------
TOTAL DECREASE IN NET ASSETS (486,786) (147,158,351)
Net assets at beginning of period 990,108,710 1,137,267,061
------------- --------------
Net assets at end of period $ 989,621,924 $ 990,108,710
============= ==============
Net assets at end of period includes undistributed net investment income $ 1,965,377 $ 1,953,608
============= ==============
See notes to financial statements
8
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
JANUS FORTY PORTFOLIO -------------------------
FOR THE PERIOD
ENDED
JUNE 30, 2007 ----------
(UNAUDITED) 2006
-------------- ------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $ 77.64 $78.28
------- ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income (Loss).......................................... 0.14 (a) 0.14 (a)
Net Realized/Unrealized Gain (Loss) on Investments.................... 7.50 2.13
------- ------
Total from Investment Operations...................................... 7.64 2.27
------- ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. (0.15) --
Distributions from Net Realized Capital Gains......................... (14.06) (2.91)
Return of Capital..................................................... -- --
------- ------
Total Distributions................................................... (14.21) (2.91)
------- ------
NET ASSET VALUE, END OF PERIOD........................................ $ 71.07 $77.64
======= ======
TOTAL RETURN 10.63% 3.08%
Ratio of Expenses to Average Net Assets............................... 0.69%* 0.73%
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 0.70%* 0.73%
Ratio of Net Investment Income (Loss) to Average Net Assets........... 0.36%* 0.19%
Portfolio Turnover Rate............................................... 22.6% 60.5%
Net Assets, End of Period (in millions)............................... $ 987.7 $990.1
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS A
JANUS FORTY PORTFOLIO ---------------------------------------------
FOR THE YEARS ENDED DECEMBER 31,
---------------------------------------------
2005 2004++ 2003++ 2002++
-------- -------- ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $ 66.23 $ 55.41 $44.38 $ 60.30
-------- -------- ------ -------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income (Loss).......................................... (0.04)(a) (0.09)(a) 0.07 (a) 0.14 (a)
Net Realized/Unrealized Gain (Loss) on Investments.................... 12.09 10.91 (a) 10.99 (a) (15.24)(a)
-------- -------- ------ -------
Total from Investment Operations...................................... 12.05 10.82 11.06 (15.10)
-------- -------- ------ -------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. -- -- (0.03) (0.81)
Distributions from Net Realized Capital Gains......................... -- -- -- --
Return of Capital..................................................... -- -- (0.00)+ (0.01)
-------- -------- ------ -------
Total Distributions................................................... -- -- (0.03) (0.82)
-------- -------- ------ -------
NET ASSET VALUE, END OF PERIOD........................................ $ 78.28 $ 66.23 $55.41 $ 44.38
======== ======== ====== =======
TOTAL RETURN 18.19 % 19.53 % 24.91% (25.09)%
Ratio of Expenses to Average Net Assets............................... 0.78 % 0.82 % 0.82% 0.84 %
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 0.78 % 0.82 % 0.84% 0.84 %
Ratio of Net Investment Income (Loss) to Average Net Assets........... (0.06)% (0.15)% 0.14% 0.27 %
Portfolio Turnover Rate............................................... 30.0 % 16.0 % 59.0% 52.0 %
Net Assets, End of Period (in millions)............................... $1,137.0 $1,042.0 $986.0 $864.0
CLASS B
----------------
FOR THE PERIOD
ENDED
JUNE 30, 2007(B)
(UNAUDITED)
----------------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $66.33
------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Loss................................................... (0.08)(a)
Net Realized/Unrealized Gain on Investments........................... 2.58
------
Total from Investment Operations...................................... 2.50
------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. --
Distributions from Net Realized Capital Gains......................... --
Return of Capital..................................................... --
------
Total Distributions................................................... --
------
NET ASSET VALUE, END OF PERIOD........................................ $68.83
======
TOTAL RETURN 3.77 %
Ratio of Expenses to Average Net Assets............................... 0.96 %*
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 0.97 %*
Ratio of Net Investment Loss to Average Net Assets.................... (0.66)%*
Portfolio Turnover Rate............................................... 22.6 %
Net Assets, End of Period (in millions)............................... $ 1.2
* Annualized
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations - 04/28/2007.
+ Rounds to less than $0.005 per share.
++ Audited by other Independent Registered Public Accounting Firm.
See notes to financial statements
9
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS E
JANUS FORTY PORTFOLIO ----------------
FOR THE PERIOD
ENDED
JUNE 30, 2007(B)
(UNAUDITED)
----------------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $67.23
------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Loss................................................... (0.07)(a)
Net Realized/Unrealized Gain on Investments........................... 2.61
------
Total from Investment Operations...................................... 2.54
------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. --
Distributions from Net Realized Capital Gains......................... --
Return of Capital..................................................... --
------
Total Distributions................................................... --
------
NET ASSET VALUE, END OF PERIOD........................................ $69.77
======
TOTAL RETURN 3.78 %
Ratio of Expenses to Average Net Assets............................... 0.85 %*
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 0.86 %*
Ratio of Net Investment Loss to Average Net Assets.................... (0.54)%*
Portfolio Turnover Rate............................................... 22.6 %
Net Assets, End of Period (in millions)............................... $ 0.7
* Annualized
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations - 04/28/2007.
See notes to financial statements
10
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is Janus Forty Portfolio (formerly Janus
Capital Appreciation Portfolio), which is non- diversified. Shares in the Trust
are not offered directly to the general public and are currently available only
to separate accounts established by certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A, B, and E Shares
are offered by the Portfolio. Shares of each Class of the Portfolio represent
an equal pro rata interest in the Portfolio and generally give the shareholder
the same voting, dividend, liquidation, and other rights. Investment income,
realized and unrealized capital gains and losses, the common expenses of the
Portfolio and certain Portfolio-level expense reductions, if any, are allocated
on a pro rata basis to each class based on the relative net assets of each
class to the total net assets of the Portfolio. Each class of shares differs in
its respective distribution expenses and certain other class-specific expense
reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date.
11
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The value of the security so purchased is subject to market fluctuations during
this period. The Portfolio segregates assets having an aggregate value at least
equal to the amount of the when issued or delayed delivery purchase commitments
until payment is made.
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
The Portfolio utilizes the provisions of the federal income tax laws that
provide for the carryforward of capital losses for eight years, offsetting such
losses against any future net realized capital gains. At December 31, 2006, the
accumulated capital loss carryforwards and expiration dates by the Portfolio
were as follows:
Expiring Expiring Expiring Expiring
Portfolio Total 12/31/2009 12/31/2010 12/31/2011 12/31/2012
- --------- ------------ ----------- ----------- ------------ -----------
Janus Forty Portfolio $293,010,804 $61,393,522 $74,123,366 $104,924,615 $52,569,301
On May 1, 2006, the Capital Appreciation Fund was reorganized into the Janus
Capital Appreciation Portfolio, a series of Met Investors Series Trust. The
Portfolio acquired capital losses of $338,668,642. The losses incurred by the
Portfolio are subject to an annual limitation of $45,657,838.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. SECURITIES LENDING - The Portfolio may lend its securities to certain
qualified brokers who borrow securities in order to complete certain
transactions. By lending its investment securities, the Portfolio attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term of the loan would
accrue to the account of the Portfolio. Risks of delay in recovery of the
securities or even loss of rights in the collateral may occur should the
borrower of the securities fail financially. Risks may also arise to the extent
that the value of the collateral decreases below the value of the securities
loaned.
Upon entering into a securities lending transaction, the Portfolio receives
cash or other securities as collateral in an amount equal to or exceeding 102%
of the current market value of the loaned securities. Any cash received as
collateral is generally invested by State Street Bank and Trust Company ("State
Street"), acting in its capacity as securities lending agent (the "Agent"), in
the State Street Navigator Securities Lending Prime Portfolio which is a money
market fund registered under the 1940 Act. A portion of the dividends received
on the collateral is rebated to the borrower of the securities and the
remainder is split between the Agent and the Portfolio. On loans collateralized
by cash, the cash collateral is invested in a money market fund or short term
securities. A portion of the income generated upon investment of the collateral
is remitted to the Borrowers and the remainder is allocated between the fund
and the lending agent. On loans collateralized by U.S. Treasuries, a fee is
received from the Borrower and is allocated between the fund and the lending
agent.
G. SHORT SALES - The Portfolio may enter into a "short sale" of securities in
circumstances in which, at the time the short position is open, the Portfolio
owns an equal amount of the securities sold short or owns preferred stocks or
debt securities, convertible or exchangeable without payment of further
consideration, into an equal number of securities sold short. This kind of
short sale, which is referred to as one "against the box," may be entered into
by the Portfolio to, for example, lock in a sale price for a security the
Portfolio does not wish to sell immediately.
The Portfolio may also make short sales of a security it does not own, in
anticipation of a decline in the market value of that security. To complete
such a transaction, the Portfolio must borrow the security to make delivery to
the buyer. The Portfolio then is obligated to replace the security borrowed by
purchasing it at market price at the time of replacement. The price at such
time may be more or less than the price at which the
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
security was sold by the Portfolio. Until the security is replaced, the
Portfolio is required to pay to the lender any dividends or interest which
accrue during the period of the loan. To borrow the security, the Portfolio
also may be required to pay a premium, which would increase the cost of the
security sold. The proceeds of the short sale will be retained by the broker,
to the extent necessary to meet margin requirements, until the short position
is closed out. Until the Portfolio replaces a borrowed security, the Portfolio
will segregate with its custodian, or earmark, cash or other liquid assets at
such a level that (i) the amount segregated, or earmarked, plus the amount
deposited with the broker as collateral will equal the current value of the
security sold short and (ii) the amount segregated plus the amount deposited
with the broker as collateral will not be less than the market value of the
security at the time it was sold short. The Portfolio will incur a loss as a
result of the short sale if the price of the security increases between the
date of the short sale and the date on which the Portfolio replaces the
borrowed security. The Portfolio will realize a gain if the security declines
in price between those dates. This result is the opposite of what one would
expect from a cash purchase of a long position in a security. The amount of any
gain will be decreased, and the amount of any loss increased, by the amount of
any premium, dividends or interest the Portfolio may be required to pay in
connection with a short sale. No more than one third of the Portfolio's net
assets will be, when added together: (i) deposited as collateral for the
obligation to replace securities borrowed to effect short sales; and
(ii) segregated in connection with short sales.
H. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
I. DIRECTED BROKERAGE AGREEMENT - The Trust has entered into a directed
brokerage arrangement with State Street Global Markets ("SSGM"). Under this
arrangement, the Portfolio directs certain trades to SSGM in return for a
recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to
each Portfolio are shown separately as an expense reduction on the Statement of
Operations of the Portfolio.
J. FOREIGN CURRENCY TRANSLATION - The books and records of the Portfolio are
maintained in U.S. dollars. Foreign currencies, investments and other assets
and liabilities are translated into U.S. dollars on a daily basis using
prevailing exchange rates. Purchases and sales of securities are translated at
the rates of exchange prevailing when such securities were acquired or sold.
Income is translated at rates of exchange prevailing when interest is accrued
or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in
forward foreign currency contracts, sales of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities
transactions, and the difference between the amounts of dividends, interest,
and foreign withholding taxes recorded on the Portfolio's books, and the U.S.
dollar equivalent of the amounts actually received or paid. Net unrealized
foreign exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at fiscal year end, from
changes in the exchange rates of foreign currency held, and from changes in the
contract value of forward foreign currency contracts.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with Janus Capital Management LLC, (the "Adviser") for investment advisory
services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
June 30, 2007
Portfolio (Unaudited) % per annum Average Daily Assets
--------- -------------------- ----------- --------------------
Janus Forty Portfolio $3,161,114 0.65% First $1 Billion
0.60% Over $1 Billion
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Maximum Expense Ratio
under current Expense
Limitation Agreement
----------------------
Portfolio Class A Class B Class E
--------- ------- ------- -------
Janus Forty Portfolio 1.25% 1.50% 1.40%
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratio as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
The amount waived and expenses reimbursed for the period ended June 30, 2007 is
shown as investment advisory fee waiver in the Statement of Operations of the
Portfolio.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
14
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued Net Increase
Through (Decrease)
Beginning Shares Dividend Shares in Shares Ending
Shares Sold Reinvestment Repurchased Outstanding Shares
---------- ------- ------------- ----------- ------------ ----------
Janus Forty Portfolio
Class A
06/30/2007 12,753,231 72,630 2,497,079 (1,425,941) 1,143,768 13,896,999
12/31/2006 14,528,622 153,034 550,130 (2,478,555) (1,775,391) 12,753,231
Class B
04/28/2007-06/30/2007 -- 21,007 -- (3,131) 17,876 17,876
Class E
04/28/2007-06/30/2007 -- 10,864 -- (1,283) 9,581 9,581
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
Janus Forty Portfolio $-- $214,727,181 $-- $350,100,575
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
--------- ------------ ------------ -------------- --------------
Janus Forty Portfolio $659,983,351 $300,335,057 $(9,049,097) $291,285,960
6. SECURITY LENDING
As of June 30, 2007, the Portfolio had loaned securities which were
collateralized by short-term investments. The value of securities on loan and
the value of the related collateral were as follows:
Value of Value of
Securities Collateral
----------- -----------
Janus Forty Portfolio $68,211,668 $69,828,195
7. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
--------------- ---------------------- ----------------
2006 2005 2006 2005 2006 2005
---- ---- ----------- ---- ----------- ----
Janus Forty Portfolio $-- $-- $40,759,161 $-- $40,759,161 $--
15
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
7. DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
------------- ------------- ------------ ------------------ ------------
Janus Forty Portfolio $1,953,608 $168,219,513 $244,257,740 $(293,010,804) $121,420,057
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
8. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
9. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
16
MET INVESTORS SERIES TRUST
Lazard
Mid-Cap Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
LAZARD MID-CAP PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY LAZARD ASSET MANAGEMENT LLC
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
For the six months ended June 30, 2007, the Lazard Mid-Cap Portfolio Class B
returned 12.41% versus the 9.90% return of the Russell Midcap(R) Index/1/, the
Portfolio's benchmark.
In the beginning of the year, stocks rose modestly, fueled by the combination
of moderating economic growth, solid corporate profits, and strong mergers and
acquisitions activity. Then, a sharp selloff began two days before the end of
February, driving indices to modest losses. While there was no obvious trigger
for the selloff, some analysts pointed to a sharp decline in Chinese shares.
Others blamed the rally in the Japanese yen, which implied that speculators
were reversing the "carry trade." However, stocks recovered much of these
losses in March. Equity markets proved to be resilient in April and May, rising
steadily and ending the first two months of the second quarter with strong
gains. Stocks performed well through May, ignoring a sharp rise in government
bond yields as earnings reports continued to exceed investors' expectations.
Merger activity provided a further boost to stocks. However, stocks experienced
increased volatility in June, as the rise in interest rates accelerated and
investors became increasingly cautious following news of potential hedge fund
losses in the subprime mortgage market. The Federal Reserve decided to leave
interest rates unchanged at the June meeting for the eighth time in the last 12
months, with inflation concerns and sustained economic growth as the main
drivers behind its decision. High commodity prices coupled with a weaker U.S.
dollar and a tight labor market have put pressure on consumer prices,
underscoring the Fed's comment that, "a sustained moderation in inflation
pressures has yet to be convincingly demonstrated." In addition, concerns about
the future of the housing and subprime mortgage markets remain sources of
uncertainty that surround the outlook for the economy. From a sector
perspective, cyclical sectors of the market, such as materials, industrials,
and energy, performed well as economic growth was resilient. Conversely, more
economically defensive groups, such as areas of health care, consumer staples,
and utilities, lagged. Financials were among the worst performing groups, as
uncertainty surrounding the scope of the recent rise in subprime-loan defaults
weighed on the sector.
For the year-to-date-period, performance benefited from solid broad-based stock
selection, in some cases driven by robust corporate activity, as the Portfolio
experienced five takeouts. Stock selection in consumer staples was one of the
largest contributors to outperformance, as shares of Coca-Cola Enterprises,
which bottles and distributes Coca-Cola Company (Coke) products, saw its stock
rise, based on reports that Coke would purchase another beverage company in an
effort to improve its portfolio of products. We believe that this kind of
strategic purchase would significantly benefit Coca-Cola Enterprises. Holdings
such as, Smithfield Foods, Constellation Brands, Kroger, and Pilgrim's Pride
also performed well. In addition, solid
/1/The Russell Midcap(R) Index is an unmanaged index which measures the
performance of the 800 smallest companies in the Russell 1000(R) Index, which
represent approximately 30% of the total market capitalization of the Russell
1000(R) Index. As of the latest reconstitution, the average market
capitalization was approximately $6.3 billion; the median market capitalization
was approximately $4.7 billion. The largest company in the Index had a market
capitalization of $18.3 billion. The Index does not include fees or expenses
and is not available for direct investment.
stock selection in the consumer discretionary sector aided performance, as the
Portfolio's media holdings, including Idearc Inc. and R.H. Donnelley continued
to perform well. However the overall impact in this sector was diminished, as
shares of Liz Claiborne declined. The company reported disappointing earnings,
due to a decline in wholesale-clothing sales to large department stores.
However, we believe the company should benefit from a focus on its more
profitable clothing lines and company-owned stores. Performance was also helped
by stock selection in technology, as Avaya, Solectron, and CDW agreed to be
acquired. Many of the takeout offers in the Portfolio were from private-equity
firms, which show that these strategic buyers are focusing on attractive
valuations and free cash flow. In addition, stock selection in financials
helped returns, as shares of A.G. Edwards rose; Wachovia agreed to buy the
company, creating the second-largest U.S. brokerage firm. Conversely, stock
selection in health care detracted from returns, as shares of Sepracor declined
due to reduced Medicare reimbursement rates for one of its major respiratory
drugs. Returns were also hurt by stock selection in industrials and materials,
as deeper cyclical stocks performed well.
OUTLOOK
While the multiyear rally in equities continues, a change in market leadership
appears to be underway, as investors' risk tolerance moderates after an
extended period of embracing risk. Historically, periods of slowing
corporate-earnings growth have favored more consistently profitable companies,
as investors seek out stability in a more adverse environment. Valuations
remain attractive, earnings visibility is quite strong, and the fundamentals
for owning highly cash-generative stocks are compelling. We believe the
Portfolio is well positioned to benefit from those companies that, from our
perspective, are attractively valued yet offer high returns on capital and high
levels of free cash flow. As a result, we believe the Portfolio should perform
well in these market conditions.
TEAM MANAGED
The Portfolio is managed by Andrew Lacey, Christopher Blake, Gary Buesser and
Robert Failla.
LAZARD ASSET MANAGEMENT LLC
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
LAZARD MID-CAP PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY LAZARD ASSET MANAGEMENT LLC
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
--------------------------------------
Coca-Cola Enterprises, Inc. 2.57%
--------------------------------------
Liz Claiborne, Inc. 2.47%
--------------------------------------
Pitney Bowes, Inc. 2.12%
--------------------------------------
Mellon Financial Corp. 2.08%
--------------------------------------
Citizens Communications Co. 1.97%
--------------------------------------
Ingram Micro, Inc.--Class A 1.96%
--------------------------------------
Idearc, Inc. 1.94%
--------------------------------------
Dover Corp. 1.90%
--------------------------------------
Hubbell, Inc.--Class B 1.87%
--------------------------------------
Barr Pharmaceuticals, Inc. 1.87%
--------------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
[CHART]
Energy 23.6%
Technology 17.9%
Industrials 16.0%
Cyclical 14.0%
Basic Materials 9.6%
Financials 9.4%
Non-Cyclical 7.5%
Communications 2.0%
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
LAZARD MID-CAP PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY LAZARD ASSET MANAGEMENT LLC
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
LAZARD MID-CAP PORTFOLIO MANAGED BY
LAZARD ASSET MANAGEMENT LLC VS. RUSSELL MIDCAP(R) INDEX/1/
Growth Based on $10,000+
[CHART]
Lazard Mid-Cap Portfolio Russell Midcap(R) Index
------------------------ -----------------------
10/9/2001 $10,000 $10,000
12/31/2001 11,026 11,463
12/31/2002 9,843 9,608
12/31/2003 12,406 13,457
12/31/2004 14,183 16,177
12/31/2005 15,336 18,225
12/31/2006 17,587 21,005
6/30/2007 19,769 23,085
------------------------------------------------------------
Average Annual Return/2/
(for the period ended 6/30/07)
------------------------------------------------------------
Since
1 Year 3 Year 5 Year Inception/3/
------------------------------------------------------------
Lazard Mid-Cap
Portfolio--Class A 25.28% 13.92% 13.03% 11.53%
- -- Class B 25.04% 13.68% 12.80% 12.64%
Class E 25.14% 13.77% 12.91% 10.80%
------------------------------------------------------------
- - - Russell Midcap(R) Index/1/ 20.83% 17.16% 16.39% 16.11%
------------------------------------------------------------
+The chart reflects the performance of Class B shares of the Portfolio. The
performance of Class B shares will differ from that of the other Classes
because of the difference in expenses paid by policyholders investing in the
different share classes.
/1/The Russell Midcap(R) Index is an unmanaged index which measures the
performance of the 800 smallest companies in the Russell 1000(R) Index, which
represent approximately 30% of the total market capitalization of the Russell
1000(R) Index. As of the latest reconstitution, the average market
capitalization was approximately $6.3 billion; the median market capitalization
was approximately $4.7 billion. The largest company in the Index had a market
capitalization of $18.3 billion. The Index does not include fees or expenses
and is not available for direct investment.
/2/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/3/Inception of the Class A shares is 1/2/02. Inception of the Class B shares
is 10/9/01. Inception of the Class E shares is 4/01/02. Index returns are based
on an inception date of 10/9/01.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
3
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
LAZARD MID-CAP PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,125.10 $3.74
Hypothetical (5% return before expenses) 1,000.00 1,021.27 3.56
- ------------------------------------------ ------------- ------------- --------------
Class B
Actual $1,000.00 $1,124.10 $5.06
Hypothetical (5% return before expenses) 1,000.00 1,020.03 4.81
- ------------------------------------------ ------------- ------------- --------------
Class E
Actual $1,000.00 $1,124.50 $4.53
Hypothetical (5% return before expenses) 1,000.00 1,020.53 4.31
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.71%,
0.96%, and 0.86% for the Class A, Class B, and Class E, respectively,
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period).
4
MET INVESTORS SERIES TRUST
LAZARD MID-CAP PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
----------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
----------------------------------------------------------------
COMMON STOCKS - 94.3%
BANKS - 5.8%
First Horizon National Corp.(a).... 274,010 $ 10,686,390
Hudson City Bancorp, Inc........... 890,000 10,875,800
Huntington Bancshares, Inc.(a)..... 470,700 10,703,718
Marshall & Ilsley Corp............. 289,800 13,803,174
Republic Bancorp, Inc. - Class A(a) 11 182
-------------
46,069,264
-------------
BEVERAGES - 3.7%
Coca-Cola Enterprises, Inc......... 851,200 20,428,800
Constellation Brands, Inc.*(a)..... 380,300 9,233,684
-------------
29,662,484
-------------
BUILDING PRODUCTS - 2.2%
Masco Corp......................... 346,300 9,859,161
USG Corp.*(a)...................... 146,800 7,199,072
-------------
17,058,233
-------------
CHEMICALS - 0.5%
Cabot Corp......................... 85,500 4,076,640
-------------
COMMERCIAL SERVICES & SUPPLIES - 8.0%
Cintas Corp.(a).................... 363,400 14,328,862
Covanta Holding Corp.*(a).......... 447,700 11,035,805
Pitney Bowes, Inc.(a).............. 360,700 16,887,974
R.H. Donnelley Corp.*(a)........... 151,822 11,505,071
Republic Services, Inc............. 313,650 9,610,236
-------------
63,367,948
-------------
COMPUTERS & PERIPHERALS - 4.7%
Ingram Micro, Inc. - Class A*...... 719,100 15,611,661
Seagate Technology................. 431,900 9,402,463
Sun Microsystems, Inc.*............ 2,290,300 12,046,978
-------------
37,061,102
-------------
CONTAINERS & PACKAGING - 1.4%
Ball Corp.......................... 205,000 10,899,850
-------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 5.0%
Arrow Electronics, Inc.*........... 269,200 10,345,356
Flextronics International, Ltd.*(a) 1,352,500 14,607,000
Hubbell, Inc. - Class B............ 274,500 14,883,390
-------------
39,835,746
-------------
FINANCIAL - DIVERSIFIED - 4.7%
AmeriCredit Corp.*(a).............. 302,400 8,028,720
Ameriprise Financial, Inc.......... 204,000 12,968,280
Mellon Financial Corp.............. 376,600 16,570,400
-------------
37,567,400
-------------
FOOD PRODUCTS - 2.9%
Pilgrim's Pride Corp.(a)........... 239,600 9,145,532
Smithfield Foods, Inc.*............ 463,300 14,265,007
-------------
23,410,539
-------------
--------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
--------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES - 1.4%
Applera Corp........................ 372,600 $ 11,379,204
-------------
HEALTH CARE PROVIDERS & SERVICES - 1.2%
Omnicare, Inc.(a)................... 273,200 9,851,592
-------------
HOTELS, RESTAURANTS & LEISURE - 3.3%
Darden Restaurants, Inc............. 333,100 14,653,069
Royal Caribbean Cruises, Ltd.(a).... 277,000 11,905,460
-------------
26,558,529
-------------
HOUSEHOLD DURABLES - 1.0%
Stanley Works (The)(a).............. 133,800 8,121,660
-------------
HOUSEHOLD PRODUCTS - 1.1%
Fortune Brands, Inc.(a)............. 105,800 8,714,746
-------------
INDUSTRIAL - DIVERSIFIED - 1.6%
Textron, Inc........................ 112,000 12,332,320
-------------
INSURANCE - 10.5%
Aon Corp............................ 321,600 13,703,376
Conseco, Inc.*...................... 466,700 9,749,363
Lincoln National Corp............... 185,605 13,168,675
OneBeacon Insurance Group, Ltd...... 424,800 10,760,184
PartnerRe, Ltd.(a).................. 164,173 12,723,407
RenaissanceRe Holdings, Ltd.(a)..... 208,000 12,893,920
Willis Group Holdings, Ltd.(a)...... 235,900 10,393,754
-------------
83,392,679
-------------
IT CONSULTING & SERVICES - 0.8%
DST Systems, Inc.*(a)............... 79,800 6,320,958
-------------
MACHINERY - 1.9%
Dover Corp.......................... 295,400 15,109,710
-------------
MEDIA - 3.4%
Belo Corp.(a)....................... 582,100 11,985,439
Idearc, Inc.(a)..................... 435,500 15,386,215
-------------
27,371,654
-------------
METALS & MINING - 2.6%
Foundation Coal Holdings, Inc.(a)... 226,500 9,204,960
Massey Energy Co.(a)................ 422,300 11,254,295
-------------
20,459,255
-------------
OIL & GAS - 4.9%
BJ Services Co...................... 435,100 12,374,244
Pride International, Inc.*.......... 238,900 8,949,194
Sunoco, Inc......................... 113,500 9,043,680
Williams Cos., Inc. (The)........... 270,100 8,540,562
-------------
38,907,680
-------------
PAPER & FOREST PRODUCTS - 1.3%
Louisiana-Pacific Corp.(a).......... 564,400 10,678,448
-------------
PHARMACEUTICALS - 6.1%
Barr Pharmaceuticals, Inc.*(a)...... 296,000 14,868,080
Hospira, Inc.*...................... 348,600 13,609,344
See notes to financial statements
5
MET INVESTORS SERIES TRUST
LAZARD MID-CAP PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
------------------------------------------------------------------
PHARMACEUTICALS - CONTINUED
Sepracor, Inc.*......................... 164,800 $ 6,760,096
Warner Chilcott, Ltd.*(a)............... 720,900 13,041,081
-------------
48,278,601
-------------
REAL ESTATE - 1.3%
CBL & Associates Properties, Inc. (REIT) 285,800 10,303,090
-------------
RETAIL - SPECIALTY - 6.1%
Foot Locker, Inc........................ 664,700 14,490,460
Liz Claiborne, Inc.(a).................. 525,700 19,608,610
Pacific Sunwear of California, Inc.*.... 443,200 9,750,400
Talbots, Inc. (The)(a).................. 197,900 4,953,437
-------------
48,802,907
-------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS - 2.4%
Analog Devices, Inc..................... 205,700 7,742,548
QLogic Corp.*........................... 663,900 11,053,935
-------------
18,796,483
-------------
SOFTWARE - 1.1%
Sybase, Inc.*........................... 350,200 8,366,278
-------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 2.2%
Citizens Communications Co.(a).......... 1,025,100 15,653,277
NeuStar, Inc. - Class A*................ 63,000 1,817,713
-------------
17,470,990
-------------
TRANSPORTATION - 1.2%
YRC Worldwide, Inc.*(a)................. 259,100 9,534,880
-------------
Total Common Stocks
(Cost $699,469,740) 749,760,870
-------------
------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------------
SHORT-TERM INVESTMENT - 4.8%
State Street Bank & Trust Co.,
Repurchase Agreement dated 06/29/07
at 3.400% to be repurchased at
$37,854,722 on 07/02/07 collateralized
by $38,700,000 FNMA at 5.990% due
04/18/17 with a value of $38,603,250.
(Cost - $37,844,000)................... $37,844,000 37,844,000
------------
TOTAL INVESTMENTS - 99.1%
(Cost $737,313,740) 787,604,870
------------
Other Assets and Liabilities (net) - 0.9% 7,160,259
------------
TOTAL NET ASSETS - 100.0% $794,765,129
============
PORTFOLIO FOOTNOTES:
* Non-income producing security.
(a) A portion or all of the security was held on loan. As of June 30, 2007, the
market value of the securities loaned was $174,940,600 and the collateral
received consisted of cash in the amount of $179,507,648.
FNMA - Federal National Mortgage Association
REIT - Real Estate Investment Trust
See notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
LAZARD MID-CAP PORTFOLIO
ASSETS
Investments, at value (Note 2)* $749,760,870
Repurchase Agreement 37,844,000
Cash 855
Cash denominated in foreign currencies** 1
Collateral for securities on loan 179,507,648
Receivable for investments sold 12,089,824
Receivable for Trust shares sold 939,607
Dividends receivable 641,391
Interest receivable 3,574
------------
Total assets 980,787,770
------------
LIABILITIES
Payables for:
Investments purchased 5,379,988
Trust shares redeemed 384,324
Distribution and services fees - Class B 58,759
Distribution and services fees - Class E 6,045
Collateral for securities on loan 179,507,648
Investment advisory fee payable (Note 3) 445,435
Administration fee payable 8,592
Custodian and accounting fees payable 95,894
Accrued expenses 135,956
------------
Total liabilities 186,022,641
------------
NET ASSETS $794,765,129
============
NET ASSETS REPRESENTED BY:
Paid in surplus $703,659,149
Accumulated net realized gain 39,160,689
Unrealized appreciation on investments 50,291,130
Undistributed net investment income 1,654,161
------------
Total $794,765,129
============
NET ASSETS
Class A $457,833,863
============
Class B 287,333,091
============
Class E 49,598,175
============
CAPITAL SHARES OUTSTANDING
Class A 32,600,197
============
Class B 20,553,293
============
Class E 3,540,133
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 14.04
============
Class B 13.98
============
Class E 14.01
============
- -------------------------------------------------------------------------------------
* Investments at cost, excluding Repurchase Agreements $699,469,740
**Cost of cash denominated in foreign currencies 1
See notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
LAZARD MID-CAP PORTFOLIO
INVESTMENT INCOME:
Dividends $ 4,358,209
Interest (1) 730,840
-----------
Total investment income 5,089,049
-----------
EXPENSES:
Investment advisory fee (Note 3) 2,280,602
Administration fees 24,498
Custody and accounting fees 19,065
Distribution fee - Class B 304,951
Distribution fee - Class E 32,221
Transfer agent fees 14,511
Audit 11,312
Legal 10,359
Trustee fees and expenses 7,027
Shareholder reporting 25,052
Insurance 3,735
Other 892
-----------
Total expenses 2,734,225
Less broker commission recapture (64,661)
-----------
Net expenses 2,669,564
-----------
Net investment income 2,419,485
-----------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on:
Investments 71,496,574
-----------
Net realized gain on investments 71,496,574
-----------
Net change in unrealized appreciation on:
Investments 1,849,599
-----------
Net change in unrealized appreciation on investments 1,849,599
-----------
Net realized and change in unrealized gain on investments 73,346,173
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $75,765,658
===========
- --------------------------------------------------------------------------------------
(1)Interest income includes securities lending income of: $ 50,023
See notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
LAZARD MID-CAP PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 2,419,485 $ 2,657,173
Net realized gain on investments and futures contracts 71,496,574 24,967,756
Net change in unrealized appreciation on investments 1,849,599 33,713,317
------------ ------------
Net increase in net assets resulting from operations 75,765,658 61,338,246
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (2,359,453) (604,066)
Class B (841,667) (617,620)
Class E (220,835) (126,614)
From net realized gains
Class A (32,336,865) (13,270,801)
Class B (20,992,665) (24,211,011)
Class E (3,958,801) (3,826,111)
------------ ------------
Net decrease in net assets resulting from distributions (60,710,286) (42,656,223)
------------ ------------
CAPITAL SHARE TRANSACTIONS (NOTES 4 AND 8):
Proceeds from shares sold
Class A 91,147,798 209,238,546
Class B 74,551,695 19,609,795
Class E 14,124,895 4,348,643
Net asset value of shares issued through acquisition
Class A 52,674,423 --
Class B 11,229,550 --
Net asset value of shares issued through dividend reinvestment
Class A 34,696,318 13,874,867
Class B 21,834,332 24,828,631
Class E 4,179,636 3,952,725
Cost of shares repurchased
Class A (23,720,940) (15,429,381)
Class B (60,549,468) (30,758,205)
Class E (5,536,231) (5,369,828)
------------ ------------
Net increase in net assets from capital share transactions 214,632,008 224,295,793
------------ ------------
TOTAL INCREASE IN NET ASSETS 229,687,380 242,977,816
Net assets at beginning of period 565,077,749 322,099,933
------------ ------------
Net assets at end of period $794,765,129 $565,077,749
============ ============
Net assets at end of period includes undistributed net investment
income $ 1,654,161 $ 2,656,631
============ ============
See notes to financial statements
9
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS A
LAZARD MID-CAP PORTFOLIO ----------------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 -------------------------------------------
(UNAUDITED) 2006 2005 2004 2003
-------------- ------ ------ ------ ------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $13.74 $13.65 $14.13 $12.33 $ 9.85
------ ------ ------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................. 0.06 (a) 0.10 (a) 0.04 (a) 0.08 (a) 0.01 (a)
Net Realized/Unrealized Gain (Loss) on Investments.................... 1.61 1.75 1.16 1.72 2.58
------ ------ ------ ------ ------
Total from Investment Operations...................................... 1.67 1.85 1.20 1.80 2.59
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. (0.09) (0.08) (0.06) -- (0.01)
Distributions from Net Realized Capital Gains......................... (1.28) (1.68) (1.62) -- (0.10)
------ ------ ------ ------ ------
Total Distributions................................................... (1.37) (1.76) (1.68) -- (0.11)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD........................................ $14.04 $13.74 $13.65 $14.13 $12.33
====== ====== ====== ====== ======
TOTAL RETURN 12.51% 14.87% 8.40% 14.60% 26.42%
Ratio of Expenses to Average Net Assets**............................. 0.71%* 0.77% 0.79% 0.85% 0.93%
Ratio of Expenses to Average Net Assets After Broker Rebates**........ N/A N/A N/A N/A 0.92%
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 0.73%* 0.80% 0.82%(c) 0.83%(c) 0.96%(c)
Ratio of Net Investment Income to Average Net Assets.................. 0.84%* 0.76% 0.63% 0.59% 0.10%
Portfolio Turnover Rate............................................... 59.7% 65.4% 170.0% 90.7% 36.2%
Net Assets, End of Period (in millions)............................... $457.8 $312.2 $89.0 $58.8 $4.5
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
LAZARD MID-CAP PORTFOLIO --------
--------
2002(B)
-------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $ 10.98
-------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................. 0.03 (a)
Net Realized/Unrealized Gain (Loss) on Investments.................... (1.15)
-------
Total from Investment Operations...................................... (1.12)
-------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. (0.00)+
Distributions from Net Realized Capital Gains......................... (0.01)
-------
Total Distributions................................................... (0.01)
-------
NET ASSET VALUE, END OF PERIOD........................................ $ 9.85
=======
TOTAL RETURN (10.18)%
Ratio of Expenses to Average Net Assets**............................. 0.90%*
Ratio of Expenses to Average Net Assets After Broker Rebates**........ 0.86%*
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 1.64%*
Ratio of Net Investment Income to Average Net Assets.................. 0.26%*
Portfolio Turnover Rate............................................... 37.1%
Net Assets, End of Period (in millions)............................... $4.2
* Annualized
** Prior to 05/01/2003, broker rebates were excluded from the calculation of
the expense limitation.
+ Rounds to less than $0.005 per share.
N/A Not Applicable
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--01/02/2002.
(c) Excludes effect of Deferred Expense Reimbursement--See Note 3 of financial
statements.
See notes to financial statements
10
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS B
LAZARD MID-CAP PORTFOLIO ----------------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 -------------------------------------------
(UNAUDITED) 2006 2005 2004 2003
-------------- ------ ------ ------ ------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $13.65 $13.57 $14.05 $12.29 $ 9.83
------ ------ ------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income (Loss).......................................... 0.04 (a) 0.06 (a) 0.05 (a) 0.02(a) (0.01)(a)
Net Realized/Unrealized Gain (Loss) on Investments.................... 1.62 1.74 1.10 1.74 2.57
------ ------ ------ ------ ------
Total from investment operations...................................... 1.66 1.80 1.15 1.76 2.56
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. (0.05) (0.04) (0.01) -- (0.00)+
Distributions from Net Realized Capital Gains......................... (1.28) (1.68) (1.62) -- (0.10)
------ ------ ------ ------ ------
Total Distributions................................................... (1.33) (1.72) (1.63) -- (0.10)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD........................................ $13.98 $13.65 $13.57 $14.05 $12.29
====== ====== ====== ====== ======
TOTAL RETURN 12.41% 14.67% 8.06% 14.32% 26.03%
Ratio of Expenses to Average Net Assets**............................. 0.96%* 1.02% 1.03% 1.08% 1.19%
Ratio of Expenses to Average Net Assets After Broker Rebates**........ N/A N/A N/A N/A 1.19%
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 0.98%* 1.05% 1.07%(b) 1.03%(b) 1.15%(b)
Ratio of Net Investment Income (Loss) to Average Net Assets........... 0.59%* 0.48% 0.38% 0.16% (0.08)%
Portfolio Turnover Rate............................................... 59.7% 65.4% 170.0% 90.7% 36.2%
Net Assets, End of Period (in millions)............................... $287.3 $216.8 $200.4 $211.0 $211.8
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
LAZARD MID-CAP PORTFOLIO --------
--------
2002
-------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $ 11.02
-------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income (Loss).......................................... -- (a)
Net Realized/Unrealized Gain (Loss) on Investments.................... (1.18)
-------
Total from investment operations...................................... (1.18)
-------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. (0.00)+
Distributions from Net Realized Capital Gains......................... (0.01)
-------
Total Distributions................................................... (0.01)
-------
NET ASSET VALUE, END OF PERIOD........................................ $ 9.83
=======
TOTAL RETURN (10.73)%
Ratio of Expenses to Average Net Assets**............................. 1.15%
Ratio of Expenses to Average Net Assets After Broker Rebates**........ 1.12%
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 1.91%
Ratio of Net Investment Income (Loss) to Average Net Assets........... --%
Portfolio Turnover Rate............................................... 37.1%
Net Assets, End of Period (in millions)............................... $32.8
* Annualized
** Prior to 05/01/2003, broker rebates were excluded from the calculation of
the expense limitation.
+ Rounds to less than $0.005 per share.
N/A Not Applicable
(a) Per share amounts based on average shares outstanding during the period.
(b) Excludes effect of Deferred Expense Reimbursement--See Note 3 of financial
statements.
See notes to financial statements
11
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD
ENDED:
CLASS E
LAZARD MID-CAP PORTFOLIO ------------------------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 ---------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002(B)
-------------- ------ ------ ------ ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD.............. $13.69 $13.61 $14.10 $12.32 $ 9.84 $ 11.60
------ ------ ------ ------ ------ -------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income............................. 0.05 (a) 0.08 (a) 0.07 (a) 0.04 (a) 0.00+(a) 0.01 (a)
Net Realized/Unrealized Gain (Loss) on Investments 1.62 1.74 1.10 1.74 2.58 (1.76)
------ ------ ------ ------ ------ -------
Total from Investment Operations.................. 1.67 1.82 1.17 1.78 2.58 (1.75)
------ ------ ------ ------ ------ -------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.............. (0.07) (0.06) (0.04) -- (0.00)+ (0.00)+
Distributions from Net Realized Capital Gains..... (1.28) (1.68) (1.62) -- (0.10) (0.01)
------ ------ ------ ------ ------ -------
Total Distributions............................... (1.35) (1.74) (1.66) -- (0.10) (0.01)
------ ------ ------ ------ ------ -------
NET ASSET VALUE, END OF PERIOD.................... $14.01 $13.69 $13.61 $14.10 $12.32 $ 9.84
====== ====== ====== ====== ====== =======
TOTAL RETURN 12.45% 14.74% 8.23% 14.45% 26.35% (15.17)%
Ratio of Expenses to Average Net Assets**......... 0.86%* 0.93% 0.93% 0.98% 1.09% 1.05%*
Ratio of Expenses to Average Net Assets After
Broker Rebates**................................ N/A N/A N/A N/A 1.08% 1.02%*
Ratio of Expenses to Average Net Assets Before
Reimbursement and Rebates....................... 0.88%* 0.95% 0.97%(c) 0.94%(c) 1.07%(c) 1.75%*
Ratio of Net Investment Income to Average Net
Assets.......................................... 0.68%* 0.58% 0.49% 0.29% 0.02% 0.13%*
Portfolio Turnover Rate........................... 59.7% 65.4% 170.0% 90.7% 36.2% 37.1%
Net Assets, End of Period (in millions)........... $ 49.6 $ 36.0 $32.6 $30.5 $19.8 $4.3
* Annualized
** Prior to 05/01/2003, broker rebates were excluded from the calculation of
the expense limitation.
+ Rounds to less than $0.005 per share.
N/A Not Applicable
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--04/01/2002.
(c) Excludes effect of Deferred Expense Reimbursement--See Note 3 of financial
statements.
See notes to financial statements
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is Lazard Mid-Cap Portfolio, which is
diversified. Shares in the Trust are not offered directly to the general public
and are currently available only to separate accounts established by certain
affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A, B and E Shares are
offered by the Portfolio. Shares of each Class of the Portfolio represent an
equal pro rata interest in the Portfolio and generally give the shareholder the
same voting, dividend, liquidation, and other rights. Investment income,
realized and unrealized capital gains and losses, the common expenses of the
Portfolio and certain Portfolio-level expense reductions, if any, are allocated
on a pro rata basis to each class based on the relative net assets of each
class to the total net assets of the Portfolio. Each class of shares differs in
its respective distribution expenses and certain other class-specific expense
reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date. The value of the
security so purchased is subject to market fluctuations during this period. The
Portfolio segregates assets having an aggregate value at least equal to the
amount of the when issued or delayed delivery purchase commitments until
payment is made.
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. SECURITIES LENDING - The Portfolio may lend its securities to certain
qualified brokers who borrow securities in order to complete certain
transactions. By lending its investment securities, the Portfolio attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term of the loan would
accrue to the account of the Portfolio. Risks of delay in recovery of the
securities or even loss of rights in the collateral may occur should the
borrower of the securities fail financially. Risks may also arise to the extent
that the value of the collateral decreases below the value of the securities
loaned.
Upon entering into a securities lending transaction, the Portfolio receives
cash or other securities as collateral in an amount equal to or exceeding 102%
of the current market value of the loaned securities. Any cash received as
collateral is generally invested by State Street Bank and Trust Company ("State
Street"), acting in its capacity as securities lending agent (the "Agent"), in
the State Street Navigator Securities Lending Prime Portfolio which is a money
market fund registered under the 1940 Act. A portion of the dividends received
on the collateral is rebated to the borrower of the securities and the
remainder is split between the Agent and the Portfolio. On loans collateralized
by cash, the cash collateral is invested in a money market fund or short term
securities. A portion of the income generated upon investment of the collateral
is remitted to the Borrowers and the remainder is allocated between the fund
and the lending agent. On loans collateralized by U.S. Treasuries, a fee is
received from the Borrower and is allocated between the fund and the lending
agent.
G. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
H. DIRECTED BROKERAGE AGREEMENT - The Trust has entered into a directed
brokerage arrangement with State Street Global Markets ("SSGM"). Under this
arrangement, the Portfolio directs certain trades to SSGM in return for a
recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to
each Portfolio are shown separately as an expense reduction on the Statement of
Operations of the Portfolio.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with Lazard Asset Management LLC, (the "Adviser") for investment advisory
services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- --------------------------
Lazard Mid-Cap Portfolio $2,280,602 0.70% First $500 Million
0.675% $500 Million to $1 Billion
0.60% Over $1 Billion
14
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Maximum Expense Ratio
under current Expense
Limitation Agreement
----------------------
Portfolio Class A Class B Class E
--------- ------- ------- -------
Lazard Mid-Cap Portfolio 0.80% 1.05% 0.95%
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratio as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
The amount waived and expenses reimbursed for the period ended June 30, 2007 is
shown as investment advisory fee waiver in the Statement of Operations of the
Portfolio.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued
in Connection Shares Issued
with Through Net Increase
Beginning Shares Acquisition Dividend Shares in Shares Ending
Shares Sold (Note 8) Reinvestment Repurchased Outstanding Shares
- - ---------- ---------- ------------- ------------- ----------- ------------ ----------
Lazard Mid-Cap Portfolio
Class A
06/30/2007 22,731,003 6,437,770 2,549,182 2,553,077 (1,670,835) 9,869,194 32,600,197
12/31/2006 6,521,885 16,287,983 -- 1,117,139 (1,196,004) 16,209,118 22,731,003
15
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
Shares Issued
in Connection Shares Issued
with Through Net Increase
Beginning Shares Acquisition Dividend Shares in Shares Ending
Shares Sold (Note 8) Reinvestment Repurchased Outstanding Shares
- - ---------- --------- ------------- ------------- ----------- ------------ ----------
Class B
06/30/2007 15,879,390 5,358,085 2,117,803 1,612,580 (4,414,565) 4,673,903 20,553,293
12/31/2006 14,764,291 1,480,841 -- 2,008,789 (2,374,531) 1,115,099 15,879,390
Class E
06/30/2007 2,630,859 999,516 -- 308,005 (398,247) 909,274 3,540,133
12/31/2006 2,398,654 327,829 -- 319,026 (414,650) 232,205 2,630,859
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
Lazard Mid-Cap Portfolio $-- $449,149,489 $-- $377,026,275
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
- --------- ------------ ------------ -------------- --------------
Lazard Mid-Cap Portfolio $737,313,740 $62,359,175 $(12,068,045) $50,291,130
6. SECURITY LENDING
As of June 30, 2007, the Portfolio had loaned securities which were
collateralized by short term investments. The value of securities on loan and
the value of the related collateral were as follows:
Value of Value of
Securities Collateral
------------ ------------
Lazard Mid-Cap Portfolio $174,940,600 $179,507,648
7. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
----------------------- ----------------------- -----------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Lazard Mid-Cap Portfolio $16,553,650 $16,954,128 $26,102,573 $17,832,117 $42,656,223 $34,786,245
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
------------- ------------- ------------ ------------------ -----------
Lazard Mid-Cap Portfolio $21,197,245 $6,713,694 $38,873,059 $-- $66,783,998
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
16
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
8. ACQUISITIONS
On April 30, 2007, Lazard Mid-Cap Portfolio ("Lazard") acquired all the net
assets of Met/Putnam Capital Opportunities Portfolio ("Met/Putnam") and Pioneer
Mid-Cap Value Portfolio ("Pioneer"), a series of Met Investors Series Trust,
pursuant to a plan of reorganization approved by Met/Putnam and Pioneer
shareholders on April 24, 2007. The acquisition was accomplished by a tax-free
exchange of 2,549,182 Class A shares of Lazard (valued at $35.0 Million),
822,075 Class B shares of Lazard (valued at $11.2 Million) and 1,295,728 Class
B shares of Pioneer (valued at $17.7 Million) in exchange for the 2,220,759
Class A and 722,871 Class B shares of Met/Putnam and 1,561,719 Class A shares
of Pioneer outstanding on April 27, 2007. Met/Putnam Class A net assets at that
date ($35.0 Million) and Class B net assets at that date ($11.2 Million),
including $6,677,258 and $1,011,369 of unrealized appreciation and
approximately $24,438,292 and $1,776,210 of accumulated net realized gains,
were combined with those of Lazard Class A and Class B, respectively. Pioneer
Class A net assets at that date ($17.7 Million), including $1,577,984 of
unrealized appreciation and approximately $706,258 of accumulated net realized
gains, were combined with those of Lazard Class B. The aggregate Class A and
Class B net assets of Lazard immediately before the acquisition were
$383,289,168 and $247,171,254, respectively. The aggregate Class A and Class B
net assets of Met/Putnam immediately before the acquisition were $34,974,776
and $11,229,550, respectively. The aggregate Class A net assets of Pioneer
immediately before the acquisition was $17,699,647. The aggregate Class A and
Class B net assets of Lazard immediately after the acquisition were
$418,263,944 and $276,100,451, respectively.
9. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
10. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
17
MET INVESTORS SERIES TRUST
Legg Mason Partners
Aggressive Growth Portfolio
(formerly Legg Mason Aggressive Growth Portfolio)
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
LEGG MASON PARTNERS AGGRESSIVE GROWTH PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY CLEARBRIDGE ADVISORS, LLC
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
MARKET REVIEW AND OUTLOOK
The first half of 2007 saw U.S. equity markets move higher, with the Dow Jones
Industrial Average/1/ and other major stock market indexes exiting the second
quarter just a few percentage points below all-time or multi-year highs. The
catalysts for the advance included strong corporate earnings, abundant
liquidity and a continuation of the strong mergers and acquisitions (M&A)
trends of the past 12 months. During the period, the Federal Reserve ("Fed")/2/
kept short term interest rates unchanged, a sign that Fed members believe we
are in a period of decent, albeit slowing, growth and relatively benign core
inflation. The Dow industrials ended the first half of the year with a 7.6%
gain.
We began the second quarter just weeks removed from the 6% correction in the
major averages of late February/early March. At the end of the first quarter,
we wrote that "whether or not the short and sharp decline seen in the first
quarter will prove the end of the pullback or the beginning of a longer
correction remains to be seen, but we are presently more confident in the
potential for the bull market to proceed apace than we were at the start of the
year."
Perhaps the most encouraging derivative of the strong equity markets in the
second quarter was that the advance was met with increasingly skittish
headlines. Investor concern grew over the rising sub-prime mortgage defaults in
the U.S. and the effect that the backup in long-term interest rates could have
on the future funding of levered transactions. As has been stated often, we
believe a healthy bull market is one that climbs a proverbial "wall of worry,"
and the market of 2007 has so far fit this pattern nicely.
We remain generally constructive in our view toward the equity markets, and our
portfolio holdings in particular. We continue to believe that with corporate
balance sheets flush with cash, we should continue to see stock buybacks,
dividend increases and a proliferation of M&A activity. In fact, it is our view
that the change in administrations in 2008 should only serve to accelerate
large cash transactions amongst corporations. Given this backdrop, we believe
the primary bull market that began in the spring of 2003 is intact, and would
view future pullbacks or corrections in the market constructively.
PORTFOLIO PERFORMANCE REVIEW AND STRATEGY
For the first half of 2007, the Portfolio's relative underperformance compared
with the Russell 3000(R) Growth Index was largely due to stock selection, with
sector selection having only a slightly negative impact on the Portfolio during
the six-month period.
In particular, stock selection in health care was the leading detractor to
Portfolio performance, with stock selection in information technology (IT) and
financials also weighing down relative performance. Sector allocation detracted
the most from performance in health care, cash holdings, IT and industrials.
The Portfolio was significantly overweight in health care and significantly
underweight in IT. Stock selection in energy and industrials were the top
positive contributions to performance during the six month period. The energy
sector, where the Portfolio was significantly overweight, made a positive
contribution to Portfolio performance. It is important to note that the
Portfolio's sector allocation and corresponding over- or underweight positions
were, as usual, effectively a byproduct of the manager's bottom-up, stock
selection process rather than the result of any top-down strategy or questions
of benchmark sensitivity.
Among individual stocks in the Portfolio, Weatherford International Ltd.,
Anadarko Petroleum and Grant Prideco Inc. in the energy sector, and Cablevision
Systems Corp. in consumer discretionary and Tyco International Ltd. in the
industrial sector, contributed positively to performance. The largest
contributors to Portfolio performance in the quarter were our energy sector
holdings in both the service/drilling and exploration/production (E&P)
industries. We view the growth of these businesses as an important trend, which
still may not be fully discounted. The service companies continue to grow
earnings substantially, especially internationally. We also believe it could
prove cheaper for major/national oil companies to acquire reserves on the NYSE
than it would be to drill on their own, which could lift the valuations of the
E&P companies.
Detractors included Amgen Inc., Forest Laboratories Inc., UnitedHealth Group
Inc. in health care, Merrill Lynch & Co. in financials, and Micron Technology
Inc. in IT. The health care and technology holdings suffered from
stock-specific concerns.
In line with our buy-and-hold approach, portfolio turnover during the six-month
period remained low/3/, with the only significant sale being Biosite, a medical
device maker, following the announcement of a proposed acquisition that drove
the company's stock up dramatically in March. Citadel Broadcasting Corp. was
the only significant addition, acquired through Walt Disney Co.'s spin-off of
its ABC Radio assets. As of June 30, the Portfolio was overweight in the health
care, energy and consumer discretionary and financials, and underweight in IT
and industrials. The Portfolio had no substantial holdings in consumer staples,
materials and utilities during the six-month period.
- --------
/1/ The DJIA is a widely followed measurement of the stock market. The average
is comprised of 30 stocks that represent leading companies in major industries.
These stocks, widely held by both individual and institutional investors, are
considered to be all blue-chip companies. Please note an investor cannot
directly invest in an index.
/2/ The Federal Reserve Board ("Fed") is responsible for the formulation of
policies designed to promote economic growth, full employment, stable prices,
and a sustainable pattern of international trade and payments.
/3/ There is no guarantee low turnover will continue.
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
LEGG MASON PARTNERS AGGRESSIVE GROWTH PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY CLEARBRIDGE ADVISORS, LLC
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
As we have said in the past, our goal is to buy and hold quality companies that
are showing consistent earnings and/or cash flow growth. While we offer our
market/macroeconomic thoughts above, it is the fundamental success or failure
of our companies that will determine the success or failure of our portfolios.
To use a baseball analogy, our goal is to hit for a high average/slugging
percentage, and we believe that to hit a curveball, you need to keep your focus
on the pitch, not the positioning of the fielders.
Keep in mind, the portfolio may invest a significant portion of its assets in
small- and mid-cap companies which may be more volatile than an investment that
focuses only on large-cap companies. The statistics have been obtained from
sources believed to be reliable, but the accuracy and completeness of this
information cannot be guaranteed. Portfolio holdings and characteristics
subject to change.
Limited investments may be made in ADRs and stocks of non-U.S. companies which
involve risks in addition to those ordinarily associated with investing in
domestic securities, including the potentially negative effects of currency
fluctuations, political and economic developments, foreign taxation and
differences in auditing and other financial standards. International investing
may not be suitable for everyone.
RICHARD FREEMAN EVAN BAUMAN
Portfolio Manager Co-Portfolio Manager
CLEARBRIDGE ADVISORS, LLC CLEARBRIDGE ADVISORS, LLC
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
- -------------------------------------------------------------------------------
Anadarko Petroleum Corp. 8.50%
- -------------------------------------------------------------------------------
UnitedHealth Group, Inc. 7.75%
- -------------------------------------------------------------------------------
Weatherford International, Ltd. 6.21%
- -------------------------------------------------------------------------------
Genzyme Corp. 5.43%
- -------------------------------------------------------------------------------
Biogen Idec, Inc. 5.12%
- -------------------------------------------------------------------------------
Tyco International, Ltd. 4.87%
- -------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc. 4.49%
- -------------------------------------------------------------------------------
Comcast Corp. Special - Class A 4.25%
- -------------------------------------------------------------------------------
Forest Laboratories, Inc. 3.82%
- -------------------------------------------------------------------------------
Amgen, Inc. 3.78%
- -------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
LOGO
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
LEGG MASON PARTNERS AGGRESSIVE GROWTH PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY CLEARBRIDGE ADVISORS, LLC
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
LEGG MASON PARTNERS AGGRESSIVE GROWTH PORTFOLIO MANAGED BY
CLEARBRIDGE ADVISORS, LLC VS. RUSSELL 3000(R) GROWTH INDEX/1/
Growth Based on $10,000+
[CHART]
Legg Mason Partners Russell 3000(R)
Aggressive Growth Portfolio Growth Index
--------------------------- ---------------
2/12/2001 $10,000 $10,000
12/31/2001 7,400 7,512
12/31/2002 5,341 5,406
12/31/2003 6,991 7,081
12/31/2004 7,582 7,571
12/31/2005 8,611 7,963
12/31/2006 8,461 8,716
6/30/2007 8,932 9,433
-----------------------------------------------------------------
Average Annual Return/2/
(for the period ended 6/30/07)
-----------------------------------------------------------------
Since
1 Year 3 Year 5 Year Inception/3/
-----------------------------------------------------------------
Legg Mason Partners
Aggressive Growth
Portfolio--Class A 6.12% 7.47% 7.62% 3.66%
- -- Class B 5.97% 7.25% 7.37% -1.76%
Class E 6.15% 7.34% -- 11.61%
-----------------------------------------------------------------
- - - Russell 3000(R) Growth Index/1/ 18.84% 8.97% 9.58% -0.91%
-----------------------------------------------------------------
+The chart reflects the performance of Class B shares of the Portfolio. The
performance of Class B shares will differ from that of Class A and E shares
because of the difference in expenses paid by policyholders investing in the
different share classes.
/1/The Russell 3000(R) Growth Index is an unmanaged index which measures the
performance of those Russell 3000(R) Index companies with higher price-to- book
ratios and higher forecasted growth values. The Index does not include Fees or
expenses and is not available for direct investment.
/2/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/3/Inception of Class A shares is 1/2/02. Inception of Class B shares is
2/12/01. Inception of Class E shares is 4/17/03. Index returns are based on an
inception date of 1/31/01.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
3
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
LEGG MASON PARTNERS AGGRESSIVE GROWTH PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,057.30 $3.37
Hypothetical (5% return before expenses) 1,000.00 1,021.52 3.31
- ----------------------------------------------- ------------- ------------- --------------
Class B
Actual $1,000.00 $1,055.70 $4.64
Hypothetical (5% return before expenses) 1,000.00 1,020.28 4.56
- ----------------------------------------------- ------------- ------------- --------------
Class E
Actual $1,000.00 $1,056.20 $4.13
Hypothetical (5% return before expenses) 1,000.00 1,020.78 4.06
- ----------------------------------------------- ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.66%,
0.91%, and 0.81% for the Class A, Class B, and Class E, respectively,
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period).
4
MET INVESTORS SERIES TRUST
LEGG MASON PARTNERS AGGRESSIVE GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
------------------------------------------------------------------------------
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
------------------------------------------------------------------------------
COMMON STOCKS - 92.8%
AEROSPACE & DEFENSE - 2.6%
L-3 Communications Holdings, Inc.(a).............. 285,700 $ 27,824,323
---------------
BIOTECHNOLOGY - 16.0%
Amgen, Inc.*...................................... 716,700 39,626,343
Biogen Idec, Inc.*................................ 1,003,500 53,687,250
BioMimetic Therapeutics, Inc.*(a)................. 145,000 2,266,350
Genzyme Corp.*.................................... 883,200 56,878,080
ImClone Systems, Inc.*(a)......................... 418,500 14,798,160
---------------
167,256,183
---------------
COMMUNICATIONS EQUIPMENT & SERVICES - 2.6%
C-COR, Inc.*(a)................................... 265,200 3,728,712
DSP Group, Inc.*.................................. 106,400 2,178,008
Motorola, Inc..................................... 817,300 14,466,210
Nokia Oyj (ADR)................................... 238,100 6,692,991
---------------
27,065,921
---------------
COMPUTERS & PERIPHERALS - 2.6%
SanDisk Corp.*(a)................................. 402,400 19,693,456
Seagate Technology(a)............................. 354,400 7,715,288
---------------
27,408,744
---------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 1.5%
Broadcom Corp. - Class A*......................... 540,300 15,803,775
---------------
ENERGY EQUIPMENT & SERVICES - 3.3%
Grant Prideco, Inc.*.............................. 634,400 34,149,752
---------------
FINANCIAL - DIVERSIFIED - 8.1%
CIT Group, Inc.................................... 79,400 4,353,502
Lehman Brothers Holdings, Inc..................... 631,700 47,074,284
Merrill Lynch & Co., Inc.......................... 402,100 33,607,518
---------------
85,035,304
---------------
HEALTH CARE EQUIPMENT & SUPPLIES - 1.1%
Johnson & Johnson................................. 185,300 11,418,186
---------------
HEALTH CARE PROVIDERS & SERVICES - 7.7%
UnitedHealth Group, Inc........................... 1,587,400 81,179,636
---------------
INDUSTRIAL - DIVERSIFIED - 4.9%
Tyco International, Ltd........................... 1,510,100 51,026,279
---------------
MACHINERY - 1.0%
Pall Corp......................................... 238,100 10,950,219
---------------
MEDIA - 15.3%
Cablevision Systems Corp.*........................ 789,900 28,586,481
CBS Corp.......................................... 79,400 2,645,608
Citadel Broadcasting Corp.(a)..................... 38,590 248,906
Comcast Corp. - Class A*.......................... 159,000 4,471,080
Comcast Corp. Special - Class A*.................. 1,591,100 44,487,156
Liberty Media Holding Corp. - Class A*............ 79,200 9,320,256
Liberty Media Holding Corp. - Interactive - Class
A*.............................................. 344,200 7,685,986
---------------------------------------------------------------------------------
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
---------------------------------------------------------------------------------
MEDIA - CONTINUED
Sirius Satellite Radio, Inc.*(a).................. 1,981,200 $ 5,983,224
Time Warner, Inc.................................. 1,726,000 36,315,040
Viacom, Inc. - Class A*........................... 79,600 3,313,748
Walt Disney Co. (The)............................. 502,500 17,155,350
---------------
160,212,835
---------------
OIL & GAS - 14.7%
Anadarko Petroleum Corp........................... 1,713,300 89,074,467
Weatherford International, Ltd.*(a)............... 1,178,100 65,078,244
---------------
154,152,711
---------------
PHARMACEUTICALS - 6.7%
Forest Laboratories, Inc.*........................ 877,200 40,044,180
Genentech, Inc.*.................................. 58,200 4,403,412
King Pharmaceuticals, Inc.*(a).................... 423,700 8,668,902
Millennium Pharmaceuticals, Inc.*(a).............. 477,900 5,051,403
Teva Pharmaceutical Industries, Ltd. (ADR)........ 52,900 2,182,125
Valeant Pharmaceuticals International(a).......... 325,100 5,425,919
Vertex Pharmaceuticals, Inc.*(a).................. 158,900 4,538,184
---------------
70,314,125
---------------
RETAIL - SPECIALTY - 0.2%
Charming Shoppes, Inc.*........................... 177,100 1,917,993
---------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS - 3.2%
Cirrus Logic, Inc.*(a)............................ 291,400 2,418,620
Cree, Inc.*(a).................................... 109,800 2,838,330
Intel Corp........................................ 264,900 6,294,024
Micron Technology, Inc.*(a)....................... 1,405,100 17,605,903
Teradyne, Inc.*................................... 264,500 4,649,910
---------------
33,806,787
---------------
SOFTWARE - 0.9%
Autodesk, Inc.*................................... 193,000 9,086,440
---------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 0.4%
Liberty Global, Inc.*(a).......................... 52,900 2,171,015
RF Micro Devices, Inc.*(a)........................ 317,900 1,983,696
---------------
4,154,711
---------------
Total Common Stocks (Cost $902,955,606) 972,763,924
---------------
See notes to financial statements
5
MET INVESTORS SERIES TRUST
LEGG MASON PARTNERS AGGRESSIVE GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
- --------------------------------------------------------------------------------
PAR VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENT - 7.2%
State Street Bank & Trust Co., Repurchase
Agreement dated 06/29/07 at 4.720% to
be repurchased at $75,069,516 on 07/02/07
collateralized by $77,535,000 FHLB at 4.375%
due 09/17/10 with a value of $76,545,653. (Cost
- $75,040,000).................................. $ 75,040,000 $ 75,040,000
---------------
TOTAL INVESTMENTS - 100.0% (Cost $977,995,606) 1,047,803,924
---------------
Other Assets and Liabilities (net) - 0.0% (94,203)
---------------
TOTAL NET ASSETS - 100.0% $ 1,047,709,721
===============
PORTFOLIO FOOTNOTES:
* Non-income producing security.
(a) A portion or all of the security was held on loan. As of June 30, 2007, the
market value of the securities loaned was $78,744,667 and the collateral
received consisted of cash in the amount of $81,234,142.
ADR - American Depositary Receipt
FHLB - Federal Home Loan Bank
See notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
LEGG MASON PARTNERS AGGRESSIVE GROWTH PORTFOLIO
ASSETS
Investments, at value (Note 2)* $ 972,763,924
Repurchase Agreement 75,040,000
Cash 735
Collateral for securities on loan 81,234,142
Receivable for Trust shares sold 1,035,974
Dividends receivable 58,452
Interest receivable 19,677
--------------
Total assets 1,130,152,904
--------------
LIABILITIES
Payables for:
Trust shares redeemed 313,446
Distribution and services fees--Class B 50,634
Distribution and services fees--Class E 687
Collateral for securities on loan 81,234,142
Investment advisory fee payable (Note 3) 535,071
Administration fee payable 11,199
Custodian and accounting fees payable 216,761
Accrued expenses 81,243
--------------
Total liabilities 82,443,183
--------------
NET ASSETS $1,047,709,721
==============
NET ASSETS REPRESENTED BY:
Paid in surplus $ 973,294,703
Accumulated net realized gain 4,302,019
Unrealized appreciation on investments and foreign currency 69,808,318
Undistributed net investment income 304,681
--------------
Total $1,047,709,721
==============
NET ASSETS
Class A $ 799,962,563
==============
Class B 242,344,188
==============
Class E 5,402,970
==============
CAPITAL SHARES OUTSTANDING
Class A 102,909,269
==============
Class B 31,645,943
==============
Class E 702,853
==============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 7.77
==============
Class B 7.66
==============
Class E 7.69
==============
- -------------------------------------------------------------------------------
*Investments at cost, excluding Repurchase Agreements $ 902,955,606
See notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
LEGG MASON PARTNERS AGGRESSIVE GROWTH PORTFOLIO
INVESTMENT INCOME:
Dividends (1) $ 1,944,359
Interest (2) 1,615,402
-----------
Total investment income 3,559,761
-----------
EXPENSES:
Investment advisory fee (Note 3) 2,912,943
Administration fees 34,048
Custody and accounting fees 40,416
Distribution fee--Class B 304,005
Distribution fee--Class E 4,213
Transfer agent fees 13,277
Audit 12,272
Legal 10,717
Trustee fees and expenses 7,194
Shareholder reporting 41,402
Insurance 6,381
Other 2,212
-----------
Total expenses 3,389,080
Less broker commission recapture (405)
-----------
Net expenses 3,388,675
-----------
Net investment income 171,086
-----------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS,
FUTURES CONTRACTS AND FOREIGN CURRENCY:
Net realized gain on:
Investments 7,510,105
Futures contracts 99,207
Foreign currency 7,261
-----------
Net realized gain on investments, futures and foreign currency 7,616,573
-----------
Net change in unrealized appreciation (depreciation) on:
Investments 43,288,445
Foreign currency (6,051)
-----------
Net change in unrealized appreciation on investments and foreign
currency 43,282,394
-----------
Net realized and change in unrealized gain on investments, futures
and foreign currency 50,898,967
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $51,070,053
===========
- --------------------------------------------------------------------------------------
(1)Dividend income is net withholding taxes of: $ 21,190
(2)Interest income includes securities lending income of: 97,578
See notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
LEGG MASON PARTNERS AGGRESSIVE GROWTH PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
-------------- -------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 171,086 $ 2,075,646
Net realized gain on investments, futures contracts and foreign
currency 7,616,573 85,756,657
Net change in unrealized appreciation (depreciation) on
investments and foreign currency 43,282,394 (95,067,554)
-------------- -------------
Net increase (decrease) in net assets resulting from operations 51,070,053 (7,235,251)
-------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From Net investment income
Class A (1,522,845) --
Class B -- --
Class E (2,875) --
From net realized gains
Class A (62,016,186) (31,553,092)
Class B (22,350,035) (15,787,239)
Class E (515,614) (405,360)
-------------- -------------
Net decrease in net assets resulting from distributions (86,407,555) (47,745,691)
-------------- -------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class A 168,478,260 217,241,455
Class B 9,773,360 24,304,390
Class E 140,754 2,041,838
Net asset value of shares issued through dividend reinvestment
Class A 63,539,031 31,553,092
Class B 22,350,035 15,787,239
Class E 518,489 405,360
Cost of shares repurchased
Class A (13,565,888) (107,878,564)
Class B (34,783,664) (43,170,570)
Class E (985,128) (2,316,980)
-------------- -------------
Net increase in net assets from capital share transactions 215,465,249 137,967,260
-------------- -------------
TOTAL INCREASE IN NET ASSETS 180,127,747 82,986,318
Net assets at beginning of period 867,581,974 784,595,656
-------------- -------------
Net assets at end of period $1,047,709,721 $ 867,581,974
============== =============
Net assets at end of period includes undistributed net investment
income $ 304,681 $ 1,659,315
============== =============
See notes to financial statements
9
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS A
LEGG MASON PARTNERS AGGRESSIVE GROWTH PORTFOLIO --------------------------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 -----------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002(B)
-------------- ------- ------ ------ ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD................... $ 8.09 $ 8.70 $ 7.65 $ 7.03 $ 5.37 $ 7.44
------ ------- ------ ------ ------ -------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income (Loss)........................... 0.00+(a) 0.03 (a) 0.00+(a) 0.01(a) (0.01)(a) 0.01 (a)
Net Realized/Unrealized Gain (Loss) on Investments..... 0.46 (0.14) 1.06 0.61 1.67 (2.08)
------ ------- ------ ------ ------ -------
Total from Investment Operations....................... 0.46 (0.11) 1.06 0.62 1.66 (2.07)
------ ------- ------ ------ ------ -------
LESS DISTRIBUTIONS
Dividends from Net Investment Income................... (0.02) -- -- -- -- (0.00)+
Distributions from Net Realized Capital Gains.......... (0.76) (0.50) (0.01) -- -- --
------ ------- ------ ------ ------ -------
Total Distributions.................................... (0.78) (0.50) (0.01) -- -- (0.00)+
------ ------- ------ ------ ------ -------
NET ASSET VALUE, END OF PERIOD......................... $ 7.77 $ 8.09 $ 8.70 $ 7.65 $ 7.03 $ 5.37
====== ======= ====== ====== ====== =======
TOTAL RETURN 5.73% (1.60)% 13.84% 8.82% 30.91 % (27.78)%
Ratio of Expenses to Average Net Assets**.............. 0.66%* 0.73 % 0.72% 0.90% 0.89 % 0.85 %
Ratio of Expenses to Average Net Assets After Broker
Rebates**............................................ N/A 0.73 % N/A N/A 0.89 % 0.77 %
Ratio of Expenses to Average Net Assets Before
Reimbursement and Rebates............................ 0.66%* 0.75 % 0.72%(c) 0.85%(c) 0.90 %(c) 1.43 %
Ratio of Net Investment Income (Loss) to Average Net
Assets............................................... 0.11%* 0.33 % --+ 0.15% (0.09)% 0.11 %
Portfolio Turnover Rate................................ 0.8% 190.3 % 121.0% 104.7% 91.5 % 92.7 %
Net Assets, End of Period (in millions)................ $800.0 $ 607.7 $500.4 $250.8 $ 19.9 $ 2.7
* Annualized
** Prior to 05/01/2003, broker rebates were excluded from the calculation of
the expense limitation.
+ Rounds to less than $0.005 per share.
N/A Not Applicable
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--01/02/2002.
(c) Excludes effect of Deferred Expense Reimbursement.
See notes to financial statements
10
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
LEGG MASON PARTNERS AGGRESSIVE GROWTH PORTFOLIO -------------------------
FOR THE PERIOD
ENDED
JUNE 30, 2007 ----------
(UNAUDITED) 2006
-------------- ------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $ 7.98 $ 8.60
------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income (Loss).......................................... (0.01)(a) 0.01 (a)
Net Realized/Unrealized Gain (Loss) on Investments.................... 0.45 (0.13)
------ ------
Total from Investment Operations...................................... 0.44 (0.12)
------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. -- --
Distributions from Net Realized Capital Gains......................... (0.76) (0.50)
------ ------
Total Distributions................................................... (0.76) (0.50)
------ ------
NET ASSET VALUE, END OF PERIOD........................................ $ 7.66 $ 7.98
====== ======
TOTAL RETURN 5.57 % (1.74)%
Ratio of Expenses to Average Net Assets**............................. 0.91 %* 0.98 %
Ratio of Expenses to Average Net Assets After Broker Rebates**........ N/A 0.98 %
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 0.91 %* 1.00 %
Ratio of Net Investment Income (Loss) to Average Net Assets........... (0.16)%* 0.10 %
Portfolio Turnover Rate............................................... 0.8 % 190.3 %
Net Assets, End of Period (in millions)............................... $242.3 $254.0
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS B
LEGG MASON PARTNERS AGGRESSIVE GROWTH PORTFOLIO --------------------------------------------
FOR THE YEARS ENDED DECEMBER 31,
--------------------------------------------
2005 2004 2003 2002
------ ------ ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $ 7.58 $ 6.99 $ 5.34 $ 7.40
------ ------ ------ -------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income (Loss).......................................... (0.02)(a) (0.01)(a) (0.02)(a) (0.01)(a)
Net Realized/Unrealized Gain (Loss) on Investments.................... 1.05 0.60 1.67 (2.05)
------ ------ ------ -------
Total from Investment Operations...................................... 1.03 0.59 1.65 (2.06)
------ ------ ------ -------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. -- -- -- (0.00)+
Distributions from Net Realized Capital Gains......................... (0.01) -- -- --
------ ------ ------ -------
Total Distributions................................................... (0.01) -- -- (0.00)+
------ ------ ------ -------
NET ASSET VALUE, END OF PERIOD........................................ $ 8.60 $ 7.58 $ 6.99 $ 5.34
====== ====== ====== =======
TOTAL RETURN 13.58 % 8.44 % 30.90 % (27.83)%
Ratio of Expenses to Average Net Assets**............................. 0.97 % 1.15 % 1.14 % 1.10 %
Ratio of Expenses to Average Net Assets After Broker Rebates**........ N/A N/A 1.13 % 1.00 %
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 0.97 %(b) 1.08 %(b) 1.18 %(b) 1.69 %
Ratio of Net Investment Income (Loss) to Average Net Assets........... (0.25)% (0.11)% (0.37)% (0.18)%
Portfolio Turnover Rate............................................... 121.0 % 104.7 % 91.5 % 92.7 %
Net Assets, End of Period (in millions)............................... $277.8 $339.5 $252.6 $ 46.8
* Annualized
** Prior to 05/01/2003, broker rebates were excluded from the calculation of
the expense limitation.
+ Rounds to less than $0.005 per share.
N/A Not Applicable
(a) Per share amounts based on average shares outstanding during the period.
(b) Excludes effect of Deferred Expense Reimbursement.
See notes to financial statements
11
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
LEGG MASON PARTNERS AGGRESSIVE GROWTH PORTFOLIO --------------
FOR THE PERIOD
ENDED
JUNE 30, 2007
(UNAUDITED)
--------------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $ 8.01
------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income (Loss).......................................... 0.00+(a)
Net Realized/Unrealized Gain (Loss) on Investments.................... 0.44
------
Total from Investment Operations...................................... 0.44
------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. (0.00)+
Distributions from Net Realized Capital Gains......................... (0.76)
------
Total Distributions................................................... (0.76)
------
NET ASSET VALUE, END OF PERIOD........................................ $ 7.69
======
TOTAL RETURN 5.62 %
Ratio of Expenses to Average Net Assets**............................. 0.81 %*
Ratio of Expenses to Average Net Assets After Broker Rebates**........ N/A
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 0.81 %*
Ratio of Net Investment Income (Loss) to Average Net Assets........... (0.06)%*
Portfolio Turnover Rate............................................... 0.8 %
Net Assets, End of Period (in millions)............................... $5.4
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS E
LEGG MASON PARTNERS AGGRESSIVE GROWTH PORTFOLIO ------------------------------------------
FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------------
2006 2005 2004 2003(B)
------ ------ ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $ 8.62 $ 7.59 $ 6.99 $ 5.65
------ ------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income (Loss).......................................... 0.02 (a) (0.01)(a) 0.00+(a) (0.01)(a)
Net Realized/Unrealized Gain (Loss) on Investments.................... (0.13) 1.05 0.60 1.35
------ ------ ------ ------
Total from Investment Operations...................................... (0.11) 1.04 0.60 1.34
------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. -- -- -- --
Distributions from Net Realized Capital Gains......................... (0.50) (0.01) -- --
------ ------ ------ ------
Total Distributions................................................... (0.50) (0.01) -- --
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD........................................ $ 8.01 $ 8.62 $ 7.59 $ 6.99
====== ====== ====== ======
TOTAL RETURN (1.61)% 13.69 % 8.58 % 23.72 %
Ratio of Expenses to Average Net Assets**............................. 0.88 % 0.87 % 1.05 % 1.10 %*
Ratio of Expenses to Average Net Assets After Broker Rebates**........ 0.88 % N/A N/A 1.05 %*
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 0.90 % 0.87 %(c) 0.98 %(c) 1.04 %(c)*
Ratio of Net Investment Income (Loss) to Average Net Assets........... 0.20 % (0.15)% (0.05)% (0.26)%*
Portfolio Turnover Rate............................................... 190.3 % 121.0 % 104.7 % 91.5 %
Net Assets, End of Period (in millions)............................... $5.9 $6.4 $5.5 $4.1
* Annualized
** Prior to 05/01/2003, broker rebates were excluded from the calculation of
the expense limitation.
N/A Not Applicable
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--04/17/2003.
(c) Excludes effect of Deferred Expense Reimbursement
See notes to financial statements
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is Legg Mason Partners Aggressive Growth
Portfolio (formerly Legg Mason Aggressive Growth Portfolio), which is
non-diversified. Shares in the Trust are not offered directly to the general
public and are currently available only to separate accounts established by
certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A, B and E Shares are
offered by the Portfolio. Shares of each Class of the Portfolio represent an
equal pro rata interest in the Portfolio and generally give the shareholder the
same voting, dividend, liquidation, and other rights. Investment income,
realized and unrealized capital gains and losses, the common expenses of the
Portfolio and certain Portfolio-level expense reductions, if any, are allocated
on a pro rata basis to each class based on the relative net assets of each
class to the total net assets of the Portfolio. Each class of shares differs in
its respective distribution expenses and certain other class-specific expense
reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date. The value of the
security so purchased is subject to market fluctuations during this period. The
Portfolio segregates assets having an aggregate value at least equal to the
amount of the when issued or delayed delivery purchase commitments until
payment is made.
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
The Portfolio utilizes the provisions of the federal income tax laws that
provide for the carryforward of capital losses for eight years, offsetting such
losses against any future net realized capital gains. At December 31, 2006, the
accumulated capital loss carryforwards and expiration dates by the Portfolio
were as follows:
Expiring Expiring
Portfolio Total 12/31/2009 12/31/2010
- --------- ---------- ---------- ----------
Legg Mason Partners Aggressive Growth Portfolio $3,178,721 $1,996,340 $1,182,381
Legg Mason Partners Aggressive Growth Portfolio acquired losses of $7,266,413
in the merger with Janus Growth Portfolio on April 28th, 2003 which are subject
to an annual limitation of $1,021,923.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. SECURITIES LENDING - The Portfolio may lend its securities to certain
qualified brokers who borrow securities in order to complete certain
transactions. By lending its investment securities, the Portfolio attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term of the loan would
accrue to the account of the Portfolio. Risks of delay in recovery of the
securities or even loss of rights in the collateral may occur should the
borrower of the securities fail financially. Risks may also arise to the extent
that the value of the collateral decreases below the value of the securities
loaned.
Upon entering into a securities lending transaction, the Portfolio receives
cash or other securities as collateral in an amount equal to or exceeding 102%
of the current market value of the loaned securities. Any cash received as
collateral is generally invested by State Street Bank and Trust Company ("State
Street"), acting in its capacity as securities lending agent (the "Agent"), in
the State Street Navigator Securities Lending Prime Portfolio which is a money
market fund registered under the 1940 Act. A portion of the dividends received
on the collateral is rebated to the borrower of the securities and the
remainder is split between the Agent and the Portfolio. On loans collateralized
by cash, the cash collateral is invested in a money market fund or short term
securities. A portion of the income generated upon investment of the collateral
is remitted to the Borrowers and the remainder is allocated between the fund
and the lending agent. On loans collateralized by U.S. Treasuries, a fee is
received from the Borrower and is allocated between the fund and the lending
agent.
G. SHORT SALES - The Portfolio may enter into a "short sale" of securities in
circumstances in which, at the time the short position is open, the Portfolio
owns an equal amount of the securities sold short or owns preferred stocks or
debt securities, convertible or exchangeable without payment of further
consideration, into an equal number of securities sold short. This kind of
short sale, which is referred to as one "against the box," may be entered into
by the Portfolio to, for example, lock in a sale price for a security the
Portfolio does not wish to sell immediately.
The Portfolio may also make short sales of a security it does not own, in
anticipation of a decline in the market value of that security. To complete
such a transaction, the Portfolio must borrow the security to make delivery to
the buyer. The Portfolio then is obligated to replace the security borrowed by
purchasing it at market price at the time of replacement. The price at such
time may be more or less than the price at which the security was sold by the
Portfolio. Until the security is replaced, the Portfolio is required to pay to
the lender any dividends or interest which accrue during the period of the
loan. To borrow the security, the Portfolio also may be required to pay a
premium, which would increase the cost of the security sold. The proceeds of
the short sale will be retained by the broker, to the extent necessary to meet
margin requirements, until the short position is closed out. Until the
Portfolio replaces a borrowed security, the Portfolio will segregate with its
custodian, or earmark, cash or other liquid assets at such a level that (i) the
amount segregated, or earmark, plus the amount deposited with the broker as
collateral will equal the current value of the security sold short and (ii) the
amount segregated plus the amount deposited with the broker as collateral will
not be less
14
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
than the market value of the security at the time it was sold short. The
Portfolio will incur a loss as a result of the short sale if the price of the
security increases between the date of the short sale and the date on which the
Portfolio replaces the borrowed security. The Portfolio will realize a gain if
the security declines in price between those dates. This result is the opposite
of what one would expect from a cash purchase of a long position in a security.
The amount of any gain will be decreased, and the amount of any loss increased,
by the amount of any premium, dividends or interest the Portfolio may be
required to pay in connection with a short sale. No more than one third of the
Portfolio's net assets will be, when added together: (i) deposited as
collateral for the obligation to replace securities borrowed to effect short
sales; and (ii) segregated in connection with short sales.
H. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
I. DIRECTED BROKERAGE AGREEMENT - The Trust has entered into a directed
brokerage arrangement with State Street Global Markets ("SSGM"). Under this
arrangement, the Portfolio directs certain trades to SSGM in return for a
recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to
each Portfolio are shown separately as an expense reduction on the Statement of
Operations of the Portfolio.
J. FOREIGN CURRENCY TRANSLATION - The books and records of the Portfolio are
maintained in U.S. dollars. Foreign currencies, investments and other assets
and liabilities are translated into U.S. dollars on a daily basis using
prevailing exchange rates. Purchases and sales of securities are translated at
the rates of exchange prevailing when such securities were acquired or sold.
Income is translated at rates of exchange prevailing when interest is accrued
or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in
forward foreign currency contracts, sales of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities
transactions, and the difference between the amounts of dividends, interest,
and foreign withholding taxes recorded on the Portfolio's books, and the U.S.
dollar equivalent of the amounts actually received or paid. Net unrealized
foreign exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at fiscal year end, from
changes in the exchange rates of foreign currency held and from changes in the
contract value of forward foreign currency contracts.
K. FORWARD FOREIGN CURRENCY CONTRACTS - The Portfolio may enter into forward
foreign currency contracts to hedge their portfolio holdings against future
movements in certain foreign currency exchange rates. A forward currency
contract is a commitment to purchase or sell a foreign currency at a future
date at a set price. The forward currency contracts are valued at the forward
rate and are marked-to-market daily. The change in market value is recorded by
the Portfolio as an unrealized gain or loss. When the contract is closed, the
Portfolio recognizes a realized gain or loss equal to the difference between
the value of the contract at the time it was opened and the value at the time
it was closed.
The use of forward foreign currency contracts does not eliminate fluctuations
in the underlying prices of the securities of the Portfolio, but it does
establish a rate of exchange that can be achieved in the future. Although
forward foreign currency contracts to sell limit the risk of loss due to a
decline in the value of the currency holdings, they also limit any potential
gain that might result should the value of the currency increase. In addition,
the Portfolio could be exposed to risks if the counterparties to the contracts
are unable to meet the terms of the contracts.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with ClearBridge Advisors, LLC, (the "Adviser") for investment advisory
services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
15
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- --------------------------
Legg Mason Partners Aggressive Growth Portfolio $2,912,943 0.65% First $500 Million
0.60% $500 Million to $1 Billion
0.55% $1 Billion to $2 Billion
0.50% Over $2 Billion
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Maximum Expense Ratio
under current Expense
Limitation Agreement
----------------------
Portfolio Class A Class B Class E
--------- ------- ------- -------
Legg Mason Partners Aggressive Growth Portfolio 0.90% 1.15% 1.05%
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratio as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
The amount waived and expenses reimbursed for the period ended June 30, 2007 is
shown as investment advisory fee waiver in the Statement of Operations of the
Portfolio.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
16
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued Net Increase
Through (Decrease)
Beginning Shares Dividend Shares in Shares Ending
Shares Sold Reinvestment Repurchased Outstanding Shares
---------- ---------- ------------- ----------- ------------ -----------
Legg Mason Partners Aggressive Growth Portfolio
Class A
06/30/2007 75,074,455 21,264,607 8,273,311 (1,703,104) 27,834,814 102,909,269
12/31/2006 57,525,796 26,477,156 3,707,766 (12,636,263) 17,548,659 75,074,455
Class B
06/30/2007 31,842,094 1,252,215 2,952,448 (4,400,814) (196,151) 31,645,943
12/31/2006 32,293,897 2,936,693 1,879,433 (5,267,929) (451,803) 31,842,094
Class E
06/30/2007 741,914 17,669 68,312 (125,042) (39,061) 702,853
12/31/2006 739,514 246,643 48,143 (292,386) 2,400 741,914
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
Legg Mason Partners Aggressive Growth Portfolio $-- $120,225,066 $-- $6,598,949
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
- --------- ------------ ------------ -------------- --------------
Legg Mason Partners Aggressive Growth Portfolio $977,995,606 $107,761,109 $(37,952,791) $69,808,318
6. SECURITY LENDING
As of June 30, 2007, the Portfolio had loaned securities which were
collateralized by short-term investments. The value of securities on loan and
the value of the related collateral were as follows:
Value of Value of
Securities Collateral
----------- -----------
Legg Mason Partners Aggressive Growth Portfolio $78,744,667 $81,234,142
7. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
---------------- ---------------------- --------------------
2006 2005 2006 2005 2006 2005
----------- ---- ----------- -------- ----------- --------
Legg Mason Partners Aggressive Growth Portfolio $20,061,310 $-- $27,684,381 $819,936 $47,745,691 $819,936
17
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
7. DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
------------- ------------- ------------ ------------------ ------------
Legg Mason Partners Aggressive Growth Portfolio $7,292,818 $79,114,619 $26,523,803 $(3,178,721) $109,752,519
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
8. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
9. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
18
MET INVESTORS SERIES TRUST
Legg Mason Partners
Managed Assets Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
LEGG MASON PARTNERS MANAGED ASSETS PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY BATTERYMARCH FINANCIAL MANAGEMENT, INC.,
CLEARBRIDGE ADVISORS, LLC, LEGG MASON GLOBAL ASSET ALLOCATION,
LLC AND WESTERN ASSET MANAGEMENT COMPANY
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
EQUITY
During the six-month period ended June 30, 2007, the Portfolio had a return of
5.10%, versus 0.98% for its benchmark, the Lehman Government/Credit Bond Index,
6.96% for its benchmark S&P 500(R) Index and 6.96% for its benchmark Merrill
Lynch All Qualities, All Convertibles Index.
YOUR PORTFOLIO
The impact of stock selection was positive for the period, led by selection in
the health care and transportation sectors. Stock selection in the retailers
sector was the greatest detractor. The effect of relative sector weightings was
positive, most notably an overweight in energy services and an underweight in
financials--banks.
Our stock selection model performed well for the period, with all of the
dimensions having positive top-to-bottom quintile spreads on an equal weighted
basis. The Technical dimension led in the first quarter, while the Earnings
Growth and Expectations dimensions led in the second quarter.
As of June 30, 2007, your Portfolio remained broadly diversified and
attractively valued compared with the benchmark, with a lower 12-month forward
price-to-earnings ratio ("P/E") and a strong two-year forward earnings growth
rate. Looking forward, your portfolio is focused on stocks that rank
attractively relative to their peers across the dimensions of our stock
selection model.
MARKET ENVIRONMENT
After a positive start to the year, markets globally suffered a correction
towards the end of February, sparked by a sharp one-day decline in local China
A shares. The downturn was exacerbated within the US by sub-prime lending
concerns, with initial reaction centered on the stocks of mortgage lenders. The
second quarter began with benign economic data and strong corporate earnings
until news headlines, involving spikes in bond yields, hedge fund bailouts and
declining home sales, reawakened investors to economic risks. Still, consumer
spending remained stable, industrial growth continued and monetary policy
makers appeared satisfied with the current balance between currency stability
and economic growth. Merger and acquisition activity in the US continued at a
high level, reflecting the global environment.
The leading sectors within the benchmark for the period were energy services,
materials and energy Services as oil process climbed. The only sectors posting
negative returns for the six-month period were financials--banks and
financials--real estate as sub-prime mortgage lending continued to worry
investors.
OUTLOOK
Economic growth has moderated, and the Federal Reserve ("Fed") continues to
monitor signs of inflationary pressure. The consensus outlook for the US
economy therefore remains mostly upbeat, having weathered much of the recent
uncertainty. Our Portfolios are positioned for continued global growth that is
not dependent on the US consumer as the primary source of demand.
INVESTMENT RESEARCH UPDATE
During the period, we completed research on ways to glean additional
information from corporate earnings announcements. As a result, we have
implemented a new Decayed 4-Day Relative Return factor within the Expectations
dimension of our stock selection model. Decayed 4-Day Relative Return
encapsulates earnings information by calculating four-day relative returns
surrounding a company's earnings release. Share-price movement in the days
after an earnings announcement reflects not only earnings data, but also
insights about corporate guidance and future revenues.
We also completed research that furthers our ability to capture shifts in the
distribution of analyst opinions over time so that we can better understand and
exploit changes in market sentiment. As a result, we enhanced the Estimate
Diffusion Factor within our Expectations dimension: we added a second
calculation for this factor that allows us to have a more complete picture of
the distribution of estimates and improves stock count, information ratio and
alpha spreads in peer groups where this factor is applied.
FIXED INCOME
MARKET REVIEW
Bond yields moved higher this year as the economy proved stronger than expected
and expectations of future Fed easing were largely reversed. Long-term rates
rose more than short-term rates, leaving the yield curve almost flat with a
modest positive slope. Core inflation fell within the Fed's comfort zone, but
headline inflation remained elevated and energy prices rose, leaving both the
market and Fed uncertain about future inflation. As bond yields approached the
highs of last year late in the period, signs of stress began to accumulate.
Mortgage-backed spreads widened sharply as extension risk increased and
volatility rose. Swap spreads were driven higher by pressure from
mortgage-backed securities hedging and subprime lending contagion concerns.
Credit spreads were generally tighter, particularly lower-quality spreads,
though they spiked toward the end of the period. Treasury inflation protected
securities' ("TIP") yields rose slightly less than nominal yields, as 10-year
breakeven spreads rose to a modest 2.37%. Emerging market spreads reached
record lows, only to rebound somewhat late in the period. Commodity prices were
generally higher, and gold prices rose modestly. The U.S. dollar fell against
most currencies. Equity markets were generally higher around the world.
CONTRIBUTORS TO PERFORMANCE
Strategies produced mixed results during the period. A tactically driven
duration posture detracted from returns as interest rates rose and duration was
somewhat overweight on average. A modestly bulleted yield curve exposure
contributed to performance as the front end of the curve steepened. Overweight
exposure to the mortgage-backed sector subtracted from returns as spreads
widened. Underweight
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
LEGG MASON PARTNERS MANAGED ASSETS PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY BATTERYMARCH FINANCIAL MANAGEMENT, INC.,
CLEARBRIDGE ADVISORS, LLC, LEGG MASON GLOBAL ASSET ALLOCATION,
LLC AND WESTERN ASSET MANAGEMENT COMPANY
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
exposure to investment grade credits was a negative as the sector outperformed,
but an overweight exposure to lower quality credits was rewarded as spreads
tightened. A moderate exposure to TIPS contributed to performance, due mainly
to a larger than expected inflation adjustment, which in turn was primarily
driven by rising energy prices.
OUTLOOK AND STRATEGY
Markets fret and pundits pontificate. However, despite a list of concerns that
includes recession, inflation, a plunging U.S. housing market, a soaring U.S.
current account deficit, the collapse of subprime lending, and a surge in
leveraged buyouts, the global financial environment has probably never been so
healthy and relatively calm. Interest and inflation rates in most major
economies haven't been so low and stable for many decades. The implied
volatility of stock and bond options has been exceptionally low for the past
several years, and credit spreads are generally low and stable. The volatility
that we have seen has been relatively contained, and interest rates have
generally moved in a narrow and slight upward sloping range for the past few
years. Free markets are working their wonders in China and India, and rapidly
expanding global trade is boosting the efficiency of all but a handful of
nations. As a result, global living standards are improving significantly and
more people are upwardly mobile than at any other time in history. Not
surprisingly, equity markets are moving steadily higher in nearly every
industrialized and emerging market economy.
Of the many contributing factors to global prosperity, a prevailing pessimism
is one of the lesser remarked factors. The memory of the stock market collapse
of 2000-2002 is still fresh, terrorist threats are real, the U.S. housing
market has yet to bottom out, hedge funds are stumbling, and central banks are
still finding reasons to raise interest rates. If bull markets can climb walls
of worry, then the good times will likely continue.
The recent spike in interest rates in most markets is the latest concern to
investors. However, it too stems from pessimism. Good economic news in recent
months has challenged investors' gloomy outlook for the U.S. economy, so Fed
rate cuts now are considered to be significantly less likely. In recent years,
central banks tended to overestimate the risks of deflation and underestimate
the potential for economic growth, so their pessimism resulted in monetary
policy that was probably easier than it should have been. Easy money has helped
fuel demand and keep inflation and interest rates higher than they might
otherwise have been.
Leaving headlines aside, it's hard to find evidence of any major threats to
growth. Most recessions have been caused by a substantial tightening of
monetary policy, which is typically a response to a real or perceived inflation
threat. However, real interest rates are not particularly high in any major
economy, and inflation is generally contained. Fiscal policy is supportive
overall, and while Democrats seem anxious to raise taxes, the rapidly shrinking
U.S. federal budget deficit significantly mitigates that risk. The U.S. housing
market has yet to bottom out, but there are signs that the worst of
construction declines is behind us. Thus, the drag from housing should lessen
in the future. Ongoing strength in industrial commodity prices is evidence of
the vitality of the global economy.
At the same time, it's hard to envision the U.S. economy becoming strong enough
to sound alarms at the Fed. Job growth has been quite modest, and productivity
has fallen substantially. We can't dismiss the possibility of further
deterioration in the housing market, especially in light of the 50 bps rise in
mortgage rates over the past three months and the virtual cessation of subprime
lending activity. The economy is currently rebounding from a soft first
quarter, but seems unlikely to grow more than 2-3% over the next year.
We are continuing to pursue a tactical duration policy which calls for
increased duration as rates rise, and reduced duration as rates fall. We
believe rates are likely to oscillate in a relatively stable range, and should
decline from recent highs as investor jitters subside. Long-term yields are
likely to be less volatile than short-term yields, since they appear to be
anchored by inflationary pressures that are reasonably contained. The curve is
likely to flatten on continued economic strength, or to steepen on any signs of
weakness. Thus, an overweight exposure to short-term rates should be a good
hedge against our overweight exposure to lower quality credits.
Our primary sector overweight exposure is to mortgage-backed securities, since
they should benefit from stable interest rates and reduced volatility. In
addition, the recent upward drift in spreads has made this sector generally
attractive. With credit spreads generally low, we are targeting an underweight
exposure to the sector overall, with an overweight exposure to lower quality
credits where spreads are still somewhat attractive. We are mindful of growing
downside risks, and concerned about the increased level of takeovers and
leveraged buyout activity, since these factors undermine fundamental credit
quality. We like TIPS as an inflation hedge, and have increased our exposure as
real yields have reached attractive levels.
CONVERTIBLE
MARKET REVIEW
The continuing correction in the U.S. housing market combined with the
surprisingly weak business investment spending resulted in an anemic growth
rate of 0.7% in US GDP in the first quarter of 2007. Fortunately, the U.S.
consumer remains resilient as employment growth continues, and with an
improvement in the trade balance and an uptick in business investment the
second quarter, yet to be reported, seems likely to have picked up the pace.
MARKET OUTLOOK
Housing remains the weak spot in the economic picture, clearly the victim of
the last cycle of rising interest rates conducted by the Federal Reserve, but
while it will obviously take some time for the large inventory of both new and
existing homes to be cleared, the drag on economic growth from this sector
seems likely to slowly decline going into the second half of 2007 and 2008.
With income growth
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
LEGG MASON PARTNERS MANAGED ASSETS PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY BATTERYMARCH FINANCIAL MANAGEMENT, INC.,
CLEARBRIDGE ADVISORS, LLC, LEGG MASON GLOBAL ASSET ALLOCATION,
LLC AND WESTERN ASSET MANAGEMENT COMPANY
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
accelerating and gains in financial assets offsetting the decline in home
values, consumers remain in good shape and are likely to cope with yet another
rise in energy prices.
The convertible market has performed admirably for the first half of 2007, but
if our expectation of a strong finish to the year by stock prices proves to be
correct convertibles will likely lag behind, particularly if the recent
widening of credit spreads in the fixed income market continues. Remember that
convertibles typically offer higher current income but less appreciation
potential than stocks, and greater appreciation potential and less current
income than bonds.
PORTFOLIO PERFORMANCE REVIEW AND STRATEGY
The industrial sector, which was the largest sector holding at June 30, 2007,
was the top group contributor to Portfolio returns for the period. This
performance was led by the convertible bonds of Actuant Corp., a manufacturer
of a broad range of industrial products and systems, and by the convertible
bonds of United Rentals, an equipment rental company.
The second largest group contributor to Portfolio returns for the first half of
2007 was the information technology sector. This group was led by our holdings
in Sina Corp., an online media and information services provider that serves
China and Chinese-language communities worldwide, and by Corning Inc., a
fiber-optic technology company.
The largest detractor from Portfolio returns for the six-month period was the
financials sector, led by holdings in Merrill Lynch & Co., a provider of
financial services, and Countrywide Financial Corp., a holding company engaged
in financial services, including mortgage lending.
The second worst performing group in the Portfolio was the materials sector,
one of the smallest sectors in the Portfolio, where our two holdings, Pioneer
Cos., a chemicals company, and Headwaters Inc., a diversified company serving
the energy and construction industries, ended the first half of the year with
no gain or loss.
TEAM MANAGED
BATTERYMARCH FINANCIAL MANAGEMENT, INC.
Yu-Nien (Charles) Ko, CFA, is a Co-Director and Senior Portfolio Manager of the
Batterymarch U.S. investment team. Mr. Ko joined Batterymarch in 2000 as a
quantitative analyst and was promoted to portfolio manager in 2003 and
co-director and senior portfolio manager of the U.S. investment team in 2006.
Mr. Ko has seven years of investment experience.
Stephen A. Lanzendorf, CFA, is a Co-Director and Senior Portfolio Manager of
the Batterymarch U.S. investment team. He joined Batterymarch in 2006. Mr.
Lanzendorf is an experienced quantitative strategist with 22 years of
investment experience. He previously held responsibilities at Independence
Investments and The Colonial Group and is a member of the Chicago Quantitative
Alliance and the Boston Security Analysts Society.
CLEARBRIDGE ADVISORS, LLC
Mr. Peter D. Luke is responsible for managing the investment of the Portfolio's
assets in convertible securities. Mr. Luke is a senior portfolio manager for
U.S. convertible strategies for ClearBridge and a sector manager for flexible
strategies. Mr. Luke has over 33 years of industry experience. He joined
ClearBridge or its predecessor companies in 2001. Prior to that time, he was a
convertible portfolio manager for General Motors Investment Management
Corporation from 1989.
LEGG MASON GLOBAL ASSETS ALLOCATION, LLC
Mr. Steven Bleiberg is Head of Global Asset Allocation for Legg Mason. He
joined the organization in 2003 from Credit Suisse Asset Management, where he
was an international equity portfolio manager and chairman of CSAM's Global
Equity Strategy Group. Before that, Mr. Bleiberg was portfolio manager at
Matrix Capital Management, where he managed the firm's active equity assets.
Mr. Andrew Purdy serves as Portfolio Manager, Asset Allocation Strategies for
Legg Mason Global Asset Allocation, LLC. He is responsible for coordination and
implementation of asset allocation strategies. He has 14 years of investment
experience.
WESTERN ASSET MANAGEMENT COMPANY
A team of investment professionals at Western Asset manages the portion of the
Portfolio's assets allocated to Western Asset. The team includes portfolio
managers, sector specialists and other investment professionals. Mr. S. Kenneth
Leech and Mr. Stephen A. Walsh serve as co-team leaders responsible for
day-to-day strategic oversight of the Portfolio's investments and for
supervising the day-to-day operations of the various sector specialist teams
dedicated to the specific asset classes in which the Portfolio invests. Mr.
Mark Lindbloom, Mr. Carl Eichstaedt and Mr. Frederick Marki are responsible for
portfolio structure, including sector allocation, duration weighting and term
structure decisions.
S. Kenneth Leech has been employed as a portfolio manager for Western Asset for
the past five years and has been the Chief Investment Officer of Western Asset
since 1990.
Stephen A. Walsh has been employed as a portfolio manager of Western Asset for
the past five years. Mr. Walsh has been Deputy Chief Investment Officer of
Western Asset since 1991.
Carl L. Eichstaedt has been a portfolio manager for Western Asset since 1991.
Mark Lindbloom joined Western Asset in 2006 as a portfolio manager. Prior to
this, Mr. Lindbloom was a managing director of Salomon Brothers Asset
Management Inc. and a senior portfolio manager responsible for managing its
Mortgage/Corporate Group, and was associated with Citigroup, Inc. or its
predecessor companies since 1986.
- --------------------------------------------------------------------------------
3
- --------------------------------------------------------------------------------
LEGG MASON PARTNERS MANAGED ASSETS PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY BATTERYMARCH FINANCIAL MANAGEMENT, INC.,
CLEARBRIDGE ADVISORS, LLC, LEGG MASON GLOBAL ASSET ALLOCATION,
LLC AND WESTERN ASSET MANAGEMENT COMPANY
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
Frederick Marki joined Western Asset in 2006 as a portfolio manager. Prior to
this, Mr. Marki was a director of Salomon Brothers Asset Management Inc. and a
senior portfolio manager responsible for managing Treasury/Agency portfolios,
and was associated with Citigroup Inc. or its predecessor companies since 1991.
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
--------------------------------------------------------------------
Federal National Mortgage Assoc. (6.000%, due TBA) 3.25%
--------------------------------------------------------------------
U.S Treasury Note (5.125%, due 5/15/16) 3.21%
--------------------------------------------------------------------
U.S Treasury Note (4.625%, due 11/15/16) 3.04%
--------------------------------------------------------------------
U.S Treasury Note (5.125%, due 6/30/11) 2.00%
--------------------------------------------------------------------
Exxon Mobil Corp. 1.98%
--------------------------------------------------------------------
U.S Treasury Note (4.625%, due 10/31/11) 1.76%
--------------------------------------------------------------------
U.S Treasury Note (4.500%, due 05/15/17) 1.60%
--------------------------------------------------------------------
Government National Mortgage Assoc. (6.000%, due 6/15/36) 1.49%
--------------------------------------------------------------------
Citigroup, Inc. (4.125%, due 02/22/10) 1.41%
--------------------------------------------------------------------
AT&T, Inc. 1.14%
--------------------------------------------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
- --------------------------------------------------------------------------------
4
- --------------------------------------------------------------------------------
LEGG MASON PARTNERS MANAGED ASSETS PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY BATTERYMARCH FINANCIAL MANAGEMENT, INC.,
CLEARBRIDGE ADVISORS, LLC, LEGG MASON GLOBAL ASSET ALLOCATION,
LLC AND WESTERN ASSET MANAGEMENT COMPANY
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
LEGG MASON PARTNERS MANAGED ASSETS PORTFOLIO MANAGED BY
BATTERYMARCH FINANCIAL MANAGEMENT, INC., CLEARBRIDGE ADVISORS, LLC, LEGG MASON
GLOBAL ASSET ALLOCATION, LLC AND WESTERN ASSET MANAGEMENT COMPANY VS. LEHMAN
BROTHERS GOVERNMENT/CREDIT BOND INDEX/1/ AND
S&P 500(R) INDEX/2/
Growth Based on $10,000+
[CHART]
Legg Mason Lehman Brothers
PartnersManaged Government/Credit S&P 500/(R)/
Assets Portfolio Bond Index Index
---------------- ----------------- -----------
12/31/1996 $10,000 $10,000 $10,000
12/31/1997 12,131 10,975 13,336
12/31/1998 14,732 12,014 17,147
12/31/1999 16,827 11,756 20,755
12/30/2000 16,554 13,148 18,864
12/31/2001 15,713 14,267 16,623
12/31/2002 14,362 15,839 12,950
12/31/2003 17,519 16,580 16,664
12/30/2004 19,172 17,278 18,477
12/31/2005 19,909 17,683 19,384
12/31/2006 22,061 18,355 22,444
6/30/2007 23,186 18,534 24,007
-------------------------------------------------------------
Average Annual Return/3/
(for the period ended 6/30/07)
-------------------------------------------------------------
Since
1 Year 3 Year 5 Year 10 Year Inception/4/
-------------------------------------------------------------
Legg Mason Partners
Managed Assets
- -- Portfolio--Class A 14.76% 8.93% 9.58% 7.57% 9.04%
-------------------------------------------------------------
Lehman Brothers
Government/Credit
- -- Bond Index/1/ 6.02% 3.85% 4.70% 6.08% 8.35%
-------------------------------------------------------------
- - - S&P 500(R) Index/2/ 20.59% 11.68% 10.71% 7.13% 12.77%
-------------------------------------------------------------
+The chart reflects the performance of Class A shares of the Portfolio. This is
currently the only active Class in the Portfolio.
/1/The Lehman Brothers Government/Credit Bond Index is a weighted composite of
the Lehman Brothers Government Bond Index, which is a broad-based index of all
public debt obligations of the U.S. Government and its agencies and has an
average maturity of nine years and the Lehman Brothers Credit Bond Index, which
is comprised of all public fixed-rate non-convertible investment grade domestic
corporate debt, excluding collateralized mortgage obligations. The Index does
not include fees or expenses and is not available for direct investment.
/2/The S&P 500(R) Index is an unmanaged index consisting of 500 stocks chosen
for market size, liquidity, and industry group representation. It is a
market-weighted index (stock price times number of shares outstanding) with
each stock's weight in the Index proportionate to its market value. The Index
does not include fees or expenses and is not available for direct investment.
/3/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gains distributions.
/4/Inception of Class A shares is 4/08/1983. Index returns are based on an
inception date of 4/30/1983.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
5
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
LEGG MASON PARTNERS MANAGED ASSETS PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,051.00 $2.95
Hypothetical (5% return before expenses) 1,000.00 1,021.92 2.91
- -------------------------------------------- ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.58%
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period).
6
MET INVESTORS SERIES TRUST
LEGG MASON PARTNERS MANAGED ASSETS PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------------
DOMESTIC BONDS & DEBT SECURITIES - 17.8%
AIRLINES - 0.1%
Continental Airlines, Inc.
5.983%, due 04/19/22.................. $ 300,000 $ 291,750
ASSET-BACKED SECURITIES - 1.2%
American Home Mortgage Investment Trust
5.294%, due 06/25/45(a)............... 616,381 611,749
Chase Funding Mortgage Loan Asset-Backed
Certificates, Series 2002-2, Class 1A5
5.833%, due 04/25/32.................. 356,699 350,065
Countrywide Asset-Backed Certificates
5.770%, due 03/25/47(144A)............ 852,693 857,090
GMAC LLC
6.625%, due 05/15/12.................. 1,020,000 985,998
Terwin Mortgage Trust
4.750%, due 10/25/37.................. 224,974 223,252
-------------
3,028,154
-------------
AUTOMOBILES - 0.3%
DaimlerChrysler North America Holding
Corp.
7.300%, due 01/15/12.................. 360,000 382,179
Ford Motor Co.
7.450%, due 07/16/31(b)............... 530,000 425,988
808,167
AUTOMOTIVE LOANS - 1.2%
Ford Motor Credit Co.
7.375%, due 10/28/09................... 1,400,000 1,390,445
5.700%, due 01/15/10................... 100,000 95,590
9.750%, due 09/15/10................... 270,000 282,122
General Motors Acceptance Corp.
6.125%, due 08/28/07(b)................ 1,100,000 1,100,790
4.375%, due 12/10/07................... 60,000 59,574
5.125%, due 05/09/08(b)................ 40,000 39,508
5.850%, due 01/14/09................... 50,000 49,294
8.000%, due 11/01/31................... 200,000 205,069
-------------
3,222,392
-------------
BANKS - 1.6%
Bank of America Corp.
5.375%, due 08/15/11- 06/15/14........ 420,000 415,876
Glitnir Banki HF
6.330%, due 07/28/11 (144A)(f)......... 100,000 101,872
6.693%, due 06/15/16 (144A)(f)......... 230,000 237,098
Kaupthing Bank
6.045%, due 04/12/11 (144A)(a),(f).... 290,000 292,493
Landsbanki Islands HF
6.100%, due 08/25/11 (144A)(f)........ 320,000 324,339
Rabobank Capital Fund Trust III
5.254%, due 12/31/16 (144A)(f)........ 200,000 187,599
RBS Capital Trust I
4.709%, due 12/29/49.................. 300,000 279,607
---------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
---------------------------------------------------------------------
BANKS - CONTINUED
Royal Bank of Scotland Group Plc
5.050%, due 01/08/15..................... $ 300,000 $ 288,445
RSHB Capital (Russian Agricultural
Bank) S.A.
6.299%, due 05/15/17 (144A).............. 260,000 255,138
Shinsei Finance Cayman, Ltd.
6.418%, due 01/29/49 (144A)(f)........... 200,000 194,785
SunTrust Capital VIII
6.100%, due 12/15/36..................... 260,000 238,869
Wachovia Bank North America
4.800%, due 11/01/14...................... 200,000 188,845
5.735%, due 11/03/14(a)................... 700,000 708,966
Washington Mutual Bank FA.
5.125%, due 01/15/15(b).................. 400,000 377,700
-------------
4,091,632
-------------
CHEMICALS - 0.0%
FMC Finance III S.A.
6.875%, due 07/15/17 (144A).............. 90,000 88,650
Westlake Chemical Corp.
6.625%, due 01/15/16..................... 40,000 38,100
-------------
126,750
-------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 3.2%
Banc of America Commercial Mortgage,
Inc., Series 2004-6, Class AJ
4.870%, due 12/10/42..................... 450,000 424,147
Bayview Commercial Asset Trust
5.590%, due 04/25/36(144A)................ 1,004,760 1,004,710
5.550%, due 07/25/36(144A)................ 963,016 962,265
Countrywide Alternative Loan Trust
5.560%, due 12/25/46(a).................. 1,014,213 1,018,454
Credit Suisse Mortgage Capital Certificates
5.467%, due 09/15/39..................... 370,000 359,228
European Investment Bank
4.625%, due 03/21/12..................... 120,000 117,067
GMAC Mortgage Corp. Loan Trust
5.560%, due 10/25/34..................... 1,000,000 1,001,094
Indymac Index Mortgage Loan Trust
5.630%, due 06/25/34(a)................... 310,224 311,858
5.386%, due 10/25/35...................... 428,483 424,571
JPMorgan Chase Commercial Mortgage
Securities Corp.
Series 2004-C3, Class AJ
4.922%, due 01/15/42.................... 600,000 566,547
Series 2005-LDP4, Class AM
4.999%, due 10/15/42.................... 430,000 406,519
Lake Country Mortgage Loan Trust
5.450%, due 07/25/34
(144A)(a),(f)............................ 507,609 507,563
See notes to financial statements
7
MET INVESTORS SERIES TRUST
LEGG MASON PARTNERS MANAGED ASSETS PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS - CONTINUED
Morgan Stanley Capital I
5.332%, due 12/15/43............. $ 510,000 $ 490,284
Thornburg Mortgage Securities Trust
5.430%, due 06/25/36............. 263,645 263,381
Wachovia Bank Commercial Mortgage
Trust 4.935%, due 04/15/42....... 260,000 246,023
Washington Mutual, Inc.
5.953%, due 09/25/36............. 278,382 278,295
-------------
8,382,006
-------------
ELECTRIC UTILITIES - 0.9%
Duke Energy Corp.
5.625%, due 11/30/12............. 210,000 210,181
Exelon Corp.
5.625%, due 06/15/35............. 260,000 233,052
FirstEnergy Corp.
6.450%, due 11/15/11.............. 250,000 256,595
7.375%, due 11/15/31.............. 485,000 526,579
Pacific Gas & Electric Co.
6.050%, due 03/01/34.............. 210,000 204,085
5.800%, due 03/01/37.............. 20,000 18,719
SP PowerAssets, Ltd.
5.000%, due 10/22/13 (144A)(f)... 700,000 679,534
TXU Corp.
5.550%, due 11/15/14.............. 70,000 59,775
6.500%, due 11/15/24.............. 10,000 8,319
6.550%, due 11/15/34(b)........... 70,000 56,967
-------------
2,253,806
-------------
ENERGY - 0.2%
Kinder Morgan Energy Partners L.P.
6.300%, due 02/01/09.............. 10,000 10,111
6.750%, due 03/15/11.............. 30,000 31,071
5.125%, due 11/15/14.............. 200,000 188,922
6.000%, due 02/01/17.............. 20,000 19,607
Williams Cos., Inc.
7.750%, due 06/15/31(b).......... 165,000 175,519
-------------
425,230
-------------
ENVIRONMENTAL SERVICES - 0.1%
Waste Management, Inc.
6.375%, due 11/15/12............. 370,000 378,841
FINANCIAL - DIVERSIFIED - 4.6%
Aiful Corp.
5.000%, due 08/10/10 (144A)(f)... 200,000 195,082
AIG SunAmerica Global Financing VII
5.850%, due 08/01/08 (144A)(f)... 400,000 401,772
American Express Co.
6.800%, due 09/01/66............. 390,000 402,820
American General Finance Corp.
3.875%, due 10/01/09............. 800,000 774,398
------------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------------------
FINANCIAL - DIVERSIFIED - CONTINUED
Bear Stearns Cos., Inc. (The)
5.550%, due 01/22/17(b).................. $ 380,000 $ 359,752
Capital One Bank
5.000%, due 06/15/09..................... 310,000 307,756
Capital One Financial Corp.
5.500%, due 06/01/15..................... 80,000 77,343
Citigroup, Inc.
4.125%, due 02/22/10..................... 930,000 902,725
Countrywide Financial Corp.
5.470%, due 06/18/08(a)................... 90,000 90,022
5.500%, due 01/05/09(a)................... 70,000 69,826
Credit Suisse First Boston USA, Inc.
6.125%, due 11/15/11..................... 140,000 143,192
Credit Suisse Guernsey, Ltd.
5.860%, due 05/29/49..................... 250,000 241,308
General Electric Capital Corp.
4.125%, due 09/01/09...................... 350,000 341,700
5.450%, due 01/15/13...................... 40,000 39,629
Goldman Sachs Capital I, Capital Securities
6.345%, due 02/15/34..................... 200,000 191,339
Goldman Sachs Group, Inc.
4.500%, due 06/15/10...................... 130,000 126,835
5.625%, due 01/15/17...................... 650,000 624,096
HSBC Finance Corp.
6.375%, due 10/15/11..................... 1,100,000 1,131,319
JPMorgan Chase & Co.
5.125%, due 09/15/14...................... 360,000 346,205
5.250%, due 05/01/15(b)................... 400,000 385,994
5.150%, due 10/01/15...................... 190,000 180,968
Lehman Brothers Holdings, Inc.
5.750%, due 01/03/17(b).................. 530,000 515,823
Merrill Lynch & Co., Inc. Series C
4.250%, due 02/08/10...................... 170,000 165,396
5.000%, due 01/15/15(b)................... 170,000 161,246
6.110%, due 01/29/37...................... 730,000 687,229
Morgan Stanley
5.050%, due 01/21/11...................... 600,000 588,065
5.809%, due 10/18/16(a)................... 80,000 80,054
Residential Capital Corp.
6.000%, due 02/22/11...................... 745,000 721,466
6.500%, due 06/01/12...................... 120,000 117,263
Resona Preferred Global Securities
Cayman, Ltd.
7.191%, due 12/29/49 (144A)(f)........... 120,000 122,886
Santander Issuances, S.A Unipersonal
5.805%, due 06/20/16 (144A)(f)........... 170,000 170,888
SLM Corp.
5.000%, due 10/01/13...................... 150,000 128,147
5.375%, due 05/15/14...................... 375,000 321,792
See notes to financial statements
8
MET INVESTORS SERIES TRUST
LEGG MASON PARTNERS MANAGED ASSETS PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
--------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------
FINANCIAL - DIVERSIFIED - CONTINUED
5.050%, due 11/14/14(b)............ $ 40,000 $ 33,312
5.000%, due 04/15/15(b)............ 10,000 8,230
5.625%, due 08/01/33(b)............ 20,000 15,642
SMFG Preferred Capital
6.078%, due 01/29/49 (144A)(f).... 340,000 328,783
Wells Fargo & Co.
5.300%, due 08/26/11.............. 435,000 432,244
Wells Fargo Capital X
5.950%, due 12/15/36.............. 100,000 93,586
-------------
12,026,133
-------------
HEALTH CARE PROVIDERS & SERVICES - 0.1%
HCA, Inc.
6.250%, due 02/15/13(b)............ 80,000 72,400
5.750%, due 03/15/14............... 358,000 303,852
-------------
376,252
-------------
HOTELS, RESTAURANTS & LEISURE - 0.0%
MGM Mirage
7.625%, due 01/15/17(b)........... 120,000 114,750
-------------
INDUSTRIAL - DIVERSIFIED - 0.3%
General Electric Co.
5.000%, due 02/01/13.............. 250,000 242,674
Tyco International Group S.A.
6.000%, due 11/15/13.............. 630,000 647,757
-------------
890,431
-------------
INSURANCE - 0.2%
Berkshire Hathaway Finance Corp.
4.750%, due 05/15/12.............. 230,000 223,806
Travelers Cos., Inc.
6.250%, due 03/15/37(b)........... 310,000 298,425
-------------
522,231
-------------
INTERNET SOFTWARE & SERVICES - 0.0%
Electronic Data Systems Corp.
7.125%, due 10/15/09.............. 10,000 10,297
-------------
MEDIA - 0.6%
Clear Channel Communications, Inc.
6.250%, due 03/15/11.............. 190,000 182,993
Comcast Cable Communications, Inc.
8.875%, due 05/01/17.............. 880,000 1,042,542
EchoStar DBS Corp.
7.000%, due 10/01/13(b)........... 60,000 59,400
News America, Inc.
6.200%, due 12/15/34.............. 20,000 18,703
Time Warner Cos, Inc.
7.625%, due 04/15/31.............. 260,000 279,346
-------------
1,582,984
-------------
----------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
----------------------------------------------------------------
METALS & MINING - 0.1%
Peabody Energy Corp.
6.875%, due 03/15/13(b).......... $ 20,000 $ 20,000
Steel Dynamics, Inc.
6.750%, due 04/01/15............. 45,000 44,325
Vale Overseas, Ltd.
6.875%, due 11/21/36............. 250,000 251,922
-------------
316,247
-------------
OIL & GAS - 0.8%
Anadarko Finance Co., Series B
6.750%, due 05/01/11.............. 110,000 113,669
7.500%, due 05/01/31.............. 90,000 96,978
ConocoPhillips Holding Co.
6.950%, due 04/15/29............. 645,000 705,976
Intergas Finance BV
6.375%, due 05/14/17(144A)....... 260,000 249,600
Kerr-McGee Corp.
6.950%, due 07/01/24.............. 90,000 93,609
7.875%, due 09/15/31.............. 40,000 46,357
Pemex Project Funding Master Trust
6.625%, due 06/15/35(b).......... 292,000 296,745
Petrobras International Finance Co.
6.125%, due 10/06/16............. 180,000 177,300
TNK-BP Finance S.A.
7.500%, due 07/18/16 (144A)(f)... 190,000 196,365
XTO Energy, Inc.
6.100%, due 04/01/36............. 240,000 225,921
-------------
2,202,520
-------------
OIL & GAS EXPLORATION & PRODUCTION - 0.3%
Anadarko Petroleum Corp.
6.450%, due 09/15/36............. 300,000 289,473
Chesapeake Energy Corp.
6.375%, due 06/15/15............. 20,000 19,175
Gaz Capital (GAZPROM)
6.212%, due 11/22/16 (144A)(f).... 240,000 234,360
6.510%, due 03/07/22 (144A)(f).... 130,000 128,635
-------------
671,643
-------------
PAPER & FOREST PRODUCTS - 0.1%
Weyerhaeuser Co.
6.750%, due 03/15/12............. 210,000 217,495
-------------
PHARMACEUTICALS - 0.3%
Cardinal Health, Inc.
5.850%, due 12/15/17(b).......... 220,000 214,052
Wyeth
5.950%, due 04/01/37............. 500,000 478,201
-------------
692,253
-------------
See notes to financial statements
9
MET INVESTORS SERIES TRUST
LEGG MASON PARTNERS MANAGED ASSETS PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-----------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-----------------------------------------------------------------
REAL ESTATE - 0.1%
iStar Financial, Inc. (REIT)
6.000%, due 12/15/10................ $ 300,000 $ 301,498
Ventas Realty LP/Ventas Capital Corp.
6.750%, due 04/01/17................ 60,000 59,550
-------------
361,048
-------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 1.2%
Citizens Communications Co.
7.125%, due 03/15/19................. 20,000 19,000
7.875%, due 01/15/27................. 35,000 34,213
Deutsche Telekom International Finance
BV 8.250%, due 06/15/30............. 330,000 396,643
France Telecom S.A.
8.500%, due 03/01/31................ 150,000 189,017
Nextel Communications, Inc.
6.875%, due 10/31/13................ 150,000 149,016
Qwest Corp.
7.500%, due 10/01/14................. 30,000 30,900
6.875%, due 09/15/33................. 40,000 37,700
Royal KPN NV
8.000%, due 10/01/10................ 350,000 374,863
SBC Communications, Inc.
6.450%, due 06/15/34................ 300,000 297,411
Sprint Capital Corp.
8.375%, due 03/15/12................. 560,000 610,654
8.750%, due 03/15/32................. 50,000 56,308
Telecom Italia Capital S.A.
5.250%, due 10/01/15................. 200,000 186,277
6.000%, due 09/30/34(b).............. 240,000 216,906
Verizon Global Funding Corp.
7.375%, due 09/01/12(b)............. 120,000 129,384
Verizon New York, Inc.
6.875%, due 04/01/12(b)............. 270,000 281,787
Windstream Corp.
8.625%, due 08/01/16................ 50,000 53,125
-------------
3,063,204
-------------
TOBACCO - 0.3%
Altria Group, Inc.
5.625%, due 11/04/08................ 700,000 700,822
Reynolds American, Inc.
6.750%, due 06/15/17................ 70,000 71,015
-------------
771,837
-------------
Total Domestic Bonds & Debt Securities
(Cost $47,092,692) 46,828,053
-------------
U. S. GOVERNMENT AGENCY MORTGAGE BACKED SECURITIES - 7.0%
Federal National Mortgage Assoc.
6.500%, due 12/01/27................. 18,829 19,155
6.000%, due 03/01/28-08/01/28........ 329,877 328,867
5.500%, due 08/01/28................. 149,528 145,060
-----------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-----------------------------------------------------------------
U. S. GOVERNMENT AGENCY MORTGAGE BACKED SECURITIES - CONTINUED
5.000%, due 09/01/35-01/01/37........ $ 2,698,229 $ 2,533,993
5.143%, due 09/01/35(a).............. 591,476 593,045
5.000%, due TBA(c)................... 300,000 281,109
6.000%, due TBA(c)................... 10,600,000 10,615,874
Government National Mortgage Assoc.
9.000%, due 11/15/19................. 11,560 12,430
6.000%, due 06/15/36................. 3,921,357 3,903,126
-------------
Total U. S. Government Agency Mortgage
Backed Securities
(Cost $18,448,243).................. 18,432,659
-------------
U. S. GOVERNMENT & AGENCY OBLIGATIONS - 16.6%
Federal Agricultural Mortgage Corp.
5.125%, due 04/19/17................ 400,000 386,570
Federal Home Loan Mortgage Corp.
4.875%, due 11/15/13(b).............. 500,000 487,686
5.500%, due 07/15/36(b).............. 500,000 493,175
6.583%, due 01/01/37................. 370,647 376,551
5.837%, due 02/01/37................. 163,042 163,675
6.618%, due 02/01/37................. 95,109 96,203
6.039%, due 05/01/37................. 400,000 401,131
Tenn Valley Authority
5.980%, due 04/01/36................ 430,000 453,932
U.S. Treasury Bond
8.875%, due 08/15/17(b).............. 470,000 609,017
6.000%, due 02/15/26(b).............. 2,440,000 2,664,177
4.500%, due 02/15/36................. 685,000 620,461
U.S. Treasury Inflation Index Bond
2.375%, due 04/15/11-01/15/27(b)..... 1,928,368 1,857,837
2.000%, due 01/15/26................. 197,815 179,239
U.S. Treasury Inflation Index Note
0.875%, due 04/15/10(b).............. 87,261 82,899
2.000%, due 01/15/16................. 707,968 672,404
2.500%, due 07/15/16(b).............. 296,734 293,512
U.S. Treasury Note
3.750%, due 05/15/08(b).............. 10,000 9,894
5.125%, due 06/30/11-05/15/16(b)..... 13,610,000 13,700,991
4.500%, due 09/30/11-04/30/12(b)..... 1,870,000 1,839,215
4.625%, due 10/31/11-11/15/16(b)..... 12,925,000 12,620,229
4.250%, due 08/15/14(b).............. 800,000 765,501
4.500%, due 05/15/17(b).............. 4,390,000 4,210,287
4.750%, due 02/15/37(b).............. 690,000 650,811
-------------
Total U. S. Government & Agency
Obligations
(Cost $44,501,199).................. 43,635,397
-------------
See notes to financial statements
10
MET INVESTORS SERIES TRUST
LEGG MASON PARTNERS MANAGED ASSETS PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
----------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
----------------------------------------------------------------
FOREIGN BONDS & DEBT SECURITIES - 0.5%
LUXEMBOURG - 0.1%
Telecom Italia Capital S.A.
4.000%, due 01/15/10............... $ 300,000 $ 288,568
-------------
MEXICO - 0.3%
Mexico Government International Bond
6.750%, due 09/27/34(b)............ 728,000 778,232
-------------
RUSSIA - 0.1%
Russian Federation
7.500%, due 03/31/30 (144A)(f)..... 189,050 208,542
-------------
Total Foreign Bonds & Debt Securities
(Cost $1,280,023).................. 1,275,342
-------------
CONVERTIBLE BONDS - 3.9%
AEROSPACE & DEFENSE - 0.3%
AAR Corp. 1.750%, due 02/01/26(f).... 175,000 223,563
DRS Technologies, Inc.
2.000%, due 02/01/26 (144A)........ 125,000 137,500
L-3 Communications Corp.
3.000%, due 08/01/35 (144A)(f)...... 75,000 84,938
3.000%, due 08/01/35(b),(f)......... 100,000 113,250
Orbital Sciences Corp.
2.438%, due 01/15/27 (144A)(f)..... 125,000 136,562
-------------
695,813
-------------
AUTOMOTIVE LOANS - 0.1%
Americredit Corp.
2.125%, due 09/15/13............... 125,000 133,906
-------------
BIOTECHNOLOGY - 0.2%
Amgen, Inc.
0.375%, due 02/01/13 (144A)(f)..... 250,000 223,125
Genzyme Corp.
1.250%, due 12/01/23(b)............ 225,000 237,375
Incyte Corp.
3.500%, due 02/15/11(b)............ 150,000 132,188
-------------
592,688
-------------
BUILDING MATERIALS - 0.1%
NCI Building Systems, Inc.
2.125%, due 11/15/24(b)............ 150,000 199,875
-------------
COMMERCIAL SERVICES & SUPPLIES - 0.2%
Euronet Worldwide, Inc.
3.500%, due 10/15/25............... 325,000 343,281
United Rentals North America, Inc.
1.875%, due 10/15/23............... 100,000 151,750
-------------
495,031
-------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.3%
Anixter International, Inc.
1.000%, due 02/15/13(b)............ 100,000 129,125
Avnet, Inc. 2.000%, due 03/15/34(b).. 100,000 127,000
----------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
----------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - CONTINUED
LSI Logic Corp.
4.000%, due 05/15/10(b)...... $ 175,000 $ 170,406
WESCO International, Inc.
2.625%, due 10/15/25(f)...... 250,000 386,563
-------------
813,094
-------------
ELECTRONICS - 0.1%
Flextronics International, Ltd.
1.000%, due 08/01/10(b)...... 175,000 163,625
-------------
ENERGY - 0.1%
Sunpower Corp.
1.250%, due 02/15/27......... 125,000 157,656
-------------
FINANCIAL - DIVERSIFIED - 0.2%
Affiliated Managers Group, Inc.
4.860%, due 02/25/33(a)...... 50,000 163,670
Merrill Lynch & Co., Inc.
0.000%, due 03/13/32(b),(d).. 325,000 400,368
-------------
564,038
-------------
HEALTH CARE EQUIPMENT & SUPPLIES - 0.2%
Henry Schein, Inc.
3.000%, due 08/15/34......... 175,000 224,875
Medtronic, Inc.
1.500%, due 04/15/11 (144A)(f) 225,000 239,625
1.500%, due 04/15/11
(144A)(f)(b)................ 25,000 26,625
-------------
491,125
-------------
HEALTH CARE PROVIDERS & SERVICES - 0.1%
Pacificare Health Systems, Inc.
3.000%, due 10/15/32......... 100,000 368,875
-------------
HOLDING COMPANIES-DIVERSIFIED - 0.0%
Acquicor Technology, Inc.
8.000%, due 12/31/11......... 125,000 113,750
-------------
HOMEBUILDERS - 0.1%
Beazer Homes USA, Inc.
4.625%, due 06/15/24(b)...... 425,000 375,594
-------------
HOTELS, RESTAURANTS & LEISURE - 0.1%
Carnival Corp.
2.000%, due 04/15/21......... 100,000 126,750
Hilton Hotels Corp.
3.375%, due 04/15/23......... 100,000 151,125
-------------
277,875
-------------
INDUSTRIAL - DIVERSIFIED - 0.2%
Actuant Corp.
2.000%, due 11/15/23(b)...... 200,000 323,000
Danaher Corp.
1.482%, due 01/22/21(d)...... 175,000 194,031
-------------
517,031
-------------
See notes to financial statements
11
MET INVESTORS SERIES TRUST
LEGG MASON PARTNERS MANAGED ASSETS PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
---------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
---------------------------------------------------------------
MACHINERY - 0.1%
Roper Industries, Inc.
1.481%, due 01/15/34(b)........... $ 225,000 $ 163,406
-------------
OIL & GAS - 0.1%
Halliburton Co.
3.125%, due 07/15/23(b)........... 75,000 139,219
Pride International, Inc.
3.250%, due 05/01/33(b)........... 150,000 224,812
-------------
364,031
-------------
OIL & GAS EXPLORATION & PRODUCTION - 0.0%
Cameron International Corp.
2.500%, due 06/15/26(b)........... 100,000 122,125
-------------
PHARMACEUTICALS - 0.3%
Alexion Pharmaceuticals, Inc.
1.375%, due 02/01/12.............. 75,000 116,063
BioMarin Pharmaceutical, Inc.
2.500%, due 03/29/13(b)........... 200,000 257,500
NPS Pharmaceuticals, Inc.
3.000%, due 06/15/08.............. 200,000 191,000
Teva Pharmaceutical Industries, Ltd.
0.250%, due 02/01/24(b)........... 175,000 213,937
-------------
778,500
-------------
RETAIL - MULTILINE - 0.2%
Charming Shoppes, Inc.
1.125%, due 05/01/14 (144A)....... 175,000 157,719
Lowe's Cos., Inc.
0.861%, due 10/19/21(d)........... 200,000 215,000
Pier 1 Imports, Inc. /
6.125% 6.375%, due 02/15/36
(144A)(f),(e)..................... 125,000 124,687
-------------
497,406
-------------
SAVINGS & LOANS - 0.2%
Bankunited Capital Trust
3.125%, due 03/01/34(b)........... 525,000 472,500
-------------
SOFTWARE - 0.2%
Blackboard, Inc.
3.250%, due 07/01/27.............. 125,000 131,406
Lawson Software, Inc.
2.500%, due 04/15/12 (144A)....... 125,000 133,438
Mentor Graphics Corp.
6.250%, due 03/01/26.............. 225,000 245,812
SINA Corp.
0.000%, due 07/15/23(d)........... 100,000 168,000
-------------
678,656
-------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 0.4%
ADC Telecommunications, Inc.
5.784%, due 06/15/13(a)........... 250,000 244,687
----------------------------------------------------------------
SECURITY SHARES/PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
----------------------------------------------------------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - CONTINUED
Amdocs, Ltd.
0.500%, due 03/15/24(b)............ $ 200,000 $ 207,500
Comverse Technology, Inc.
0.000%, due 05/15/23(d)............ 100,000 123,500
Dobson Communications Corp.
1.500%, due 10/01/25 (144A)(f)..... 75,000 91,125
Logix Communications Enterprises
1.500%, due 10/01/25............... 50,000 60,750
NII Holdings, Inc.
2.750%, due 08/15/25(f)............ 200,000 345,500
Symmetricom, Inc.
3.250%, due 06/15/25............... 75,000 75,000
-------------
1,148,062
-------------
TRANSPORTATION - 0.1%
YRC Worldwide, Inc.
5.000%, due 08/08/23(b)............ 125,000 152,969
-------------
Total Convertible Bonds
(Cost $9,556,229).................. 10,337,631
-------------
COMMON STOCKS - 55.3%
AEROSPACE & DEFENSE - 1.8%
Boeing Co. (The)..................... 14,166 1,362,203
General Dynamics Corp................ 3,276 256,249
Lockheed Martin Corp................. 8,950 842,463
Northrop Grumman Corp................ 10,473 815,532
Raytheon Co.......................... 7,012 377,877
United Technologies Corp............. 15,736 1,116,154
-------------
4,770,478
-------------
AIR FREIGHT & LOGISTICS - 0.7%
FedEx Corp........................... 5,900 654,723
Ryder System, Inc.................... 17,100 919,980
United Parcel Service, Inc. - Class B 3,720 271,560
-------------
1,846,263
-------------
BANKS - 2.2%
Bank of America Corp................. 44,226 2,162,209
Bank of New York Co., Inc............ 12,070 500,181
Commerce Bancorp, Inc.(b)............ 6,300 233,037
Credicorp, Ltd....................... 3,900 238,563
Northern Trust Corp.................. 12,200 783,728
U.S. Bancorp......................... 8,826 290,816
Wachovia Corp........................ 10,123 518,804
Wells Fargo & Co..................... 26,770 941,501
-------------
5,668,839
-------------
BEVERAGES - 1.0%
Anheuser-Busch Cos., Inc............. 3,900 203,424
Coca-Cola Co......................... 11,765 615,427
See notes to financial statements
12
MET INVESTORS SERIES TRUST
LEGG MASON PARTNERS MANAGED ASSETS PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
--------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
--------------------------------------------------------------
BEVERAGES - CONTINUED
Molson Coors Brewing Co. - Class B....... 14,670 $ 1,356,388
PepsiCo, Inc............................. 8,482 550,058
-------------
2,725,297
-------------
BIOTECHNOLOGY - 0.4%
Amgen, Inc.*............................. 9,822 543,058
Gilead Sciences, Inc.*................... 4,754 184,313
Invitrogen Corp.*........................ 4,000 295,000
-------------
1,022,371
-------------
CHEMICALS - 0.6%
Albemarle Corp........................... 8,300 319,799
Dow Chemical Co. (The)................... 16,751 740,729
E.I. du Pont de Nemours & Co............. 9,523 484,150
-------------
1,544,678
-------------
COMMERCIAL SERVICES & SUPPLIES - 0.2%
Brink's Co. (The)(b)..................... 4,400 272,316
R. R. Donnelley & Sons Co................ 6,560 285,426
-------------
557,742
-------------
COMMUNICATIONS EQUIPMENT & SERVICES - 1.5%
Cisco Systems, Inc.*..................... 58,292 1,623,432
Harris Corp.(b).......................... 31,700 1,729,235
Motorola, Inc............................ 12,075 213,728
QUALCOMM, Inc............................ 8,475 367,730
-------------
3,934,125
-------------
COMPUTERS & PERIPHERALS - 2.2%
Apple, Inc.*............................. 4,717 575,663
Dell, Inc.*.............................. 11,828 337,689
EMC Corp.*............................... 10,637 192,530
Hewlett-Packard Co....................... 42,209 1,883,366
Ingram Micro, Inc. - Class A*............ 6,200 134,602
International Business Machines Corp.(b). 22,073 2,323,183
Lexmark International, Inc. - Class A*(b) 4,100 202,171
Western Digital Corp.*................... 4,900 94,815
-------------
5,744,019
-------------
ELECTRIC UTILITIES - 1.5%
Centerpoint Energy, Inc.(b).............. 19,600 341,040
Edison International..................... 8,200 460,184
Exelon Corp.............................. 3,488 253,229
FirstEnergy Corp.(b)..................... 15,321 991,728
Northeast Utilities...................... 3,400 96,424
OGE Energy Corp.......................... 7,875 288,619
PG&E Corp................................ 14,300 647,790
Public Service Enterprise Group, Inc..... 6,350 557,403
Reliant Energy, Inc.*(b)................. 11,300 304,535
TXU Corp.(b)............................. 22 1,480
-------------
3,942,432
-------------
--------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
--------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.9%
Acuity Brands, Inc................. 17,600 $ 1,060,928
Emerson Electric Co................ 12,900 603,720
Vishay Intertechnology, Inc.*...... 27,300 431,886
Xerox Corp.*....................... 18,300 338,184
-------------
2,434,718
ENERGY - 0.0%
Enterprise GP Holdings L.P(b)...... 2,000 75,860
-------------
ENERGY EQUIPMENT & SERVICES - 0.9%
Cameron International Corp.*....... 15,000 1,072,050
Diamond Offshore Drilling, Inc.(b). 2,000 203,120
GlobalSantaFe Corp................. 7,000 505,750
Rowan Companies, Inc.(b)........... 2,500 102,450
Schlumberger, Ltd.................. 6,010 510,489
-------------
2,393,859
-------------
FINANCIAL - DIVERSIFIED - 5.1%
American Express Co................ 6,107 373,626
Ameriprise Financial, Inc.......... 11,300 718,341
Citigroup, Inc..................... 72,260 3,706,215
Countrywide Financial Corp.(b)..... 5,800 210,830
Fannie Mae......................... 5,034 328,871
Federated Investors, Inc. - Class B 18,000 689,940
First Marblehead Corp. (The)(b).... 10,200 394,128
Freddie Mac........................ 3,064 185,985
Goldman Sachs Group, Inc. (The).... 4,523 980,360
JPMorgan Chase & Co................ 50,796 2,461,066
Lehman Brothers Holdings, Inc...... 9,056 674,853
Merrill Lynch & Co., Inc........... 12,687 1,060,380
Morgan Stanley..................... 14,594 1,224,145
Prudential Financial, Inc.......... 3,137 305,011
Washington Mutual, Inc.(b)......... 4,800 204,672
-------------
13,518,423
-------------
FOOD & DRUG RETAILING - 0.3%
Safeway, Inc....................... 18,310 623,089
Walgreen Co........................ 5,396 234,942
-------------
858,031
-------------
FOOD PRODUCTS - 1.1%
Archer-Daniels-Midland Co.......... 22,100 731,289
Corn Products International, Inc... 23,500 1,068,075
Tyson Foods, Inc. - Class A........ 48,400 1,115,136
-------------
2,914,500
-------------
FOOD RETAILERS - 0.3%
Kroger Co. (The)................... 25,400 714,502
-------------
HEALTH CARE EQUIPMENT & SUPPLIES - 1.5%
Applera Corp....................... 30,800 940,632
DENTSPLY International, Inc........ 4,975 190,344
Edwards Lifesciences Corp.*........ 4,400 217,096
Hillenbrand Industries, Inc........ 3,400 221,000
See notes to financial statements
13
MET INVESTORS SERIES TRUST
LEGG MASON PARTNERS MANAGED ASSETS PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES - CONTINUED
Johnson & Johnson...................... 32,225 $ 1,985,704
Medtronic, Inc......................... 6,045 313,494
-------------
3,868,270
-------------
HEALTH CARE PROVIDERS & SERVICES - 2.2%
Aetna, Inc............................. 16,704 825,177
Humana, Inc.*.......................... 14,726 896,961
LifePoint Hospitals, Inc.*(b).......... 4,900 189,532
McKesson Corp.......................... 23,450 1,398,558
UnitedHealth Group, Inc................ 27,308 1,396,531
WellPoint, Inc.*....................... 12,318 983,346
-------------
5,690,105
-------------
HOMEBUILDERS - 0.1%
NVR, Inc.*(b).......................... 232 157,702
-------------
HOTELS, RESTAURANTS & LEISURE - 0.3%
Carnival Corp.......................... 8,100 395,037
McDonald's Corp........................ 6,252 317,352
-------------
712,389
-------------
HOUSEHOLD DURABLES - 0.1%
Toro Co. (The)......................... 3,700 217,893
-------------
HOUSEHOLD PRODUCTS - 0.5%
Kimberly-Clark Corp.................... 64 4,281
Procter & Gamble Co. (The)............. 21,389 1,308,793
-------------
1,313,074
-------------
INDUSTRIAL - DIVERSIFIED - 1.6%
3M Co.................................. 3,800 329,802
General Electric Co.................... 69,215 2,649,550
Honeywell International, Inc........... 13,210 743,459
Tyco International, Ltd................ 13,063 441,399
-------------
4,164,210
-------------
INSURANCE - 3.5%
ACE, Ltd............................... 3,600 224,657
Allstate Corp. (The)................... 10,159 624,880
American International Group, Inc...... 34,635 2,425,489
Chubb Corp. (The)...................... 25,300 1,369,742
Hartford Financial Services Group, Inc.
(The)................................ 5,315 523,581
Loews Corp............................. 15,860 808,543
Manulife Financial Corp.(b)............ 20,900 779,988
PartnerRe, Ltd.(b)..................... 11,772 912,330
Principal Financial Group, Inc......... 13,700 798,573
RenaissanceRe Holdings, Ltd............ 3,400 210,766
Travelers Cos., Inc. (The)............. 11,900 636,650
-------------
9,315,199
-------------
INTERNET SOFTWARE & SERVICES - 0.4%
eBay, Inc.*............................ 7,172 230,795
Google, Inc. - Class A*................ 1,300 680,394
--------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
--------------------------------------------------------------
INTERNET SOFTWARE & SERVICES - CONTINUED
Yahoo!, Inc.*............................ 6,855 $ 185,976
-------------
1,097,165
-------------
IT CONSULTING & SERVICES - 0.2%
Electronic Data Systems Corp............. 22,850 633,630
-------------
MACHINERY - 0.5%
Caterpillar, Inc......................... 11,600 908,280
Parker Hannifin Corp..................... 3,300 323,103
-------------
1,231,383
-------------
MEDIA - 1.5%
Citadel Broadcasting Corp................ 1 7
Comcast Corp. - Class A*................. 34,899 981,360
EchoStar Communications Corp.*........... 9,400 407,678
News Corp. - Class A..................... 19,575 415,186
Time Warner, Inc......................... 55,233 1,162,102
Walt Disney Co. (The).................... 28,076 958,515
-------------
3,924,848
-------------
METALS & MINING - 0.7%
Alcan, Inc............................... 7,100 577,230
Commercial Metals Co..................... 17,300 584,221
Reliance Steel & Aluminum Co.(b)......... 11,300 635,738
-------------
1,797,189
-------------
OIL & GAS - 6.5%
Apache Corp.............................. 800 65,272
Chesapeake Energy Corp.(b)............... 18,600 643,560
Chevron Corp............................. 21,519 1,812,761
ConocoPhillips........................... 24,829 1,949,076
Devon Energy Corp........................ 8,203 642,213
Exxon Mobil Corp......................... 62,025 5,202,657
Halliburton Co........................... 21,054 726,363
Hess Corp................................ 9,120 537,715
Marathon Oil Corp........................ 16,020 960,559
Occidental Petroleum Corp................ 6,494 375,873
Petro-Canada............................. 20,000 1,063,200
Superior Energy Services, Inc.*(b)....... 15,200 606,784
Tidewater, Inc.(b)....................... 9,200 652,096
Transocean, Inc.*........................ 6,852 726,175
UGI Corp................................. 8,800 240,064
Valero Energy Corp....................... 11,220 828,709
-------------
17,033,077
-------------
PERSONAL PRODUCTS - 0.3%
Estee Lauder Companies, Inc. - Class A(b) 12,700 577,977
NBTY, Inc.*(b)........................... 5,400 233,280
-------------
811,257
-------------
PHARMACEUTICALS - 3.6%
Abbott Laboratories...................... 7,882 422,081
Biovail Corp............................. 14,500 368,590
Bristol-Myers Squibb Co.................. 10,091 318,472
See notes to financial statements
14
MET INVESTORS SERIES TRUST
LEGG MASON PARTNERS MANAGED ASSETS PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
---------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
---------------------------------------------------------------
PHARMACEUTICALS - CONTINUED
Cephalon, Inc.*(b)........................ 4,850 $ 389,891
Eli Lilly & Co............................ 5,779 322,931
Endo Pharmaceuticals Holdings, Inc.*...... 9,700 332,031
Forest Laboratories, Inc.*................ 14,900 680,185
King Pharmaceuticals, Inc.*............... 43,600 892,056
Medco Health Solutions, Inc.*............. 2,200 171,578
Merck & Co., Inc.......................... 20,516 1,021,697
Mylan Laboratories, Inc.(b)............... 39,700 722,143
Pfizer, Inc............................... 93,123 2,381,155
Schering-Plough Corp...................... 8,147 247,995
Watson Pharmaceuticals, Inc.*(b).......... 24,600 800,238
Wyeth..................................... 7,256 416,059
-------------
9,487,102
-------------
REAL ESTATE - 0.3%
CB Richard Ellis Group, Inc. - Class A*(b) 18,100 660,650
Digital Realty Trust, Inc.* (REIT)........ 8,600 204,250
Host Hotels & Resorts, Inc. (REIT)........ 400 9,248
-------------
874,148
-------------
RETAIL - MULTILINE - 2.2%
Costco Wholesale Corp..................... 2,522 147,587
J.C. Penney Co., Inc...................... 19,200 1,389,696
Kohl's Corp. *............................ 4,700 333,841
Target Corp............................... 14,204 903,374
Wal-Mart Stores, Inc...................... 61,515 2,959,487
-------------
5,733,985
-------------
RETAIL - SPECIALTY - 1.5%
American Eagle Outfitters, Inc.(b)........ 31,528 809,008
Home Depot, Inc. (The).................... 22,656 891,514
Lowe's Cos., Inc.......................... 8,225 252,425
Men's Wearhouse, Inc. (The)(b)............ 3,200 163,424
NIKE, Inc. - Class B...................... 16,200 944,298
Ross Stores, Inc.......................... 11,900 366,520
Staples, Inc.(b).......................... 20,900 495,957
-------------
3,923,146
-------------
ROAD & RAIL - 0.6%
Burlington Northern Santa Fe Corp......... 8,193 697,552
CSX Corp.................................. 7,488 337,559
Union Pacific Corp........................ 3,700 426,055
-------------
1,461,166
-------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS - 1.5%
ASML Holding N.V.*(b)..................... 30,960 849,852
Integrated Device Technology, Inc.*....... 31,200 476,424
Intel Corp................................ 63,417 1,506,788
Linear Technology Corp.................... 14,300 517,374
Novellus Systems, Inc.*(b)................ 10,100 286,537
Texas Instruments, Inc.................... 7,584 285,386
-------------
3,922,361
-------------
------------------------------------------------------------
SECURITY SHARES/PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------
SOFTWARE - 1.9%
BMC Software, Inc.*................ 27,900 $ 845,370
Compuware Corp.*(b)................ 93,000 1,102,980
Microsoft Corp..................... 74,367 2,191,595
Oracle Corp.*...................... 28,966 570,920
Sybase, Inc.*(b)................... 16,721 399,465
-------------
5,110,330
-------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 1.6%
Corning, Inc.*(b).................. 13,537 345,870
Qwest Communications International,
Inc.*(b)......................... 135,100 1,310,470
Sprint Nextel Corp................. 14,258 295,283
Telephone & Data Systems, Inc...... 6,150 384,806
Verizon Communications, Inc........ 44,076 1,814,609
-------------
4,151,038
-------------
TELECOMMUNICATION SERVICES - WIRELESS - 1.1%
AT&T, Inc.......................... 72,186 2,995,719
-------------
TOBACCO - 0.4%
Altria Group, Inc.................. 14,987 1,051,188
-------------
Total Common Stocks
(Cost $121,275,140) 145,343,711
-------------
CONVERTIBLE PREFERRED STOCKS - 0.5%
COMMERCIAL SERVICES & SUPPLIES - 0.1%
United Rentals Trust I
6.500%, due 08/01/28............. $ 3,958 195,426
-------------
ELECTRIC UTILITIES - 0.1%
NRG Energy, Inc. 4.000%(b)......... 90 192,150
-------------
ENTERTAINMENT & LEISURE - 0.1%
Six Flags, Inc. 7.250%, due
08/15/09(b)...................... 8,400 204,750
-------------
FINANCE - DIVERSIFIED - (0.1)%
E*Trade Financial Corp.
6.125%, due 11/18/08............. 3,500 97,563
-------------
HEALTH CARE PROVIDERS & SERVICES - 0.1%
Omnicare, Inc., Series B
4.000%, due 06/15/33............. 5,300 263,675
-------------
MEDIA - 0.1%
Interpublic Group (IPG) - Class B
5.250%, (144A)(f)................ 183 195,650
-------------
REAL ESTATE - 0.1%
Simon Property Group, Inc. (REIT)
6.000%........................... 2,600 197,574
-------------
Total Convertible Preferred Stocks
(Cost $1,250,193) 1,346,788
-------------
See notes to financial statements
15
MET INVESTORS SERIES TRUST
LEGG MASON PARTNERS MANAGED ASSETS PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 3.1%
State Street Bank & Trust Co., Repurchase
Agreement dated 06/29/07 at 2.550% to
be repurchased at $2,029,431 on
07/02/07 collateralized by $1,615,000
U.S Treasury Bond at 8.000% due
11/15/21 with a value of $2,071,238.... $2,029,000 $ 2,029,000
State Street Bank & Trust Co., Repurchase
Agreement dated 06/29/07 at 3.400% to
be repurchased at $5,740,626 on
07/02/07 collateralized by $5,885,000
FNMA at 5.148% due 08/08/07 with a
value of $5,856,152.................... 5,739,000 5,739,000
State Street Bank & Trust Co., Repurchase
Agreement dated 06/29/07 at 4.720% to
be repurchased at $234,092 on
07/02/07 collateralized by $240,000
U.S Treasury Bond at 5.250% due
11/15/28 with a value of $241,500...... 234,000 234,000
-------------
Total Short-Term Investments
(Cost $8,002,000) 8,002,000
-------------
TOTAL INVESTMENTS - 104.7%
(Cost $251,405,719) 275,201,581
------------
Other Assets and Liabilities (net) - (4.7)% (12,370,024)
------------
TOTAL NET ASSETS - 100.0% $262,831,557
============
PORTFOLIO FOOTNOTES:
* Non-income producing security
(a) Variable or floating rate security. The stated rate represents the rate at
June 30, 2007.
(b) A portion or all of the security was held on loan. As of June 30, 2007, the
market value of the securities loaned was $57,122,900 and the collateral
received consisted of cash in the amount of $58,335,013.
(c) Settlement is on a delayed delivery or when-issued basis with final
maturity to be announced (TBA) in the future.
(d) Zero coupon bond - Interest rate represents current yield to maturity.
(e) Security is a "step-down" bond where the coupon decreases or steps down at
a predetermined date. Rates shown are current coupon and next coupon rate
when a security steps down.
(f) Securities that may be resold to "qualified institutional buyers" under
Rule 144A or securities offered pursuant to Section 4(2) of the Securities
Act of 1933, as amended. These securities have been determined to be liquid
under the guidelines established by the Board of Trustees. These securities
represent in the aggregate $6,703,809 of net assets
AIG - American International Guaranty
FNMA - Federal National Mortgage Association
REIT - Real Estate Investment Trust
See notes to financial statements
16
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
LEGG MASON PARTNERS MANAGED ASSETS PORTFOLIO
ASSETS
Investments, at value (Note 2)* $267,199,581
Repurchase Agreement 8,002,000
Cash 1,383
Collateral for securities on loan 58,335,013
Receivable for investments sold 998,951
Receivable for Trust shares sold 557
Dividends receivable 117,691
Interest receivable 1,261,060
------------
Total assets 335,916,236
------------
LIABILITIES
Payables for:
Investments purchased 14,229,931
Trust shares redeemed 209,299
Unrealized depreciation on forward currency contracts (Note 7) 29,271
Collateral for securities on loan 58,335,013
Investment advisory fee payable (Note 3) 109,010
Administration fee payable 3,383
Custodian and accounting fees payable 75,716
Accrued expenses 93,056
------------
Total liabilities 73,084,679
------------
NET ASSETS $262,831,557
============
NET ASSETS REPRESENTED BY:
Paid in surplus $224,310,005
Accumulated net realized gain 10,955,771
Unrealized appreciation on investments and foreign currency 23,766,779
Undistributed net investment income 3,799,002
------------
Total $262,831,557
============
NET ASSETS
Class A $262,831,557
============
CAPITAL SHARES OUTSTANDING
Class A 15,499,025
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 16.96
============
- -------------------------------------------------------------------------------------
* Investments at cost, excluding Repurchase Agreements $243,403,719
See notes to financial statements
17
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
LEGG MASON PARTNERS MANAGED ASSETS PORTFOLIO
INVESTMENT INCOME:
Dividends (1) $ 1,259,568
Interest (2) 3,019,457
-----------
Total investment income 4,279,025
-----------
EXPENSES:
Investment advisory fee (Note 3) 659,670
Administration fees 11,027
Custody and accounting fees 45,394
Transfer agent fees 2,466
Audit 12,064
Legal 8,392
Trustee fees and expenses 2,607
Shareholder reporting 19,852
Insurance 5,940
Other 1,164
-----------
Total expenses 768,576
Less broker commission recapture (11,511)
-----------
Net expenses 757,065
-----------
Net investment income 3,521,960
-----------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain (loss) on:
Investments 12,313,615
Foreign currency (46,788)
-----------
Net realized gain on investments and foreign currency 12,266,827
-----------
Net change in unrealized depreciation on:
Investments (2,563,135)
Foreign currency (9,060)
-----------
Net change in unrealized depreciation on investments and foreign currency (2,572,195)
-----------
Net realized and change in unrealized gain on investments and foreign currency 9,694,632
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $13,216,592
===========
- ---------------------------------------------------------------------------------------------------
(1)Dividend income is net withholding taxes of: $ 6,379
(2)Interest income includes securities lending income of: 33,252
See notes to financial statements
18
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
LEGG MASON PARTNERS MANAGED ASSETS PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 3,521,960 $ 6,481,976
Net realized gain on investments and foreign currency 12,266,827 21,787,404
Net change in unrealized depreciation on investments and foreign
currency (2,572,195) (746,478)
------------ ------------
Net increase in net assets resulting from operations 13,216,592 27,522,902
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (6,361,425) (6,069,158)
From net realized gains
Class A (22,361,843) (8,233,117)
------------ ------------
Net decrease in net assets resulting from distributions (28,723,268) (14,302,275)
------------ ------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class A 1,600,186 2,095,842
Net asset value of shares issued through dividend reinvestment
Class A 28,723,268 14,302,275
Cost of shares repurchased
Class A (18,899,251) (40,191,799)
------------ ------------
Net increase (decrease) in net assets from capital share
transactions 11,424,203 (23,793,682)
------------ ------------
TOTAL DECREASE IN NET ASSETS (4,082,473) (10,573,055)
Net assets at beginning of period 266,914,030 277,487,085
------------ ------------
Net assets at end of period $262,831,557 $266,914,030
============ ============
Net assets at end of period includes undistributed net investment
income $ 3,799,002 $ 6,638,467
============ ============
See notes to financial statements
19
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
LEGG MASON PARTNERS MANAGED ASSETS PORTFOLIO --------------
FOR THE PERIOD
ENDED
JUNE 30, 2007
(UNAUDITED)
--------------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $ 18.07
-------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................. 0.24(a)
Net Realized/Unrealized Gain (Loss) on Investments.................... 0.67
-------
Total from Investment Operations...................................... 0.91
-------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. (0.45)
Distributions from Net Realized Capital Gains......................... (1.57)
-------
Total Distributions................................................... (2.02)
-------
NET ASSET VALUE, END OF PERIOD........................................ $ 16.96
=======
TOTAL RETURN 5.10%
Ratio of Expenses to Average Net Assets............................... 0.58%*
Ratio of Expenses to Average Net Assets Before Rebates................ 0.59%*
Ratio of Net Investment Income to Average Net Assets.................. 2.71%*
Portfolio Turnover Rate............................................... 75.2%
Net Assets, End of Period (in millions)............................... $262.8
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS A
LEGG MASON PARTNERS MANAGED ASSETS PORTFOLIO ----------------------------------------------
FOR THE YEARS ENDED DECEMBER 31,
---------------------------------------------
2006 2005 2004++ 2003++ 2002++
------- ------ ------ ------ ------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $ 17.20 $16.67 $15.72 $13.20 $15.55
------- ------ ------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................. 0.42(a) 0.36(a) 0.37(a) 0.39 0.45
Net Realized/Unrealized Gain (Loss) on Investments.................... 1.37 0.27 1.11(a) 2.51 (1.79)
------- ------ ------ ------ ------
Total from Investment Operations...................................... 1.79 0.63 1.48 2.90 (1.34)
------- ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. (0.39) (0.00)+ (0.39) (0.38) (0.92)
Distributions from Net Realized Capital Gains......................... (0.53) (0.10) (0.14) -- (0.09)
------- ------ ------ ------ ------
Total Distributions................................................... (0.92) (0.10) (0.53) (0.38) (1.01)
------- ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD........................................ $ 18.07 $17.20 $16.67 $15.72 $13.20
======= ====== ====== ====== ======
TOTAL RETURN 10.81% 3.84% 9.44% 21.98% (8.60)%
Ratio of Expenses to Average Net Assets............................... 0.63% 0.61% 0.60% 0.59% 0.61 %
Ratio of Expenses to Average Net Assets Before Rebates................ 0.65% 0.61% 0.61% 0.59% 0.61 %
Ratio of Net Investment Income to Average Net Assets.................. 2.40% 2.15% 2.31% 2.64% 2.80 %
Portfolio Turnover Rate............................................... 171.9% 56.0% 64.0% 84.0% 39.0 %
Net Assets, End of Period (in millions)............................... $266.9 $277.0 $297.0 $290.0 $251.0
+ Rounds to less than $0.005 per share.
(a) Per share amounts based on average shares outstanding during the period.
++ Audited by other Independent Registered Public Accounting Firm.
See notes to financial statements
20
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is Legg Mason Partners Managed Assets
Portfolio, which is diversified. Shares in the Trust are not offered directly
to the general public and are currently available only to separate accounts
established by certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A Shares are offered
by the Portfolio. Class B and E Shares are not currently offered by the
Portfolio included in this report. Shares of each Class of the Portfolio
represent an equal pro rata interest in the Portfolio and generally give the
shareholder the same voting, dividend, liquidation, and other rights.
Investment income, realized and unrealized capital gains and losses, the common
expenses of the Portfolio and certain Portfolio-level expense reductions, if
any, are allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the Portfolio. Each class of
shares differs in its respective distribution expenses and certain other
class-specific expense reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
21
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date. The value of the
security so purchased is subject to market fluctuations during this period. The
Portfolio segregates assets having an aggregate value at least equal to the
amount of the when issued or delayed delivery purchase commitments until
payment is made.
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. SECURITIES LENDING - The Portfolio may lend its securities to certain
qualified brokers who borrow securities in order to complete certain
transactions. By lending its investment securities, the Portfolio attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term of the loan would
accrue to the account of the Portfolio. Risks of delay in recovery of the
securities or even loss of rights in the collateral may occur should the
borrower of the securities fail financially. Risks may also arise to the extent
that the value of the collateral decreases below the value of the securities
loaned.
Upon entering into a securities lending transaction, the Portfolio receives
cash or other securities as collateral in an amount equal to or exceeding 102%
of the current market value of the loaned securities. Any cash received as
collateral is generally invested by State Street Bank and Trust Company ("State
Street"), acting in its capacity as securities lending agent (the "Agent"), in
the State Street Navigator Securities Lending Prime Portfolio which is a money
market fund registered under the 1940 Act. A portion of the dividends received
on the collateral is rebated to the borrower of the securities and the
remainder is split between the Agent and the Portfolio. On loans collateralized
by cash, the cash collateral is invested in a money market fund or short term
securities. A portion of the income generated upon investment of the collateral
is remitted to the Borrowers and the remainder is allocated between the fund
and the lending agent. On loans collateralized by U.S. Treasuries, a fee is
received from the Borrower and is allocated between the fund and the lending
agent.
G. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
H. FORWARD COMMITMENTS, WHEN-ISSUED AND DELAYED DELIVERY SECURITIES - The
Portfolio may purchase securities on a when-issued or delayed delivery basis
and may purchase or sell securities on a forward commitment basis. Settlement
of such transactions normally occurs within a month or more after the purchase
or sale commitment is made. The Portfolio may purchase securities under such
conditions only with the intention of actually acquiring them, but may enter
into a separate agreement to sell the securities before the settlement date.
Since the value of securities purchased may fluctuate prior to settlement, the
Portfolio may be required to pay more at settlement than the security is worth.
In addition, the purchaser is not entitled to any of the interest earned prior
to settlement. Upon making a commitment to purchase a security on a
when-issued, delayed delivery or forward commitment basis, the Portfolio will
hold liquid assets in a segregated account at the Portfolio's custodian bank
worth at least the equivalent of the amount due. The liquid assets will be
monitored on a daily basis and adjusted as necessary to maintain the necessary
value.
I. DIRECTED BROKERAGE AGREEMENT - The Trust has entered into a directed
brokerage arrangement with State Street Global Markets ("SSGM"). Under this
arrangement, the Portfolio directs certain trades to SSGM in return for a
recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to
each Portfolio are shown separately as an expense reduction on the Statement of
Operations of the Portfolio.
22
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
J. FOREIGN CURRENCY TRANSLATION - The books and records of the Portfolio are
maintained in U.S. dollars. Foreign currencies, investments and other assets
and liabilities are translated into U.S. dollars on a daily basis using
prevailing exchange rates. Purchases and sales of securities are translated at
the rates of exchange prevailing when such securities were acquired or sold.
Income is translated at rates of exchange prevailing when interest is accrued
or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in
forward foreign currency contracts, sales of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities
transactions, and the difference between the amounts of dividends, interest,
and foreign withholding taxes recorded on the Portfolio's books, and the U.S.
dollar equivalent of the amounts actually received or paid. Net unrealized
foreign exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at fiscal year end, from
changes in the exchange rates of foreign currency held, and from changes in the
contract value of forward foreign currency contracts.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into a separate advisory
agreement with each of Batterymarch Financial Management, Inc., Western Asset
Management Company, ClearBridge Advisors, LLC and Legg Mason Global Asset
Allocation, LLC, (each, an "Adviser") for investment advisory services in
connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Advisers and has full discretion with respect to the retention or renewal
of each advisory agreement. The Manager pays the Advisers a fee based on the
Portfolio's average daily net assets.
Under the terms of the Portfolio's investment advisory agreements, the
Portfolio pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- --------------------
Legg Mason Partners Managed Assets Portfolio $659,670 0.50% All
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Maximum Expense Ratio
under current Expense
Limitation Agreement
---------------------
Portfolio Class A Class B Class E
--------- ------- ------- -------
Legg Mason Partners Managed Assets Portfolio 1.25% 1.50%* 1.40%*
* Classes not offered during the period.
23
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratio as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
The amount waived and expenses reimbursed for the period ended June 30, 2007 is
shown as investment advisory fee waiver in the Statement of Operations of the
Portfolio.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued
Through Net Decrease
Beginning Shares Dividend Shares in Shares Ending
Shares Sold Reinvestment Repurchased Outstanding Shares
---------- ------- ------------- ----------- ------------ ----------
Legg Mason Partners Managed Assets Portfolio
Class A
06/30/2007 14,770,336 89,944 1,704,645 (1,065,900) 728,689 15,499,025
12/31/2006 16,134,334 120,528 847,793 (2,332,319) (1,363,998) 14,770,336
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
Legg Mason Partners Managed Assets Portfolio $126,581,495 $76,075,433 $127,241,875 $82,476,574
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
- --------- ------------ ------------ -------------- --------------
Legg Mason Partners Managed Assets Portfolio $251,405,719 $27,562,058 $(3,766,196) $23,795,862
24
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
6. SECURITY LENDING
As of June 30, 2007, the Portfolio had loaned securities which were
collateralized by short-term investments. The value of securities on loan and
the value of the related collateral were as follows:
Value of Value of
Securities Collateral
----------- -----------
Legg Mason Partners Managed Assets Portfolio $57,122,900 $58,335,013
7. FORWARD FOREIGN CURRENCY CONTRACTS
Forward Foreign Currency Contracts to Buy:
Value at In Exchange Net Unrealized
Settlement Date Contracts to Deliver June 30, 2007 for U.S. $ Depreciation
--------------- -------------------- ------------- ----------- --------------
08/08/2007 113,142,000 JPY $921,502 $950,773 $(29,271)
--------
$(29,271)
========
JPY - Japanese Yen
8. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
------------------ --------------------- ----------------------
2006 2005 2006 2005 2006 2005
---------- ------- ---------- ---------- ----------- ----------
Legg Mason Partners Managed Assets Portfolio $6,683,640 $45,070 $7,618,635 $1,756,536 $14,302,275 $1,801,606
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal Income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
------------- ------------- ------------ ------------------ -----------
Legg Mason Partners Managed Assets Portfolio $8,584,413 $20,177,530 $25,266,285 $-- $54,028,228
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
9. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
10. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
25
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
10. RECENT ACCOUNTING PRONOUNCEMENTS - CONTINUED
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
26
MET INVESTORS SERIES TRUST
Legg Mason
Value Equity Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
LEGG MASON VALUE EQUITY PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY LEGG MASON CAPITAL MANAGEMENT, INC.
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
ECONOMIC OVERVIEW & OUTLOOK
Equity markets powered higher during the first six months of 2007, shrugging
off continued concerns about subprime lending in particular and the U.S.
housing market in general, as well as a correction in late February and early
March. The S&P 500(R) Index returned 6.96% during the two quarters, while the
Russell 2000(R) Index/1/ of small caps returned 6.45%, a reversal of the last
few years of small cap dominance. From a style perspective, the Russell 1000(R)
Growth Index/2/ returned 8.13% versus 6.23% for the Russell 1000(R) Value
Index/3/, also a turnaround from recent patterns.
Economic growth and corporate profits slowed but remain solidly in positive
territory. Although the Fed continues to profess a hawkish bias, inflation
worries have thankfully begun to recede. The rate cuts that many were expecting
at the beginning of the year, however, are now looking less and less likely. We
believe U.S. economic growth, softened by a downturn in the housing market,
will continue to be slow but positive for the rest of 2007. Given strong
employment levels and healthy corporate profits, the likelihood of a recession
remains remote, in our view.
The new year continued the "game change" that has been evident since early
August 2006, as traditional growth stocks outperformed value, and large caps
posted better results than smaller issues. Our U.S. equity market outlook
remains unchanged since the beginning of the year. We continue to expect equity
returns in the mid-teens based on a favorable economic backdrop that should
support solid earnings growth and dividends, benign monetary policy (recent
rises in bond yield notwithstanding), and attractive valuations that leave room
for a point or so of multiple expansion.
PORTFOLIO OVERVIEW
For the six months ended June 30, 2007, the Portfolio posted a total return of
5.06% for Class B, underperforming the 6.96% return of the
- --------
/1/ The Russell 2000(R) Index is an unmanaged index which measures the
performance of the 2,000 smallest companies in the Russell 3000(R) Index, which
represents approximately 8% of the total market capitalization of the Russell
3000(R) Index. As of the latest reconstitution, the average market
capitalization was approximately $898.3 million; the median market
capitalization was approximately $705.4 million. The largest company in the
index had a market capitalization of $2.5 billion. The Index does not include
fees or expenses and is not available for direct investment.
/2/ The Russell 1000(R) Growth Index is an unmanaged index that measures the
performance of those Russell 1000 companies with higher price-to-book ratios
and higher forecasted growth values. The Index does not include fees or
expenses and is not available for direct investment.
/3/ The Russell 1000(R) Value Index is an unmanaged index which measures the
performance of the Russell 1000(R) Index companies with lower price-to-book
ratios and lower forecasted growth values. The Index does not include fees or
expenses and is not available for direct investment.
benchmark S&P 500(R) Index. Large stakes in weak-performing securities in the
information technology, consumer discretionary, health care and
telecommunication sectors were among the largest detractors from returns. Our
absence from the strong-performing energy sector also weighed meaningfully on
relative performance.
From an individual security perspective, Amazon.com took off after reporting an
unexpectedly impressive first quarter that saw sequential margin expansion,
increased full-year profit guidance, and a $500 million share repurchase. Other
Internet holdings Expedia and Google also posted solid gains. Sprint Nextel,
which performed poorly in 2006, made up some lost ground in the first half of
2007, as pressure from activist investors seems to have helped light a fire
under the struggling company. Managed care organizations Aetna and Health Net
also helped portfolio performance, as medical cost trends appear to be tipping
back in their favor. On the downside, concerns about the sickly housing market,
especially during the market's volatile first quarter, caused housing-related
companies to perform poorly. Although the six stocks--Countrywide Financial,
Centex, Pulte Homes, Beazer Homes, Ryland, and Home Depot--together represent
only about 10% of the portfolio, their combined performance accounted for the
lion's share of drag on overall returns. Most of the downturn was concentrated
in February and March, and the group was able to make up some lost ground in
the second quarter. Seagate Technology suffered following an April earnings
release showing a weaker-than-expected demand environment and
higher-than-expected price competition among desktop class drives. Meanwhile,
expected synergies and lower intensity of competition from the Maxtor deal have
yet to fully materialize.
We are optimistic about the portfolio for the rest of 2007 and beyond. We
continue to believe that our disciplined, fundamental, bottom-up,
valuation-focused process will, over the long-term, produce competitive
results, and we thank investors for their continued trust and confidence.
MARY CHRIS GAY
Portfolio Manager
LEGG MASON CAPITAL MANAGEMENT, INC.
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
LEGG MASON VALUE EQUITY PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY LEGG MASON CAPITAL MANAGEMENT, INC.
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
---------------------------------------------------
Amazon.com, Inc. 10.52%
---------------------------------------------------
Tyco International, Ltd. 7.99%
---------------------------------------------------
AES Corp. 7.41%
---------------------------------------------------
Sprint Nextel Corp. 7.37%
---------------------------------------------------
Google, Inc. - Class A 7.22%
---------------------------------------------------
Qwest Communications International, Inc. 6.38%
---------------------------------------------------
UnitedHealth Group, Inc. 6.34%
---------------------------------------------------
JPMorgan Chase & Co. 6.16%
---------------------------------------------------
Sears Holdings Corp. 5.68%
---------------------------------------------------
Aetna, Inc. 5.52%
---------------------------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
[CHART]
Communications 40.7%
Cyclical 10.0%
Non-Cyclical 11.8%
Financials 14.2%
Industrials 10.5%
Technology 7.6%
Utilities 5.2%
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
LEGG MASON VALUE EQUITY PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY LEGG MASON CAPITAL MANAGEMENT, INC.
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
LEGG MASON VALUE EQUITY PORTFOLIO MANAGED BY
LEGG MASON CAPITAL MANAGEMENT, INC. VS. S&P 500(R) INDEX/1/
Growth Based on $10,000+
[CHART]
Legg Mason Value Equity Portfolio S&P 500(R) Index
--------------------------------- ----------------
11/1/2005 $10,000 $10,000
12/31/2005 10,650 10,382
12/31/2006 11,351 12,023
6/30/2007 11,925 12,860
-------------------------------------------------------
Average Annual Return/2/
(for the period ended 6/30/07)
-------------------------------------------------------
Since
1 Year Inception/3/
-------------------------------------------------------
Legg Mason Value Equity
Portfolio--Class A 17.95% 11.44%
- -- Class B 17.49% 11.17%
Class E 17.74% 11.27%
-------------------------------------------------------
- - - S&P 500(R) Index/1/ 20.59% 16.28%
-------------------------------------------------------
+The chart reflects the performance of Class A shares of the Portfolio. The
performance of Class A shares will differ from that of the Class B shares
because of the difference in expenses paid by policyholders investing in the
different share class.
/1/The S&P 500(R) Index is an unmanaged index consisting of 500 stocks chosen
for market size, liquidity, and industry group representation. It is a
market-value weighted index (stock price times number of shares outstanding),
with each stock's weight in the Index proportionate to its market value. The
Index does not include fees or expenses and is not available for direct
investment.
/2/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/3/Inception of Class A and Class B shares is 11/1/05. Inception of Class E
shares is 5/1/06. Index returns are based on an inception date of 10/31/05.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
3
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
LEGG MASON VALUE EQUITY PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,052.30 $3.31
Hypothetical (5% return before expenses) 1,000.00 1,021.57 3.26
- ------------------------------------------ ------------- ------------- --------------
Class B
Actual $1,000.00 $1,050.60 $4.58
Hypothetical (5% return before expenses) 1,000.00 1,020.33 4.51
- ------------------------------------------ ------------- ------------- --------------
Class E
Actual $1,000.00 $1,051.40 $4.07
Hypothetical (5% return before expenses) 1,000.00 1,020.83 4.01
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.65% ,
0.90% , and 0.80% for the Class A, Class B, and Class E, respectively,
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period).
4
MET INVESTORS SERIES TRUST
LEGG MASON VALUE EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-----------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
-----------------------------------------------------------------
COMMON STOCKS - 99.0%
AUTOMOBILES - 0.6%
General Motors Corp.(a)................. 224,300 $ 8,478,540
--------------
COMMUNICATIONS EQUIPMENT & SERVICES - 2.2%
Cisco Systems, Inc.*.................... 854,300 23,792,255
Motorola, Inc........................... 547,700 9,694,290
--------------
33,486,545
--------------
COMPUTERS & PERIPHERALS - 4.7%
Hewlett-Packard Co...................... 624,000 27,842,880
International Business Machines Corp.(a) 215,600 22,691,900
Seagate Technology...................... 903,100 19,660,487
--------------
70,195,267
--------------
ELECTRIC UTILITIES - 5.2%
AES Corp.*.............................. 3,547,200 77,612,736
--------------
FINANCIAL - DIVERSIFIED - 11.6%
Capital One Financial Corp.............. 322,225 25,275,329
Citigroup, Inc.......................... 760,400 39,000,916
Countrywide Financial Corp.............. 1,228,300 44,648,705
JPMorgan Chase & Co..................... 1,332,200 64,545,090
--------------
173,470,040
--------------
HEALTH CARE PROVIDERS & SERVICES - 10.1%
Aetna, Inc.............................. 1,170,500 57,822,700
Health Net, Inc.*....................... 515,400 27,213,120
UnitedHealth Group, Inc................. 1,299,600 66,461,544
--------------
151,497,364
--------------
HOUSEHOLD DURABLES - 3.1%
Beazer Homes USA, Inc.(a)............... 155,450 3,834,951
Centex Corp............................. 445,750 17,874,575
Pulte Homes, Inc........................ 797,600 17,906,120
Ryland Group, Inc. (The)(a)............. 162,500 6,072,625
--------------
45,688,271
--------------
INDUSTRIAL - DIVERSIFIED - 7.5%
General Electric Co..................... 758,500 29,035,380
Tyco International, Ltd................. 2,478,600 83,751,894
--------------
112,787,274
--------------
INSURANCE - 2.4%
American International Group, Inc....... 513,250 35,942,898
--------------
INTERNET & CATALOG RETAIL - 2.7%
Expedia, Inc.*.......................... 1,365,800 40,004,282
--------------
INTERNET SOFTWARE & SERVICES - 21.4%
Amazon.com, Inc.*(a).................... 1,610,700 110,187,987
eBay, Inc.*............................. 1,303,000 41,930,540
Google, Inc. - Class A*................. 144,600 75,680,748
IAC/InterActiveCorp.*(a)................ 1,203,500 41,653,135
Yahoo!, Inc.*........................... 1,844,600 50,043,998
--------------
319,496,408
--------------
------------------------------------------------------------------------
SECURITY SHARES/PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS - 2.9%
Eastman Kodak Co.(a)...................... 1,552,800 $ 43,214,424
--------------
MEDIA - 4.3%
DIRECTV Group, Inc. (The)*................ 1,234,400 28,526,984
Time Warner, Inc.......................... 1,737,400 36,554,896
--------------
65,081,880
--------------
PHARMACEUTICALS - 1.6%
Pfizer, Inc............................... 933,100 23,859,367
--------------
RETAIL - MULTILINE - 4.0%
Sears Holdings Corp.*..................... 351,000 59,494,500
--------------
RETAIL - SPECIALTY - 2.3%
Home Depot, Inc. (The).................... 869,900 34,230,565
--------------
SOFTWARE - 2.8%
CA, Inc................................... 752,150 19,428,035
Electronic Arts, Inc.*.................... 475,700 22,510,124
--------------
41,938,159
--------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 9.6%
Qwest Communications International,
Inc.*(a)................................ 6,886,800 66,801,960
Sprint Nextel Corp........................ 3,726,700 77,179,957
--------------
143,981,917
--------------
Total Common Stocks
(Cost $1,338,264,404) 1,480,460,437
--------------
SHORT-TERM INVESTMENT - 1.4%
State Street Bank & Trust Co.,
Repurchase Agreement dated 06/29/07 at
3.400% to be repurchased at $21,717,151
on 07/02/07 collateralized by 22,435,000
FHLB at 4.375% due 9/17/10 with a value
of $22,148,729.
(Cost - $21,711,000).................... $21,711,000 21,711,000
--------------
TOTAL INVESTMENTS - 100.4%
(Cost $1,359,975,404) 1,502,171,437
--------------
Other Assets and Liabilities (net) - (0.4)% (6,517,261)
--------------
TOTAL NET ASSETS - 100.0% $1,495,654,176
==============
PORTFOLIO FOOTNOTES
* Non-income producing security.
(a) A portion or all of the security was held on loan. As of June 30, 2007, the
market value of the securities loaned was $155,582,418 and the collateral
received consisted of cash in the amount of $95,299,185 and securities in
the amount of $64,463,465.
FHLB - Federal Home Loan Bank
See notes to financial statements
5
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
LEGG MASON VALUE EQUITY PORTFOLIO
ASSETS
Investments, at value (Note 2)* $1,480,460,437
Repurchase Agreement 21,711,000
Cash 7
Collateral for securities on loan 159,762,650
Receivable for Trust shares sold 2,226,662
Dividends receivable 690,723
Interest receivable 2,050
--------------
Total assets 1,664,853,529
--------------
LIABILITIES
Payables for:
Investments purchased 8,254,789
Trust shares redeemed 170,105
Distribution and services fees - Class B 24,457
Distribution and services fees - Class E 3,008
Collateral for securities on loan 159,762,650
Investment advisory fee payable (Note 3) 776,346
Administration fee payable 15,606
Custodian and accounting fees payable 103,334
Accrued expenses 89,058
--------------
Total liabilities 169,199,353
--------------
NET ASSETS $1,495,654,176
==============
NET ASSETS REPRESENTED BY:
Paid in surplus $1,345,575,116
Accumulated net realized gain 6,612,354
Unrealized appreciation on investments and foreign currency 142,196,033
Undistributed net investment income 1,270,673
--------------
Total $1,495,654,176
==============
NET ASSETS
Class A $1,353,568,582
==============
Class B 118,163,757
==============
Class E 23,921,837
==============
CAPITAL SHARES OUTSTANDING
Class A 115,538,652
==============
Class B 10,107,768
==============
Class E 2,043,576
==============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 11.72
==============
Class B 11.69
==============
Class E 11.71
==============
- -------------------------------------------------------------------------------
*Investments at cost, excluding Repurchase Agreements $1,338,264,404
See notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
LEGG MASON VALUE EQUITY PORTFOLIO
INVESTMENT INCOME:
Dividends $ 4,923,994
Interest (1) 441,209
-----------
Total investment income 5,365,203
-----------
EXPENSES:
Investment advisory fee (Note 3) 3,936,191
Administration fees 44,702
Custody and accounting fees 26,307
Distribution fee - Class B 141,088
Distribution fee - Class E 17,767
Transfer agent fees 15,655
Audit 10,910
Legal 7,367
Trustee fees and expenses 9,005
Shareholder reporting 15,837
Insurance 24,593
Other 2,534
-----------
Total expenses 4,251,956
Less broker commission recapture (68,011)
-----------
Net expenses 4,183,945
-----------
Net investment income 1,181,258
-----------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS,
FUTURES CONTRACTS AND FOREIGN CURRENCY:
Net realized gain (loss) on:
Investments 7,758,638
Futures contracts 259,072
Foreign currency (11,526)
-----------
Net realized gain on investments, futures contracts and foreign
currency 8,006,184
-----------
Net change in unrealized appreciation on:
Investments 50,442,554
Foreign currency 60
-----------
Net change in unrealized appreciation on investments and foreign
currency 50,442,614
-----------
Net realized and change in unrealized gain on investment, futures
contracts and foreign currency 58,448,798
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $59,630,056
===========
- --------------------------------------------------------------------------------------
(1)Interest income includes securities lending income of: $ 73,021
See notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
LEGG MASON VALUE EQUITY PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 1,181,258 $ 1,361,496
Net realized gain on investments, futures
contracts and foreign currency 8,006,184 20,906,878
Net change in unrealized appreciation on
investments and foreign currency 50,442,614 73,569,493
-------------- --------------
Net increase in net assets resulting from
operations 59,630,056 95,837,867
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (35,618) (1,365,072)
Class B (3,741) --
Class E (777) (10,937)
From net realized gains
Class A (1,203,539) (18,100,772)
Class B (126,501) (2,124,828)
Class E (26,276) (448,691)
-------------- --------------
Net decrease in net assets resulting from
distributions (1,396,452) (22,050,300)
-------------- --------------
CAPITAL SHARE TRANSACTIONS (NOTES 4 AND 8):
Proceeds from shares sold
Class A 355,303,412 889,008,817
Class B 17,585,185 63,574,342
Class E 805,239 1,343,563
Net asset value of shares issued through
acquisition
Class A -- 55,964,976
Class B -- 51,850,624
Class E -- 23,484,428
Net asset value of shares issued through
dividend reinvestment
Class A 1,239,157 19,465,844
Class B 130,242 2,124,828
Class E 27,053 459,628
Cost of shares repurchased
Class A (27,296,799) (60,874,300)
Class B (18,465,634) (15,556,894)
Class E (2,070,655) (2,528,473)
-------------- --------------
Net increase in net assets from capital share
transactions 327,257,200 1,028,317,383
-------------- --------------
TOTAL INCREASE IN NET ASSETS 385,490,804 1,102,104,950
Net assets at beginning of period 1,110,163,372 8,058,422
-------------- --------------
Net assets at end of period $1,495,654,176 $1,110,163,372
============== ==============
Net assets at end of period includes
undistributed net investment income $ 1,270,673 $ 129,551
============== ==============
See notes to financial statements
8
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS A
LEGG MASON VALUE EQUITY PORTFOLIO ----------------------------------
FOR THE PERIOD FOR THE YEARS ENDED
ENDED DECEMBER 31,
JUNE 30, 2007 -----------------
(UNAUDITED) 2006 2005(B)
-------------- ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD............................................ $ 11.15 $10.65 $10.00
-------- ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income........................................................... 0.01 (a) 0.03 (a) 0.00+(a)
Net Realized/Unrealized Gain on Investments..................................... 0.57 0.70 0.65
-------- ------ ------
Total from Investment Operations................................................ 0.58 0.73 0.65
-------- ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income............................................ (0.00)+ (0.02) --
Distributions from Net Realized Capital Gains................................... (0.01) (0.21) --
-------- ------ ------
Total Distributions............................................................. (0.01) (0.23) --
-------- ------ ------
NET ASSET VALUE, END OF PERIOD.................................................. $ 11.72 $11.15 $10.65
======== ====== ======
TOTAL RETURN 5.23% 6.83% 6.50%
Ratio of Expenses to Average Net Assets......................................... 0.65%* 0.72% 0.80%*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates........ 0.66%* 0.74%(c) 8.27%*
Ratio of Net Investment Income to Average Net Assets............................ 0.22%* 0.26% 0.08%*
Portfolio Turnover Rate......................................................... 6.2% 38.7% 9.1%
Net Assets, End of Period (in millions)......................................... $1,353.6 $972.7 $ 3.2
CLASS B
----------------------------------
FOR THE PERIOD FOR THE YEARS ENDED
ENDED DECEMBER 31,
JUNE 30, 2007 -----------------
(UNAUDITED) 2006 2005(B)
-------------- ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD............................................ $ 11.14 $10.65 $10.00
-------- ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Loss............................................................. (0.00)+(a) (0.01)(a) (0.01)(a)
Net Realized/Unrealized Gain on Investments..................................... 0.56 0.71 0.66
-------- ------ ------
Total from Investment Operations................................................ 0.56 0.70 0.65
-------- ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income............................................ (0.00)+ -- --
Distributions from Net Realized Capital Gains................................... (0.01) (0.21) --
-------- ------ ------
Total Distributions............................................................. (0.01) (0.21) --
-------- ------ ------
NET ASSET VALUE, END OF PERIOD.................................................. $ 11.69 $11.14 $10.65
======== ====== ======
TOTAL RETURN 5.06 % 6.58 % 6.50 %
Ratio of Expenses to Average Net Assets......................................... 0.90 %* 1.05 % 1.05 %*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates........ 0.91 %* 1.06 %(c) 4.54 %*
Ratio of Net Investment Loss to Average Net Assets.............................. (0.04)%* (0.09)% (0.36)%*
Portfolio Turnover Rate......................................................... 6.2 % 38.7 % 9.1 %
Net Assets, End of Period (in millions)......................................... $ 118.2 $113.5 $ 4.9
* Annualized
+ Rounds to less than $0.005 per share.
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--11/01/2005.
(c) Excludes effect of deferred expense reimbursement--see Note 3 of financial
statements.
See notes to financial statements
9
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE PERIOD ENDED:
CLASS E
LEGG MASON VALUE EQUITY PORTFOLIO -----------------------
FOR THE FOR THE
PERIOD ENDED PERIOD ENDED
JUNE 30, 2007 DECEMBER 31,
(UNAUDITED) 2006(B)
------------- ------------
NET ASSET VALUE, BEGINNING OF PERIOD...................................................... $11.15 $10.55
------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income..................................................................... 0.00+(a) 0.01 (a)
Net Realized/Unrealized Gain on Investments............................................... 0.57 0.81
------ ------
Total from Investment Operations.......................................................... 0.57 0.82
------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income...................................................... (0.00)+ (0.01)
Distributions from Net Realized Capital Gains............................................. (0.01) (0.21)
------ ------
Total Distributions....................................................................... (0.01) (0.22)
------ ------
NET ASSET VALUE, END OF PERIOD............................................................ $11.71 $11.15
====== ======
TOTAL RETURN 5.14% 7.74%
Ratio of Expenses to Average Net Assets................................................... 0.80%* 0.86%*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates.................. 0.81%* 0.87%*(c)
Ratio of Net Investment Income to Average Net Assets...................................... 0.06%* 0.12%*
Portfolio Turnover Rate................................................................... 6.2% 38.7%
Net Assets, End of Period (in millions)................................................... $ 23.9 $ 24.0
* Annualized
+ Rounds to less than $0.005 per share.
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--05/01/2006.
(c) Excludes effect of deferred expense reimbursement--see Note 3 of financial
statements.
See notes to financial statements
10
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is Legg Mason Value Equity Portfolio, which
is non-diversified. Shares in the Trust are not offered directly to the general
public and are currently available only to separate accounts established by
certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A, B and E Shares are
offered by the Portfolio. Shares of each Class of the Portfolio represent an
equal pro rata interest in the Portfolio and generally give the shareholder the
same voting, dividend, liquidation, and other rights. Investment income,
realized and unrealized capital gains and losses, the common expenses of the
Portfolio and certain Portfolio-level expense reductions, if any, are allocated
on a pro rata basis to each class based on the relative net assets of each
class to the total net assets of the Portfolio. Each class of shares differs in
its respective distribution expenses and certain other class-specific expense
reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Trust's Valuation
Committee. The Valuation Committee will regularly monitor and review the
services provided by the pricing service to the Portfolios and periodically
report to the Board on the pricing services' performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date. The value of the
security so purchased is subject to market fluctuations during this period. The
Portfolio segregates assets having an aggregate value at least equal to the
amount of the when issued or delayed delivery purchase commitments until
payment is made.
11
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. FORWARD FOREIGN CURRENCY CONTRACTS - The Portfolio may enter into forward
foreign currency contracts to hedge their portfolio holdings against future
movements in certain foreign currency exchange rates. A forward currency
contract is a commitment to purchase or sell a foreign currency at a future
date at a set price. The forward currency contracts are valued at the forward
rate and are marked-to-market daily. The change in market value is recorded by
the Portfolio as an unrealized gain or loss. When the contract is closed, the
Portfolio recognizes a realized gain or loss equal to the difference between
the value of the contract at the time it was opened and the value at the time
it was closed.
The use of forward foreign currency contracts does not eliminate fluctuations
in the underlying prices of the securities of the Portfolio, but it does
establish a rate of exchange that can be achieved in the future. Although
forward foreign currency contracts to sell limit the risk of loss due to a
decline in the value of the currency holdings, they also limit any potential
gain that might result should the value of the currency increase. In addition,
the Portfolio could be exposed to risks if the counterparties to the contracts
are unable to meet the terms of the contracts.
G. FOREIGN CURRENCY TRANSLATION - The books and records of the Portfolio are
maintained in U.S. dollars. Foreign currencies, investments and other assets
and liabilities are translated into U.S. dollars on a daily basis using
prevailing exchange rates. Purchases and sales of securities are translated at
the rates of exchange prevailing when such securities were acquired or sold.
Income is translated at rates of exchange prevailing when interest is accrued
or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in
forward foreign currency contracts, sales of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities
transactions, and the difference between the amounts of dividends, interest,
and foreign withholding taxes recorded on the Portfolio's books, and the U.S.
dollar equivalent of the amounts actually received or paid. Net unrealized
foreign exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at fiscal year end, from
changes in the exchange rates of foreign currency held, and from changes in the
contract value of forward foreign currency contracts.
H. SECURITIES LENDING - The Portfolio may lend its securities to certain
qualified brokers who borrow securities in order to complete certain
transactions. By lending its investment securities, the Portfolio attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term of the loan would
accrue to the account of the Portfolio. Risks of delay in recovery of the
securities or even loss of rights in the collateral may occur should the
borrower of the securities fail financially. Risks may also arise to the extent
that the value of the collateral decreases below the value of the securities
loaned.
Upon entering into a securities lending transaction, the Portfolio receives
cash or other securities as collateral in an amount equal to or exceeding 102%
of the current market value of the loaned securities. Any cash received as
collateral is generally invested by State Street Bank and Trust Company ("State
Street"), acting in its capacity as securities lending agent (the "Agent"), in
the State Street Navigator Securities Lending Prime Portfolio which is a money
market fund registered under the 1940 Act. A portion of the dividends received
on the collateral is rebated to the borrower of the securities and the
remainder is split between the Agent and the Portfolio. On loans collateralized
by cash, the cash collateral is invested in a money market fund or short term
securities. A portion of the income generated upon investment of the collateral
is remitted to the Borrowers and the remainder is allocated between the fund
and the lending agent. On loans collateralized by U.S. Treasuries, a fee is
received from the Borrower and is allocated between the fund and the lending
agent.
I. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Portfolio enters into a repurchase agreement, the value of the collateral
securities including accrued interest will be equal to or exceed the value of
the repurchase agreement and, for repurchase agreements that mature in more
than one day, the seller will agree that the value of the collateral securities
including accrued interest will continue to be at least equal to the value of
the repurchase agreement.
J. DIRECTED BROKERAGE AGREEMENT - The Trust has entered into a directed
brokerage arrangement with State Street Global Markets ("SSGM"). Under this
arrangement, the Portfolio directs certain trades to SSGM in return for a
recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to
each Portfolio are shown separately as an expense reduction on the Statement of
Operations of the Portfolio.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with Legg Mason Capital Management, Inc., (the "Adviser") for investment
advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- --------------------
Legg Mason Value Equity Portfolio $3,936,191 0.65% First $200 Million
0.63% Over $200 Million
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Maximum Expense Ratio
under current Expense
Limitation Agreement
----------------------
Portfolio Class A Class B Class E
--------- ------- ------- -------
Legg Mason Value Equity Portfolio 0.80% 1.05% 0.95%
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratio as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
The amount waived and expenses reimbursed for the period ended June 30, 2007 is
shown as investment advisory fee waiver in the Statement of Operations of the
Portfolio.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
wholly-owned subsidiary of MetLife, Inc. The Class B and Class E Distribution
Plans provide that the Trust, on behalf of the Portfolio, may pay annually up
to 0.50% and 0.25% respectively of the average net assets of the Portfolio
attributable to its Class B and Class E shares in respect to activities
primarily intended to result in the sale of Class B and Class E Shares.
However, under Class B and Class E Distribution Agreements, payments to the
Distributor for activities pursuant to the Class B Distribution Plan and Class
E Distribution Plan are currently limited to payments at an annual rate equal
to 0.25% and 0.15% of average daily net assets of the Portfolio attributable to
its Class B and Class E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued Shares Issued Net Increase
in Connection Through (Decrease)
Beginning Shares with Acquisition Dividend Shares in Shares Ending
Shares Sold (Note 8) Reinvestment Repurchased Outstanding Shares
---------- ---------- ---------------- ------------- ----------- ------------ -----------
Legg Mason Value Equity Portfolio
Class A
06/30/2007 87,202,671 30,608,838 -- 108,889 (2,381,746) 28,335,981 115,538,652
12/31/2006 299,000 85,556,091 5,304,737 1,731,838 (5,688,995) 86,903,671 87,202,671
Class B
06/30/2007 10,182,546 1,537,629 -- 11,465 (1,623,872) (74,778) 10,107,768
12/31/2006 457,402 6,088,981 4,919,414 189,210 (1,472,461) 9,725,144 10,182,546
Class E
06/30/2007 2,153,830 68,879 -- 2,379 (181,512) (110,254) 2,043,576
05/01/2006-12/31/2006 -- 127,826 2,226,012 40,892 (240,900) 2,153,830 2,153,830
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
Legg Mason Value Equity Portfolio $-- $398,398,228 $-- $76,528,685
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
- --------- -------------- ------------ -------------- --------------
Legg Mason Value Equity Portfolio $1,359,975,404 $177,648,739 $(35,452,706) $142,196,033
6. SECURITY LENDING
As of June 30, 2007, the Portfolio had loaned securities which were
collateralized by short term investments. The value of securities on loan and
the value of the related collateral were as follows:
Value of Value of
Securities Collateral
------------ ------------
Legg Mason Value Equity Portfolio $155,582,418 $159,762,650
14
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
7. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long Term Capital Gain Total
--------------- ---------------------- ----------------
2006 2005 2006 2005 2006 2005
---------- ---- ----------- ---- ----------- ----
Legg Mason Value Equity Portfolio $5,579,139 $-- $16,471,161 $-- $22,050,300 $--
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforward
Income Gain Appreciation and Deferrals Total
------------- ------------- ------------ ----------------- -----------
Legg Mason Value Equity Portfolio $2,783,791 $292,584 $88,769,081 $-- $91,845,456
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
8. ACQUISITIONS
On May 1, 2006, Legg Mason Value Equity Portfolio ("Value Equity") acquired all
of the net assets of MFS Investors Trust Portfolio, a series of Metropolitan
Series Fund, Inc., ("MFS Investors") pursuant to a plan of reorganization
approved by MFS Investors shareholders on March 14, 2006. The acquisition was
accomplished by a tax-free exchange of 5,304,737 Class A shares of Value Equity
(valued at $56.0 million) in exchange for the 5,954,932 Class A shares of MFS
Investors, 4,919,414 Class B shares of Value Equity (valued at $51.9 million)
in exchange for the 5,505,682 Class B shares of MFS Investors and 2,226,012
Class E shares of Value Equity (valued at $23.5 million) in exchange for the
2,496,689 Class E shares of MFS Investors. MFS Investors Class A net assets at
that date ($56.0 million), including $7,451,570 of unrealized appreciation were
combined with those of Value Equity Class A. MFS Investors Class B net assets
at that date ($51.9 million), including $7,423,569 of unrealized appreciation
were combined with those of Value Equity Class B. MFS Investors Class E net
assets at that date ($23.5 million), including $3,153,729 of unrealized
appreciation were combined with those of Value Equity Class E. The cost of
securities acquired by Value Equity from MFS Investors was $113,318,381. The
aggregate Class A net assets of Value Equity and MFS Investors immediately
before the acquisition were $3,153,591 and $55,964,976, respectively. The
aggregate Class A net assets of Value Equity immediately after the acquisition
were $59,118,567. The aggregate Class B net assets of Value Equity and MFS
Investors immediately before the acquisition were $29,399,561 and $51,850,624,
respectively. The aggregate Class B net assets of Value Equity immediately
after the acquisition were $81,250,185. The aggregate Class E net assets of
Value Equity and MFS Investors immediately before the acquisition were $10,000
and $23,484,428, respectively. The aggregate Class E net assets of Value Equity
immediately after the acquisition were $23,494,428.
9. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
10. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's
15
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
Public Reference Room in Washington, D.C. and information on the operation of
the Public Reference Room may be obtained by calling 1-800-SEC-0330. Once
filed, the most recent Form N-Q will be available without charge, upon request,
by calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
16
MET INVESTORS SERIES TRUST
Loomis Sayles
Global Markets Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
LOOMIS SAYLES GLOBAL MARKETS PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY LOOMIS, SAYLES & COMPANY, L.P.
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
EQUITY OVERVIEW
MARKET & ECONOMIC REVIEW AND OUTLOOK
The market had a volatile first quarter, as investors worried about the pace of
economic activity. It rebounded from a difficult February to post a positive
return in March and for the first quarter. In March, investors had more
confidence that economic activity would continue to be reasonably strong, and
the Federal Reserve seemed to signal a softer stance toward rate increases,
thus resulting in a rebound in the stock markets.
The market was surprisingly buoyant in the second quarter. Bad news on the
subprime mortgage and housing fronts was absorbed with little indigestion and
bumpy economic statistics were shrugged off, as investors focused on strong
earnings growth and the ebullient merger and acquisition climate. We wouldn't
be surprised to see the market consolidate its gains in the near-term, but it
remains poised to deliver high single-digit, low double-digit gains for the
year. The backdrop: solid profit growth, constructive valuation levels and a
reasonable inflation/interest rate environment, may augur well for a healthy
market. We are watching global liquidity levels, as this continues to be a key
market lynchpin, but with no real change expected on this front, we remain
optimistic about market prospects for the balance of the year.
PORTFOLIO PERFORMANCE REVIEW
Within this environment, the equities sleeve of the Portfolio outperformed its
benchmark, the MSCI World Index/SM/, returning +11.1% versus +9.5% for the
Index. Strong returns were due in large part to positive stock selections
across all sectors, as there were no sectors that detracted from performance
for the first half of the year. Leading the pack in contribution to return were
technology and financials names.
The technology sectors' performance was due primarily to Apple. Apple continued
to benefit from the anticipation of the iPhone, which had an early summer
release, the introduction of its iTV service, and strong sales of its iPod and
iMac line-up. Financials performed well due to the performance of Keppel Land
and Piraeus Bank. Keppel Land, a Singapore real estate company shares rose in
February, as a potential shortage of office space in the downtown area of
Singapore has been driving rents higher. Piraeus Bank shares rose after it was
reported that Dubai Investment Group LLC might make a bid for the bank and
offer as much as seven billion euros.
FIXED INCOME OVERVIEW
MARKET AND ECONOMIC REVIEW AND OUTLOOK
The US dollar weakened and global Treasury yields rose in the first half of
2007. Perceptions of a "strong Eurasia, weak US" have shifted towards "strong
Eurasia, strong US." Investors largely ignored friendlier data on core
inflation, which has declined in the US to within the Federal Reserve's target
range, and have instead focused on rising commodity prices. Treasurys only
briefly rallied in late June in reaction to subprime mortgage and hedge fund
stresses. In general, we continue to expect a robust global economy, higher
central bank policy rates abroad, and stable policy rates in the US. Bond
yields may find their way irregularly higher over time. Among currencies, the
US dollar and Japanese yen are near recent valuation lows, and the Euro and
currencies such as the Canadian dollar and Australian dollar are near decade
highs. We retain a preference for non-Japanese Asian currencies as we expect
fast Asian economic growth to continue.
PORTFOLIO PERFORMANCE REVIEW
The fixed income sleeve of the Portfolio outperformed its benchmark, the
Citigroup World Government Bond Index/1/, returning 2.23%, versus a 0.41% loss
for the Index. At the total Portfolio level, the Portfolio remained heavily
tilted towards equities, which have strongly outperformed bonds. The main
drivers of fixed income gains were exposure to smaller foreign currency markets
such as Colombia, Iceland and Brazil, and selected U.S. high yield and
investment grade corporate issues. The weakest segments of the Portfolio's
fixed income sleeve were our positions in Malaysian Ringgit and Japanese yen.
Top and bottom returns were either currency or company specific. Top performers
included an Avnet convertible bond, a Rabobank issue in Icelandic krona, and a
Merrill Lynch issue in Brazilian real. Our worst performers included the debt
of SLM Corp (Sallie Mae), which was taken private; Hovnanian, which has
weakened with the slump in new home sales and Canadian paper-maker Abitibi,
which has been hurt by Canadian dollar strength and weak pulp sales.
TEAM MANAGED
Mark B. Baribeau, CFA, a Vice President of Loomis Sayles, joined the firm in
1989. He is the Growth portfolio manager of the domestic equity securities
sector and international equity securities sector of the Portfolio.
Daniel J. Fuss, CFA, CIC, Executive Vice President, Vice Chairman and Director
of Loomis Sayles has been with the firm since 1976. He is the portfolio manager
of the domestic fixed income securities sector of the Portfolio.
Warren Koontz, CFA, a Vice President of Loomis Sayles, joined the firm in 1995.
He is the Value portfolio manager of the domestic equity securities sector and
international equity securities sector of the Portfolio.
David Rolley, CFA, Vice President of Loomis Sayles, has been with the firm
since 1994. He is the portfolio manager of the international fixed income
securities sector of the Portfolio.
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
- --------
/1/ The Citigroup World Government Bond Index (WGBI) includes the most
significant and liquid government bond markets globally that carry at least an
investment grade rating. Currently, this includes all countries in the
Citigroup EMU Governments Index (EGBI) and Australia, Canada, Denmark, Japan,
Sweden, Switzerland, United Kingdom and the United States. Index weights are
based on the market capitalization of qualifying outstanding debt stocks.
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
LOOMIS SAYLES GLOBAL MARKETS PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY LOOMIS, SAYLES & COMPANY, L.P.
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
-----------------------------------------
ABB, Ltd. 2.52%
-----------------------------------------
America Movil S.A. de C.V. 2.42%
-----------------------------------------
Google, Inc. - Class A 2.38%
-----------------------------------------
China Mobile (Hong Kong), Ltd. 1.93%
-----------------------------------------
Piraeus Bank S.A. 1.91%
-----------------------------------------
Precision Castparts Corp. 1.83%
-----------------------------------------
Nintendo Co., Ltd. 1.71%
-----------------------------------------
Apple, Inc. 1.50%
-----------------------------------------
Fiat S.p.A. 1.42%
-----------------------------------------
Capita Group Plc 1.41%
-----------------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
[CHART]
Others 3.1%
Basic Materials 4.1%
Foreign Government 7.2%
U.S. Government 7.4%
Technology 8.7%
Industrials 10.4%
Cyclical 10.9%
Non-cyclical 13.0%
Communications 16.3%
Financials 18.9%
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
LOOMIS SAYLES GLOBAL MARKETS PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY LOOMIS, SAYLES & COMPANY, L.P.
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
LOOMIS SAYLES GLOBAL MARKETS PORTFOLIO MANAGED BY
LOOMIS, SAYLES & COMPANY, L.P. VS. MSCI WORLD INDEX/SM1/
Growth Based on $10,000+
[CHART]
Loomis Sayles Global
Markets Portfolio MSCI World Index/SM/
-------------------- -------------------
5/1/2006 $10,000 $10,000
6/30/2006 9,330 9,669
9/30/2006 9,660 10,111
12/31/2006 10,466 10,967
6/30/2007 11,497 12,007
Average Annual Return/2/
(for the period ended 6/30/07)
------------------------------------------------------------
1 Year Since Inception/3/
------------------------------------------------------------
Loomis Sayles Global Markets
- -- Portfolio--Class A 23.22% 12.69%
Class B 23.06% 12.36%
------------------------------------------------------------
- - - MSCI World Index/SM1/ 24.19% 16.98%
------------------------------------------------------------
+The chart reflects the performance of Class A shares of the Portfolio. The
performance of Class A shares will differ from that of the Class B shares
because of the difference in expenses paid by policyholders investing in the
different share class.
/1/The MSCI World Index/SM/ is an unmanaged free-float adjusted market
capitalization index that is designed to measure global developed market equity
performance. The Index does not include fees or expenses and is not available
for direct investment.
/2/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/3/Inception of Class A and Class B shares is 5/1/06. Index returns are based
on an inception date of 4/30/06.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
3
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
LOOMIS SAYLES GLOBAL MARKETS PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,098.50 $3.80
Hypothetical (5% return before expenses) 1,000.00 1,021.17 3.66
- ------------------------------------------ ------------- ------------- --------------
Class B
Actual $1,000.00 $1,097.70 $5.10
Hypothetical (5% return before expenses) 1,000.00 1,019.93 4.91
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.73% and
0.98% for the Class A and Class B, respectively, multiplied by the average
account value over the period, multiplied by 181/365 (to reflect the one-half
year period).
4
MET INVESTORS SERIES TRUST
LOOMIS SAYLES GLOBAL MARKETS PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
- --------------------------------------------------------------------------------
PAR VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
- --------------------------------------------------------------------------------
DOMESTIC BONDS & DEBT SECURITIES - 18.3%
AEROSPACE & DEFENSE - 0.1%
Embraer Overseas, Ltd. 6.375%, due 01/24/17....... $ 770,000 $ 756,525
-------------
APPAREL & TEXTILES - 0.1%
Kellwood Co. 7.625%, due 10/15/17................. 1,250,000 1,211,341
-------------
ASSET-BACKED SECURITIES - 0.2%
Citibank Credit Card Issuance Trust 5.375%, due
04/10/13(i)..................................... 600,000 824,638
MBNA Credit Card Master Note 4.150%, due
04/19/10(i)..................................... 665,000 883,005
-------------
1,707,643
-------------
AUTO COMPONENTS - 0.1%
Goodyear Tire & Rubber Co. 7.000%, due 03/15/28... 978,000 894,870
-------------
AUTOMOBILES - 0.1%
General Motors Corp.
8.250%, due 07/15/23(b)......................... 475,000 435,219
8.375%, due 07/15/33(b)......................... 25,000 22,937
-------------
458,156
-------------
AUTOMOTIVE LOANS - 0.2%
Ford Motor Credit Co. 8.625%, due 11/01/10........ 2,000,000 2,032,820
-------------
BANKS - 1.7%
Asian Development Bank 2.350%, due 06/26/27....... 210,000,000 1,711,039
Depfa ACS Bank 1.650%, due 12/20/16............... 110,000,000 872,597
European Investment Bank
1.250%, due 09/20/12(m)......................... 322,000,000 2,569,699
6.500%, due 08/12/14(q)......................... 4,510,000 1,698,423
1.400%, due 06/20/17(m)......................... 140,000,000 1,089,282
HSBC Bank USA 2.764%, due 05/17/12 (144A)(a)(c)(o) 3,500,000 839,392
ICICI Bank, Ltd. 6.375%, due 04/30/22 (144A)(a)... 1,955,000 1,861,039
Inter-American Development Bank 13.000%, due
06/20/08(l)..................................... 32,000,000 512,688
Kreditanstalt fuer Wiederaufbau 1.850%, due
09/20/10(m)..................................... 453,000,000 3,748,111
-------------
14,902,270
-------------
BUILDING MATERIALS - 0.0%
Owens Corning, Inc.
6.500%, due 12/01/16............................ 90,000 90,275
7.000%, due 12/01/36............................ 140,000 136,833
USG Corp. 6.300%, due 11/15/16.................... 195,000 190,876
-------------
417,984
-------------
- --------------------------------------------------------------------------------
PAR VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
- --------------------------------------------------------------------------------
CHEMICALS - 0.2%
Hercules, Inc. 6.500%, due 06/30/29............... $ 10,000 $ 8,450
LPG International, Inc. 7.250%, due 12/20/15(b)... 1,465,000 1,475,988
-------------
1,484,438
-------------
ELECTRIC - 0.1%
Empresa Nacional de Electricidad S.A. 8.350%, due
08/01/13........................................ 910,000 1,017,183
-------------
ENERGY - 0.7%
El Paso Corp. 6.950%, due 06/01/28................ 5,000 4,671
NGC Corp. Capital Trust - Series B 8.316%, due
06/01/27........................................ 540,000 498,150
Tennessee Gas Pipeline Co. 7.000%, due 10/15/28(b) 4,635,000 4,796,400
Transportadora de Gas del Sur S.A. 7.875%, due
05/14/17 (144A)(a).............................. 865,000 860,675
-------------
6,159,896
-------------
FINANCIAL - DIVERSIFIED - 1.5%
BNP Paribas S.A. 8.031%, due
06/13/11 (144A)(a)(c)(k)........................ 8,241,755,000 646,655
Goldman Sachs Group, Inc. (The) 4.428%, due
05/23/16........................................ 1,650,000 2,229,572
JPMorgan Chase & Co. 2.641%, due
06/08/12 (144A)(a)(c)(o)........................ 6,383,540 1,524,774
Merrill Lynch & Co., Inc. 10.710%, due 03/08/17(f) 2,900,000 1,605,730
Morgan Stanley 5.375%, due 11/14/13(j)............ 1,110,000 2,100,127
Network Rail MTN Finance, Plc. 4.875%, due
03/06/09(j)..................................... 505,000 995,515
Ranhill Labuan, Ltd. 12.500%, due
10/26/11 (144A)(a).............................. 1,230,000 1,238,610
SLM Corp.
5.000%, due 10/01/13-06/15/18................... 1,765,000 1,469,578
5.375%, due 05/15/14............................ 105,000 90,102
5.050%, due 11/14/14............................ 710,000 618,622
5.625%, due 08/01/33............................ 1,270,000 993,244
-------------
13,512,529
-------------
FOOD & DRUG RETAILING - 0.6%
Albertson's, Inc. 7.450%, due 08/01/29............ 5,470,000 5,362,400
-------------
See notes to financial statements
5
MET INVESTORS SERIES TRUST
LOOMIS SAYLES GLOBAL MARKETS PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
- --------------------------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
- --------------------------------------------------------------------------------------
FOOD PRODUCTS - 0.0%
Cosan Finance, Ltd. 7.000%, due 02/01/17 (144A)(a) $ 105,000 $ 102,249
-------------
HEALTH CARE PROVIDERS & SERVICES - 0.8%
HCA, Inc.
6.500%, due 02/15/16(b)......................... 2,145,000 1,825,931
7.500%, due 12/15/23-11/06/33................... 4,970,000 4,238,227
8.360%, due 04/15/24............................ 60,000 55,622
7.690%, due 06/15/25............................ 250,000 218,699
7.580%, due 09/15/25............................ 600,000 520,946
7.050%, due 12/01/27............................ 80,000 65,407
7.750%, due 07/15/36............................ 95,000 81,740
-------------
7,006,572
-------------
HOMEBUILDERS - 0.5%
Desarrolladora Homex S.A. de C.V. 7.500%, due
09/28/15........................................ 985,000 1,024,400
K Hovnanian Enterprises, Inc. 6.250%, due 01/15/16 1,000,000 855,000
Pulte Homes, Inc.
6.375%, due 05/15/33............................ 1,565,000 1,382,757
6.000%, due 02/15/35............................ 1,900,000 1,624,004
-------------
4,886,161
-------------
INDUSTRIAL - DIVERSIFIED - 0.6%
Borden, Inc.
8.375%, due 04/15/16............................ 3,030,000 2,878,500
9.200%, due 03/15/21............................ 1,910,000 1,824,050
7.875%, due 02/15/23............................ 60,000 51,600
Wendel
4.875%, due 05/26/16(i)......................... 200,000 258,272
4.375%, due 08/09/17(i)......................... 450,000 552,160
-------------
5,564,582
-------------
MACHINERY - 0.1%
Cummins, Inc. 6.750%, due 02/15/27................ 509,000 496,809
-------------
MEDIA - 0.1%
Grupo Televisa S.A. 8.490%, due 05/11/37
(144A)(a)(n).................................... 7,500,000 705,345
News America, Inc. 6.150%, due 03/01/37 (144A)(a). 305,000 282,070
Time Warner, Inc. 6.500%, due 11/15/36............ 45,000 42,862
-------------
1,030,277
-------------
METALS & MINING - 0.0%
Vale Overseas, Ltd. 6.875%, due 11/21/36.......... 300,000 302,306
-------------
OIL & GAS - 0.0%
Colorado Interstate Gas Co. 6.800%, due 11/15/15.. 5,000 5,167
-------------
- -----------------------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
- -----------------------------------------------------------------------------------
OIL & GAS EXPLORATION & PRODUCTION - 0.3%
Anadarko Petroleum Corp.
5.950%, due 09/15/16............................ $ 395,000 $ 386,360
6.450%, due 09/15/36............................ 290,000 279,824
Chesapeake Energy Corp.
6.500%, due 08/15/17............................ 155,000 147,637
6.875%, due 11/15/20............................ 600,000 577,500
Hilcorp Energy I LP/Hilcorp Finance Co. 7.750%,
due 11/01/15 (144A)(a).......................... 850,000 828,750
-------------
2,220,071
-------------
PAPER & FOREST PRODUCTS - 0.5%
Georgia-Pacific Corp.
8.000%, due 01/15/24............................ 595,000 580,125
7.375%, due 12/01/25............................ 415,000 391,138
7.250%, due 06/01/28............................ 120,000 111,000
7.750%, due 11/15/29............................ 1,995,000 1,885,275
8.875%, due 05/15/31............................ 1,735,000 1,739,337
-------------
4,706,875
-------------
REAL ESTATE - 0.0%
Host Marriott LP 6.750%, due 06/01/16............. 110,000 108,350
-------------
RETAIL - MULTILINE - 0.7%
Edcon Proprietary, Ltd. 7.395%, due 06/15/14
(144A)(a)(i).................................... 690,000 920,719
JC Penney, Inc. 6.375%, due 10/15/36.............. 725,000 690,423
Marfrig Overseas, Ltd. 9.625%, due 11/16/16
(144A)(a)....................................... 1,380,000 1,449,000
Toys R US, Inc.
7.875%, due 04/15/13(b)......................... 565,000 511,325
7.375%, due 10/15/18............................ 3,615,000 3,063,712
-------------
6,635,179
-------------
SOFTWARE - 0.2%
Hanarotelecom, Inc. 7.000%, due 02/01/12 (144A)(a) 1,565,000 1,572,825
-------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 1.9%
Axtel S.A.B. de C.V. 7.625%, due 02/01/17
(144A)(a)....................................... 1,660,000 1,647,550
Excelcomindo Finance Co. BV 7.125%, due 01/18/13
(144A)(a)....................................... 955,000 968,131
France Telecom S.A. 3.625%, due 10/14/15(i)....... 905,000 1,095,597
GTE Corp. 6.940%, due 04/15/28.................... 55,000 56,724
New England Telephone and Telegraph Co. 7.875%,
due 11/15/29.................................... 415,000 455,282
Nextel Communications, Inc.
6.875%, due 10/31/13............................ 47,000 46,692
Series F5.950%, due 03/15/14.................... 144,000 137,339
See notes to financial statements
6
MET INVESTORS SERIES TRUST
LOOMIS SAYLES GLOBAL MARKETS PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
- -----------------------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
- -----------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - CONTINUED
Northern Telecom Capital 7.875%, due 06/15/26..... $ 960,000 $ 912,000
Qwest Capital Funding, Inc.
6.500%, due 11/15/18............................ 860,000 778,300
7.625%, due 08/03/21(b)......................... 520,000 499,200
6.875%, due 07/15/28(b)......................... 835,000 733,756
7.750%, due 02/15/31............................ 1,445,000 1,369,137
Qwest Corp. 6.875%, due 09/15/33(b)............... 590,000 556,075
Shaw Communications, Inc. 6.150%, due 05/09/16(g). 1,720,000 1,595,102
Sprint Capital Corp. 6.875%, due 11/15/28......... 60,000 57,267
Sprint Nextel Corp. 6.000%, due 12/01/16.......... 109,000 103,585
Telecom Italia Capital S.A.
6.375%, due 11/15/33............................ 195,000 184,246
6.000%, due 09/30/34............................ 140,000 126,528
Telefonica Emisiones SAU 6.221%, due 07/03/17..... 1,520,000 1,518,986
Verizon Communications 5.850%, due 09/15/35....... 390,000 358,885
Verizon Maryland, Inc. 5.125%, due 06/15/33....... 130,000 105,535
Verizon New York, Inc., Series B 7.375%, due
04/01/32........................................ 3,400,000 3,586,487
-------------
16,892,404
-------------
TOBACCO - 0.1%
Reynolds American, Inc.
6.750%, due 06/15/17............................ 470,000 476,815
7.250%, due 06/15/37............................ 125,000 128,594
-------------
605,409
-------------
U.S. GOVERNMENT & AGENCY OBLIGATIONS - 6.9%
Federal National Mortgage Assoc. 1.750%, due
03/26/08(m)..................................... 480,000,000 3,916,431
U.S. Treasury Bond
4.500%, due 02/15/16-02/15/36(b)................ 25,575,000 23,910,911
5.375%, due 02/15/31............................ 5,975,000 6,137,448
U.S. Treasury Inflation Index Bond 2.000%, due
01/15/26(b)..................................... 1,124,420 1,018,831
U.S. Treasury Note
4.625%, due 02/29/08(b)......................... 11,840,000 11,811,335
4.500%, due 05/15/17(b)......................... 6,200,000 5,946,191
4.750%, due 02/15/37(b)......................... 9,765,000 9,210,387
-------------
61,951,534
-------------
Total Domestic Bonds & Debt Securities (Cost
$163,962,931) 164,004,825
-------------
- --------------------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
- --------------------------------------------------------------------------------
FOREIGN BONDS & DEBT SECURITIES - 7.7%
ARGENTINA - 0.2%
Argentina Bonos
5.475%, due 08/03/12(d)......................... $ 540,000 $ 394,875
2.000%, due 09/30/14(e)......................... 4,320,000 1,566,459
-------------
1,961,334
-------------
BRAZIL - 0.0%
ISA Capital do Brasil S.A. 7.875%, due 01/30/12
(144A)(b)(a).................................... 105,000 107,363
-------------
CANADA - 0.1%
Canadian Government Bond 4.500%, due
06/01/15(b)(g).................................. 985,000 922,532
-------------
COLOMBIA - 0.5%
Colombia Government International Bond
11.750%, due 03/01/10(h)........................ 489,000,000 263,066
12.000%, due 10/22/15(h)........................ 5,179,000,000 3,053,221
8.125%, due 05/21/24(b)......................... 230,000 271,400
Republic of Colombia
7.375%, due 01/27/17(b)......................... 115,000 124,948
9.850%, due 06/28/27(h)......................... 875,000,000 469,651
-------------
4,182,286
-------------
GERMANY - 1.8%
Bundesrepublik Deutschland
3.750%, due 07/04/13-01/04/17(i)................ 7,180,000 9,223,496
6.500%, due 07/04/27(i)......................... 970,000 1,612,094
4.000%, due 01/04/37(i)......................... 1,635,000 1,971,933
Hypothekenbank in Essen AG 5.250%, due 01/17/11(i) 645,000 886,715
Kreditanstalt fuer Wiederaufbau 2.500%, due
10/11/10(i)..................................... 675,000 855,842
Muenchener Hypothekenbank 5.000%, due 01/16/12(i). 1,405,000 1,922,022
-------------
16,472,102
-------------
IRELAND - 0.5%
Depfa ACS Bank 0.750%, due 09/22/08(m)............ 170,000,000 1,375,240
Ireland Government Bond 4.600%, due 04/18/16(i)... 2,730,000 3,685,289
-------------
5,060,529
-------------
JAPAN - 0.7%
Japan Government Two Year Bond 0.200%, due
09/20/07(m)..................................... 420,000,000 3,398,888
Oesterreichische Kontrollbank AG 1.800%, due
03/22/10(m)..................................... 315,000,000 2,595,372
-------------
5,994,260
-------------
See notes to financial statements
7
MET INVESTORS SERIES TRUST
LOOMIS SAYLES GLOBAL MARKETS PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
----------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
----------------------------------------------------------------
MEXICO - 0.2%
America Movil S.A. de C.V.
5.500%, due 03/01/14............. $ 755,000 $ 741,676
9.000%, due 01/15/16(n).......... 5,100,000 495,509
Mexican Bonos
9.000%, due 12/20/12(n)......... 5,000,000 490,798
-------------
1,727,983
-------------
NETHERLANDS - 0.2%
Bite Finance International B.V.
7.645%, due 03/15/14
(144A)(a)(i).................... 280,000 395,675
Rabobank Nederland
13.500%, due 01/28/08
(144A)(a)(l).................... 70,000,000 1,120,059
-------------
1,515,734
-------------
NORWAY - 0.4%
Government of Norway
5.500%, due 05/15/09(p).......... 8,600,000 1,462,859
6.000%, due 05/16/11(p).......... 2,035,000 353,728
Norway Government Bond
5.000%, due 05/15/15(p)......... 8,985,000 1,506,384
-------------
3,322,971
-------------
PERU - 0.3%
Peru Government International Bond
6.125%, due 03/07/17............ 2,401,700 2,401,700
-------------
SINGAPORE - 0.9%
Singapore Government Bond
4.625%, due 07/01/10(r)......... 11,345,000 7,856,388
-------------
SOUTH AFRICA - 0.5%
Republic of South Africa
4.500%, due 04/05/16(i)......... 2,720,000 3,515,688
South Africa Government Bond
13.000%, due 08/31/10(s)........ 7,975,000 1,250,574
-------------
4,766,262
-------------
UNITED KINGDOM - 1.0%
BSkyB Finance UK Plc
5.750%, due 10/20/17(j)......... 555,000 1,047,080
HSBC Bank Plc London
2.965%, due 04/18/12
(144A)(a)(c)(o)................. 7,655,000 1,856,933
United Kingdom Gilt
6.250%, due 11/25/10(j).......... 420,000 854,758
5.000%, due 03/07/12(j).......... 885,000 1,724,632
4.000%, due 09/07/16(j).......... 555,000 997,268
4.750%, due 03/07/20(j).......... 1,320,000 2,507,749
4.250%, due 03/07/36(j).......... 215,000 393,033
-------------
9,381,453
-------------
-------------------------------------------------------------------
SECURITY SHARES/PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-------------------------------------------------------------------
URUGUAY - 0.4%
Uruguay Government International Bond
4.250%, due 04/05/27(t)............ $ 75,000,000 $ 3,376,576
-------------
Total Foreign Bonds & Debt Securities
(Cost $68,872,091) 69,049,473
-------------
CONVERTIBLE BONDS - 0.5%
APPAREL & TEXTILES - 0.1%
Kellwood Co. 3.500%, due 06/15/34.... 500,000 458,750
-------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.0%
Avnet, Inc. 2.000%, due 03/15/34..... 140,000 177,800
-------------
PHARMACEUTICALS - 0.2%
Enzon Pharmaceuticals, Inc.
4.500%, due 07/01/08............... 1,000,000 988,750
Valeant Pharmaceuticals
3.000%, due 08/16/10............... 1,150,000 1,092,500
-------------
2,081,250
-------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 0.2%
Level 3 Communications, Inc.
6.000%, due 09/15/09................ 540,000 523,800
2.875%, due 07/15/10................ 1,310,000 1,432,812
-------------
1,956,612
-------------
Total Convertible Bonds
(Cost $4,319,869) 4,674,412
-------------
MUNICIPAL BOND - 0.2%
VIRGINIA - 0.2%
Tobacco Settlement Financing Corp
6.706%, due 06/01/46
(Cost - $1,409,683)................ 1,410,000 1,352,966
-------------
COMMON STOCKS - 68.8%
AUTOMOBILES - 1.4%
Fiat S.p.A........................... 427,310 12,697,520
-------------
BANKS - 4.7%
Anglo Irish Bank Corp. Plc(b)........ 538,660 10,932,847
DBS Group Holdings, Ltd.............. 478,000 7,111,945
Julius Baer Holding AG............... 102,390 7,305,675
Piraeus Bank S.A..................... 467,318 17,080,702
-------------
42,431,169
-------------
BEVERAGES - 1.4%
Heineken N.V.(b)..................... 213,702 12,538,294
-------------
BIOTECHNOLOGY - 1.3%
Gilead Sciences, Inc.*............... 301,124 11,674,577
-------------
COMMERCIAL SERVICES & SUPPLIES - 3.9%
Capita Group Plc..................... 874,156 12,656,258
MasterCard, Inc. - Class A(b)........ 67,677 11,225,584
Randstad Holdings N.V.(b)............ 141,050 11,166,016
-------------
35,047,858
-------------
See notes to financial statements
8
MET INVESTORS SERIES TRUST
LOOMIS SAYLES GLOBAL MARKETS PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT & SERVICES - 3.3%
Cisco Systems, Inc.*................. 277,671 $ 7,733,137
QUALCOMM, Inc........................ 234,546 10,176,951
Research In Motion, Ltd.*............ 57,550 11,509,425
-------------
29,419,513
-------------
COMPUTERS & PERIPHERALS - 3.8%
Apple, Inc.*......................... 110,004 13,424,888
Hewlett-Packard Co................... 271,305 12,105,629
International Business Machines
Corp.(b)........................... 84,813 8,926,568
-------------
34,457,085
-------------
CONSTRUCTION & ENGINEERING - 0.9%
Foster Wheeler, Ltd.*................ 79,533 8,509,236
-------------
CONSTRUCTION MATERIALS - 1.1%
Lafarge S.A.(b)...................... 53,293 9,686,365
-------------
CONTAINERS & PACKAGING - 1.0%
Owens-Illinois, Inc.*................ 257,354 9,007,390
-------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 3.3%
ABB, Ltd............................. 1,000,854 22,560,319
Sony Corp. (ADR)..................... 134,067 6,887,022
-------------
29,447,341
-------------
ENERGY EQUIPMENT & SERVICES - 0.9%
Tenaris S.A. (ADR)................... 162,808 7,971,080
-------------
FINANCIAL - DIVERSIFIED - 6.1%
Chicago Mercantile Exchange Holdings,
Inc................................ 14,420 7,705,471
Franklin Resources, Inc.............. 52,786 6,992,561
Goldman Sachs Group, Inc. (The)...... 57,875 12,544,406
IntercontinentalExchange, Inc.*(b)... 58,634 8,669,037
Man Group Plc........................ 1,024,300 12,419,000
Prudential Financial, Inc............ 68,389 6,649,463
-------------
54,979,938
-------------
HEALTH CARE EQUIPMENT & SUPPLIES - 1.0%
Phonak Holding AG.................... 103,228 9,254,237
-------------
HOTELS, RESTAURANTS & LEISURE - 0.8%
McDonald's Corp...................... 141,954 7,205,585
-------------
INTERNET SOFTWARE & SERVICES - 2.4%
Google, Inc. - Class A*.............. 40,777 21,341,866
-------------
MACHINERY - 1.8%
Deere & Co........................... 62,688 7,568,949
Volvo AB............................. 444,664 8,818,538
-------------
16,387,487
-------------
MEDIA - 1.8%
Focus Media Holding, Ltd.*(b)........ 171,180 8,644,590
News Corp. - Class B(b).............. 313,070 7,181,826
-------------
15,826,416
-------------
-----------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
-----------------------------------------------------------------
METALS & MINING - 4.1%
Companhia Vale do Rio Doce (ADR). 202,478 $ 9,020,395
Freeport-McMoRan Copper & Gold,
Inc. - Class B................. 136,080 11,270,146
Precision Castparts Corp......... 134,853 16,365,760
-------------
36,656,301
-------------
OIL & GAS - 1.6%
Exxon Mobil Corp................. 80,850 6,781,698
Halliburton Co................... 219,927 7,587,481
-------------
14,369,179
-------------
PHARMACEUTICALS - 4.4%
Merck & Co., Inc................. 239,814 11,942,737
Novartis AG...................... 170,339 9,567,669
Novo Nordisk A/S................. 89,400 9,725,870
Roche Holdings AG................ 45,064 7,977,077
-------------
39,213,353
-------------
REAL ESTATE - 3.3%
CB Richard Ellis Group, Inc. -
Class A*(b).................... 285,565 10,423,123
China Overseas Land & Investment,
Ltd............................ 5,630,000 8,714,252
Keppel Land, Ltd.(b)............. 1,762,000 10,082,799
-------------
29,220,174
-------------
RETAIL - MULTILINE - 1.3%
CVS Caremark Corp................ 323,725 11,799,776
-------------
RETAIL - SPECIALTY - 2.0%
Esprit Holdings, Ltd............. 742,200 9,449,363
Inditex S.A.(b).................. 140,932 8,303,949
-------------
17,753,312
-------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS - 1.0%
NVIDIA Corp.*.................... 207,802 8,584,301
-------------
SOFTWARE - 2.6%
Adobe Systems, Inc.*............. 207,355 8,325,303
Nintendo Co., Ltd................ 42,135 15,353,678
-------------
23,678,981
-------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 1.4%
Corning, Inc.*................... 484,118 12,369,215
-------------
TELECOMMUNICATION SERVICES - WIRELESS - 5.4%
America Movil S.A. de C.V.(b).... 7,016,600 21,692,378
AT&T, Inc........................ 218,765 9,078,747
China Mobile (Hong Kong), Ltd.... 1,601,400 17,285,458
-------------
48,056,583
-------------
TEXTILES, APPAREL & LUXURY GOODS - 0.8%
Guess?, Inc.(b).................. 150,952 7,251,734
-------------
Total Common Stocks
(Cost $518,524,000) 616,835,866
-------------
See notes to financial statements
9
MET INVESTORS SERIES TRUST
LOOMIS SAYLES GLOBAL MARKETS PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
----------------------------------------------------------------------
SECURITY SHARES/PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
----------------------------------------------------------------------
WARRANT - 1.3%
TELECOMMUNICATION SERVICES - DIVERSIFIED - 1.3%
Bharti Airtel, Ltd. (144A)*(a)
(Cost - $11,886,526)............... 574,690 $ 11,835,741
-------------
SHORT-TERM INVESTMENT - 2.8%
State Street Bank & Trust Co.,
Repurchase Agreement dated
06/29/07 at 3.400% to be
repurchased at $410,337 on
07/02/07 collateralized by $420,000
FHLMC at 5.957% due 04/25/17 with
a value of $418,425................ $ 410,221 410,221
State Street Bank & Trust Co.,
Repurchase Agreement dated
06/29/07 at 3.400% to be
repurchased at $24,390,688 on
07/02/07 collateralized by
$24,935,000 FNMA at 5.99% due
04/18/17 with a value of
$24,872,663........................ 24,383,779 24,383,779
-------------
24,794,000
-------------
TOTAL SHORT-TERM INVESTMENT
(Cost $24,794,000) 24,794,000
-------------
TOTAL INVESTMENTS - 99.6%
(Cost $793,769,100) 892,547,283
-------------
Other Assets and Liabilities (net) - 0.4% 3,952,046
-------------
TOTAL NET ASSETS - 100.0% $ 896,499,329
=============
PORTFOLIO FOOTNOTES:
* Non-income producing security.
(a) Securities that may be resold to "qualified institutional buyers" under
Rule 144A or securities offered pursuant to Section 4(2) of the Securities
Act of 1933, as amended. These securities have been determined to be liquid
under the guidelines established by the Board of Trustees. These securities
represent in the aggregate $30,763,555 of net assets.
(b) A portion or all of the security was held on loan. As of June 30, 2007, the
market value of the securities loaned was $142,241,897 and the collateral
received consisted of cash in the amount of $146,154,222.
(c) Zero coupon bond - Interest rate represents current yield to maturity.
(d) Variable or floating rate security. The stated rate represents the rate at
June 30, 2007.
(e) Par shown in Argentine Peso. Value is shown in USD.
(f) Par shown in Brazilian Real. Value is shown in USD.
(g) Par shown in Canadian Dollar. Value is shown in USD.
(h) Par shown in Colombian Peso. Value is shown in USD.
(i) Par shown in Euro Currency. Value is shown in USD.
(j) Par shown in Pound Sterling. Value is shown in USD.
(k) Par shown in Indonesian Rupiah. Value is shown in USD.
(l) Par shown in Iceland Krona. Value is shown in USD.
(m) Par shown in Japanese Yen. Value is shown in USD.
(n) Par shown in Mexican Peso. Value is shown in USD.
(o) Par shown in Malaysian Ringgit. Value is shown in USD.
(p) Par shown in Norwegian Krone. Value is shown in USD.
(q) Par shown in Polish Zloty. Value is shown in USD.
(r) Par shown in Singapore Dollar. Value is shown in USD.
(s) Par shown in South African Rand. Value is shown in USD
(t) Par shown in Uruguayan Peso. Value is shown in USD.
ADR - American Depositary Receipt.
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
See notes to financial statements
10
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
LOOMIS SAYLES GLOBAL MARKETS PORTFOLIO
ASSETS
Investments, at value (Note 2)* $ 867,753,283
Repurchase Agreement 24,794,000
Cash 1,959
Cash denominated in foreign currencies** 2,469,349
Collateral for securities on loan 146,154,222
Receivable for investments sold 3,775,827
Receivable for Trust shares sold 983,212
Dividends receivable 301,684
Interest receivable 4,110,822
Unrealized appreciation on forward currency contracts (Note 8) 87,633
--------------
Total assets 1,050,431,991
--------------
LIABILITIES
Payables for:
Investments purchased 6,721,296
Trust shares redeemed 302,867
Unrealized depreciation on forward currency contracts (Note 8) 7,318
Distribution and services fees - Class B 3,468
Collateral for securities on loan 146,154,222
Investment advisory fee payable (Note 3) 491,177
Administration fee payable 9,524
Custodian and accounting fees payable 176,977
Accrued expenses 65,813
--------------
Total liabilities 153,932,662
--------------
NET ASSETS $ 896,499,329
==============
NET ASSETS REPRESENTED BY:
Paid in surplus $ 811,214,950
Accumulated net realized loss (19,432,056)
Unrealized appreciation on investments and foreign currency 98,925,444
Undistributed net investment income 5,790,991
--------------
Total $ 896,499,329
==============
NET ASSETS
Class A $ 878,427,043
==============
Class B 18,072,286
==============
CAPITAL SHARES OUTSTANDING
Class A 77,185,028
==============
Class B 1,592,356
==============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 11.38
==============
Class B 11.35
==============
- -----------------------------------------------------------------------------------------
*Investments at cost, excluding Repurchase Agreements $ 768,975,100
**Cost of cash denominated in foreign currencies 2,445,078
See notes to financial statements
11
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
LOOMIS SAYLES GLOBAL MARKETS PORTFOLIO
INVESTMENT INCOME:
Dividends (1) $ 2,651,711
Interest (2) 5,627,550
-----------
Total investment income 8,279,261
-----------
EXPENSES:
Investment advisory fee (Note 3) 2,260,976
Administration fees 24,306
Custody and accounting fees 66,508
Distribution fee - Class B 16,083
Transfer agent fees 7,883
Audit 13,917
Legal 7,309
Trustee fees and expenses 7,667
Shareholder reporting 16,734
Insurance 11,874
Other 823
-----------
Total expenses 2,434,080
Less broker commission recapture (16,791)
-----------
Net expenses 2,417,289
-----------
Net investment income 5,861,972
-----------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY:
Net realized gain (loss) on:
Investments 7,984,385
Foreign currency (416,847)
-----------
Net realized gain on investments and foreign currency 7,567,538
-----------
Net change in unrealized appreciation on
Investments 50,016,352
Foreign currency 229,482
-----------
Net change in unrealized appreciation on investments and foreign
currency 50,245,834
-----------
Net realized and change in unrealized gain on investments and
foreign currency 57,813,372
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $63,675,344
===========
- --------------------------------------------------------------------------------------
(1)Dividend income is net withholding taxes of: $ 190,466
(2)Interest income includes securities lending income of: 157,800
See notes to financial statements
12
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
LOOMIS SAYLES GLOBAL MARKETS PORTFOLIO
Period Ended Period Ended
June 30, 2007 December 31,
(Unaudited) 2006*
------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 5,861,972 $ 5,064,594
Net realized gain (loss) on investments, futures contracts and
foreign currency 7,567,538 (26,759,701)
Net change in unrealized appreciation on investments and foreign
currency 50,245,834 48,679,610
------------ ------------
Net increase in net assets resulting from operations 63,675,344 26,984,503
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A -- (5,286,349)
Class B -- (89,119)
------------ ------------
Net decrease in net assets resulting from distributions -- (5,375,468)
------------ ------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class A 311,418,608 507,453,386
Class B 9,913,668 9,655,363
Net asset value of shares issued through dividend reinvestment
Class A -- 5,286,349
Class B -- 89,119
Cost of shares repurchased
Class A (18,952,215) (10,218,834)
Class B (2,835,650) (594,844)
------------ ------------
Net increase in net assets from capital share transactions 299,544,411 511,670,539
------------ ------------
TOTAL INCREASE IN NET ASSETS 363,219,755 533,279,574
Net assets at beginning of period 533,279,574 --
------------ ------------
Net assets at end of period $896,499,329 $533,279,574
============ ============
Net assets at end of period includes undistributed (distributions
in excess of) net investment income $ 5,790,991 $ (70,981)
============ ============
* For the period 05/01/2006 (Commencement of Operations) through 12/31/2006.
See notes to financial statements
13
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE PERIOD ENDED:
CLASS A
LOOMIS SAYLES GLOBAL MARKETS PORTFOLIO -------------------------
FOR THE PERIOD FOR THE PERIOD
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
(UNAUDITED) 2006(B)
-------------- --------------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $10.36 $10.00
------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................. 0.10(a) 0.11 (a)
Net Realized/Unrealized Gain on Investments........................... 0.92 0.36
------ ------
Total from Investment Operations...................................... 1.02 0.47
------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. -- (0.11)
Distributions from Net Realized Capital Gains......................... -- --
------ ------
Total Distributions................................................... -- (0.11)
------ ------
NET ASSET VALUE, END OF PERIOD........................................ $11.38 $10.36
====== ======
TOTAL RETURN 9.85% 4.66%
Ratio of Expenses to Average Net Assets............................... 0.73%* 0.87%*
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 0.74%* 0.88%*
Ratio of Net Investment Income to Average Net Assets.................. 1.79%* 1.72%*
Portfolio Turnover Rate............................................... 64.1% 45.9%
Net Assets, End of Period (in millions)............................... $878.4 $523.5
CLASS B
-------------------------
FOR THE PERIOD FOR THE PERIOD
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
(UNAUDITED) 2006(B)
-------------- --------------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $10.34 $10.00
------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................. 0.08(a) 0.09 (a)
Net Realized/Unrealized Gain on Investments........................... 0.93 0.35
------ ------
Total from Investment Operations...................................... 1.01 0.44
------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. -- (0.10)
Distributions from Net Realized Capital Gains......................... -- --
------ ------
Total Distributions................................................... -- (0.10)
------ ------
NET ASSET VALUE, END OF PERIOD........................................ $11.35 $10.34
====== ======
TOTAL RETURN 9.77% 4.37%
Ratio of Expenses to Average Net Assets............................... 0.98%* 1.15%*
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 0.99%* 1.16%*
Ratio of Net Investment Income to Average Net Assets.................. 1.52%* 1.36%*
Portfolio Turnover Rate............................................... 64.1% 45.9%
Net Assets, End of Period (in millions)............................... $18.1 $9.8
* Annualized
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--05/01/2006.
See notes to financial statements
14
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is Loomis Sayles Global Markets Portfolio,
which is diversified. Shares in the Trust are not offered directly to the
general public and are currently available only to separate accounts
established by certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A and B Shares are
offered by the Portfolio. Class E Shares are not currently offered by the
Portfolio included in this report. Shares of each Class of the Portfolio
represent an equal pro rata interest in the Portfolio and generally give the
shareholder the same voting, dividend, liquidation, and other rights.
Investment income, realized and unrealized capital gains and losses, the common
expenses of the Portfolio and certain Portfolio-level expense reductions, if
any, are allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the Portfolio. Each class of
shares differs in its respective distribution expenses and certain other
class-specific expense reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date.
15
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The value of the security so purchased is subject to market fluctuations during
this period. The Portfolio segregates assets having an aggregate value at least
equal to the amount of the when issued or delayed delivery purchase commitments
until payment is made.
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
The Portfolio utilizes the provisions of the federal income tax laws that
provide for the carryforward of capital losses for eight years, offsetting such
losses against any future net realized capital gains. At December 31, 2006, the
accumulated capital loss carryforwards and expiration dates by the Portfolio
were as follows:
Expiring
Portfolio Total 12/31/2014
--------- ----------- -----------
Loomis Sayles Global Markets Portfolio $18,067,159 $18,067,159
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. FORWARD FOREIGN CURRENCY CONTRACTS - The Portfolio may enter into forward
foreign currency contracts to hedge their portfolio holdings against future
movements in certain foreign currency exchange rates. A forward currency
contract is a commitment to purchase or sell a foreign currency at a future
date at a set price. The forward currency contracts are valued at the forward
rate and are marked-to-market daily. The change in market value is recorded by
the Portfolio as an unrealized gain or loss. When the contract is closed, the
Portfolio recognizes a realized gain or loss equal to the difference between
the value of the contract at the time it was opened and the value at the time
it was closed.
The use of forward foreign currency contracts does not eliminate fluctuations
in the underlying prices of the securities of the Portfolio, but it does
establish a rate of exchange that can be achieved in the future. Although
forward foreign currency contracts to sell limit the risk of loss due to a
decline in the value of the currency holdings, they also limit any potential
gain that might result should the value of the currency increase. In addition,
the Portfolio could be exposed to risks if the counterparties to the contracts
are unable to meet the terms of the contracts.
G. SECURITIES LENDING - The Portfolio may lend its securities to certain
qualified brokers who borrow securities in order to complete certain
transactions. By lending its investment securities, the Portfolio attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term of the loan would
accrue to the account of the Portfolio. Risks of delay in recovery of the
securities or even loss of rights in the collateral may occur should the
borrower of the securities fail financially. Risks may also arise to the extent
that the value of the collateral decreases below the value of the securities
loaned.
Upon entering into a securities lending transaction, the Portfolio receives
cash or other securities as collateral in an amount equal to or exceeding 102%
of the current market value of the loaned securities. Any cash received as
collateral is generally invested by State Street Bank and Trust Company ("State
Street"), acting in its capacity as securities lending agent (the "Agent"), in
the State Street Navigator Securities Lending Prime Portfolio which is a money
market fund registered under the 1940 Act. A portion of the dividends received
on the collateral is rebated to the borrower of the securities and the
remainder is split between the Agent and the Portfolio. On loans collateralized
by cash, the cash collateral is invested in a money market fund or short term
securities. A portion of the income generated upon investment of the collateral
is remitted to the Borrowers and the remainder is allocated between the fund
and the lending agent. On loans collateralized by U.S. Treasuries, a fee is
received from the Borrower and is allocated between the fund and the lending
agent.
H. FOREIGN CURRENCY TRANSLATION - The books and records of the Portfolio are
maintained in U.S. dollars. Foreign currencies, investments and other assets
and liabilities are translated into U.S. dollars on a daily basis using
prevailing exchange rates. Purchases and sales of securities are translated at
the rates of exchange prevailing when such securities were acquired or sold.
Income is translated at rates of exchange prevailing when interest is accrued
or dividends are recorded.
16
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The Portfolio does not isolate that portion of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in
forward foreign currency contracts, sales of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities
transactions, and the difference between the amounts of dividends, interest,
and foreign withholding taxes recorded on the Portfolio's books, and the U.S.
dollar equivalent of the amounts actually received or paid. Net unrealized
foreign exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at fiscal year end, from
changes in the exchange rates of foreign currency held, and from changes in the
contract value of forward foreign currency contracts.
I. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
J. FORWARD COMMITMENTS, WHEN-ISSUED AND DELAYED DELIVERY SECURITIES - The
Portfolio may purchase securities on a when-issued or delayed delivery basis
and may purchase or sell securities on a forward commitment basis. Settlement
of such transactions normally occurs within a month or more after the purchase
or sale commitment is made. The Portfolio may purchase securities under such
conditions only with the intention of actually acquiring them, but may enter
into a separate agreement to sell the securities before the settlement date.
Since the value of securities purchased may fluctuate prior to settlement, the
Portfolio may be required to pay more at settlement than the security is worth.
In addition, the purchaser is not entitled to any of the interest earned prior
to settlement. Upon making a commitment to purchase a security on a
when-issued, delayed delivery or forward commitment basis, the Portfolio will
hold liquid assets in a segregated account at the Portfolio's custodian bank
worth at least the equivalent of the amount due. The liquid assets will be
monitored on a daily basis and adjusted as necessary to maintain the necessary
value.
K. DIRECTED BROKERAGE AGREEMENT - The Trust has entered into a directed
brokerage arrangement with State Street Global Markets ("SSGM"). Under this
arrangement, the Portfolio directs certain trades to SSGM in return for a
recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to
each Portfolio are shown separately as an expense reduction on the Statement of
Operations of the Portfolio.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with Loomis, Sayles & Company, L.P., (the "Adviser") for investment advisory
services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- --------------------------
Loomis Sayles Global Markets Portfolio $2,260,976 0.70% First $500 Million
0.65% $500 Million to $1 Billion
0.60% Over $1 Billion
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
17
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Maximum Expense Ratio
under current Expense
Limitation Agreement
---------------------
Portfolio Class A Class B Class E
--------- ------- ------- -------
Loomis Sayles Global Markets Portfolio 0.90% 1.15% 1.05%*
* Class not offered during the period.
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratio as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
The amount waived and expenses reimbursed for the period ended June 30, 2007 is
shown as investment advisory fee waiver in the Statement of Operations of the
Portfolio.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued Net
Through Increase
Beginning Shares Dividend Shares in Shares Ending
Shares Sold Reinvestment Repurchased Outstanding Shares
- - ---------- ---------- ------------- ----------- ----------- ----------
Loomis Sayles Global Markets Portfolio
Class A
06/30/2007 50,543,063 28,387,317 -- (1,745,352) 26,641,965 77,185,028
05/01/2006-12/31/2006 -- 51,075,968 510,265 (1,043,170) 50,543,063 50,543,063
Class B
06/30/2007 947,535 906,740 -- (261,919) 644,821 1,592,356
05/01/2006-12/31/2006 -- 1,000,981 8,611 (62,057) 947,535 947,535
18
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
Loomis Sayles Global Markets Portfolio $36,363,773 $503,377,010 $3,768,586 $415,556,387
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation Depreciation Appreciation
- --------- ------------ ------------ ------------ --------------
Loomis Sayles Global Markets Portfolio $793,769,100 $103,787,845 $(5,009,662) $98,778,183
6. SECURITY LENDING
As of June 30, 2007, the Portfolio had loaned securities which were
collateralized by short-term investments. The value of securities on loan and
the value of the related collateral were as follows:
Value of Value of
Securities Collateral
------------ ------------
Loomis Sayles Global Markets Portfolio $142,241,897 $146,154,222
7. FORWARD FOREIGN CURRENCY CONTRACTS
Open forward foreign currency contracts at June 30, 2007, were as follows:
Forward Foreign Currency Contracts to Sell:
In Net Unrealized
Value at Exchange Appreciation/
Settlement Date Contacts to Deliver June 30, 2007 for US $ (Depreciation)
--------------- ----------------------- ------------- ---------- --------------
09/06/2007 3,470,000,000 COP $1,751,265 $1,838,898 $87,633
09/19/2007 4,820,000 ZAR 677,088 669,770 (7,318)
-------
$80,315
=======
COP - Colombia Peso
ZAR - South Africa Rand
8. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the period ended December 31, 2006
was as follows:
Ordinary Income Long-Term Capital Gain Total
--------------- ---------------------- ----------
2006 2006 2006
--------------- ---------------------- ----------
Loomis Sayles Global Markets Portfolio $5,375,468 $-- $5,375,468
19
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
8. DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
------------- ------------- ------------ ------------------ -----------
Loomis Sayles Global Markets Portfolio $-- $-- $47,885,451 $(26,372,243) $21,513,208
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
9. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
10. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
20
MET INVESTORS SERIES TRUST
Lord Abbett
Bond Debenture Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
LORD ABBETT BOND DEBENTURE PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY LORD, ABBETT & CO. LLC
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
MARKET REVIEW
Economic data during the period was mostly positive, with employment, wages,
and consumer confidence all strong. First quarter Gross Domestic Product (GDP)
growth, however, fell to 0.7%, the slowest growth level in four years. Within
the disappointing GDP report, the housing market was especially weak with
existing home sales slowing in April and May to an annualized rate of 5.99
million. With mixed data and relatively low inflation, the Federal Reserve
Board (the Fed) left the Fed Funds rate (the rate at which banks lend to one
another) unchanged at 5.25% at its January, March, May, and June meetings. At
the last meeting, the Fed indicated that the U.S. economy continued to grow at
a moderate pace but that "the predominant policy concern remains the risk that
inflation will fail to moderate as expected". Late in the period, the benchmark
10-year Treasury yield crossed the psychologically important level of 5% for
the first time since August of 2006, increasing to 5.295% on June 12/th/, the
highest level in five years.
Year-to-date, the Merrill Lynch High Yield Master II Index is up 3.07%, the
Lehman Aggregate Index is up 0.98%, and the Merrill Lynch All Convertibles
Index/(1)/ is up 6.96%. Convertibles captured 100% of the upside of equities,
with the S&P 500(R) Index/(2)/ also up 6.96%.
Thus far in 2007, investors have shown a preference for riskier, lower rated
securities. Within the high yield market, CCC-rated bonds outperformed single
and double B-rated bonds, with the CCC-Index up 6.14%, the B-Index up 3.34%,
and the BB-Index up 1.54%. In the convertible market, speculative grade issues
beat investment grade issues as well. The Merrill Lynch Speculative Grade
Index/(3)/ was up 9.83%, while the Merrill Lynch Investment Grade Index/(4)/
was up 5.46%. Even in the high-grade portion of the market, mortgages and
corporates outperformed treasuries.
PORTFOLIO REVIEW
The Portfolio outperformed its benchmark, the Lehman Brothers Aggregate Bond
Index, for the six months ended June 30, 2007.
Performance during the period was helped by convertible securities, which
greatly outperformed high yield and high grade holdings. These securities
benefited from positive macro trends and a strong equity market. Among
industries, pharmaceuticals, health services, and media-cable were particularly
strong. In particular, Schering-Plough Corporation did well after releasing
first quarter results which heartily beat analyst expectations. Additionally,
other pharmaceutical companies also were boosted by stronger than anticipated
sales growth. In health services, Manor Care, Inc. rose sharply on a possible
private equity buyout. Natural gas provider, The Williams Companies, Inc. was
also among top performers.
The company agreed to sell its power assets in a move to reduce debt and focus
on its core natural gas operations. The move should also lead to a lower cost
of capital for the firm.
Detracting from performance on an absolute basis were high grade holdings,
which lagged high yield and convertibles as interest rates rose over the period
and riskier assets performed better. In particular, the more interest rate
sensitive industries of investments and banking lagged. Also detracting from
performance was beverage company, Constellation Brands, Inc. The company
disappointed investors after lowering guidance for 2008, citing increasing
challenges in the UK market, primarily due to increased competition from low
cost Australian and private label wine makers. Agriculture firm,
Archer-Daniels-Midland Company, also detracted from performance after the firm
released lower than expected quarterly earnings. The company missed targets on
ethanol margins, partly due to higher corn costs. Chip maker, LSI Corporation,
also detracted from performance after the company gave guidance for second
quarter sales and profit that fell short of analyst expectations. The guidance
also led to investor worries over a recent large acquisition made by the firm.
OUTLOOK
We do not think that recent difficulties in the subprime mortgage market will
spill over into the U.S. high yield market and we have avoided subprime issuers
within our mortgage holdings. We believe much of the problem stems from
aggressive issuance and low lending standards and we have always maintained a
preference for AAA rated prime mortgages. Nevertheless, we think that investors
have become more cautious given the subprime shock and that market volatility
could continue for several more quarters. We remain positive on the outlook for
high yield. We were pleased with first quarter earnings among our holdings and
expect corporate earnings to continue growing at a high single digit pace.
We have been saying from some time that inflation would be constrained and that
Treasuries have not offered compelling value. We have seen that play out thus
far this year, with high yield and convertibles greatly outperforming
investment grade securities. We expect strength in capital goods, energy,
infrastructure, and select export markets and are avoiding high yield issuers
that are closely tied to low end consumer spending. Convertible securities have
also been an important factor this year and we have seen good earnings results
from many of the convertibles we hold. Interest rates may continue to trend
higher, but we expect that GDP growth will eventually normalize to the 2% range.
THE PORTFOLIO IS ACTIVELY MANAGED AND THEREFORE, ITS HOLDINGS AND WEIGHTINGS OF
A PARTICULAR ISSUER OR PARTICULAR SECTOR AS A PERCENTAGE OF PORTFOLIO ASSETS
ARE SUBJECT TO CHANGE. SECTORS MAY INCLUDE MANY INDUSTRIES.
NOTE: THE VIEWS OF LORD, ABBETT & CO. LLC AND THE PORTFOLIO HOLDINGS DESCRIBED
IN THIS REPORT ARE AS OF JUNE 30, 2007; VIEWS AND PORTFOLIO HOLDINGS MAY HAVE
CHANGED SUBSEQUENT TO THIS DATE. INFORMATION PROVIDED IN THIS REPORT SHOULD NOT
BE CONSIDERED A RECOMMENDATION TO PURCHASE OR SELL SECURITIES. THE PORTFOLIO IS
NOT INSURED BY THE FDIC, IS NOT A DEPOSIT OR OTHER OBLIGATION OF, OR GUARANTEED
BY, BANKS, AND IS SUBJECT TO INVESTMENT RISKS INCLUDING LOSS OF PRINCIPAL
AMOUNT INVESTED. FOR A MORE DETAILED DISCUSSION OF THE RISKS ASSOCIATED WITH
THE PORTFOLIO, SEE THE PORTFOLIO'S PROSPECTUS.
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
LORD ABBETT BOND DEBENTURE PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY LORD, ABBETT & CO. LLC
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
Indices are unmanaged, do not reflect the deduction of fees or expenses and are
not available for direct investment.
TEAM MANAGED
Lord Abbett uses a team of investment managers and analysts acting together to
manage the Portfolio's investments. Christopher J. Towle, Partner and
Investment Manager, heads the team and is primarily responsible for the
day-to-day management of the Portfolio. Mr. Towle joined Lord Abbett in 1987,
is the holder of a Chartered Financial Analyst designation and has been in the
investment business since 1980.
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
- --------
/(1)/The Merrill Lynch All Convertibles Index consists of publicly-traded U.S.
issues convertible into shares, including traditional and mandatory
convertibles.
/(2)/S&P 500(R) Index: Widely regarded as the standard for measuring large-cap
U.S. stock market performance, this popular index includes a representative
sample of leading companies in leading industries.
/(3)/The Merrill Lynch All Speculative Grade Convertible Index is comprised of
approximately 300 issues of only speculative-grade convertible bonds and
preferreds.
/(4)/The Merrill Lynch All Investment Grade Convertible Index is comprised of
approximately 200 issues of only investment-grade convertible bonds and
preferreds.
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
- -------------------------------------------------------------------------------
Federal National Mortgage Assoc. (6.500%, due TBA) 1.54%
- -------------------------------------------------------------------------------
Federal National Mortgage Assoc. (6.000%, due 02/01/37) 0.98%
- -------------------------------------------------------------------------------
Federal National Mortgage Assoc. (6.000%, due 09/01/36) 0.95%
- -------------------------------------------------------------------------------
Federal National Mortgage Assoc. (6.000%, due 03/01/36) 0.88%
- -------------------------------------------------------------------------------
Cincinnati Bell, Inc. (8.375%, due 01/15/14) 0.85%
- -------------------------------------------------------------------------------
General Motors Corp. (7.200%, due 01/15/11) 0.69%
- -------------------------------------------------------------------------------
Qwest Capital Funding, Inc. (7.900%, due 08/15/10) 0.68%
- -------------------------------------------------------------------------------
CCH I LLC/CCH I Capital Corp. (11.000%, due 10/01/15) 0.67%
- -------------------------------------------------------------------------------
Idearc, Inc. (8.000%, due 11/15/16) 0.67%
- -------------------------------------------------------------------------------
Berry Plastics Holding Corp. (8.875%, due 09/15/14) 0.67%
- -------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
[CHART]
Corporate Bonds 67.6%
Convertible Bonds 15.2%
U.S. Government Agency Obligations 8.0%
Preferred Stocks 4.5%
Common Stocks 0.5%
U.S. Government Agency Mortgage Backed Securities 4.2%
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
LORD ABBETT BOND DEBENTURE PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY LORD, ABBETT & CO. LLC
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
LORD ABBETT BOND DEBENTURE PORTFOLIO MANAGED BY LORD, ABBETT & CO. LLC, VS.
LEHMAN BROTHERS AGGREGATE BOND INDEX/1/, CREDIT SUISSE FIRST BOSTON HIGH YIELD
INDEX/2/ AND MERRILL LYNCH HIGH YIELD MASTER II CONSTRAINED INDEX/3/
Growth Based on $10,000+
[CHART]
Lehman Credit Suisse Merrill Lynch
Lord Abbett Brothers First Boston High Yield
Bond Debenture Aggregate High Yield Master II
Portfolio Bond Index/1/ Index/2/ Constrained Index/3/
--------------- ------------ ------------- --------------------
12/31/1996 $10,000 $10,000 $10,000 $10,000
12/31/1997 11,439 10,968 11,262 11,327
12/31/1998 12,154 11,920 11,327 11,661
12/31/1999 12,566 11,820 11,699 11,945
12/31/2000 12,675 13,195 11,088 11,333
12/31/2001 13,152 14,308 11,729 11,843
12/31/2002 13,100 15,778 12,092 11,619
12/31/2003 15,656 16,426 15,470 14,890
12/31/2004 16,977 17,138 17,321 16,508
12/31/2005 17,285 17,554 17,712 16,961
12/31/2006 18,903 18,316 19,824 18,957
6/30/2007 19,670 18,494 20,555 19,535
--------------------------------------------------------------
Average Annual Return/4/
(for the period ended 6/30/07)
--------------------------------------------------------------
Since
1 Year 3 Year 5 Year 10 Year Inception/5/
--------------------------------------------------------------
Lord Abbett Bond
Debenture
- -- Portfolio--Class A 11.36% 7.63% 9.00% 6.33% 7.51%
Class B 11.16% 7.37% 8.75% -- 6.59%
Class E 11.16% 7.45% 8.85% -- 7.69%
--------------------------------------------------------------
Lehman Brothers
Aggregate Bond
- - - Index/1/ 6.11% 3.98% 4.48% 6.02% 6.22%
--------------------------------------------------------------
Credit Suisse First
Boston High Yield
- -- Index/2/ 12.15% 9.04% 11.84% 6.86% 7.53%
--------------------------------------------------------------
Merrill Lynch High
Yield Master II
- - - Constrained Index/3/ 11.75% 8.98% 11.75% 6.31% 7.04%
--------------------------------------------------------------
+The chart reflects the performance of Class A shares of the Portfolio. The
performance of Class A shares will differ from that of the Class B and Class E
shares because of the difference in expenses paid by policyholders investing in
the different share class.
/1/Lehman Brothers Aggregate Bond Index represents securities that are U.S.
domestic, taxable, non-convertible and dollar denominated. The Index covers the
investment grade fixed rate bond market, with index components for government
and corporate securities, mortgage pass-through securities, and asset-backed
securities. The Index does not include fees or expenses and are not available
for direct investment.
/2/The Credit Suisse First Boston High Yield Index is an unmanaged index
representative of lower rated debt, including straight-preferred stocks. The
Index does not include fees or expenses and is not available for direct
investment.
/3/The Merrill Lynch High Yield Master II Constrained Index and the Hybrid
Index is comprised of 60% Merrill Lynch High Yield Master II Constrained Index,
20% Lehman Brothers U.S. Aggregate Bond Index, 20% Merrill Lynch all
Convertible Index. The Index does not include fees or expenses and are not
available for direct investment.
/4/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/5/Inception of the Class A shares is 5/1/96. Inception of the Class B shares
is 4/3/01. Inception of the Class E shares is 4/2/02. Index returns are based
on an inception date of 5/1/96.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
3
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
LORD ABBETT BOND DEBENTURE PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,040.60 $2.63
Hypothetical (5% return before expenses) 1,000.00 1,022.22 2.61
- ------------------------------------------ ------------- ------------- --------------
Class B
Actual $1,000.00 $1,039.20 $3.89
Hypothetical (5% return before expenses) 1,000.00 1,020.98 3.86
- ------------------------------------------ ------------- ------------- --------------
Class E
Actual $1,000.00 $1,040.10 $3.39
Hypothetical (5% return before expenses) 1,000.00 1,021.47 3.36
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.52%,
0.77%, and 0.67% for the Class A, Class B, and Class E, respectively,
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period).
4
MET INVESTORS SERIES TRUST
LORD ABBETT BOND DEBENTURE PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------------
DOMESTIC BONDS & DEBT SECURITIES - 76.9%
AEROSPACE & DEFENSE - 1.0%
Armor Holdings, Inc.
8.250%, due 08/15/13........... $ 2,000,000 $ 2,115,000
DRS Technologies, Inc.
6.875%, due 11/01/13........... 6,000,000 5,850,000
Esterline Technologies Corp......
7.750%, due 06/15/13............ 3,000,000 3,045,000
6.625%, due 03/01/17 (144A)(a).. 1,150,000 1,115,500
L-3 Communications Corp.
6.125%, due 01/15/14............ 6,000,000 5,685,000
6.375%, due 10/15/15............ 2,725,000 2,588,750
---------------
20,399,250
---------------
AIR FREIGHT & LOGISTICS - 0.4%
Hawker Beechcraft Acquisition Co.
8.500%, due 04/01/15
(144A)(a)(b).................. 6,175,000 6,391,125
9.750%, due 04/01/17
(144A)(a)(b).................. 1,600,000 1,676,000
---------------
8,067,125
---------------
APPAREL & TEXTILES - 0.4%
Levi Strauss & Co.
8.875%, due 04/01/16(b)........ 1,500,000 1,545,000
Quiksilver, Inc.
6.875%, due 04/15/15........... 5,750,000 5,433,750
---------------
6,978,750
---------------
AUTO COMPONENTS - 0.9%
Accuride Corp.
8.500%, due 02/01/15(b)........ 1,500,000 1,488,750
Cooper Standard Automotive, Inc.
8.375%, due 12/15/14(b)........ 4,100,000 3,843,750
Lear Corp.
8.500%, due 12/01/13(b)........ 4,225,000 4,077,125
Stanadyne Corp., Series
1 10.000%, due 08/15/14........ 2,075,000 2,204,688
Stanadyne Holdings, Inc.
0.000%/12.000%, due
02/15/15(c).................... 2,750,000 2,296,250
Tenneco Automotive, Inc.
8.625%, due 11/15/14(b)........ 3,375,000 3,493,125
---------------
17,403,688
---------------
AUTOMOBILES - 1.0%
General Motors Corp.
7.200%, due 01/15/11(b)......... 14,000,000 13,492,500
8.375%, due 07/15/33(b)......... 2,500,000 2,293,750
TRW Automotive, Inc.
7.250%, due 03/15/17 (144A)(a). 3,500,000 3,351,250
---------------
19,137,500
---------------
-----------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-----------------------------------------------------------------
AUTOMOTIVE LOANS - 1.2%
Ford Capital BV
9.500%, due 06/01/10............. $ 3,500,000 $ 3,570,000
Ford Motor Credit Co.
7.375%, due 10/28/09.............. 4,000,000 3,972,700
7.250%, due 10/25/11.............. 8,625,000 8,308,480
General Motors Acceptance Corp.
7.250%, due 03/02/11............. 8,500,000 8,478,835
---------------
24,330,015
---------------
BEVERAGES - 0.3%
Cerveceria Nacional Dominicana
8.000%, due 03/27/14 (144A)(a)... 2,175,000 2,245,688
Constellation Brands, Inc.
7.250%, due 05/15/17 (144A)(a)... 3,050,000 2,989,000
---------------
5,234,688
---------------
BUILDING MATERIALS - 0.9%
Associated Materials, Inc.
0.000%/11.250%, due
03/01/14(b)(c)................... 2,925,000 2,193,750
Belden Cdt, Inc.
7.000%, due 03/15/17 (144A)(a)... 2,275,000 2,252,250
Building Materials Corp. of America
7.750%, due 08/01/14(b).......... 2,000,000 1,950,000
Interline Brands, Inc.
8.125%, due 06/15/14............. 5,500,000 5,568,750
NTK Holdings, Inc.
0.000%/10.750%, due
03/01/14(b)(c)................... 3,650,000 2,664,500
Ply Gem Industries, Inc.
9.000%, due 02/15/12(b).......... 4,025,000 3,637,594
---------------
18,266,844
---------------
BUSINESS SERVICES - 0.7%
Affinion Group, Inc.
11.500%, due 10/15/15............ 5,300,000 5,750,500
RH Donnelley Corp.
8.875%, due 01/15/16............. 7,800,000 8,151,000
---------------
13,901,500
---------------
CHEMICALS - 3.4%
Mosaic Co. (The)
7.375%, due 12/01/14 (144A)(a)... 4,000,000 4,060,000
Equistar Chemicals LP
7.550%, due 02/15/26............. 7,815,000 7,170,262
Hercules, Inc.
6.750%, due 10/15/29............. 6,000,000 5,850,000
Huntsman International LLC
7.875%, due 11/15/14............. 5,500,000 5,919,375
Huntsman LLC
11.500%, due 07/15/12............ 1,320,000 1,471,800
See notes to financial statements
5
MET INVESTORS SERIES TRUST
LORD ABBETT BOND DEBENTURE PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-----------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-----------------------------------------------------------------------
CHEMICALS - CONTINUED
IMC Global, Inc.
7.300%, due 01/15/28................ $ 4,900,000 $ 4,728,500
Ineos Group Holdings Plc
8.500%, due 02/15/16
(144A)(a)(b)........................ 9,000,000 8,842,500
Lyondell Chemical Co.
8.000%, due 09/15/14................. 7,000,000 7,227,500
8.250%, due 09/15/16................. 175,000 183,750
Macdermid, Inc.
9.500%, due 04/15/17 (144A)(a)...... 3,000,000 3,030,000
Nalco Co. 8.875%, due 11/15/13(b)..... 5,150,000 5,368,875
Nova Chemicals Corp.
6.500%, due 01/15/12(b)............. 3,125,000 2,937,500
Rockwood Specialties Group, Inc.
7.500%, due 11/15/14(b)............. 4,500,000 4,545,000
Terra Capital, Inc.
7.000%, due 02/01/17................ 5,000,000 4,850,000
---------------
66,185,062
---------------
COMMERCIAL SERVICES & SUPPLIES - 3.3%
Aramark Corp.
8.500%, due 02/01/15 (144A)(a)...... 4,050,000 4,141,125
8.856%, due 02/01/15
(144A)(a)(d)....................... 1,000,000 1,020,000
Ashtead Capital, Inc.
9.000%, due 08/15/16 (144A)(a)...... 4,000,000 4,210,000
Avis Budget Car Rental LLC/Avis Budget
Finance, Inc.
7.625%, due 05/15/14................ 12,500,000 12,687,500
Deluxe Corp.
7.375%, due 06/01/15 (144A)(a)...... 3,900,000 3,900,000
FTI Consulting, Inc.
7.750%, due 10/01/16................ 4,475,000 4,586,875
Hertz Corp. 8.875%, due 01/01/14...... 6,150,000 6,442,125
Iron Mountain, Inc.
7.750%, due 01/15/15(b)............. 7,000,000 6,860,000
Neff Corp.
10.000%, due 06/01/15
(144A)(a)........................... 2,800,000 2,793,000
Rental Services Corp.
9.500%, due 12/01/14 (144A)(a)...... 4,650,000 4,766,250
United Rentals North America, Inc.
7.750%, due 11/15/13................ 5,500,000 5,534,375
Williams Scotsman, Inc.
8.500%, due 10/01/15................ 7,500,000 7,781,250
---------------
64,722,500
---------------
COMPUTER SOFTWARE & PROCESSING - 0.1%
Unisys Corp. 8.000%, due 10/15/12..... 1,200,000 1,173,000
---------------
-----------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-----------------------------------------------------------------------
COMPUTERS & PERIPHERALS - 0.2%
Advanced Micro Devices, Inc.
7.750%, due 11/01/12(b)................ $ 5,000,000 $ 4,725,000
---------------
CONTAINERS & PACKAGING - 2.7%
Ball Corp. 6.625%, due 03/15/18.......... 900,000 866,250
Berry Plastics Holding Corp.
8.875%, due 09/15/14................... 12,900,000 13,125,750
Crown Cork & Seal, Inc.
7.375%, due 12/15/26(b)................ 12,250,000 11,331,250
Graphic Packaging International Corp.
9.500%, due 08/15/13(b)................ 8,750,000 9,132,812
Owens Brockway Glass Container, Inc.
8.875%, due 02/15/09.................... 2,637,000 2,696,333
7.750%, due 05/15/11.................... 5,500,000 5,671,875
6.750%, due 12/01/14.................... 1,000,000 980,000
Owens-Illinois, Inc.
7.500%, due 05/15/10(b)................ 3,850,000 3,902,937
Smurfit-Stone Container Enterprises, Inc.
8.000%, due 03/15/17................... 5,000,000 4,875,000
---------------
52,582,207
---------------
ELECTRIC SERVICES - 0.9%
Duke Energy Co.
5.375%, due 01/01/09.................... 5,000,000 4,990,085
Pacific Gas & Electric Co.
4.800%, due 03/01/14.................... 2,500,000 2,366,035
PSEG Energy Holdings LLC
8.500%, due 06/15/11.................... 5,500,000 5,852,896
Virginia Electric & Power Co.
4.500%, due 12/15/10.................... 5,000,000 4,842,145
---------------
18,051,161
---------------
ELECTRIC UTILITIES - 2.7%
Edison Mission Energy
7.750%, due 06/15/16.................... 10,350,000 10,350,000
7.000%, due 05/15/17 (144A)(a).......... 7,500,000 7,106,250
Mirant Americas General LLC
9.125%, due 05/01/31.................... 7,850,000 8,635,000
Mirant North America LLC
7.375%, due 12/31/13.................... 6,000,000 6,165,000
Nevada Power Co.
5.875%, due 01/15/15.................... 3,500,000 3,436,482
NRG Energy, Inc.
7.250%, due 02/01/14.................... 5,000,000 5,025,000
7.375%, due 01/15/17.................... 4,750,000 4,779,687
PPL Energy Supply LLC
6.400%, due 11/01/11.................... 2,000,000 2,033,266
Reliant Energy, Inc. 3,625,000 3,715,625
6.750%, due 12/15/14....................
7.875%, due 06/15/17(b)................. 2,650,000 2,583,750
---------------
53,830,060
---------------
See notes to financial statements
6
MET INVESTORS SERIES TRUST
LORD ABBETT BOND DEBENTURE PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-----------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-----------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.6%
General Cable Corp.
7.125%, due 04/01/17 (144A)(a)....... $ 3,150,000 $ 3,134,250
NXP BV/NXP Funding LLC
7.875%, due 10/15/14................. 7,300,000 7,227,000
9.500%, due 10/15/15(b).............. 425,000 420,750
---------------
10,782,000
---------------
ENERGY - 0.9%
Dynegy Holdings, Inc.
7.750%, due 06/01/19 (144A)(a)....... 3,925,000 3,669,875
Pacific Energy Partners LP/Pacific
Energy Finance Corp.
6.250%, due 09/15/15................. 1,000,000 983,880
VeraSun Energy Corp.
9.375%, due 06/01/17 (144A)(a)....... 5,500,000 5,142,500
Williams Partners LP/Williams Partners
Finance Corp.
7.250%, due 02/01/17................. 7,000,000 7,070,000
---------------
16,866,255
---------------
ENERGY EQUIPMENT & SERVICES - 0.2%
Hornbeck Offshore Services, Inc.
6.125%, due 12/01/14................. 4,750,000 4,370,000
---------------
ENTERTAINMENT & LEISURE - 0.8%
AMC Entertainment, Inc.
8.000%, due 03/01/14................. 8,000,000 7,880,000
Great Canadian Gaming Corp.
7.250%, due 02/15/15 (144A)(a)....... 5,000,000 5,000,000
Seneca Gaming Corp.
7.250%, due 05/01/12................. 3,500,000 3,565,625
---------------
16,445,625
---------------
ENVIRONMENTAL SERVICES - 1.0%
Aleris International, Inc.
10.000%, due 12/15/16
(144A)(a)........................... 6,150,000 6,134,625
Allied Waste North America, Inc.
7.875%, due 04/15/13(b).............. 6,000,000 6,097,500
7.250%, due 03/15/15................. 7,750,000 7,711,250
---------------
19,943,375
---------------
FINANCIAL - DIVERSIFIED - 0.2%
Alamosa Delaware, Inc.
11.000%, due 07/31/10................ 1,500,000 1,589,235
Hughes Network Systems LLC/HNS
Finance Corp.
9.500%, due 04/15/14................. 2,425,000 2,546,250
---------------
4,135,485
---------------
FOOD & DRUG RETAILING - 0.2%
Supervalu, Inc.
7.500%, due 11/15/14................ 3,300,000 3,399,000
---------------
--------------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------------------
FOOD PRODUCTS - 0.5%
Dole Food Co., Inc.
8.750%, due 07/15/13(b)................... $ 8,500,000 $ 8,330,000
Land O' Lakes, Inc.
9.000%, due 12/15/10...................... 1,900,000 2,004,500
---------------
10,334,500
---------------
FOOD RETAILERS - 0.6%
Ingles Markets, Inc.
8.875%, due 12/01/11...................... 5,000,000 5,206,250
Stater Brothers Holdings, Inc.
8.125%, due 06/15/12...................... 5,825,000 5,897,813
---------------
11,104,063
---------------
HEALTH CARE EQUIPMENT & SUPPLIES - 0.8%
Advanced Medical Optics, Inc.
7.500%, due 05/01/17 (144A)(a)............ 5,000,000 4,750,000
Alliance Imaging
7.250%, due 12/15/12(b)................... 2,975,000 2,900,625
Fresenius Med Cap Trust II
7.875%, due 02/01/08...................... 1,050,000 1,055,250
Hanger Orthopedic Group, Inc.
10.250%, due 06/01/14..................... 2,450,000 2,646,000
Vanguard Health Holding Co. II
9.000%, due 10/01/14...................... 5,000,000 4,975,000
---------------
16,326,875
---------------
HEALTH CARE PROVIDERS & SERVICES - 2.8%
Bio-Rad Laboratories, Inc.
6.125%, due 12/15/14...................... 7,000,000 6,615,000
Centene Corp.
7.250%, due 04/01/14...................... 3,400,000 3,366,000
Community Health Systems, Inc.
8.875%, due 07/15/15 (144A)(a)............ 3,925,000 3,998,594
DaVita, Inc.
7.250%, due 03/15/15(b)................... 7,500,000 7,443,750
HCA, Inc.
9.125%, due 11/15/14 (144A)(a)............. 5,000,000 5,268,750
6.375%, due 01/15/15....................... 10,500,000 8,951,250
Select Medical Corp.
7.625%, due 02/01/15(b)................... 1,775,000 1,597,500
Sun Healthcare Group
9.125%, due 04/15/15 (144A)(a)............ 7,225,000 7,550,125
Tenet Healthcare Corp.
9.875%, due 07/01/14(b)................... 3,000,000 2,985,000
9.250%, due 02/01/15(b).................... 2,500,000 2,387,500
United Surgical Partners International, Inc.
8.875%, due 05/01/17 (144A)(a)............ 2,500,000 2,518,750
UnitedHealth Group, Inc.
4.875%, due 04/01/13...................... 3,000,000 2,864,520
---------------
55,546,739
---------------
See notes to financial statements
7
MET INVESTORS SERIES TRUST
LORD ABBETT BOND DEBENTURE PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
--------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------------
HOMEBUILDERS - 0.3%
Beazer Homes USA, Inc.
6.500%, due 11/15/13(b)............. $ 5,000,000 $ 4,325,000
K Hovnanian Enterprises, Inc.
8.625%, due 01/15/17................ 900,000 868,500
William Lyon Homes, Inc.
10.750%, due 04/01/13(b)............ 1,500,000 1,417,500
---------------
6,611,000
---------------
HOTELS, RESTAURANTS & LEISURE - 4.2%
Boyd Gaming Corp.
7.125%, due 02/01/16................ 4,500,000 4,387,500
Dennys Holdings, Inc.
10.000%, due 10/01/12(b)............ 5,000,000 5,300,000
Friendly Ice Cream Corp.
8.375%, due 06/15/12................ 1,525,000 1,601,250
Gaylord Entertainment Co.
8.000%, due 11/15/13(b)............. 7,675,000 7,818,906
6.750%, due 11/15/14................. 5,000,000 4,937,500
Isle of Capri Casinos, Inc.
9.000%, due 03/15/12................ 3,000,000 3,142,500
7.000%, due 03/01/14................. 9,000,000 8,561,250
Landry's Restaurants, Inc.
7.500%, due 12/15/14................ 6,700,000 6,532,500
Las Vegas Sands Corp.
6.375%, due 02/15/15(b)............. 6,000,000 5,737,500
Mandalay Resort Group
9.375%, due 02/15/10................ 2,000,000 2,120,000
MGM Mirage, Inc.
6.750%, due 09/01/12................ 5,500,000 5,280,000
Premier Entertainment Biloxi LLC
10.750%, due 02/01/12............... 3,100,000 3,239,500
River Rock Entertainment Authority
9.750%, due 11/01/11................ 4,850,000 5,116,750
Scientific Games Corp.
6.250%, due 12/15/12................ 2,500,000 2,415,625
Snoqualmie Entertainment Authority
9.125%, due 02/01/15 (144A)(a)...... 4,250,000 4,377,500
Station Casinos, Inc.
6.500%, due 02/01/14................ 4,500,000 4,005,000
Turning Stone Casino Resort Enterprise
9.125%, due 12/15/10 - 09/15/14
(144A)(a)........................... 7,350,000 7,515,375
---------------
82,088,656
---------------
HOUSEHOLD DURABLES - 0.3%
Standard Pacific Corp.
7.000%, due 08/15/15(b)............. 3,550,000 3,141,750
Vitro S.A. de C.V.
9.125%, due 02/01/17 (144A)(a)...... 3,500,000 3,605,000
---------------
6,746,750
---------------
-------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-------------------------------------------------------------------
INDUSTRIAL - DIVERSIFIED - 1.0%
Actuant Corp. 6.875%, due 06/15/17
(144A)(a)(b)....................... $ 1,325,000 $ 1,318,375
Mueller Water Products, Inc.
7.375%, due 06/01/17 (144A)(a)..... 4,900,000 4,883,389
Park - Ohio Industries, Inc.
8.375%, due 11/15/14(b)............ 4,250,000 4,111,875
RBS Global, Inc./Rexnord Corp.
9.500%, due 08/01/14................ 9,100,000 9,373,000
11.750%, due 08/01/16(b)............ 300,000 324,000
8.875%, due 09/01/16................ 100,000 100,750
---------------
20,111,389
---------------
INSURANCE - 0.3%
HUB International Holdings, Inc.
9.000%, due 12/15/14 (144A)(a)..... 3,200,000 3,152,000
USI Holdings Corp.
9.230%, due 11/15/14
(144A)(a)(d)....................... 3,500,000 3,500,000
---------------
6,652,000
---------------
INVESTMENT COMPANIES - 0.2%
Algoma Acquisition Corp.
9.875%, due 06/15/15 (144A)(a)..... 3,300,000 3,300,000
---------------
MACHINERY - 0.7%
Baldor Electric Co.
8.625%, due 02/15/17(b)............ 8,400,000 8,925,000
Gardner Denver, Inc.
8.000%, due 05/01/13............... 4,100,000 4,305,000
---------------
13,230,000
---------------
MEDIA - 5.5%
Allbritton Communications Co.
7.750%, due 12/15/12............... 8,500,000 8,585,000
Barrington Broadcasting Group LLC and
Barrington Broadcasting Capital
Corp. 10.500%, due 08/15/14
(144A)(a).......................... 400,000 419,000
CCH I Holdings LLC
11.750%, due 05/15/14(b)........... 7,800,000 7,702,500
CCH I LLC/CCH I Capital Corp.
11.000%, due 10/01/15.............. 12,600,000 13,214,250
Charter Communications
10.250%, due 09/15/10.............. 2,540,000 2,667,000
DirecTV Holdings LLC/DirecTV
Financing Co.
8.375%, due 03/15/13................ 1,625,000 1,708,281
6.375%, due 06/15/15................ 8,000,000 7,540,000
EchoStar DBS Corp.
6.375%, due 10/01/11................ 6,000,000 5,895,000
7.125%, due 02/01/16................ 6,000,000 5,895,000
Idearc, Inc. 8.000%, due 11/15/16.... 13,000,000 13,195,000
See notes to financial statements
8
MET INVESTORS SERIES TRUST
LORD ABBETT BOND DEBENTURE PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
--------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------------
MEDIA - CONTINUED
Interpublic Group of Cos., Inc.
6.250%, due 11/15/14............. $ 3,085,000 $ 2,845,913
Lin Television Corp.
6.500%, due 05/15/13(b).......... 7,000,000 6,877,500
Mediacom Broadband LLC
8.500%, due 10/15/15(b).......... 3,275,000 3,307,750
Mediacom LLC
9.500%, due 01/15/13............. 6,760,000 6,929,000
Paxson Communications Corp.
11.606%, due 01/15/13
(144A)(a)(d)..................... 2,000,000 2,075,000
Radio One, Inc.
6.375%, due 02/15/13(b).......... 2,000,000 1,890,000
Sinclair Broadcast Group, Inc.
8.000%, due 03/15/12............. 932,000 959,960
Univision Communications, Inc.
9.750%, due 03/15/15
(144A)(a)(b)..................... 10,775,000 10,694,187
Warner Music Group
7.375%, due 04/15/14............. 6,525,000 6,100,875
---------------
108,501,216
---------------
METALS & MINING - 2.2%
AK Steel Corp.
7.750%, due 06/15/12(b).......... 4,000,000 4,020,000
Allegheny Ludlum Corp.
6.950%, due 12/15/25............. 4,000,000 4,180,000
Century Aluminum Co.
7.500%, due 08/15/14............. 3,500,000 3,548,125
Freeport McMoRan Copper &
Gold, Inc........................
8.250%, due 04/01/15.............. 3,500,000 3,701,250
8.375%, due 04/01/17.............. 9,300,000 9,951,000
Noranda Aluminium Acquisition Corp.
9.360%, due 05/15/15
(144A)(a)(d)..................... 6,000,000 5,790,000
Novelis, Inc. 7.250%, due 02/15/15. 4,275,000 4,408,594
Peabody Energy Corp.
5.875%, due 04/15/16.............. 4,500,000 4,230,000
7.375%, due 11/01/16.............. 3,500,000 3,587,500
---------------
43,416,469
---------------
OIL & GAS - 5.5%
Airgas, Inc. 6.250%, due 07/15/14.. 4,000,000 3,860,000
Chesapeake Energy Corp.
7.625%, due 07/15/13............. 300,000 309,000
Cimarex Energy Co.
7.125%, due 05/01/17............. 7,000,000 6,860,000
Dynegy Holdings, Inc.
6.875%, due 04/01/11(b)........... 2,375,000 2,345,312
8.375%, due 05/01/16(b)........... 5,775,000 5,673,937
El Paso Corp. 7.000%, due 06/15/17. 6,300,000 6,237,000
------------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------------------
c
OIL & GAS - CONTINUED
Ferrellgas LP 6.750%, due 05/01/14..... $ 5,500,000 $ 5,238,750
Ferrellgas Partners LLP
8.750%, due 06/15/12................. 4,000,000 4,140,000
Foundation Pennsylvania Coal Co.
7.250%, due 08/01/14................. 5,000,000 4,981,250
Grant Prideco, Inc.
6.125%, due 08/15/15................. 5,500,000 5,238,750
Hanover Compressor Co.
8.625%, due 12/15/10.................. 3,000,000 3,108,750
7.500%, due 04/15/13.................. 1,850,000 1,868,500
Inergy LP/Inergy Finance Corp.
8.250%, due 03/01/16................. 5,500,000 5,678,750
KCS Energy, Inc.
7.125%, due 04/01/12................. 5,000,000 4,962,500
Kerr-McGee Corp.
6.950%, due 07/01/24................. 6,850,000 7,124,706
MarkWest Energy Partners LP/MarkWest
Energy Finance Corp.
6.875%, due 11/01/14.................. 5,000,000 4,750,000
8.500%, due 07/15/16.................. 825,000 843,563
Pioneer Natural Resources Co., Series A
7.200%, due 01/15/28................. 1,510,000 1,403,362
Pogo Producing Co.
6.625%, due 03/15/15................. 9,000,000 8,955,000
Pride International, Inc.
7.375%, due 07/15/14................. 3,700,000 3,727,750
Quicksilver Resources, Inc.
7.125%, due 04/01/16................. 2,400,000 2,328,000
Range Resources Corp.
7.375%, due 07/15/13................. 2,575,000 2,613,625
SEMCO Energy, Inc.
7.125%, due 05/15/08................. 8,000,000 8,071,560
Williams Companies, Inc.
7.875%, due 09/01/21................. 6,950,000 7,506,000
---------------
107,826,065
---------------
OIL & GAS EXPLORATION & PRODUCTION - 1.8%
Chesapeake Energy Corp.
6.250%, due 01/15/18................. 10,000,000 9,387,500
Complete Production Services, Inc.
8.000%, due 12/15/16 (144A)(a)....... 7,000,000 7,105,000
Dresser-Rand Group, Inc.
7.375%, due 11/01/14................. 4,750,000 4,791,562
Forest Oil Corp.
8.000%, due 06/15/08.................. 1,500,000 1,526,250
7.250%, due 06/15/19
(144A)(a)(b)........................ 5,300,000 5,167,500
Tesoro Corp.
6.250%, due 11/01/12.................. 5,750,000 5,735,625
6.500%, due 06/01/17 (144A)(a)........ 875,000 855,313
---------------
34,568,750
---------------
See notes to financial statements
9
MET INVESTORS SERIES TRUST
LORD ABBETT BOND DEBENTURE PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
--------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------------
PAPER & FOREST PRODUCTS - 2.0%
Abitibi-Consolidated, Inc.
8.550%, due 08/01/10(b).......... $ 8,352,000 $ 8,017,920
Bowater, Inc.
9.500%, due 10/15/12.............. 4,000,000 3,960,000
6.500%, due 06/15/13(b)........... 4,225,000 3,691,594
Buckeye Technologies, Inc.
8.000%, due 10/15/10............. 5,600,000 5,628,000
Domtar, Inc. 7.875%, due 10/15/11.. 2,275,000 2,340,406
Jefferson Smurfit Corp.
8.250%, due 10/01/12(b).......... 1,750,000 1,745,625
7.500%, due 06/01/13(b)........... 4,000,000 3,900,000
Norske Skog Canada
7.375%, due 03/01/14............. 5,225,000 4,722,094
Rock-Tenn Co.
8.200%, due 08/15/11............. 2,575,000 2,665,125
Tembec Industries, Inc. (Yankee)
8.625%, due 06/30/09(b).......... 2,850,000 1,802,625
---------------
38,473,389
---------------
PERSONAL PRODUCTS - 0.3%
Playtex Products, Inc.
9.375%, due 06/01/11(b).......... 5,000,000 5,162,500
---------------
PHARMACEUTICALS - 0.7%
Mylan Laboratories, Inc.
6.375%, due 08/15/15............. 6,700,000 6,934,500
Warner Chilcott Corp.
8.750%, due 02/01/15............. 5,671,000 5,855,308
---------------
12,789,808
---------------
PUBLISHING - 0.2%
Dex Media West, Series B
9.875%, due 08/15/13............. 3,418,000 3,674,350
---------------
REAL ESTATE - 0.6%
Felcor Lodging LP (REIT)
8.500%, due 06/01/11(b).......... 2,260,000 2,387,125
Host Marriott LP (REIT)
7.000%, due 08/15/12............. 7,000,000 7,043,750
6.375%, due 03/15/15.............. 3,000,000 2,895,000
---------------
12,325,875
---------------
RETAIL - MULTILINE - 1.2%
Brookstone Co., Inc.
12.000%, due 10/15/12(b)......... 3,950,000 4,068,500
Michaels Stores, Inc.
10.000%, due 11/01/14
(144A)(a)(b)..................... 3,000,000 3,090,000
Neiman Marcus Group, Inc. (The)
9.000%, due 10/15/15(b).......... 1,825,000 1,961,875
Rite Aid Corp. 8.125%, due 05/01/10 5,000,000 5,081,250
9.375%, due 12/15/15 (144A)(a).... 5,000,000 4,825,000
------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------------
RETAIL - MULTILINE - CONTINUED
Varietal Distribution Merger
Subordinated, Inc. 10.250%, due
07/15/15 (144A)(a)................ $ 4,000,000 $ 4,010,000
---------------
23,036,625
---------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS - 0.6%
Freescale Semiconductor, Inc.
8.875%, due 12/15/14
(144A)(a)(b) 10,700,000 10,272,000
10.125%, due 12/15/16
(144A)(a)(b)..................... 2,500,000 2,362,500
---------------
12,634,500
---------------
SOFTWARE - 1.6%
Open Solutions, Inc.
9.750%, due 02/01/15 (144A)(a).... 3,500,000 3,552,500
PGS Solutions, Inc.
9.625%, due 02/15/15 (144A)(a).... 5,000,000 5,080,735
Sensus Metering Systems, Inc.
8.625%, due 12/15/13.............. 4,000,000 4,080,000
Serena Software, Inc.
10.375%, due 03/15/16............. 3,500,000 3,788,750
Sungard Data Systems, Inc.
9.125%, due 08/15/13.............. 6,975,000 7,175,531
10.250%, due 08/15/15(b)........... 6,400,000 6,800,000
---------------
30,477,516
---------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 3.8%
Cincinnati Bell, Inc................
8.375%, due 01/15/14(b)............ 16,500,000 16,747,500
7.000%, due 02/15/15(b)............ 800,000 788,000
Hellas Telecommunications
Luxembourg II
11.106%, due 01/15/15
(144A)(a)(d)...................... 4,000,000 4,140,000
Intelsat Bermuda Ltd.
9.250%, due 06/15/16.............. 2,650,000 2,828,875
Intelsat Ltd.
6.500%, due 11/01/13(b)........... 1,250,000 1,009,375
Intelsat Subsidiary Holding Co. Ltd.
8.250%, due 01/15/13.............. 7,000,000 7,140,000
iPCS, Inc.
8.605%, due 05/01/14
(144A)(a)(d)...................... 1,175,000 1,183,812
Mastec, Inc.
7.625%, due 02/01/17 (144A)(a).... 2,550,000 2,569,125
Nordic Telephone Holdings Co.
8.875%, due 05/01/16 (144A)(a).... 7,625,000 8,120,625
Qwest Capital Funding, Inc.
7.900%, due 08/15/10(b)........... 13,100,000 13,394,750
See notes to financial statements
10
MET INVESTORS SERIES TRUST
LORD ABBETT BOND DEBENTURE PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-----------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-----------------------------------------------------------------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - CONTINUED
Qwest Communications International,
Inc. 7.250%, due 02/15/11........... $ 7,500,000 $ 7,593,750
Qwest Corp. 7.625%, due 06/15/15...... 2,000,000 2,075,000
Syniverse Technologies, Inc.
7.750%, due 08/15/13................ 6,850,000 6,576,000
Windstream Corp. 7.000%, due
03/15/19............................ 1,250,000 1,200,000
---------------
75,366,812
---------------
TELECOMMUNICATION SERVICES - WIRELESS - 1.8%
Centennial Communications Corp.
10.000%, due 01/01/13(b)............ 8,000,000 8,620,000
Dobson Communications Corp.
8.875%, due 10/01/13(b)............. 10,250,000 10,762,500
Nextel Communications, Inc.
7.375%, due 08/01/15(b)............. 7,000,000 7,003,059
Nextel Partners, Inc.
8.125%, due 07/01/11................ 5,900,000 6,153,995
Rogers Wireless Communications, Inc.
7.250%, due 12/15/12................ 2,650,000 2,801,167
---------------
35,340,721
---------------
TEXTILES, APPAREL & LUXURY GOODS - 0.8%
Elizabeth Arden, Inc.
7.750%, due 01/15/14................ 9,300,000 9,416,250
INVISTA, Inc.
9.250%, due 05/01/12 (144A)(a)...... 5,600,000 5,950,000
---------------
15,366,250
---------------
TRANSPORTATION - 0.8%
Bristow Group, Inc....................
6.125%, due 06/15/13................. 8,000,000 7,580,000
7.500%, due 09/15/17
(144A)(a)(b)....................... 3,000,000 3,022,500
CHC Helicopter Corp.
7.375%, due 05/01/14................ 6,000,000 5,745,000
---------------
16,347,500
---------------
U.S. GOVERNMENT & AGENCY OBLIGATIONS - 11.8%
Federal Home Loan Mortgage Corp.
5.750%, due 04/15/08(b)............. 11,500,000 11,537,064
Federal National Mortgage Assoc.......
6.000%, due 03/01/33-06/01/37........ 150,481,739 149,147,739
6.500%, due 05/01/35-02/01/37........ 40,383,278 40,821,360
6.500%, due TBA(e)................... 30,000,000 30,285,930
---------------
231,792,093
---------------
Total Domestic Bonds & Debt Securities
(Cost $1,512,402,706) 1,510,082,501
---------------
CONVERTIBLE BONDS - 14.7%
AEROSPACE & DEFENSE - 1.2%
AAR Corp. 1.750%, due 02/01/26........ 900,000 1,149,750
Alliant Techsystems, Inc.
2.750%, due 02/15/24(b)............. 2,000,000 2,625,000
------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------------
AEROSPACE & DEFENSE - CONTINUED
Armor Holdings, Inc.
2.000%/0.000%, due 11/01/24(f).... $ 800,000 $ 1,432,000
EDO Corp. 4.000%, due 11/15/25...... 4,000,000 4,625,000
L-3 Communications Corp.
3.000%, due 08/01/35(b)........... 4,000,000 4,530,000
Lockheed Martin Corp.
5.110%, due 08/15/33(d)........... 7,000,000 9,438,800
---------------
23,800,550
---------------
AIRLINES - 0.0%
Frontier Airlines, Inc.
5.000%, due 12/15/25.............. 1,000,000 872,500
---------------
BANKS - 0.1%
BNP Paribas 6.700%, due 12/14/07
(144A)(a)......................... 2,000,000 2,214,000
---------------
BEVERAGES - 0.3%
Molson Coors Brewing Co.
2.500%, due 07/30/13.............. 5,000,000 5,218,750
---------------
BIOTECHNOLOGY - 1.0%
Amgen, Inc. 0.125%, due 02/01/11(b). 5,300,000 4,823,000
Genzyme Corp.
1.250%, due 12/01/23(b)........... 7,150,000 7,543,250
InterMune, Inc. 0.250%, due 03/01/11 1,000,000 1,368,750
Millipore Corp.
3.750%, due 06/01/26.............. 6,000,000 6,457,500
---------------
20,192,500
---------------
BUSINESS SERVICES - 0.2%
Omnicom Group, Inc.
0.000%, due 07/01/38(b)(g)........ 3,640,000 3,963,050
---------------
COMMERCIAL SERVICES & SUPPLIES - 0.9%
Charles River Associates, Inc.
2.875%, due 06/15/34.............. 4,500,000 6,204,375
Euronet Worldwide, Inc.
3.500%, due 10/15/25.............. 1,100,000 1,161,875
FTI Consulting, Inc.
3.750%, due 07/15/12(b)........... 7,200,000 10,188,000
---------------
17,554,250
---------------
COMPUTERS & PERIPHERALS - 0.1%
Cadence Design Systems, Inc.
1.375%, due 12/15/11 (144A)(a).... 1,800,000 2,081,250
---------------
CONSTRUCTION MATERIALS - 0.5%
Fluor Corp. 1.500%, due 02/15/24.... 5,000,000 10,006,250
---------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.8%
Flir Systems, Inc.
3.000%, due 06/01/23.............. 4,000,000 8,500,000
Itron, Inc. 2.500%, due 08/01/26(b). 1,000,000 1,348,750
LSI Logic Corp.
4.000%, due 05/15/10(b)........... 5,000,000 4,868,750
---------------
14,717,500
---------------
See notes to financial statements
11
MET INVESTORS SERIES TRUST
LORD ABBETT BOND DEBENTURE PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-----------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-----------------------------------------------------------------
FINANCIAL - DIVERSIFIED - 0.5%
Lehman Brothers Holdings, Inc.
0.450%, due 12/27/13............. $ 6,000,000 $ 5,821,200
Morgan Stanley 2.000%, due 06/28/12
(144A)(a)........................ 3,700,000 3,782,325
---------------
9,603,525
---------------
FOOD PRODUCTS - 0.2%
Archer-Daniels-Midland Co.
0.875%, due 02/15/14
(144A)(a)(b)..................... 5,000,000 4,775,000
---------------
HEALTH CARE EQUIPMENT & SUPPLIES - 0.4%
Invitrogen Corp.
3.250%, due 06/15/25(b).......... 6,500,000 6,638,125
Medtronic, Inc.
1.500%, due 04/15/11(b).......... 2,000,000 2,130,000
---------------
8,768,125
---------------
HEALTH CARE PROVIDERS & SERVICES - 0.5%
Alza Corp.
0.566%, due 07/28/20(g)(b)....... 8,000,000 6,810,000
Five Star Quality Care, Inc.
3.750%, due 10/15/26............. 200,000 180,500
Pacificare Health Systems, Inc.
3.000%, due 10/15/32............. 700,000 2,582,125
---------------
9,572,625
---------------
HOTELS, RESTAURANTS & LEISURE - 0.3%
Hilton Hotels Corp.
3.375%, due 04/15/23............. 4,500,000 6,800,625
---------------
INDUSTRIAL - DIVERSIFIED - 0.3%
3M Co. 2.400%, due 11/21/32(d)..... 1,200,000 1,087,500
Actuant Corp.
2.000%, due 11/15/23(b).......... 1,400,000 2,261,000
Danaher Corp.
0.707%, due 01/22/21(g).......... 2,500,000 2,771,875
---------------
6,120,375
---------------
IT CONSULTING & SERVICES - 0.4%
Electronic Data Systems Corp.
3.875%, due 07/15/23(b).......... 7,200,000 7,326,000
---------------
MACHINERY - 0.4%
Roper Industries, Inc.
1.4813%/0.000%, due
01/15/34(f)...................... 11,580,000 8,409,975
---------------
MEDIA - 1.3%
Liberty Media Corp.
4.000%, due 11/15/29.............. 1,700,000 1,151,750
3.500%, due 01/15/31.............. 4,605,612 4,559,556
3.250%, due 03/15/31.............. 8,250,000 7,074,375
---------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
---------------------------------------------------------------------
MEDIA - CONTINUED
Sinclair Broadcast Group, Inc.
6.000%, due 09/15/12............... $ 5,000,000 $ 4,825,000
4.875%/2.000%, due 07/15/18(f)..... 3,000,000 2,928,750
Walt Disney Co.
2.125%, due 04/15/23(b)........... 3,500,000 4,208,750
---------------
24,748,181
---------------
METALS & MINING - 0.4%
Placer Dome, Inc. 2.750%, due
10/15/23.......................... 5,550,000 7,048,500
---------------
OIL & GAS - 1.5%
Devon Energy Corp.
4.900%, due 08/15/08(b)........... 5,200,000 8,203,000
Hanover Compressor Co.
4.750%, due 01/15/14.............. 3,500,000 6,098,750
Pride International, Inc.
3.250%, due 05/01/33(b)........... 1,600,000 2,398,000
Quicksilver Resources, Inc.
1.875%, due 11/01/24(b)........... 3,000,000 4,807,500
Schlumberger, Ltd.
1.500%, due 06/01/23.............. 3,000,000 7,053,750
---------------
28,561,000
---------------
PHARMACEUTICALS - 1.1%
Alexion Pharmaceuticals, Inc.
1.375%, due 02/01/12.............. 500,000 773,750
BioMarin Pharmaceutical, Inc.
2.500%, due 03/29/13 (b).......... 500,000 643,750
CV Therapeutics, Inc.
2.750%, due 05/16/12............... 700,000 679,875
3.250%, due 08/16/13(b)............ 4,250,000 3,761,250
Decode Genetics, Inc.
3.500%, due 04/15/11.............. 1,666,000 1,220,345
MGI Pharma, Inc.
1.682%/0.000%, due 03/02/24(f).... 3,500,000 2,450,000
Nektar Therapeutics
3.250%, due 09/28/12.............. 900,000 789,750
Teva Pharmaceutical Industries, Ltd.
0.250%, due 02/01/24.............. 1,600,000 1,956,000
Wyeth 4.877%, due 01/15/24(d)(b).... 8,000,000 9,089,600
---------------
21,364,320
---------------
ROAD & RAIL - 0.4%
CSX Corp. 0.372%, due 10/30/21(g)... 4,655,000 7,465,456
---------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS - 0.4%
Cypress Semiconductor Corp.
1.000%, due 09/15/09
(144A)(a)(b)...................... 1,700,000 1,887,000
Intel Corp. 2.950%, due 12/15/35(b). 6,000,000 5,752,500
---------------
7,639,500
---------------
See notes to financial statements
12
MET INVESTORS SERIES TRUST
LORD ABBETT BOND DEBENTURE PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
--------------------------------------------------------------------
SECURITY SHARES/ VALUE
DESCRIPTION PAR AMOUNT (NOTE 2)
--------------------------------------------------------------------
SOFTWARE - 0.7%
Equinix, Inc.
2.500%, due 04/15/12(b).......... $ 2,500,000 $ 2,612,500
Symantec Corp.
0.750%, due 06/15/11............. 4,500,000 5,265,000
Trizetto Group
1.125%, due 04/15/12 (144A)(a)... 5,000,000 5,150,000
---------------
13,027,500
---------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 0.7%
ADC Telecommunications, Inc.
5.784%, due 06/15/13(d).......... 2,400,000 2,349,000
Comverse Technology, Inc.
0.000%, due 05/15/23(g).......... 1,500,000 1,852,500
Dobson Communications Corp.
1.500%, due 10/01/25 (144A)(a)... 900,000 1,093,500
NII Holdings, Inc.
2.750%, due 08/15/25............. 1,600,000 2,764,000
Qwest Communications International,
Inc. 3.500%, due 11/15/25(b)..... 3,100,000 5,448,250
---------------
13,507,250
---------------
TELECOMMUNICATION SERVICES - WIRELESS - 0.1%
Nextel Communications, Inc.
5.250%, due 01/15/10(b).......... 2,500,000 2,496,875
---------------
Total Convertible Bonds
(Cost $253,098,380) 287,855,432
---------------
COMMON STOCKS - 0.5%
BANKS - 0.1%
Commerce Bancorp, Inc.(b).......... 49,400 1,827,306
---------------
BIOTECHNOLOGY - 0.1%
BioMarin Pharmaceutical, Inc.*(b).. 92,764 1,664,186
---------------
COMMUNICATIONS EQUIPMENT & SERVICES - 0.1%
Avaya, Inc.*....................... 160,001 2,694,417
---------------
ENERGY EQUIPMENT & SERVICES - 0.0%
Rowan Companies, Inc.(b)........... 14,200 581,916
---------------
MEDIA - 0.1%
Charter Communications, Inc.*(b)... 166,500 674,325
Interpublic Group of Cos., Inc.*(b) 74,994 854,931
---------------
1,529,256
---------------
PAPER & FOREST PRODUCTS - 0.0%
PT Indah Kiat Pulp & Paper Corp.*.. 1,867,500 233,358
---------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 0.1%
Time Warner Cable, Inc.*(b)........ 28,787 1,127,587
---------------
Total Common Stocks
(Cost $8,334,871) 9,658,026
---------------
---------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
---------------------------------------------------------------
PREFERRED STOCKS - 2.4%
AUTOMOBILES - 0.1%
Ford Motor Co.
6.500%, due 01/15/32(b)........ $ 60,000 $ 2,313,600
---------------
ELECTRIC UTILITIES - 0.5%
NRG Energy, Inc.
5.750%, due 03/16/09........... 25,000 9,243,750
---------------
FINANCE - DIVERSIFIED - 0.2%
Lehman Brothers Holdings, Inc.
6.250%, due 10/15/07(b)........ 140,000 3,788,400
---------------
OIL & GAS - 0.7%
Chesapeake Energy Corp.
4.500%, due 12/31/49(b)........ 45,000 4,567,500
Williams Cos., Inc.
5.500%, due 06/01/33........... 65,000 9,644,375
---------------
14,211,875
---------------
PHARMACEUTICALS - 0.4%
Schering Plough Corp.
6.000%, due 09/14/07(b)........ 100,000 6,880,000
---------------
UTILITIES - 0.5%
PNM Resources, Inc.
6.750%, due 05/16/08(b)........ 200,000 10,000,000
---------------
Total Preferred Stocks
(Cost $37,997,611) 46,437,625
---------------
CONVERTIBLE PREFERRED STOCKS - 1.9%
BANKS - 0.4%
Marshall & Ilsley Corp.
6.500%, due 08/15/07(b)........ 300,000 7,929,000
---------------
ELECTRIC UTILITIES - 0.1%
NRG Energy, Inc.
4.000%, due 12/31/49........... 900 1,921,500
---------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.0%
CMS Energy Corp.
4.500%, due 12/31/49(b)........ 5,000 448,750
---------------
FINANCIAL - DIVERSIFIED - 0.2%
Morgan Stanley
7.300%, due 12/14/07 (144A)(a).. 100,000 1,934,000
7.250%, due 05/23/08 (144A)(a).. 42,000 3,087,420
---------------
5,021,420
---------------
INSURANCE - 0.0%
Fortis Insurance N.V.
7.750%, due 01/26/08 (144A)(a). 150 223,185
---------------
INVESTMENT COMPANIES - 0.4%
Vale Capital Ltd.
5.500%, due 06/15/10........... 160,725 7,895,616
---------------
MEDIA - 0.1%
Interpublic Group (IPG) - Class B
5.250%, due 12/31/49 (144A)(a). 1,440 1,539,540
---------------
See notes to financial statements
13
MET INVESTORS SERIES TRUST
LORD ABBETT BOND DEBENTURE PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
---------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
---------------------------------------------------------------------
METALS & MINING - 0.2%
Freeport McMoRan Copper & Gold, Inc.
6.750%, due 05/01/10(b)........... $ 30,000 $ 3,855,000
---------------
OIL & GAS - 0.4%
El Paso Corp.
4.990%, due 12/31/49.............. 5,500 8,036,876
---------------
REAL ESTATE - 0.1%
Simon Property Group, Inc.
(REIT) 6.000%, due 12/31/49....... 15,200 1,155,048
---------------
Total Convertible Preferred Stocks
(Cost $34,540,138) 38,025,935
---------------
SHORT-TERM INVESTMENT - 3.2%
State Street Bank & Trust Co.,
Repurchase Agreement
dated 06/29/07 at 3.400% to be
repurchased at $63,471,979
on 07/02/07 collateralized by
$67,420,000 FNMA 5.500% due
05/10/27 with a value of
$64,723,200.
(Cost - $63,454,000).............. $ 63,454,000 63,454,000
---------------
TOTAL INVESTMENTS - 99.6%
(Cost $1,909,827,706) 1,955,513,519
Other Assets and Liabilities (net) - 0.4% 7,310,853
---------------
TOTAL NET ASSETS - 100.0% $ 1,962,824,372
===============
PORTFOLIO FOOTNOTES:
* Non-income producing security.
(a) Securities that may be resold to "qualified institutional buyers" under
Rule 144A or securities offered pursuant to Section 4(2) of the Securities
Act of 1933, as amended. These securities have been determined to be liquid
under the guidelines established by the Board of Trustees. These securities
represent in the aggregate $260,761,063 of net assets
(b) A portion or all of the security was held on loan. As of June 30, 2007, the
market value of the securities loaned was $360,495,708 and the collateral
received consisted of cash in the amount of $368,145,295.
(c) Security is a "step-up" bond where coupon increases or steps up at a
predetermined date. Rates shown are current coupon and next coupon rate
when security steps up.
(d) Variable or floating rate security. The stated rate represents the rate at
June 30, 2007.
(e) This security is traded on a "to-be-announced" basis.
(f) Security is a "step-down" bond where the coupon decreases or steps down at
a predetermined date. Rates shown are current coupon and next coupon rate
when a security steps down.
(g) Zero coupon bond - Interest rate represents current yield to maturity.
FNMA - Federal National Mortgage Association
REIT - Real Estate Investment Trust
The following table summarizes the credit composition of the portfolio holdings
of the Lord Abbett Bond Debenture Portfolio at June 30, 2007, based upon
quality ratings issued by Standard & Poor's. For Securities not rated by
Standard & Poor's, the equivalent Moody's rating is used.
PERCENT OF
PORTFOLIO COMPOSITION BY CREDIT QUALITY PORTFOLIO
--------------------------------------------------
AAA 11.01%
AA 0.59
A 4.69
BBB 5.56
BB 18.21
B 42.10
Below B 10.41
Equities/Other 7.43
------
Total: 100.00%
======
See notes to financial statements
14
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
LORD ABBETT BOND DEBENTURE PORTFOLIO
ASSETS
Investments, at value (Note 2)* $1,892,059,519
Repurchase Agreement 63,454,000
Cash 21,135,057
Collateral for securities on loan 368,145,295
Receivable for Trust shares sold 2,187,341
Dividends receivable 103,438
Interest receivable 28,287,111
--------------
Total assets 2,375,371,761
--------------
LIABILITIES
Payables for:
Investments purchased 41,723,527
Trust shares redeemed 1,390,841
Distribution and services fees--Class B 167,605
Distribution and services fees--Class E 4,895
Collateral for securities on loan 368,145,295
Investment advisory fee payable (Note 3) 797,690
Administration fee payable 20,838
Custodian and accounting fees payable 120,308
Accrued expenses 176,390
--------------
Total liabilities 412,547,389
--------------
NET ASSETS $1,962,824,372
==============
NET ASSETS REPRESENTED BY:
Paid in surplus $1,895,341,919
Accumulated net realized gain 3,233,341
Unrealized appreciation on investments 45,685,813
Undistributed net investment income 18,563,299
--------------
Total $1,962,824,372
==============
NET ASSETS
Class A $1,115,296,320
==============
Class B 808,754,470
==============
Class E 38,773,582
==============
CAPITAL SHARES OUTSTANDING
Class A 90,690,996
==============
Class B 66,136,402
==============
Class E 3,167,897
==============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 12.30
==============
Class B 12.23
==============
Class E 12.24
==============
--------------------------------------------------------------------
*Investments at cost, excluding Repurchase Agreements $1,846,373,706
See notes to financial statements
15
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
LORD ABBETT BOND DEBENTURE PORTFOLIO
INVESTMENT INCOME:
Dividends $ 1,934,592
Interest (1) 61,417,287
-----------
Total investment income 63,351,879
-----------
EXPENSES:
Investment advisory fee (Note 3) 4,779,996
Administration fees 69,075
Custody and accounting fees 49,255
Distribution fee--Class B 976,785
Distribution fee--Class E 29,005
Transfer agent fees 16,823
Audit 10,901
Legal 8,133
Trustee fees and expenses 7,950
Shareholder reporting 87,694
Insurance 13,499
Other 2,246
-----------
Total expenses 6,051,362
-----------
Net investment income 57,300,517
-----------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS :
Net realized gain on:
Investments 18,445,896
-----------
Net realized gain on investments 18,445,896
-----------
Net change in unrealized appreciation on:
Investments 645,920
-----------
Net change in unrealized appreciation on investments 645,920
-----------
Net realized and change in unrealized gain on investments 19,091,816
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $76,392,333
===========
------------------------------------------------------------------------------
(1)Interest income includes securities lending income of: $ 385,470
See notes to financial statements
16
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
LORD ABBETT BOND DEBENTURE PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 57,300,517 $ 98,012,450
Net realized gain on investments 18,445,896 13,509,202
Net change in unrealized appreciation on investments 645,920 41,735,574
-------------- --------------
Net increase in net assets resulting from operations 76,392,333 153,257,226
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (64,317,957) (66,714,042)
Class B (40,713,127) (48,111,532)
Class E (2,056,674) (2,402,380)
From net realized gains
Class A (1,483,303) --
Class B (982,014) --
Class E (48,695) --
-------------- --------------
Net decrease in net assets resulting from distributions (109,601,770) (117,227,954)
-------------- --------------
CAPITAL SHARE TRANSACTIONS (NOTES 4 AND 8):
Proceeds from shares sold
Class A 194,616,177 301,777,898
Class B 58,708,976 72,840,849
Class E 8,204,891 4,228,603
Net asset value of shares issued through acquisition
Class A -- 100,219,524
Class B 27,175,078 --
Class E -- --
Net asset value of shares issued through dividend reinvestment
Class A 65,801,260 66,714,042
Class B 41,695,141 48,111,532
Class E 2,105,369 2,402,380
Cost of shares repurchased
Class A (183,562,487) (285,485,123)
Class B (72,645,530) (75,533,472)
Class E (8,058,012) (5,365,456)
-------------- --------------
Net increase in net assets from capital share transactions 134,040,863 229,910,777
-------------- --------------
TOTAL INCREASE IN NET ASSETS 100,831,426 265,940,049
Net assets at beginning of period 1,861,992,946 1,596,052,897
-------------- --------------
Net assets at end of period $1,962,824,372 $1,861,992,946
============== ==============
Net assets at end of period includes undistributed net investment income $ 18,563,299 $ 68,350,540
============== ==============
See notes to financial statements
17
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
LORD ABBETT BOND DEBENTURE PORTFOLIO ----------------------------
FOR THE PERIOD
ENDED
JUNE 30, 2007 ------------
(UNAUDITED) 2006
-------------- --------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $ 12.51 $ 12.28
-------- --------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................. 0.38 (a) 0.71 (a)
Net Realized/Unrealized Gain (Loss) on Investments.................... 0.13 0.39
-------- --------
Total from Investment Operations...................................... 0.51 1.10
-------- --------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. (0.70) (0.87)
Distributions from Net Realized Capital Gains......................... (0.02) --
-------- --------
Total Distributions................................................... (0.72) (0.87)
-------- --------
NET ASSET VALUE, END OF PERIOD........................................ $ 12.30 $ 12.51
======== ========
TOTAL RETURN 4.06% 9.35%
Ratio of Expenses to Average Net Assets**............................. 0.52%* 0.56%
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. N/A N/A
Ratio of Net Investment Income to Average Net Assets.................. 6.04%* 5.85%
Portfolio Turnover Rate............................................... 21.2% 36.7%
Net Assets, End of Period (in millions)............................... $1,115.3 $1,059.0
----------------------------
FOR THE PERIOD
ENDED
JUNE 30, 2007 ------------
(UNAUDITED) 2006
-------------- --------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $ 12.43 $ 12.19
-------- --------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................. 0.36 (a) 0.67 (a)
Net Realized/Unrealized Gain (Loss) on Investments.................... 0.13 0.40
-------- --------
Total from Investment Operations...................................... 0.49 1.07
-------- --------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. (0.67) (0.83)
Distributions from Net Realized Capital Gains......................... (0.02) --
-------- --------
Total Distributions................................................... (0.69) (0.83)
-------- --------
NET ASSET VALUE, END OF PERIOD........................................ $ 12.23 $ 12.43
======== ========
TOTAL RETURN 3.92% 9.15%
Ratio of Expenses to Average Net Assets**............................. 0.77%* 0.81%
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. N/A N/A
Ratio of Net Investment Income to Average Net Assets.................. 5.78%* 5.59%
Portfolio Turnover Rate............................................... 21.2% 36.7%
Net Assets, End of Period (in millions)............................... $ 808.8 $ 765.9
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS A
LORD ABBETT BOND DEBENTURE PORTFOLIO ----------------------------------------
FOR THE YEARS ENDED DECEMBER 31,
----------------------------------------
2005 2004 2003 2002
------ ------ ------ ------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $12.63 $12.04 $10.24 $11.22
------ ------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................. 0.75 (a) 0.70 (a) 0.73 (a) 0.77 (a)
Net Realized/Unrealized Gain (Loss) on Investments.................... (0.52) 0.31 1.27 (0.79)
------ ------ ------ ------
Total from Investment Operations...................................... 0.23 1.01 2.00 (0.02)
------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. (0.58) (0.42) (0.20) (0.96)
Distributions from Net Realized Capital Gains......................... -- -- -- --
------ ------ ------ ------
Total Distributions................................................... (0.58) (0.42) (0.20) (0.96)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD........................................ $12.28 $12.63 $12.04 $10.24
====== ====== ====== ======
TOTAL RETURN 1.81% 8.43% 19.52% (0.39)%
Ratio of Expenses to Average Net Assets**............................. 0.56% 0.63% 0.70% 0.70 %
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. N/A N/A 0.67%(b) 0.77 %
Ratio of Net Investment Income to Average Net Assets.................. 5.92% 5.65% 6.52% 7.43 %
Portfolio Turnover Rate............................................... 42.1% 39.8% 36.9% 45.8 %
Net Assets, End of Period (in millions)............................... $856.4 $520.3 $234.6 $202.1
CLASS B
----------------------------------------
FOR THE YEARS ENDED DECEMBER 31,
----------------------------------------
2005 2004 2003 2002
------ ------ ------ ------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $12.54 $11.97 $10.21 $11.20
------ ------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................. 0.71 (a) 0.69 (a) 0.69 (a) 0.72 (a)
Net Realized/Unrealized Gain (Loss) on Investments.................... (0.52) 0.29 1.46 (0.76)
------ ------ ------ ------
Total from Investment Operations...................................... 0.19 0.98 2.15 (0.04)
------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. (0.54) (0.41) (0.20) (0.95)
Distributions from Net Realized Capital Gains......................... -- -- (0.19) --
------ ------ ------ ------
Total Distributions................................................... (0.54) (0.41) (0.39) (0.95)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD........................................ $12.19 $12.54 $11.97 $10.21
====== ====== ====== ======
TOTAL RETURN 1.49% 8.17% 19.15% (0.57)%
Ratio of Expenses to Average Net Assets**............................. 0.81% 0.88% 0.96% 0.95 %
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. N/A N/A 0.91%(b) 1.05 %
Ratio of Net Investment Income to Average Net Assets.................. 5.65% 5.61% 6.11% 7.12 %
Portfolio Turnover Rate............................................... 42.1% 39.8% 36.9% 45.8 %
Net Assets, End of Period (in millions)............................... $704.5 $776.0 $758.2 $197.4
* Annualized
** Prior to 05/01/2003, broker rebates were excluded from the calculation of
the expense limitation.
N/A Not Applicable
(a) Per share amounts based on average shares outstanding during the period.
(b) Excludes effect of Deferred Expense Reimbursement.
See notes to financial statements
18
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS E
LORD ABBETT BOND DEBENTURE PORTFOLIO ----------------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 -------------------------------------------
(UNAUDITED) 2006 2005 2004 2003
-------------- ------ ------ ------ ------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $12.44 $12.21 $12.57 $12.00 $10.22
------ ------ ------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net Investment Income................................................. 0.37 (a) 0.69 (a) 0.72 (a) 0.70 (a) 0.70 (a)
Net Realized/Unrealized Gain (Loss) on Investments.................... 0.14 0.38 (0.52) 0.29 1.28
------ ------ ------ ------ ------
Total from Investment Operations...................................... 0.51 1.07 0.20 0.99 1.98
------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income.................................. (0.69) (0.84) (0.56) (0.42) (0.20)
Distributions from Net Realized Capital Gains......................... (0.02) -- -- -- --
------ ------ ------ ------ ------
Total Distributions................................................... (0.71) (0.84) (0.56) (0.42) (0.20)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD........................................ $12.24 $12.44 $12.21 $12.57 $12.00
====== ====== ====== ====== ======
TOTAL RETURN 4.01% 9.18% 1.60% 8.24% 19.35%
Ratio of Expenses to Average Net Assets**............................. 0.67%* 0.71% 0.71% 0.78% 0.86%
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. N/A N/A N/A N/A 0.81%(c)
Ratio of Net Investment Income to Average Net Assets.................. 5.88%* 5.69% 5.76% 5.67% 6.10%
Portfolio Turnover Rate............................................... 21.2% 36.7% 42.1% 39.8% 36.9%
Net Assets, End of Period (in millions)............................... $ 38.8 $ 37.1 $35.1 $35.2 $22.8
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
LORD ABBETT BOND DEBENTURE PORTFOLIO -------
-------
2002(B)
-------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $11.27
------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net Investment Income................................................. 0.53 (a)
Net Realized/Unrealized Gain (Loss) on Investments.................... (0.62)
------
Total from Investment Operations...................................... (0.09)
------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income.................................. (0.96)
Distributions from Net Realized Capital Gains......................... --
------
Total Distributions................................................... (0.96)
------
NET ASSET VALUE, END OF PERIOD........................................ $10.22%
======
TOTAL RETURN (1.03)%
Ratio of Expenses to Average Net Assets**............................. 0.85 %*
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 0.98 %*
Ratio of Net Investment Income to Average Net Assets.................. 7.12 %*
Portfolio Turnover Rate............................................... 45.8 %
Net Assets, End of Period (in millions)............................... $2.5
* Annualized
** Prior to 05/01/2003, broker rebates were excluded from the calculation of
the expense limitation.
N/A Not Applicable
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--04/01/2002.
(c) Excludes effect of Deferred Expense Reimbursement.
See notes to financial statements
19
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is Lord Abbett Bond Debenture Portfolio,
which is diversified. Shares in the Trust are not offered directly to the
general public and are currently available only to separate accounts
established by certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A, B and E Shares are
offered by the Portfolio. Shares of each Class of the Portfolio represent an
equal pro rata interest in the Portfolio and generally give the shareholder the
same voting, dividend, liquidation, and other rights. Investment income,
realized and unrealized capital gains and losses, the common expenses of the
Portfolio and certain Portfolio-level expense reductions, if any, are allocated
on a pro rata basis to each class based on the relative net assets of each
class to the total net assets of the Portfolio. Each class of shares differs in
its respective distribution expenses and certain other class-specific expense
reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date. The value of the
security so purchased is subject to market fluctuations during this period. The
Portfolio segregates assets having an aggregate value at least equal to the
amount of the when issued or delayed delivery purchase commitments until
payment is made.
20
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
The Portfolio utilizes the provisions of the federal income tax laws that
provide for the carryforward of capital losses for eight years, offsetting such
losses against any future net realized capital gains. At December 31, 2006, the
accumulated capital loss carryforwards and expiration dates by the Portfolio
were as follows:
Expiring Expiring
Portfolio Total 12/31/2007 12/31/2008
--------- ---------- ---------- ----------
Lord Abbett Bond Debenture Portfolio $8,332,196 $4,020,940 $4,311,256
Lord Abbett Bond Debenture Portfolio acquired losses of $19,627,064 in the
merger with Loomis High Yield Fund on April 26, 2002, which are subject to an
annual limitation of $3,688,483.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. SECURITIES LENDING - The Portfolio may lend its securities to certain
qualified brokers who borrow securities in order to complete certain
transactions. By lending its investment securities, the Portfolio attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term of the loan would
accrue to the account of the Portfolio. Risks of delay in recovery of the
securities or even loss of rights in the collateral may occur should the
borrower of the securities fail financially. Risks may also arise to the extent
that the value of the collateral decreases below the value of the securities
loaned.
Upon entering into a securities lending transaction, the Portfolio receives
cash or other securities as collateral in an amount equal to or exceeding 102%
of the current market value of the loaned securities. Any cash received as
collateral is generally invested by State Street Bank and Trust Company ("State
Street"), acting in its capacity as securities lending agent (the "Agent"), in
the State Street Navigator Securities Lending Prime Portfolio which is a money
market fund registered under the 1940 Act. A portion of the dividends received
on the collateral is rebated to the borrower of the securities and the
remainder is split between the Agent and the Portfolio. On loans collateralized
by cash, the cash collateral is invested in a money market fund or short term
securities. A portion of the income generated upon investment of the collateral
is remitted to the Borrowers and the remainder is allocated between the fund
and the lending agent. On loans collateralized by U.S. Treasuries, a fee is
received from the Borrower and is allocated between the fund and the lending
agent.
G. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
H. FORWARD COMMITMENTS, WHEN-ISSUED AND DELAYED DELIVERY SECURITIES - The
Portfolio may purchase securities on a when-issued or delayed delivery basis
and may purchase or sell securities on a forward commitment basis. Settlement
of such transactions normally occurs within a month or more after the purchase
or sale commitment is made. The Portfolio may purchase securities under such
conditions only with the intention of actually acquiring them, but may enter
into a separate agreement to sell the securities before the settlement date.
Since the value of securities purchased may fluctuate prior to settlement, the
Portfolio may be required to pay more at settlement than the security is worth.
In addition, the purchaser is not entitled to any of the interest earned prior
to settlement. Upon making a commitment to purchase a security on a
when-issued, delayed delivery or forward commitment basis, the Portfolio will
hold liquid assets in a segregated account at the Portfolio's custodian bank
worth at least the equivalent of the amount due. The liquid assets will be
monitored on a daily basis and adjusted as necessary to maintain the necessary
value.
21
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with Lord, Abbett & Co. LLC, (the "Adviser") for investment advisory services
in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- ----------------------------
Lord Abbett Bond Debenture Portfolio $4,779,996 0.60% First $250 Million
0.55% $250 Million to $500 Million
0.50% $500 Million to $1 Billion
0.45% Over $1 Billion
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued Shares Issued
in Connection Through Net Increase
Beginning Shares with Acquisition Dividend Shares in Shares Ending
Shares Sold (Note 8) Reinvestment Repurchased Outstanding Shares
- - ---------- ---------- ---------------- ------------- ----------- ------------ ----------
Lord Abbett Bond Debenture
Portfolio
Class A
06/30/2007 84,678,506 15,455,067 -- 5,332,355 (14,774,932) 6,012,490 90,690,996
12/31/2006 69,757,308 24,775,781 8,485,998 5,663,331 (24,003,912) 14,921,198 84,678,506
Class B
06/30/2007 61,631,213 4,713,869 2,211,154 3,398,137 (5,817,971) 4,505,189 66,136,402
12/31/2006 57,782,647 6,012,269 -- 4,101,580 (6,265,283) 3,848,566 61,631,213
Class E
06/30/2007 2,983,799 657,029 -- 171,447 (644,378) 184,098 3,167,897
12/31/2006 2,877,504 348,709 -- 204,632 (447,046) 106,295 2,983,799
22
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
Lord Abbett Bond Debenture Portfolio $175,090,834.00 $518,885,566 $110,443,283.00 $437,568,963
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
- --------- -------------- ------------ -------------- --------------
Lord Abbett Bond Debenture Portfolio $1,909,827,706 $80,232,295 $(34,546,482) $45,685,813
6. SECURITY LENDING
As of June 30, 2007, the Portfolio had loaned securities which were
collateralized by short-term investments. The value of securities on loan and
the value of the related collateral were as follows:
Value of Value of
Securities Collateral
------------ ------------
Lord Abbett Bond Debenture Portfolio $360,495,708 $368,145,295
7. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
------------------------ ---------------------- ------------------------
2006 2005 2006 2005 2006 2005
------------ ----------- ---- ---- ------------ -----------
Lord Abbett Bond Debenture Portfolio $117,227,954 $69,689,907 $-- $-- $117,227,954 $69,689,907
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
------------- ------------- ------------ ------------------ ------------
Lord Abbett Bond Debenture Portfolio $68,930,962 $1,207,230 $38,885,892 $(8,332,196) $100,691,888
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
8. ACQUISITIONS
On May 1, 2006, Lord Abbett Bond Debenture Portfolio ("Bond Debenture")
acquired all of the net assets of Convertible Securities Portfolio, a series of
The Travelers Series Trust ("Convertible Securities"), pursuant to a plan of
reorganization approved by Convertible Securities shareholders on March 14,
2006. The acquisition was accomplished by a tax-free exchange of 8,485,998
Class A shares of Bond Debenture (valued at $100.2 million) in exchange for the
8,068,461 Class A shares of Convertible Securities outstanding on April 28,
2006. Convertible Securities Class A net assets at that date ($100.2 million),
including $6,800,593 of unrealized appreciation were combined with those of
Bond Debenture Class A. The cost of securities acquired in the tax-free
exchange by Bond Debenture from Convertible Securities was $93,008,142. The
aggregate Class A net assets of Bond Debenture and Convertible Securities
immediately before the acquisition were $981,050,225 and $100,219,524,
respectively. The aggregate Class A net assets of Bond Debenture immediately
after the acquisition were $1,081,269,749.
On April 30, 2007, Lord Abbett Bond Debenture Portfolio ("Bond Debenture")
acquired 27% of the net assets of Lord Abbett America's Value Portfolio
("America"), a series of Met Investors Series Trust, pursuant to a plan of
reorganization approved by America shareholders on April 24,
23
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
8. ACQUISITIONS - CONTINUED
2007. The acquisition was accomplished by a taxable exchange of 2,211,154 Class
B shares of Bond Debenture (valued at $27.2 Million) in exchange for the
1,770,569 Class B shares of America outstanding on April 27, 2007. The
aggregate Class B net assets of Bond Debenture and America immediately before
the acquisition were $785,793,046 and $27,175,078, respectively. The aggregate
Class B net assets of Bond
Debenture immediately after the acquisition were $812,968,124.
9. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
10. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
24
MET INVESTORS SERIES TRUST
Lord Abbett
Growth and Income Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
LORD ABBETT GROWTH AND INCOME PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY LORD, ABBETT & CO. LLC
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
MARKET REVIEW
Supported by above-trend earnings growth and a dwindling supply of shares
outstanding, equities returned approximately 7% (on a total return basis) in
the six-month period ended June 30, 2007. Though the path higher had its dips
and turns, both the Dow Jones Industrial Average/1 /and S&P 500(R) Index
reached record levels, with the latter finally cresting (albeit for only a
brief period) its prior high established seven years ago. A bevy of mergers and
acquisitions, private equity deals, and share buybacks cumulatively left
investors with fewer shares of public companies to own.
The industrial sector of the economy looked stronger in the period. With the
supply of inventories low and foreign demand robust, manufacturing activity
began to accelerate. The Institute for Supply Management's (ISM) survey of the
manufacturing sector, for instance, jumped 4.1 points between March and May. In
response, year-ahead forward rates on three-month deposits rose, and the yield
on the 10-year Treasury bond climbed lockstep. By early June, the rise in the
10-year Treasury bond yield eclipsed that of short-term rates, which triggered
a period of consolidation in the equity markets. Though the semiannual period
ended June 30, 2007 finished on a down-note, the gains returned during the full
period were still quite strong.
Returns in the equity market were broad; however, companies with mid to small
capitalizations outperformed large to mega capitalizations. In fact, shares of
growth-oriented small and mid cap companies led all other styles of investing.
The relative strength of small and mid caps reflected the large number of
private equity deals (reportedly worth more than $300 billion) announced
between January and June 2007. With the performance of large cap companies
trailing that of their smaller peers, the valuation gap (the difference between
the prices that investors are willing to pay for the earnings of the companies
in each index) widened. At the close of June, the price-to-earnings ratio (P/E)
of the S&P 100(R) Index/2/ was about 25% less than the P/E of the small and mid
cap indexes. Finally, unlike in the small and mid cap categories, value
continued its dominance over growth in the large cap space.
PORTFOLIO REVIEW
The largest detractor from the performance relative to the S&P 500(R) Index/3/
was stock selection within the technology sector. The Portfolio lacked exposure
to Apple, an S&P 500(R) Index holding that continues to outperform, owing to
product introductions like the iPhone. The Portfolio's underweight of the other
energy and integrated oils sectors also detracted, as both sectors advanced
nicely during the six-month period, benefiting from the price of crude oil.
Although prices began the year with a rapid sell-off to below $60 per barrel,
they subsequently rallied strongly to end on a high note in June, topping $70
per barrel--a level still below that of a year ago.
Conversely, stock selection within the consumer staples sector aided relative
performance, with Kroger performing well during the period. This large grocery
store chain solidified its competitive position in the marketplace, allowing it
to better withstand competition from giant retailers such as Wal-Mart. Lastly,
stock selection within the health care sector aided relative performance, with
pharmaceutical companies Baxter and Teva outperforming for the period. Baxter
benefited from the positive resolution of issues regarding its infusion pump.
Generic drug manufacturer Teva reported better than expected fourth quarter
2006 earnings and guided current year earnings higher.
OUTLOOK
We continue to increase our exposure to the technology sector. The glut of tech
capacity put in place in the late 1990's has been largely absorbed, and tech
companies are now well positioned to take advantage of increased infrastructure
spending.
We remain overweight consumer staples, continuing to concentrate on stable
earners that can grow earnings in a slowing economic environment through new
products and/or restructuring. We also took profits in several positions
that have performed well over the past couple of years. The health care
overweight was reduced, as we trimmed exposure to large pharmaceutical
companies that have performed well and thus represented attractive
profit-taking opportunities. We also decreased our exposure to
utilities, taking advantage of the strong performance in this sector over the
past year.
We continue to underweight financial services, especially in regional banks, as
we believe that banks are earning at above normal levels with prospects for an
upswing in problem loans (from historically low levels). Recent sub-prime
lending woes are a harbinger of more difficulties ahead. We remain underweight
integrated oils, as crude oil prices remain above long term normalized levels
and current earnings levels are not sustainable, in our opinion.
THE PORTFOLIO IS ACTIVELY MANAGED AND THEREFORE, ITS HOLDINGS AND WEIGHTINGS OF
A PARTICULAR ISSUER OR PARTICULAR SECTOR AS A PERCENTAGE OF PORTFOLIO ASSETS
ARE SUBJECT TO CHANGE. SECTORS MAY INCLUDE MANY INDUSTRIES.
NOTE: THE VIEWS OF LORD, ABBETT & CO. LLC AND THE PORTFOLIO HOLDINGS DESCRIBED
IN THIS REPORT ARE AS OF JUNE 30, 2007; VIEWS AND PORTFOLIO HOLDINGS MAY HAVE
CHANGED SUBSEQUENT TO THIS DATE. INFORMATION PROVIDED IN THIS REPORT SHOULD NOT
BE CONSIDERED A RECOMMENDATION TO PURCHASE OR SELL SECURITIES. THE PORTFOLIO IS
NOT INSURED BY THE FDIC, IS NOT A DEPOSIT OR OTHER OBLIGATION OF, OR GUARANTEED
BY BANKS, AND IS SUBJECT TO INVESTMENT RISKS INCLUDING LOSS OF PRINCIPAL AMOUNT
INVESTED. FOR A MORE DETAILED DISCUSSION OF THE RISKS ASSOCIATED WITH THE
PORTFOLIO, SEE THE PORTFOLIO'S PROSPECTUS.
- --------
/1/Dow Jones Industrial Average (DJIA): The Dow Jones Industrial Average is an
unmanaged index of common stocks comprised of major industrial companies and
assumes the reinvestment of dividends and capital gains.
/2/S&P 100(R) Index: The Standard & Poor's 100 Stock Index known by its ticker
symbol OEX, measures large company U.S. stock market performance. This market
capitalization-weighted index is made up of 100 major, blue chip stocks across
diverse industry groups.
/3/The S&P 500(R) Index is an unmanaged index consisting of 500 stocks chosen
for market size, liquidity, and industry group representation. It is a
market-value weighted index (stock price times number of shares outstanding),
with each stock's weight in the Index proportionate to its market value.
Indices are unmanaged, do not reflect the deduction of fees or expenses and are
not available for direct investment.
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
LORD ABBETT GROWTH AND INCOME PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY LORD, ABBETT & CO. LLC
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
TEAM MANAGED
The Portfolio is managed by a team of investment managers and analysts. Eli M.
Salzmann and Sholom Dinsky head the team and have the joint and primary
responsibility for the day-to-day management of the Portfolio. Messrs. Dinsky
and Salzmann are Partners of Lord Abbett. Messrs. Salzmann and Dinsky have been
with Lord Abbett since 1997 and 2000, respectively.
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
---------------------------------------------
Exxon Mobil Corp. 5.32%
---------------------------------------------
Citigroup, Inc. 4.15%
---------------------------------------------
AT&T, Inc. 3.91%
---------------------------------------------
General Electric Co. 3.51%
---------------------------------------------
American International Group, Inc. 3.16%
---------------------------------------------
Procter & Gamble Co. (The) 2.98%
---------------------------------------------
Kraft Foods, Inc.--Class A 2.45%
---------------------------------------------
Sun Microsystems, Inc. 2.44%
---------------------------------------------
Abbott Laboratories 2.09%
---------------------------------------------
CVS Caremark Corp. 2.00%
---------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
LOGO
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
LORD ABBETT GROWTH AND INCOME PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY LORD, ABBETT & CO. LLC
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
LORD ABBETT GROWTH AND INCOME PORTFOLIO MANAGED BY
LORD, ABBETT & CO. LLC VS. S&P 500(R) INDEX/1/
Growth Based on $10,000+
[CHART]
Lord Abbett Growth
and Income Portfolio S&P 500(R) Index
-------------------- ----------------
12/31/1996 $10,000 $10,000
12/31/1997 12,400 13,336
12/31/1998 14,065 17,147
12/31/1999 16,395 20,754
12/31/2000 18,802 18,862
12/31/2001 17,717 16,619
12/31/2002 14,537 12,946
12/31/2003 19,052 16,662
12/31/2004 21,516 18,473
12/31/2005 22,310 19,380
12/31/2006 26,329 22,443
6/30/2007 27,822 24,005
-------------------------------------------------------------
Average Annual Return/2/
(for the period ended 6/30/07)
-------------------------------------------------------------
Since
1 Year 3 Year 5 Year 10 Year Inception/3/
-------------------------------------------------------------
Lord Abbett Growth
and Income
- -- Portfolio--Class A 18.14% 12.06% 11.12% 9.08% 12.33%
Class B 17.80% 11.78% 10.83% -- 8.38%
-------------------------------------------------------------
- - - S&P 500(R) Index/1/ 20.59% 11.68% 10.71% 7.13% 11.05%
-------------------------------------------------------------
+The chart reflects the performance of Class A shares of the Portfolio. The
performance of Class A shares will differ from that of the Class B shares
because of the difference in expenses paid by policyholders investing in the
different share class.
/1/The S&P 500(R) Index is an unmanaged index consisting of 500 stocks chosen
for market size, liquidity, and industry group representation. It is a
market-value weighted index (stock price times number of shares outstanding),
with each stock's weight in the Index proportionate to its market value. The
Index does not include fees or expenses and is not available for direct
investment.
/2/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/3/Inception of the Class A shares is 12/11/89. Returns shown for the Class A
shares are the historical returns of the Lord Abbett Growth & Income Portfolio
of Cova Series Trust (from January 8, 1999 through December 31, 2000) and of
the Growth and Income Portfolio of Lord Abbett Series Fund, Inc. (from December
11, 1989 through January 7, 1999). Inception of the Class B shares is 3/22/01.
Index returns are based on an inception date of 12/11/89.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
3
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
LORD ABBETT GROWTH AND INCOME PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,056.70 $2.60
Hypothetical (5% return before expenses) 1,000.00 1,022.27 2.56
- ------------------------------------------ ------------- ------------- --------------
Class B
Actual $1,000.00 $1,054.90 $3.87
Hypothetical (5% return before expenses) 1,000.00 1,021.03 3.81
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.51% and
0.76% for the Class A and Class B, respectively, multiplied by the average
account value over the period, multiplied by 181/365 (to reflect the one-half
year period).
4
MET INVESTORS SERIES TRUST
LORD ABBETT GROWTH AND INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
----------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
----------------------------------------------------------------
COMMON STOCKS - 97.5%
AEROSPACE & DEFENSE - 1.9%
Boeing Co. (The)..................... 182,600 $ 17,558,816
Northrop Grumman Corp................ 6,934 539,951
Raytheon Co.......................... 739,446 39,848,745
Rockwell Collins, Inc................ 309,377 21,854,391
---------------
79,801,903
---------------
AIR FREIGHT & LOGISTICS - 0.1%
United Parcel Service, Inc. - Class B 68,500 5,000,500
---------------
AUTO COMPONENTS - 0.1%
Goodyear Tire & Rubber Co. (The)*.... 138,860 4,826,774
---------------
AUTOMOBILES - 1.0%
Hertz Global Holdings, Inc.*(a)...... 1,498,334 39,810,734
---------------
BANKS - 4.0%
Bank of New York Co., Inc............ 1,633,772 67,703,512
Fifth Third Bancorp(a)............... 341,900 13,597,363
Marshall & Ilsley Corp.(a)........... 436,020 20,767,632
PNC Financial Services Group, Inc.... 90,100 6,451,063
Regions Financial Corp............... 517,490 17,128,919
SunTrust Banks, Inc.................. 205,330 17,604,994
Wells Fargo & Co..................... 701,800 24,682,306
---------------
167,935,789
---------------
BEVERAGES - 5.3%
Anheuser-Busch Cos., Inc............. 1,127,385 58,804,401
Coca-Cola Co......................... 1,467,428 76,761,159
Coca-Cola Enterprises, Inc.(a)....... 2,617,652 62,823,648
Diageo Plc (ADR)..................... 323,923 26,986,025
---------------
225,375,233
---------------
CHEMICALS - 1.8%
Monsanto Co.......................... 698,470 47,174,664
Praxair, Inc.(a)..................... 365,974 26,346,468
---------------
73,521,132
---------------
COMMERCIAL SERVICES & SUPPLIES - 0.9%
Automatic Data Processing, Inc....... 423,498 20,526,948
Waste Management, Inc................ 480,116 18,748,530
---------------
39,275,478
---------------
COMMUNICATIONS EQUIPMENT & SERVICES - 1.0%
Juniper Networks, Inc.*.............. 468,900 11,802,213
Motorola, Inc........................ 14,600 258,420
QUALCOMM, Inc........................ 726,900 31,540,191
---------------
43,600,824
---------------
COMPUTERS & PERIPHERALS - 4.8%
Hewlett-Packard Co................... 1,320,800 58,934,096
International Business Machines
Corp.(a)........................... 279,020 29,366,855
Network Appliance, Inc.*............. 401,100 11,712,120
Sun Microsystems, Inc.*.............. 19,560,031 102,885,763
---------------
202,898,834
---------------
------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
------------------------------------------------------------
ELECTRIC UTILITIES - 4.4%
Dominion Resources, Inc........... 422,825 $ 36,494,026
FPL Group, Inc.................... 633,190 35,927,201
PG&E Corp.(a)..................... 1,160,901 52,588,815
PPL Corp.(a)...................... 865,774 40,509,565
Progress Energy, Inc.............. 467,947 21,333,704
---------------
186,853,311
---------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 1.2%
Emerson Electric Co............... 1,066,366 49,905,929
---------------
ENERGY EQUIPMENT & SERVICES - 1.0%
Schlumberger, Ltd.(a)............. 495,479 42,085,986
---------------
FINANCIAL - DIVERSIFIED - 9.2%
Charles Schwab Corp. (The)........ 576,900 11,837,988
Citigroup, Inc.................... 3,419,389 175,380,462
Fannie Mae........................ 1,116,526 72,942,643
Freddie Mac....................... 15,600 946,920
JPMorgan Chase & Co............... 1,377,151 66,722,966
Mellon Financial Corp............. 1,126,833 49,580,652
Morgan Stanley.................... 108,500 9,100,980
---------------
386,512,611
---------------
FOOD & DRUG RETAILING - 3.5%
Kraft Foods, Inc. - Class A....... 2,937,861 103,559,600
SUPERVALU, Inc.................... 914,108 42,341,483
---------------
145,901,083
---------------
FOOD PRODUCTS - 0.2%
Wm. Wrigley Jr. Co.(a)............ 128,600 7,112,866
---------------
FOOD RETAILERS - 1.8%
Kroger Co. (The).................. 2,753,853 77,465,885
---------------
GAS UTILITIES - 0.5%
Spectra Energy Corp............... 812,100 21,082,116
---------------
HEALTH CARE EQUIPMENT & SUPPLIES - 2.7%
Baxter International, Inc......... 1,044,091 58,824,087
Boston Scientific Corp.*.......... 3,620,136 55,532,886
Johnson & Johnson................. 5,500 338,910
---------------
114,695,883
---------------
HEALTH CARE PROVIDERS & SERVICES - 0.4%
WellPoint, Inc.*(a)............... 208,045 16,608,232
---------------
HOUSEHOLD PRODUCTS - 3.5%
Kimberly-Clark Corp............... 313,411 20,964,062
Procter & Gamble Co. (The)........ 2,054,947 125,742,207
---------------
146,706,269
---------------
INDUSTRIAL - DIVERSIFIED - 3.5%
General Electric Co............... 3,875,915 148,370,026
---------------
INSURANCE - 4.5%
ACE, Ltd.......................... 13,900 869,028
Allstate Corp. (The).............. 15,100 928,801
American International Group, Inc. 1,906,882 133,538,947
Aon Corp.(a)...................... 980,500 41,779,105
See notes to financial statements
5
MET INVESTORS SERIES TRUST
LORD ABBETT GROWTH AND INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-----------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
-----------------------------------------------------------------
INSURANCE - CONTINUED
MBIA, Inc.(a)....................... 234,741 $ 14,605,585
---------------
191,721,466
---------------
INTERNET SOFTWARE & SERVICES - 1.9%
IAC/InterActiveCorp.*(a)............ 1,887,246 65,317,584
Yahoo!, Inc.*....................... 594,304 16,123,468
---------------
81,441,052
---------------
MACHINERY - 0.7%
Caterpillar, Inc.................... 236,930 18,551,619
Deere & Co.......................... 5,800 700,292
Eaton Corp.......................... 128,133 11,916,369
---------------
31,168,280
---------------
MEDIA - 1.5%
Idearc, Inc.(a)..................... 667 23,565
News Corp. - Class B(a)............. 1,206,315 27,672,866
Time Warner, Inc.................... 1,755,916 36,944,473
---------------
64,640,904
---------------
METALS & MINING - 2.9%
Barrick Gold Corp................... 1,733,742 50,399,880
BHP Billiton, Ltd. (ADR)(a)......... 234,000 13,981,500
Freeport-McMoRan Copper & Gold,
Inc. - Class B(a)................. 685,416 56,766,153
---------------
121,147,533
---------------
OIL & GAS - 7.4%
Devon Energy Corp................... 276,900 21,678,501
EOG Resources, Inc.................. 125,205 9,147,477
Exxon Mobil Corp.................... 2,679,500 224,756,460
Occidental Petroleum Corp........... 378,000 21,878,640
Smith International, Inc.(a)........ 585,300 34,321,992
---------------
311,783,070
---------------
PAPER & FOREST PRODUCTS - 1.1%
International Paper Co.(a).......... 1,189,525 46,450,951
---------------
PHARMACEUTICALS - 9.7%
Abbott Laboratories................. 1,644,100 88,041,555
Bristol-Myers Squibb Co............. 1,692,056 53,401,287
Eli Lilly & Co...................... 497,900 27,822,652
Novartis AG (ADR)................... 769,829 43,164,312
Pfizer, Inc......................... 24,200 618,794
Sanofi-Aventis (ADR)................ 1,114,617 44,885,627
Teva Pharmaceutical Industries, Ltd.
(ADR)............................. 1,847,596 76,213,335
Wyeth............................... 1,319,991 75,688,284
---------------
409,835,846
---------------
--------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
--------------------------------------------------------------------
RETAIL - MULTILINE - 4.4%
Costco Wholesale Corp.(a).............. 172,318 $ 10,084,049
CVS Caremark Corp...................... 2,310,726 84,225,963
Macy's, Inc............................ 393,532 15,654,703
Wal-Mart Stores, Inc................... 1,548,300 74,488,713
---------------
184,453,428
---------------
RETAIL - SPECIALTY - 0.7%
J Crew Group, Inc.*(a)................. 577,530 31,238,598
---------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS - 2.9%
Altera Corp.(a)........................ 887,100 19,631,523
Microchip Technology, Inc.(a).......... 736,978 27,297,665
NVIDIA Corp.*.......................... 220,300 9,100,593
Taiwan Semiconductor Manufacturing Co.,
Ltd. (ADR)........................... 1,861,348 20,716,803
Texas Instruments, Inc................. 1,249,779 47,029,184
---------------
123,775,768
---------------
SOFTWARE - 1.9%
Microsoft Corp......................... 1,546,700 45,581,249
Oracle Corp.*.......................... 1,672,100 32,957,091
---------------
78,538,340
---------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 5.1%
AT&T, Inc.............................. 3,977,955 165,085,133
Corning, Inc.*......................... 1,251,200 31,968,160
Embarq Corp.(a)........................ 575 36,438
Sprint Nextel Corp..................... 11,500 238,165
Verizon Communications, Inc............ 441,190 18,163,792
---------------
215,491,688
---------------
Total Common Stocks
(Cost $3,544,299,305) 4,117,034,322
---------------
See notes to financial statements
6
MET INVESTORS SERIES TRUST
LORD ABBETT GROWTH AND INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-------------------------------------------------------------------
SECURITY SHARES/PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-------------------------------------------------------------------
ESCROWED SHARES - 0.0%
ESC Seagate Technology(b)
(Cost - $0) 10,300 $ 10
---------------
SHORT-TERM INVESTMENT - 2.4%
State Street Bank & Trust Co.,
Repurchase Agreement, dated
06/29/07 at 3.400% to be repurchased
at $73,550,856 on 07/02/07
collateralized by $75,970,000 FHLB at
4.375% due 09/17/10 with a value of
$75,000,623.......................... $73,530,022 73,530,022
State Street Bank & Trust Co.,
Repurchase Agreement, dated
06/29/07 at 3.400% to be repurchased
at $25,969,334 on 07/02/07
collateralized by $28,285,000 FNMA at
4.375% due 10/15/15 with a value of
$26,481,831.......................... 25,961,978 25,961,978
---------------
99,492,000
---------------
Total Short-Term Investment
(Cost - $99,492,000) 99,492,000 99,492,000
---------------
TOTAL INVESTMENTS - 99.9%
(Cost $3,643,791,305) 4,216,526,332
---------------
Other Assets and Liabilities (net) - 0.1% 5,020,955
---------------
TOTAL NET ASSETS - 100.0% $ 4,221,547,287
===============
PORTFOLIO FOOTNOTES:
* Non-income producing security.
(a) A portion or all of the security was held on loan. As of June 30, 2007, the
market value of the securities loaned was $217,414,777 and the collateral
received consisted of cash in the amount of $205,246,137 and securities in
the amount of $17,160,424.
(b) Illiquid securities representing 0.0% of net assets.
ADR - American Depositary Receipt
FHLB - Federal Home Loan Bank
FNMA - Federal National Mortgage Association
See notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
LORD ABBETT GROWTH AND INCOME PORTFOLIO
ASSETS
Investments, at value (Note 2)* $4,117,034,332
Repurchase Agreement 99,492,000
Cash 4,869
Collateral for securities on loan 222,406,561
Receivable for investments sold 26,097,349
Receivable for Trust shares sold 2,226,856
Dividends receivable 6,181,253
Interest receivable 9,397
--------------
Total assets 4,473,452,617
--------------
LIABILITIES
Payables for:
Investments purchased 24,958,342
Trust shares redeemed 2,034,239
Distribution and services fees - Class B 353,178
Collateral for securities on loan 222,406,561
Investment advisory fee payable (Note 3) 1,695,010
Administration fee payable 43,888
Custodian and accounting fees payable 107,344
Accrued expenses 306,768
--------------
Total liabilities 251,905,330
--------------
NET ASSETS $4,221,547,287
==============
NET ASSETS REPRESENTED BY:
Paid in surplus $3,414,792,389
Accumulated net realized gain 203,115,105
Unrealized appreciation on investments 572,735,027
Undistributed net investment income 30,904,766
--------------
Total $4,221,547,287
==============
NET ASSETS
Class A $2,519,834,663
==============
Class B 1,701,712,624
==============
CAPITAL SHARES OUTSTANDING
Class A 85,869,290
==============
Class B 58,311,321
==============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 29.35
==============
Class B 29.18
==============
- -------------------------------------------------------------------------------------------------
* Investments at cost, excluding Repurchase Agreements $3,544,299,305
See notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
LORD ABBETT GROWTH AND INCOME PORTFOLIO
INVESTMENT INCOME:
Dividends (1) $ 40,331,208
Interest (2) 2,135,497
------------
Total investment income 42,466,705
------------
EXPENSES:
Investment advisory fee (Note 3) 9,551,219
Administration fees 136,838
Custody and accounting fees 116,380
Distribution fee - Class B 2,012,883
Transfer agent fees 11,442
Audit 11,992
Legal 7,779
Trustee fees and expenses 7,962
Shareholder reporting 181,126
Insurance 28,916
Other 2,532
------------
Total expenses 12,069,069
Less broker commission recapture (175,344)
------------
Net expenses 11,893,725
------------
Net investment income 30,572,980
------------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FUTURES CONTRACTS:
Net realized gain on:
Investments 228,293,489
Futures contracts 188,352
------------
Net realized gain on investments and futures contracts 228,481,841
------------
Net change in unrealized depreciation on:
Investments (47,938,020)
------------
Net change in unrealized depreciation on investments (47,938,020)
------------
Net realized and change in unrealized gain on investments and
futures contracts 180,543,821
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $211,116,801
============
- ---------------------------------------------------------------------------------------
(1)Dividend income is net withholding taxes of: $ 654,429
(2)Interest income includes securities lending income of: 165,162
See notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
LORD ABBETT GROWTH AND INCOME PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 30,572,980 $ 53,166,816
Net realized gain on investments and futures contracts 228,481,841 208,968,321
Net change in unrealized appreciation (depreciation) on investments (47,938,020) 305,297,425
-------------- --------------
Net increase in net assets resulting from operations 211,116,801 567,432,562
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (23,281,248) (39,462,221)
Class B (13,684,829) (18,016,232)
From net realized gains
Class A (100,717,645) (173,559,959)
Class B (70,318,294) (95,632,060)
-------------- --------------
Net decrease in net assets resulting from distributions (208,002,016) (326,670,472)
-------------- --------------
CAPITAL SHARE TRANSACTIONS (NOTES 4 AND 8):
Proceeds from shares sold
Class A 351,782,375 347,527,465
Class B 171,301,904 369,741,915
Net asset value of shares issued through acquisition
Class A -- --
Class B -- 27,312,987
Net asset value of shares issued through dividend reinvestment
Class A 123,998,893 213,022,180
Class B 84,003,123 113,648,292
Cost of shares repurchased
Class A (129,400,694) (506,219,557)
Class B (151,862,236) (153,391,225)
-------------- --------------
Net increase in net assets from capital share transactions 449,823,365 411,642,057
-------------- --------------
TOTAL INCREASE IN NET ASSETS 452,938,150 652,404,147
Net assets at beginning of period 3,768,609,137 3,116,204,990
-------------- --------------
Net assets at end of period $4,221,547,287 $3,768,609,137
============== ==============
Net assets at end of period includes undistributed net investment income $ 30,904,766 $ 37,297,863
============== ==============
See notes to financial statements
10
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
LORD ABBETT GROWTH AND INCOME PORTFOLIO ---------------------------
FOR THE PERIOD
ENDED
JUNE 30, 2007 ------------
(UNAUDITED) 2006
-------------- --------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $ 29.36 $ 27.59
-------- --------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................. 0.24(a) 0.46(a)
Net Realized/Unrealized Gain (Loss) on Investments.................... 1.40 4.22
-------- --------
Total from Investment Operations...................................... 1.64 4.68
-------- --------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. (0.31) (0.54)
Distributions from Net Realized Capital Gains......................... (1.34) (2.37)
-------- --------
Total Distributions................................................... (1.65) (2.91)
-------- --------
NET ASSET VALUE, END OF PERIOD........................................ $ 29.35 $ 29.36
======== ========
TOTAL RETURN 5.67% 18.03%
Ratio of Expenses to Average Net Assets**............................. 0.51%* 0.54%
Ratio of Expenses to Average Net Assets After Broker Rebates**........ N/A N/A
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 0.52%* 0.54%
Ratio of Net Investment Income to Average Net Assets.................. 1.67%* 1.64%
Portfolio Turnover Rate............................................... 42.7% 50.2%
Net Assets, End of Period (in millions)............................... $2,519.8 $2,172.1
---------------------------
FOR THE PERIOD
ENDED
JUNE 30, 2007 ------------
(UNAUDITED) 2006
-------------- --------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $ 29.20 $ 27.43
-------- --------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................. 0.21(a) 0.39 (a)
Net Realized/Unrealized Gain (Loss) on Investments.................... 1.37 4.20
-------- --------
Total from Investment Operations...................................... 1.58 4.59
-------- --------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. (0.26) (0.45)
Distributions from Net Realized Capital Gains......................... (1.34) (2.37)
-------- --------
Total Distributions................................................... (1.60) (2.82)
-------- --------
NET ASSET VALUE, END OF PERIOD........................................ $ 29.18 $ 29.20
======== ========
TOTAL RETURN 5.49% 17.78%
Ratio of Expenses to Average Net Assets**............................. 0.76%* 0.79%
Ratio of Expenses to Average Net Assets After Broker Rebates**........ N/A N/A
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 0.77%* 0.79%
Ratio of Net Investment Income to Average Net Assets.................. 1.43%* 1.40%
Portfolio Turnover Rate............................................... 42.7% 50.2%
Net Assets, End of Period (in millions)............................... $1,701.7 $1,596.5
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS A
LORD ABBETT GROWTH AND INCOME PORTFOLIO -----------------------------------------------
FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------------------
2005 2004 2003 2002
-------- -------- -------- -------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $ 27.44 $ 24.41 $ 18.86 $ 25.05
-------- -------- -------- -------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................. 0.40 (a) 0.33 (a) 0.23 (a) 0.21 (a)
Net Realized/Unrealized Gain (Loss) on Investments.................... 0.61 2.82 5.56 (4.67)
-------- -------- -------- -------
Total from Investment Operations...................................... 1.01 3.15 5.79 (4.46)
-------- -------- -------- -------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. (0.31) (0.12) (0.24) (0.21)
Distributions from Net Realized Capital Gains......................... (0.55) -- -- (1.52)
-------- -------- -------- -------
Total Distributions................................................... (0.86) (0.12) (0.24) (1.73)
-------- -------- -------- -------
NET ASSET VALUE, END OF PERIOD........................................ $ 27.59 $ 27.44 $ 24.41 $ 18.86
======== ======== ======== =======
TOTAL RETURN 3.68% 12.92% 31.06% (17.95)%
Ratio of Expenses to Average Net Assets**............................. 0.53% 0.57% 0.62% 0.65 %
Ratio of Expenses to Average Net Assets After Broker Rebates**........ N/A N/A 0.61% 0.63 %
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 0.55%(b) 0.56%(b) 0.62%(b) 0.67 %
Ratio of Net Investment Income to Average Net Assets.................. 1.46% 1.30% 1.13% 0.94 %
Portfolio Turnover Rate............................................... 45.9% 29.7% 37.0% 55.4 %
Net Assets, End of Period (in millions)............................... $1,985.7 $1,867.5 $1,167.7 $890.2
CLASS B
-----------------------------------------------
FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------------------
2005 2004 2003 2002
-------- -------- -------- -------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $ 27.27 $ 24.29 $ 18.78 $ 25.01
-------- -------- -------- -------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................. 0.33 (a) 0.27 (a) 0.18 (a) 0.17 (a)
Net Realized/Unrealized Gain (Loss) on Investments.................... 0.61 2.80 5.54 (4.67)
-------- -------- -------- -------
Total from Investment Operations...................................... 0.94 3.07 5.72 (4.50)
-------- -------- -------- -------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. (0.23) (0.09) (0.21) (0.21)
Distributions from Net Realized Capital Gains......................... (0.55) -- -- (1.52)
-------- -------- -------- -------
Total Distributions................................................... (0.78) (0.09) (0.21) (1.73)
-------- -------- -------- -------
NET ASSET VALUE, END OF PERIOD........................................ $ 27.43 $ 27.27 $ 24.29 $ 18.78
======== ======== ======== =======
TOTAL RETURN 3.39% 12.65% 30.73% (18.12)%
Ratio of Expenses to Average Net Assets**............................. 0.78% 0.82% 0.86% 0.90 %
Ratio of Expenses to Average Net Assets After Broker Rebates**........ N/A N/A 0.86% 0.88 %
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 0.80%(b) 0.80%(b) 0.86%(b) 0.93 %
Ratio of Net Investment Income to Average Net Assets.................. 1.21% 1.08% 0.87% 0.78 %
Portfolio Turnover Rate............................................... 45.9% 29.7% 37.0% 55.4 %
Net Assets, End of Period (in millions)............................... $1,130.5 $1,282.3 $1,081.0 $337.3
* Annualized
** Prior to 05/01/2003, broker rebates were excluded from the calculation of
the expense limitation.
(a) Per share amounts based on average shares outstanding during the period.
(b) Excludes effect of Deferred Expense Reimbursement.
See notes to financial statements
11
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is Lord Abbett Growth and Income Portfolio,
which is diversified. Shares in the Trust are not offered directly to the
general public and are currently available only to separate accounts
established by certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A and B Shares are
offered by the Portfolio. Class E Shares are not currently offered by the
Portfolio included in this report. Shares of each Class of the Portfolio
represent an equal pro rata interest in the Portfolio and generally give the
shareholder the same voting, dividend, liquidation, and other rights.
Investment income, realized and unrealized capital gains and losses, the common
expenses of the Portfolio and certain Portfolio-level expense reductions, if
any, are allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the Portfolio. Each class of
shares differs in its respective distribution expenses and certain other
class-specific expense reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date.
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The value of the security so purchased is subject to market fluctuations during
this period. The Portfolio segregates assets having an aggregate value at least
equal to the amount of the when issued or delayed delivery purchase commitments
until payment is made.
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
The Portfolio utilizes the provisions of the federal income tax laws that
provide for the carryforward of capital losses for eight years, offsetting such
losses against any future net realized capital gains. At December 31, 2006, the
accumulated capital loss carryforwards and expiration dates by the Portfolio
were as follows:
Expiring Expiring Expiring
Portfolio Total 12/31/2008 12/31/2009 12/31/2010
- --------- ----------- ---------- ----------- ----------
Lord Abbett Growth and Income Portfolio $46,237,772 $8,374,531 $28,690,142 $9,173,099
Lord Abbett Growth and Income Portfolio acquired losses of $61,902,713 in the
merger with J.P. Morgan Enhanced Index Portfolio on April 28th, 2003 which are
subject to an annual limitation of $5,221,647.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. SECURITIES LENDING - The Portfolio may lend its securities to certain
qualified brokers who borrow securities in order to complete certain
transactions. By lending its investment securities, the Portfolio attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term of the loan would
accrue to the account of the Portfolio. Risks of delay in recovery of the
securities or even loss of rights in the collateral may occur should the
borrower of the securities fail financially. Risks may also arise to the extent
that the value of the collateral decreases below the value of the securities
loaned.
Upon entering into a securities lending transaction, the Portfolio receives
cash or other securities as collateral in an amount equal to or exceeding 102%
of the current market value of the loaned securities. Any cash received as
collateral is generally invested by State Street Bank and Trust Company ("State
Street"), acting in its capacity as securities lending agent (the "Agent"), in
the State Street Navigator Securities Lending Prime Portfolio which is a money
market fund registered under the 1940 Act. A portion of the dividends received
on the collateral is rebated to the borrower of the securities and the
remainder is split between the Agent and the Portfolio. On loans collateralized
by cash, the cash collateral is invested in a money market fund or short term
securities. A portion of the income generated upon investment of the collateral
is remitted to the Borrowers and the remainder is allocated between the fund
and the lending agent. On loans collateralized by U.S. Treasuries, a fee is
received from the Borrower and is allocated between the fund and the lending
agent.
G. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
H. DIRECTED BROKERAGE AGREEMENT - The Trust has entered into a directed
brokerage arrangement with State Street Global Markets ("SSGM"). Under this
arrangement, the Portfolio directs certain trades to SSGM in return for a
recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to
each Portfolio are shown separately as an expense reduction on the Statement of
Operations of the Portfolio.
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with Lord, Abbett & Co. LLC, (the "Adviser") for investment advisory services
in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- ----------------------------
Lord Abbett Growth and Income Portfolio $9,551,219 0.60% First $600 Million
0.55% $600 Million to $1.1 Billion
0.50% $1.1 Billion to $1.5 Billion
0.45% Over $1.5 Billion
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The amount waived and expenses reimbursed for the period ended June 30, 2007 is
shown as investment advisory fee waiver in the Statement of Operations of the
Portfolio.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued Net
Shares Issued in Through Increase
Beginning Shares Connection with Dividend Shares in Shares Ending
Shares Sold Acquisition (Note 8) Reinvestment Repurchased Outstanding Shares
- - ---------- ---------- -------------------- ------------- ----------- ----------- ----------
Lord Abbett Growth and Income
Portfolio
Class A
06/30/2007 73,977,334 11,991,531 -- 4,295,078 (4,394,653) 11,891,956 85,869,290
12/31/2006 71,979,223 12,455,155 -- 7,975,372 (18,432,416) 1,998,111 73,977,334
Class B
06/30/2007 54,680,361 5,905,198 -- 2,924,900 (5,199,138) 3,630,960 58,311,321
12/31/2006 41,220,010 13,717,465 1,016,486 4,270,886 (5,544,486) 13,460,351 54,680,361
14
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchase Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
Lord Abbett Growth and Income Portfolio $-- $1,839,934,160 $-- $1,632,252,988
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation Depreciation Appreciation
- --------- -------------- ------------ ------------ --------------
Lord Abbett Growth and Income Portfolio $3,643,791,305 $600,248,244 $(27,513,217) $572,735,027
6. SECURITY LENDING
As of June 30, 2007, the Portfolio had loaned securities which were
collateralized by short term investments. The value of securities on loan and
the value of the related collateral were as follows:
Value of Value of
Securities Collateral
------------ ------------
Lord Abbett Growth and Income Portfolio $217,414,777 $222,406,561
7. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
----------------------- ------------------------ ------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ------------ ----------- ------------ -----------
Lord Abbett Growth and Income Portfolio $59,808,462 $30,923,009 $266,862,010 $60,761,684 $326,670,472 $91,684,693
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
------------- ------------- ------------ ------------------ ------------
Lord Abbett Growth and Income Portfolio $39,089,371 $168,912,490 $616,524,840 $(20,886,588) $803,640,113
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
8. ACQUISITIONS
On May 1, 2006, Lord Abbett Growth and Income Portfolio ("Growth and Income")
acquired all of the net assets of Federated Stock Portfolio, a series of The
Travelers Series Trust ("Federated Stock"), pursuant to a plan of
reorganization approved by Federated Stock shareholders on March 14, 2006. The
acquisition was accomplished by a tax-free exchange of 1,016,486 Class B shares
of Growth and Income (valued at $27.3 million) in exchange for the 1,773,115
Class A shares of Federated Stock outstanding on April 28, 2006. Federated
Stock Class A net assets at that date ($27.3 million), including $2,884,780 of
unrealized appreciation were combined with those of Growth and Income Class B.
The cost of securities acquired in the tax-free exchange by Growth and Income
from Federated Stock was $24,155,155. The aggregate Class B net assets of
Growth and Income and Class A of Federated Stock immediately before the
acquisition were $1,196,462,432 and $27,312,987, respectively. The aggregate
Class B net assets of Growth and Income immediately after the acquisition were
$1,223,775,419.
15
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
9. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
10. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
16
MET INVESTORS SERIES TRUST
Lord Abbett Mid-Cap
Value Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
LORD ABBETT MID-CAP VALUE PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY LORD, ABBETT & CO. LLC
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
MARKET REVIEW
Supported by above-trend earnings growth and a dwindling supply of shares
outstanding, equities returned approximately 7% (on a total return basis) in
the six-month period ended June 30, 2007. Though the path higher had its dips
and turns, both the Dow Jones Industrial Average/(1) /and S&P 500(R) Index/(2)/
reached record levels, with the latter finally cresting (albeit for only a
brief period) its prior high established seven years ago. A bevy of mergers and
acquisitions, private equity deals, and share buybacks cumulatively left
investors with fewer shares of public companies to own.
The industrial sector of the economy looked stronger in the period. With the
supply of inventories low and foreign demand robust, manufacturing activity
began to accelerate. The Institute for Supply Management's (ISM) survey of the
manufacturing sector, for instance, jumped 4.1 points between March and May. In
response, year-ahead forward rates on three-month deposits rose, and the yield
on the 10-year Treasury bond climbed lockstep. By early June, the rise in the
10-year Treasury bond yield eclipsed that of short-term rates, which triggered
a period of consolidation in the equity markets. Though the semiannual period
ended June 30, 2007 finished on a down-note, the gains returned during the full
period were still quite strong.
Returns in the equity market were broad; however, companies with mid to small
capitalizations outperformed large to mega capitalizations. In fact, shares of
growth-oriented small and mid cap companies led all other styles of investing.
The relative strength of small and mid caps reflected the large number of
private equity deals (reportedly worth more than $300 billion) announced
between January and June 2007. With the performance of large cap companies
trailing those of their smaller peers, the valuation gap (the difference
between the prices that investors are willing to pay for the earnings of the
companies in each index) widened. At the close of June, the price-to-earnings
ratio (P/E) of the S&P 100(R) Index/(3)/ was about 25% less than the P/E of the
small and mid cap indexes. Finally, unlike in the small and mid cap categories,
value continued its dominance over growth in the large cap space.
PORTFOLIO REVIEW
For the six-month period ended June 30, 2007, the Portfolio outperformed the
Russell Midcap(R) Index/(4)/. The Portfolio's underweight within the financial
services sector was the largest contributor to performance during the period as
this sector was negatively impacted by the fallout from a troubled sub-prime
mortgage market. The largest contributor to performance overall was Mosaic, the
world's largest phosphate producer, which benefited from higher demand and
improved pricing for fertilizer. The company also prepaid a portion of its
outstanding loans in an effort to reduce overall debt and improve the strength
of its balance sheet. King Pharmaceuticals, a healthcare holding, was another
significant performer. The company's stock price rose as it surprised the
Street by announcing higher than expected earnings for the fourth quarter of
2006, and again for the first quarter of 2007.
The largest detractor from performance was stock selection within the consumer
discretionary sector. Shares of OfficeMax fell after the company announced
disappointing first quarter results, driven mainly by profit deterioration in
its contract segment. Another significant detractor was JDS Uniphase, a
communications equipment supplier. Shares fell sharply after the company
announced a loss for the fiscal third quarter and lower guidance for the fourth
quarter. Another significant detractor during the first half of 2007 was
NiSource, an energy holding company. Shares slid after management announced
that it would not be pursuing the sale of its electric business as many
analysts had hoped it would.
OUTLOOK
Returns in the stock market have been strong for the past four years,
particularly in mid cap stocks. Valuations have compressed across the
capitalization spectrum, but they do not appear to be stretched. Profitability
at many companies is at peak levels and we are clearly in the later stages of
expansion. The recent financial turmoil and housing market pressure may slow
economic growth and perhaps impinge profitability going forward.
We will continue to invest in areas where we see company and industry catalysts
to improve below-average levels of profitability. We maintain our overweight
position in telecommunications, believing the companies will benefit from
reduced costs and expanded services, including television and high speed
internet. Telecommunications equipment suppliers also remain an area of focus
for us, as we expect them to improve profitability as telephone companies and
cable companies extend their networks. Recently we have increased our exposure
to more traditionally defensive companies by adding names within the consumer
staples and health care sectors.
We have maintained an underweight position in financial services for a number
of years. With the exception of insurance-related holdings, we have not seen
the combination of valuation and the potential for improving profitability that
would make the companies attractive to us. As a result, we have no exposure to
banks or sub-prime mortgage lenders, and have a significant relative
underweight position in REIT securities. However, the sub-prime mortgage
implosion, a growing fear of credit deterioration, and general uncertainty over
the direction of future fed policy may create the opportunity for future
investment.
THE PORTFOLIO IS ACTIVELY MANAGED AND THEREFORE, ITS HOLDINGS AND WEIGHTINGS OF
A PARTICULAR ISSUER OR PARTICULAR SECTOR AS A PERCENTAGE OF PORTFOLIO ASSETS
ARE SUBJECT TO CHANGE. SECTORS MAY INCLUDE MANY INDUSTRIES.
NOTE: THE VIEWS OF LORD, ABBETT & CO. LLC AND THE PORTFOLIO HOLDINGS DESCRIBED
IN THIS REPORT ARE AS OF JUNE 30, 2007; VIEWS AND PORTFOLIO HOLDINGS MAY HAVE
CHANGED SUBSEQUENT TO THIS DATE. INFORMATION PROVIDED IN THIS REPORT SHOULD NOT
BE CONSIDERED A RECOMMENDATION TO PURCHASE OR SELL SECURITIES. THE PORTFOLIO IS
NOT INSURED BY THE FDIC, IS NOT A DEPOSIT OR OTHER OBLIGATION OF, OR GUARANTEED
BY, BANKS, AND IS SUBJECT TO INVESTMENT RISKS INCLUDING LOSS OF PRINCIPAL
AMOUNT INVESTED.
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
LORD ABBETT MID-CAP VALUE PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY LORD, ABBETT & CO. LLC
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
FOR A MORE DETAILED DISCUSSION OF THE RISKS ASSOCIATED WITH THE PORTFOLIO, SEE
THE PORTFOLIO'S PROSPECTUS.
- --------
/1/Dow Jones Industrial Average (DJIA): The Dow Jones Industrial Average is an
unmanaged index of common stocks comprised of major industrial companies and
assumes the reinvestment of dividends and capital gains.
/2/S&P 500 Index: Widely regarded as the standard for measuring large-cap U.S.
stock market performance, this popular index includes a representative sample
of leading companies in leading industries.
/3/S&P 100 Index: The Standard & Poor's 100 Stock Index known by its ticker
symbol OEX, measures large company U.S. stock market performance. This market
capitalization-weighted index is made up of 100 major, blue chip stocks across
diverse industry groups.
/4/Russell Midcap(R) Index: Measures the performance of the 800 smallest
companies in the Russell 1000 Index, which represent approximately 30% of the
total market capitalization of the Russell 1000 Index.
Indexes are unmanaged, do not reflect the deduction of fees and expenses, and
are not available for direct investment.
TEAM MANAGED
Lord Abbett uses a team of investment managers and analysts acting together to
manage the Portfolio's investments. Edward K. von der Linde, Partner and
Investment Manager, leads the team. The other senior members are Eileen Banko,
Howard E. Hansen, and David G. Builder. Mr. von der Linde and Mr. Hansen are
jointly and primarily responsible for the day-to-day management of the
Portfolio.
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
---------------------------------------------------
Qwest Communications International, Inc. 3.29%
---------------------------------------------------
R.H. Donnelley Corp. 2.94%
---------------------------------------------------
McAfee, Inc. 2.61%
---------------------------------------------------
King Pharmaceuticals, Inc. 2.55%
---------------------------------------------------
Interpublic Group of Cos., Inc. 2.50%
---------------------------------------------------
R. R. Donnelley & Sons Co. 2.29%
---------------------------------------------------
Embarq Corp. 2.28%
---------------------------------------------------
Avaya, Inc. 2.17%
---------------------------------------------------
EOG Resources, Inc. 2.16%
---------------------------------------------------
Mylan Laboratories, Inc. 2.09%
---------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
[CHART]
Communications 25.3%
Non-Cyclical 16.2%
Industrials 11.5%
Cyclical 10.0%
Basic Materials 10.0%
Utilities 8.9%
Financials 8.0%
Energy 6.7%
Technology 3.4%
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
LORD ABBETT MID-CAP VALUE PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY LORD, ABBETT & CO. LLC
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
LORD ABBETT MID-CAP VALUE PORTFOLIO MANAGED BY
LORD, ABBETT & CO. LLC VS. S&P MIDCAP(R) 400/CITIGROUP VALUE INDEX/1/ AND
RUSSELL MIDCAP(R) INDEX/2/
Growth Based on $10,000+
[CHART]
Lord Abbett Mid- S&P MidCap(R) 400/ Russell
Cap Value Portfolio Citigroup Value Index Midcap(R) Index
------------------- --------------------- ---------------
8/20/1997 $10,000 $10,000 $10,000
12/31/1997 10,490 11,191 10,678
12/31/1998 10,606 11,606 11,757
12/31/1999 11,211 11,301 13,902
12/31/2000 17,139 13,506 15,049
12/31/2001 18,527 13,699 14,203
12/31/2002 16,802 12,407 11,904
12/31/2003 21,196 16,601 16,675
12/31/2004 26,458 19,453 20,046
12/31/2005 28,649 21,548 22,583
12/31/2006 32,229 24,698 26,028
6/30/2007 35,935 27,262 28,605
------------------------------------------------------------------
Average Annual Return/3/
(for the period ended 6/30/07)
------------------------------------------------------------------
1 Year 3 Year 5 Year Since Inception/4/
------------------------------------------------------------------
Lord Abbett Mid-Cap
- -- Value Portfolio--Class A 24.44% 15.63% 14.24% 13.85%
Class B 24.10% 15.34% 13.94% 12.86%
------------------------------------------------------------------
S&P MidCap(R) 400/
- - - Citigroup Value Index/1/ 18.39% 15.61% 14.22% 10.64%
------------------------------------------------------------------
- -- Russell Midcap(R) Index/2/ 20.83% 17.16% 16.39% 11.07%
------------------------------------------------------------------
+The chart reflects the performance of Class A shares of the Portfolio. The
performance of Class A shares will differ from that of the Class B shares
because of the difference in expenses paid by policyholders investing in the
different share class.
/1/The S&P MidCap(R) 400/Citigroup Value Index consists of 400 domestic stocks
chosen for market size, liquidity, and industry group representation. The
blended Index is constructed by selecting the stocks in each index with high
book-to-price ratios. The Indices do not include fees or expenses and are not
available for direct investment.
/2/The Russell Midcap(R) Index is an unmanaged index which measures the
performance of the 800 smallest companies in the Russell 1000(R) Index, which
represent approximately 30% of the total market capitalization of the Russell
1000 Index. As of the latest reconstitution, the average market capitalization
was approximately $6.3 billion; the median market capitalization was
approximately $4.7 billion. The largest company in the Index had a market
capitalization of $18.3 billion. The Index does not include fees or expenses
and is not available for direct investment.
/3/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/4/Inception of the Class A shares is 8/20/97. Inception of the Class B shares
is 4/3/01. The Russell Midcap(R) Index returns are based on an inception date
of 8/20/97. The S&P MidCap(R) 400/Citigroup Value Index returns are based on an
inception date of 8/1/97.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
3
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
LORD ABBETT MID-CAP VALUE PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,115.00 $3.72
Hypothetical (5% return before expenses) 1,000.00 1,021.27 3.56
- ------------------------------------------ ------------- ------------- --------------
Class B
Actual $1,000.00 $1,113.40 $5.03
Hypothetical (5% return before expenses) 1,000.00 1,020.03 4.81
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.71% and
0.96% for the Class A and Class B, respectively, multiplied by the average
account value over the period, multiplied by 181/365 (to reflect the one-half
year period).
4
MET INVESTORS SERIES TRUST
LORD ABBETT MID-CAP VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
------------------------------------------------------------------------
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
------------------------------------------------------------------------
COMMON STOCKS - 95.8%
AUTO COMPONENTS - 0.5%
ArvinMeritor, Inc.(a)............................. 73,000 $ 1,620,600
Goodyear Tire & Rubber Co. (The)*(a).............. 42,800 1,487,728
-------------
3,108,328
-------------
BEVERAGES - 1.9%
Coca-Cola Enterprises, Inc........................ 470,196 11,284,704
-------------
CHEMICALS - 6.7%
Chemtura Corp..................................... 689,056 7,655,412
Eastman Chemical Co............................... 169,508 10,904,450
Monsanto Co....................................... 99,890 6,746,571
Mosaic Co.*....................................... 308,527 12,038,723
Potash Corp. of Saskatchewan, Inc................. 25,375 1,978,489
-------------
39,323,645
-------------
COMMERCIAL SERVICES & SUPPLIES - 6.6%
Allied Waste Industries, Inc.*(a)................. 475,136 6,395,330
Arbitron, Inc..................................... 34,883 1,797,521
R. R. Donnelley & Sons Co......................... 309,635 13,472,219
R.H. Donnelley Corp.*(a).......................... 228,301 17,300,650
-------------
38,965,720
-------------
COMMUNICATIONS EQUIPMENT & SERVICES - 3.9%
Avaya, Inc.*...................................... 757,593 12,757,866
Tellabs, Inc.*.................................... 970,598 10,443,635
-------------
23,201,501
-------------
CONTAINERS & PACKAGING - 3.0%
Ball Corp......................................... 212,522 11,299,795
Pactiv Corp.*..................................... 203,071 6,475,934
-------------
17,775,729
-------------
ELECTRIC UTILITIES - 6.3%
Ameren Corp....................................... 228,211 11,184,621
CMS Energy Corp.(a)............................... 581,676 10,004,827
Northeast Utilities............................... 406,958 11,541,329
Puget Energy, Inc................................. 191,389 4,627,786
-------------
37,358,563
-------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 1.8%
Hubbell, Inc. - Class B(a)........................ 190,610 10,334,874
-------------
ENERGY EQUIPMENT & SERVICES - 1.8%
GlobalSantaFe Corp.(a)............................ 143,489 10,367,080
-------------
FOOD & DRUG RETAILING - 1.2%
Safeway, Inc...................................... 216,610 7,371,238
-------------
FOOD PRODUCTS - 1.0%
Smithfield Foods, Inc.*........................... 190,446 5,863,832
-------------
FOOD RETAILERS - 1.3%
Kroger Co. (The).................................. 262,911 7,395,687
-------------
HEALTH CARE EQUIPMENT & SUPPLIES - 1.4%
Bausch & Lomb, Inc.(a)............................ 117,900 8,186,976
-------------
------------------------------------------------------------------------
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES - 1.5%
Aetna, Inc........................................ 85,081 $ 4,203,001
Healthsouth Corp.*(a)............................. 245,782 4,451,112
-------------
8,654,113
-------------
HOTELS, RESTAURANTS & LEISURE - 0.9%
Brinker International, Inc......... 187,322 5,482,915
----------
HOUSEHOLD DURABLES - 2.5%
Newell Rubbermaid, Inc............. 228,873 6,735,732
Snap-On, Inc....................... 153,802 7,768,539
----------
14,504,271
----------
INDUSTRIAL - DIVERSIFIED - 1.1%
KBR, Inc.*......................... 236,611 6,206,307
----------
INSURANCE - 6.9%
ACE, Ltd........................... 90,688 5,669,814
Conseco, Inc.*..................... 350,840 7,329,047
Everest Reinsurance Group, Ltd..... 7,492 813,931
Genworth Financial, Inc. - Class A. 41,864 1,440,122
PartnerRe, Ltd.(a)................. 133,570 10,351,675
SAFECO Corp........................ 75,161 4,679,524
XL Capital, Ltd. - Class A(a)...... 125,325 10,563,644
----------
40,847,757
----------
INTERNET SOFTWARE & SERVICES - 2.8%
McAfee, Inc.*...................... 436,351 15,359,555
Openwave Systems, Inc.(a).......... 165,148 1,033,827
----------
16,393,382
----------
MACHINERY - 2.8%
Cummins, Inc....................... 62,255 6,300,829
Joy Global, Inc.................... 1,274 74,312
Pentair, Inc.(a)................... 22,900 883,253
Timken Co. (The)................... 263,735 9,523,471
----------
16,781,865
----------
MEDIA - 3.6%
Clear Channel Communications, Inc.. 164,854 6,234,778
Interpublic Group of Cos., Inc.*(a) 1,291,680 14,725,152
----------
20,959,930
----------
OIL & GAS - 6.9%
EOG Resources, Inc................. 174,338 12,737,134
Halliburton Co..................... 300,829 10,378,601
NiSource, Inc.(a).................. 534,899 11,077,758
Range Resources Corp.(a)........... 115,264 4,312,026
Southwest Gas Corp.(a)............. 59,896 2,025,084
----------
40,530,603
----------
PAPER & FOREST PRODUCTS - 2.9%
Bowater, Inc.(a)................... 321,120 8,011,944
MeadWestvaco Corp.................. 251,566 8,885,311
----------
16,897,255
----------
See notes to financial statements
5
MET INVESTORS SERIES TRUST
LORD ABBETT MID-CAP VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-----------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
-----------------------------------------------------------
PHARMACEUTICALS - 4.6%
King Pharmaceuticals, Inc.*........ 733,160 $ 15,000,454
Mylan Laboratories, Inc............ 677,344 12,320,887
-------------
27,321,341
-------------
REAL ESTATE - 0.7%
Host Hotels & Resorts, Inc. (REIT). 181,934 4,206,314
-------------
RETAIL - MULTILINE - 0.8%
Macy's, Inc........................ 124,789 4,964,106
-------------
RETAIL - SPECIALTY - 3.3%
Foot Locker, Inc................... 313,473 6,833,711
Liz Claiborne, Inc.(a)............. 42,300 1,577,790
OfficeMax, Inc.(a)................. 280,858 11,037,720
-------------
19,449,221
-------------
SOFTWARE - 3.2%
Cadence Design Systems, Inc.*...... 541,115 11,882,886
Sybase, Inc.*...................... 299,780 7,161,744
-------------
19,044,630
-------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 11.0%
ADC Telecommunications, Inc.*(a)... 497,647 9,121,870
CenturyTel, Inc.................... 134,072 6,576,232
Embarq Corp........................ 211,550 13,405,923
JDS Uniphase Corp.*(a)............. 885,938 11,898,147
Qwest Communications International,
Inc.*(a)......................... 2,000,326 19,403,162
Windstream Corp.................... 297,900 4,397,004
-------------
64,802,338
-------------
TRADING COMPANIES & DISTRIBUTORS - 2.9%
Genuine Parts Co................... 203,661 10,101,586
W.W. Grainger, Inc................. 72,603 6,755,709
-------------
16,857,295
-------------
Total Common Stocks
(Cost $489,504,492) 564,441,520
-------------
-------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-------------------------------------------------------------------
SHORT-TERM INVESTMENT - 4.6%
State Street Bank & Trust Co., Repurchase
Agreement, dated 06/29/07 at 3.400% to
be repurchased at $27,051,662 on
07/02/07 collateralized by $27,945,000
FHLB at 4.375% due 09/17/10 with a
value of $27,588,422.
(Cost - $27,044,000)................... $27,044,000 $ 27,044,000
------------
TOTAL INVESTMENTS - 100.4%
(Cost $516,548,492) 591,485,520
Other Assets and Liabilities (net) - (0.4)% (2,351,542)
------------
TOTAL NET ASSETS - 100.0% $589,133,978
============
PORTFOLIO FOOTNOTES:
* Non-income producing security.
(a) A portion or all of the security was held on loan. As of June 30, 2007, the
market value of the securities loaned was $97,167,048 and the collateral
received consisted of cash in the amount of $90,680,427 and securities in
the amount of $9,065,500.
FHLB - Federal Home Loan Bank
REIT - Real Estate Investment Trust
See notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
LORD ABBETT MID-CAP VALUE PORTFOLIO
ASSETS
Investments, at value (Note 2)* $564,441,520
Repurchase Agreement 27,044,000
Cash 656
Collateral for securities on loan 99,745,927
Receivable for investments sold 3,093,877
Receivable for Trust shares sold 140,671
Dividends receivable 961,744
Interest receivable 5,108
------------
Total assets 695,433,503
------------
LIABILITIES
Payables for:
Investments purchased 5,351,573
Trust shares redeemed 644,907
Distribution and services fees - Class B 102,542
Collateral for securities on loan 99,745,927
Investment advisory fee payable (Note 3) 324,523
Administration fee payable 6,784
Custodian and accounting fees payable 60,872
Accrued expenses 62,397
------------
Total liabilities 106,299,525
------------
NET ASSETS $589,133,978
============
NET ASSETS REPRESENTED BY:
Paid in surplus $496,217,096
Accumulated net realized gain 16,893,161
Unrealized appreciation on investments 74,937,028
Undistributed net investment income 1,086,693
------------
Total $589,133,978
============
NET ASSETS
Class A $ 95,056,818
============
Class B 494,077,160
============
CAPITAL SHARES OUTSTANDING
Class A 4,366,759
============
Class B 22,917,020
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 21.77
============
Class B 21.56
============
- ------------------------------------------------------------------
*Investments at cost, excluding Repurchase Agreements $489,504,492
See notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
LORD ABBETT MID-CAP VALUE PORTFOLIO
INVESTMENT INCOME:
Dividends (1) $ 3,118,229
Interest (2) 320,537
-----------
Total investment income 3,438,766
-----------
EXPENSES:
Investment advisory fee (Note 3) 1,452,087
Administration fees 16,571
Custody and accounting fees 17,580
Distribution fee - Class B 421,406
Transfer agent fees 7,367
Audit 11,421
Legal 7,434
Trustee fees and expenses 7,160
Shareholder reporting 17,053
Insurance 2,935
Other 1,893
-----------
Total expenses 1,962,907
Less broker commission recapture (9,696)
-----------
Net expenses 1,953,211
-----------
Net investment income 1,485,555
-----------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY:
Net realized gain on:
Investments 34,739,111
Foreign currency 749
-----------
Net realized gain on investments and foreign currency 34,739,860
-----------
Net change in unrealized appreciation on:
Investments 3,580,766
-----------
Net change in unrealized appreciation on investments 3,580,766
-----------
Net realized and change in unrealized gain on investments and
foreign currency 38,320,626
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $39,806,181
===========
- --------------------------------------------------------------------------------------
(1)Dividend income is net withholding taxes of: $ 483
(2)Interest income includes securities lending income of: 22,488
See notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
LORD ABBETT MID-CAP VALUE PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 1,485,555 $ 2,220,692
Net realized gain on investments and foreign currency 34,739,860 31,128,628
Net change in unrealized appreciation on investments 3,580,766 8,408,255
------------ ------------
Net increase in net assets resulting from operations 39,806,181 41,757,575
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (919,253) (778,225)
Class B (1,700,310) (1,324,717)
From net realized gains
Class A (12,989,354) (9,687,781)
Class B (35,848,627) (22,739,424)
------------ ------------
Net decrease in net assets resulting from distributions (51,457,544) (34,530,147)
------------ ------------
CAPITAL SHARE TRANSACTIONS (NOTES 4 AND 8):
Proceeds from shares sold
Class A 2,113,350 1,003,182
Class B 179,826,088 42,845,402
Net asset value of shares issued through acquisition
Class A -- --
Class B 73,473,358 --
Net asset value of shares issued through dividend reinvestment
Class A 13,908,607 10,466,006
Class B 37,548,937 24,064,141
Cost of shares repurchased
Class A (14,322,158) (29,208,483)
Class B (54,885,291) (35,565,717)
------------ ------------
Net increase in net assets from capital share transactions 237,662,891 13,604,531
------------ ------------
TOTAL INCREASE IN NET ASSETS 226,011,528 20,831,959
Net assets at beginning of period 363,122,450 342,290,491
------------ ------------
Net assets at end of period $589,133,978 $363,122,450
============ ============
Net assets at end of period includes undistributed net investment
income $ 1,086,693 $ 2,220,701
============ ============
See notes to financial statements
9
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS A
LORD ABBETT MID-CAP VALUE PORTFOLIO ----------------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 -------------------------------------------
(UNAUDITED) 2006 2005 2004 2003
-------------- ------ ------ ------ ------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $22.79 $22.47 $21.64 $17.80 $14.41
------ ------ ------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................. 0.09 (a) 0.17 (a) 0.19 (a) 0.17 (a) 0.15 (a)
Net Realized/Unrealized Gain (Loss) on Investments.................... 2.47 2.44 1.60 4.25 3.62
------ ------ ------ ------ ------
Total from Investment Operations...................................... 2.56 2.61 1.79 4.42 3.77
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. (0.24) (0.17) (0.13) (0.10) (0.11)
Distributions from Net Realized Capital Gains......................... (3.34) (2.12) (0.83) (0.48) (0.27)
------ ------ ------ ------ ------
Total Distributions................................................... (3.58) (2.29) (0.96) (0.58) (0.38)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD........................................ $21.77 $22.79 $22.47 $21.64 $17.80
====== ====== ====== ====== ======
TOTAL RETURN 11.50% 12.49% 8.28% 24.82% 26.15%
Ratio of Expenses to Average Net Assets**............................. 0.71%* 0.77% 0.76% 0.78% 0.83%
Ratio of Expenses to Average Net Assets After Broker Rebates**........ N/A N/A N/A N/A N/A
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 0.72%* 0.78% 0.76% N/A 0.82%(b)
Ratio of Net Investment Income to Average Net Assets.................. 0.79%* 0.80% 0.86% 0.86% 0.98%
Portfolio Turnover Rate............................................... 22.3% 27.8% 26.2% 19.7% 18.8%
Net Assets, End of Period (in millions)............................... $95.1 $96.8 $113.3 $125.1 $90.8
CLASS B
----------------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 -------------------------------------------
(UNAUDITED) 2006 2005 2004 2003
-------------- ------ ------ ------ ------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $22.56 $22.28 $21.48 $17.70 $14.35
------ ------ ------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................. 0.07 (a) 0.12 (a) 0.14 (a) 0.12 (a) 0.11 (a)
Net Realized/Unrealized Gain (Loss) on Investments.................... 2.43 2.40 1.59 4.22 3.60
------ ------ ------ ------ ------
Total from Investment Operations...................................... 2.50 2.52 1.73 4.34 3.71
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. (0.16) (0.12) (0.10) (0.08) (0.09)
Distributions from Net Realized Capital Gains......................... (3.34) (2.12) (0.83) (0.48) (0.27)
------ ------ ------ ------ ------
Total Distributions................................................... (3.50) (2.24) (0.93) (0.56) (0.36)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD........................................ $21.56 $22.56 $22.28 $21.48 $17.70
====== ====== ====== ====== ======
TOTAL RETURN 11.34% 12.18% 8.05% 24.50% 25.87%
Ratio of Expenses to Average Net Assets**............................. 0.96%* 1.02% 1.01% 1.03% 1.08%
Ratio of Expenses to Average Net Assets After Broker Rebates**........ N/A N/A N/A N/A N/A
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 0.96%* 1.03% 1.02% N/A 1.06%(b)
Ratio of Net Investment Income to Average Net Assets.................. 0.66%* 0.56% 0.62% 0.60% 0.73%
Portfolio Turnover Rate............................................... 22.3% 27.8% 26.2% 19.7% 18.8%
Net Assets, End of Period (in millions)............................... $494.1 $266.4 $229.0 $179.1 $100.0
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
LORD ABBETT MID-CAP VALUE PORTFOLIO -------
-------
2002
------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $16.64
------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................. 0.16 (a)
Net Realized/Unrealized Gain (Loss) on Investments.................... (1.71)
------
Total from Investment Operations...................................... (1.55)
------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. (0.07)
Distributions from Net Realized Capital Gains......................... (0.61)
------
Total Distributions................................................... (0.68)
------
NET ASSET VALUE, END OF PERIOD........................................ $14.41
======
TOTAL RETURN (9.31)%
Ratio of Expenses to Average Net Assets**............................. 0.89 %
Ratio of Expenses to Average Net Assets After Broker Rebates**........ 0.89 %
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 0.90 %
Ratio of Net Investment Income to Average Net Assets.................. 1.04 %
Portfolio Turnover Rate............................................... 29.0 %
Net Assets, End of Period (in millions)............................... $74.0
-------
-------
2002
------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $16.62
------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................. 0.13 (a)
Net Realized/Unrealized Gain (Loss) on Investments.................... (1.72)
------
Total from Investment Operations...................................... (1.59)
------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. (0.07)
Distributions from Net Realized Capital Gains......................... (0.61)
------
Total Distributions................................................... (0.68)
------
NET ASSET VALUE, END OF PERIOD........................................ $14.35
======
TOTAL RETURN (9.58)%
Ratio of Expenses to Average Net Assets**............................. 1.14 %
Ratio of Expenses to Average Net Assets After Broker Rebates**........ 1.14 %
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 1.16 %
Ratio of Net Investment Income to Average Net Assets.................. 0.83 %
Portfolio Turnover Rate............................................... 29.0 %
Net Assets, End of Period (in millions)............................... $51.6
* Annualized
** Prior to 05/01/2003, broker rebates were excluded from the calculation of
the expense limitation.
N/A Not Applicable
(a) Per share amounts based on average shares outstanding during the period.
(b) Excludes effect of Deferred Expense Reimbursement.
See notes to financial statements
10
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is Lord Abbett Mid-Cap Value Portfolio, which
is diversified. Shares in the Trust are not offered directly to the general
public and are currently available only to separate accounts established by
certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A and B Shares are
offered by the Portfolio. Class E Shares are not currently offered by the
Portfolio included in this report. Shares of each Class of the Portfolio
represent an equal pro rata interest in the Portfolio and generally give the
shareholder the same voting, dividend, liquidation, and other rights.
Investment income, realized and unrealized capital gains and losses, the common
expenses of the Portfolio and certain Portfolio-level expense reductions, if
any, are allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the Portfolio. Each class of
shares differs in its respective distribution expenses and certain other
class-specific expense reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
11
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date. The value of the
security so purchased is subject to market fluctuations during this period. The
Portfolio segregates assets having an aggregate value at least equal to the
amount of the when issued or delayed delivery purchase commitments until
payment is made.
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. SECURITIES LENDING - The Portfolio may lend its securities to certain
qualified brokers who borrow securities in order to complete certain
transactions. By lending its investment securities, the Portfolio attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term of the loan would
accrue to the account of the Portfolio. Risks of delay in recovery of the
securities or even loss of rights in the collateral may occur should the
borrower of the securities fail financially. Risks may also arise to the extent
that the value of the collateral decreases below the value of the securities
loaned.
Upon entering into a securities lending transaction, the Portfolio receives
cash or other securities as collateral in an amount equal to or exceeding 102%
of the current market value of the loaned securities. Any cash received as
collateral is generally invested by State Street Bank and Trust Company ("State
Street"), acting in its capacity as securities lending agent (the "Agent"), in
the State Street Navigator Securities Lending Prime Portfolio which is a money
market fund registered under the 1940 Act. A portion of the dividends received
on the collateral is rebated to the borrower of the securities and the
remainder is split between the Agent and the Portfolio. On loans collateralized
by cash, the cash collateral is invested in a money market fund or short term
securities. A portion of the income generated upon investment of the collateral
is remitted to the Borrowers and the remainder is allocated between the fund
and the lending agent. On loans collateralized by U.S. Treasuries, a fee is
received from the Borrower and is allocated between the fund and the lending
agent.
G. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
H. DIRECTED BROKERAGE AGREEMENT - The Trust has entered into a directed
brokerage arrangement with State Street Global Markets ("SSGM"). Under this
arrangement, the Portfolio directs certain trades to SSGM in return for a
recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to
each Portfolio are shown separately as an expense reduction on the Statement of
Operations of the Portfolio.
I. FOREIGN CURRENCY TRANSLATION - The books and records of the Portfolio are
maintained in U.S. dollars. Foreign currencies, investments and other assets
and liabilities are translated into U.S. dollars on a daily basis using
prevailing exchange rates. Purchases and sales of securities are translated at
the rates of exchange prevailing when such securities were acquired or sold.
Income is translated at rates of exchange prevailing when interest is accrued
or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Reported net realized foreign exchange gains or losses arise from activity in
forward foreign currency contracts, sales of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities
transactions, and the difference between the amounts of dividends, interest,
and foreign withholding taxes recorded on the Portfolio's books, and the U.S.
dollar equivalent of the amounts actually received or paid. Net unrealized
foreign exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at fiscal year end, from
changes in the exchange rates of foreign currency held, and from changes in the
contract value of forward foreign currency contracts.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with Lord, Abbett & Co. LLC, (the "Adviser") for investment advisory services
in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- ----------------------------
Lord Abbett Mid-Cap Value Portfolio $1,452,087 0.70% First $200 Million
0.65% $200 Million to $500 Million
0.625% Over $500 Million
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The amount waived and expenses reimbursed for the period ended June 30, 2007 is
shown as investment advisory fee waiver in the Statement of Operations of the
Portfolio.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued
in Connection Shares Issued Net Increase
with Through (Decrease)
Beginning Shares Acquisition Dividend Shares in Shares Ending
Shares Sold (Note 8) Reinvestment Repurchased Outstanding Shares
- - ---------- --------- ------------- ------------- ----------- ------------ ----------
Lord Abbett Mid-Cap Value Portfolio
Class A
06/30/2007 4,246,195 95,204 -- 650,239 (624,879) 120,564 4,366,759
12/31/2006 5,043,081 45,815 -- 499,571 (1,342,272) (796,886) 4,246,195
Class B
06/30/2007 11,806,013 8,345,600 3,426,929 1,771,176 (2,432,698) 11,111,007 22,917,020
12/31/2006 10,277,705 1,985,000 -- 1,158,601 (1,615,293) 1,528,308 11,806,013
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
- - ------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
- - --------------- -------------- --------------- --------------
Lord Abbett Mid-Cap Value Portfolio $-- $99,730,446 $-- $116,912,442
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
- --------- ------------ ------------ -------------- --------------
Lord Abbett Mid-Cap Value Portfolio $516,548,492 $81,896,784 $(6,959,756) $74,937,028
6. SECURITY LENDING
As of June 30, 2007, the Portfolio had loaned securities which were
collateralized by short-term investments. The value of securities on loan and
the value of the related collateral were as follows:
Value of Value of
Securities Collateral
----------- -----------
Lord Abbett Mid-Cap Value Portfolio $97,167,048 $99,745,927
7. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
- - --------------------- ----------------------- -----------------------
2006 2005 2006 2005 2006 2005
- - ---------- ---------- ----------- ----------- ----------- -----------
Lord Abbett Mid-Cap Value Portfolio $4,166,592 $2,764,730 $30,363,555 $11,112,087 $34,530,147 $13,876,817
14
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
7. DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
- - ------------- ------------- ------------ ------------------ ------------
Lord Abbett Mid-Cap Value Portfolio $2,890,970 $30,770,112 $70,905,930 $-- $104,567,012
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
8. ACQUISITIONS
On April 30, 2007, Lord Abbett Mid-Cap Value Portfolio ("Mid-Cap") acquired 73%
of the net assets of Lord Abbett America's Value Portfolio ("America"), a
series of Met Investors Series Trust, pursuant to a plan of reorganization
approved by America shareholders on April 24, 2007. The acquisition was
accomplished by a taxable exchange of 3,426,929 Class B shares of Mid-Cap
(valued at $267.8 Million) in exchange for the 4,787,094 Class B shares of
America outstanding on April 27, 2007. The aggregate Class B net assets of
Mid-Cap and America immediately before the acquisition were $267,841,421 and
$73,473,358, respectively. The aggregate Class B net assets of Mid-Cap
immediately after the acquisition were $341,314,779.
9. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
10. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
15
MET INVESTORS SERIES TRUST
Met/AIM Capital
Appreciation Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
MET/AIM CAPITAL APPRECIATION PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY AIM CAPITAL MANAGEMENT, INC.
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
ECONOMIC OVERVIEW & OUTLOOK
Equity markets rebounded strongly during the second quarter, following the
tumultuous months of February and March when the Shanghai stock market plunged
and subprime mortgage lending practices were brought to light. Despite concerns
over a slowing economy, rising energy prices and fallout from the subprime
market, the major market indexes performed surprisingly well during the period,
boosted by global economic growth and stronger than expected corporate earnings.
Mid caps, as measured by the Russell Midcap(R) Index, outperformed large and
small caps, as measured by the Russell Top 200(R) Index and the Russell 2000(R)
Index, respectively./1/ In terms of investment style, growth stocks,
represented by the Russell 3000(R) Growth Index, outperformed value stocks,
represented by the Russell 3000(R) Value Index./1/ Energy and materials were
the best performing sectors of the stock market, as measured by the S&P 500(R)
Index, while financials and consumer discretionary were the weakest performing
sectors during the period./1/
PORTFOLIO OVERVIEW
For the six months ended June 30, 2007, the Met/AIM Capital Appreciation
Portfolio had positive returns and outperformed the S&P 500(R) Index and the
Russell 1000(R) Growth Index on a net basis.
The Portfolio outperformed the Russell 1000(R) Growth Index by the widest
margin in the industrials sector. Within this sector, the Portfolio benefited
from solid stock selection in several industries, including aerospace and
defense and industrial conglomerates. An overweight position in electrical
equipment stocks also contributed to outperformance within the sector.
The Portfolio also benefited from outperformance in several other sectors,
including energy, telecom, consumer discretionary and healthcare.
Some of this positive outperformance was offset by underperformance in the
financials, materials and utilities sectors. In the financials sector,
underperformance was driven primarily by stock selection and an overweight
position in capital markets stocks. In the materials sector, underperformance
was driven by stock selection in the chemicals industry. Finally, in the
utilities sector, the underperformance was driven by an underweight position as
utility stocks continued to perform well.
During the period, exposure was added to the consumer discretionary,
industrials and consumer staples sectors, and decreased in the information
technology, materials and financials sectors.
These Portfolio changes resulted in a positioning that is expected to benefit
from moderate global economic growth, while maintaining significant exposure to
defensive growth stocks as the economic cycle shows signs of maturing. At the
close of the period, the portfolio was overweight in the industrials,
financials, consumer discretionary, and telecom sectors, and marketweight in
the health care and information technology sectors. Underweight positions
include the consumer staples, utilities, materials and energy sectors.
The views and opinions expressed are those of the portfolio manager at the time
of publication and are subject to change. There is no guarantee that these
views will come to pass.
The Portfolio management team consists of:
LANNY H. SACHNOWITZ,
Senior Portfolio Manager (Lead)
JAMES G. BIRDSALL,
Portfolio Manager
KIRK L. ANDERSON,
Portfolio Manager
ROBERT J. LLOYD,
Portfolio Manager
AIM CAPITAL MANAGEMENT, INC.
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
- --------
/1/Lipper, Inc.
This information is provided by AIM Capital Management, Inc., as the subadvisor
for the Met/AIM Capital Appreciation Portfolio. Past performance cannot
guarantee future comparable results. Portfolio characteristics are subject to
change. If this material will be incorporated into the sales material for a
security, it is the responsibility of the distributor or offeror of that
security to ensure that such material complies with all applicable regulations
and is filed with the appropriate regulatory bodies if so required.
A I M Capital Management, Inc. 07/07.
The Russell Top 200(R) Index, Russell 2000(R) Index, Russell 3000(R) Growth
Index and Russell 3000(R) Value Index are trademark/service marks of The Frank
Russell Company. Russell(R) is a trademark of the Frank Russell Company.
The S&P 500(R) Index is an unmanaged index considered representative of the
U.S. stock market.
The Russell 2000(R) Index is comprised of the smallest 2,000 stocks in the
Russell 3000(R) Index. It is widely recognized as representative of small cap
stocks.
The Russell Midcap(R) Index measures the performance of the 800 smallest
companies in the Russell 1000 Index. These stocks represent approximately 25%
of the total market capitalization of the Russell 1000 index.
The Russell Top 200(R) Index measures the performance of the largest 200
companies in the Russell 1000 Index.
The Russell 3000(R) Value Index measures the performance of those Russell 3000
Index companies with lower price-to-book ratios and lower forecasted growth
values.
The Russell 3000(R) Growth Index measures the performance of those Russell 3000
Index companies with higher price-to-book ratios and higher forecasted growth
values.
All data provided by AIM Management Group, Inc. unless otherwise noted.
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
MET/AIM CAPITAL APPRECIATION PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY AIM CAPITAL MANAGEMENT, INC.
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
------------------------------------------
Apple, Inc. 2.93%
------------------------------------------
Merck & Co., Inc. 2.69%
------------------------------------------
Amdocs, Ltd. 2.58%
------------------------------------------
Cisco Systems, Inc. 2.36%
------------------------------------------
Family Dollar Stores, Inc. 2.35%
------------------------------------------
Precision Castparts Corp. 2.20%
------------------------------------------
Goldman Sachs Group, Inc. (The) 2.13%
------------------------------------------
Texas Instruments, Inc. 2.00%
------------------------------------------
JPMorgan Chase & Co. 1.98%
------------------------------------------
United Technologies Corp. 1.91%
------------------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
[CHART]
Basic Materials 1.2%
Communications 13.9%
Cyclical 12.8%
Non- Cyclical 23.4%
Energy 5.4%
Financials 10.8%
Industrials 17.5%
Technology 15%
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
MET/AIM CAPITAL APPRECIATION PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY AIM CAPITAL MANAGEMENT, INC.
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
MET/AIM CAPITAL APPRECIATION PORTFOLIO MANAGED BY
AIM CAPITAL MANAGEMENT, INC. VS. S&P 500(R) INDEX/1/ AND RUSSELL 1000(R) GROWTH
INDEX/2/
Growth Based on $10,000+
[CHART]
Met/AIM Capital Russell 1000(R)
Appreciation Portfolio S&P 500(R) Index Growth Index
---------------------- ---------------- ---------------
10/30/1996 $10,000 $10,000 $10,000
10/31/1997 11,796 13,213 13,047
10/31/1998 11,467 16,118 16,262
10/31/1999 15,183 20,256 21,831
10/31/2000 20,730 21,490 23,868
10/31/2001 11,741 16,138 14,333
10/31/2002 10,362 13,700 11,521
10/31/2003 12,411 16,550 14,033
10/31/2004 12,862 18,108 14,508
10/31/2005 14,337 19,687 15,786
10/31/2006 15,653 22,904 17,497
12/31/2006 16,048 23,667 17,905
6/30/2007 17,605 25,314 19,361
------------------------------------------------------------------------
Average Annual Return/3/
(for the period ended 6/30/07)
------------------------------------------------------------------------
Since Cumulative
1 Year 3 Year 5 Year 10 Year Inception/4/ Return/5/
------------------------------------------------------------------------
Met/AIM Capital
Appreciation
Portfolio--
- -- Class A 16.93% 9.97% 9.24% 4.74% 5.61% --
Class E -- -- -- -- -- 2.28%
------------------------------------------------------------------------
- - - S&P 500(R) Index/1/ 20.59% 11.68% 10.71% 7.13% 10.20% --
------------------------------------------------------------------------
Russell 1000(R)
- -- Growth Index/2/ 19.04% 8.70% 9.28% 4.39% 7.60% --
------------------------------------------------------------------------
+The chart reflects the performance of Class A shares of the Portfolio.
/1/The S&P 500(R) Index is an unmanaged index consisting of 500 stocks chosen
for market size, liquidity, and industry group representation. It is a
market-value weighted index (stock prices times number of shares outstanding),
with each stock's weight in the Index proportionate to its market value. The
Index does not include fees and expenses and is not available for direct
investment.
/2/The Russell 1000(R) Growth Index is an unmanaged index which measures the
performance of those Russell 1000 companies with higher price-to-book ratios
and higher forcasted growth values. The Index does not include fees or expenses
and is not available for direct investment.
/3/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gains distributions.
/4/Inception date of Class A shares is 10/10/1995. Inception date of Class E
shares is 4/28/2007. Index returns are based on an inception date of 10/10/1995.
/5/"Cumulative Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
3
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD**
12/31/06 6/30/07 1/1/07-6/30/07
MET/AIM CAPITAL APPRECIATION PORTFOLIO ------------- ------------- ---------------
Class A
Actual $1,000.00 $1,097.00 $4.26
Hypothetical (5% return before expenses) 1,000.00 1,020.73 4.11
- ------------------------------------------ ------------- ------------- ---------------
Class E*
Actual $1,000.00 $1,022.80 $1.68
Hypothetical (5% return before expenses) 1,000.00 1,007.10 1.67
- ------------------------------------------ ------------- ------------- ---------------
* Class Inception April 28, 2007.
** Expenses are equal to the Portfolio's annualized expense ratio of 0.82% and
0.95% for the Class A and Class E, respectively, multiplied by the average
account value over the period, multiplied by 181/365 and 64/365, respectively,
(to reflect the one-half year period).
4
MET INVESTORS SERIES TRUST
MET/AIM CAPITAL APPRECIATION PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
--------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
--------------------------------------------------------------------
COMMON STOCKS - 98.2%
AEROSPACE & DEFENSE - 6.2%
Boeing Co. (The)..................... 28,196 $ 2,711,327
General Dynamics Corp................ 46,310 3,622,368
Spirit Aerosystems Holdings, Inc.*... 123,511 4,452,572
United Technologies Corp............. 67,816 4,810,189
-------------
15,596,456
-------------
BEVERAGES - 0.8%
PepsiCo, Inc......................... 29,362 1,904,126
-------------
BIOTECHNOLOGY - 1.2%
Gilead Sciences, Inc.*............... 74,704 2,896,274
-------------
CHEMICALS - 1.2%
Syngenta AG.......................... 15,313 2,979,387
-------------
COMMERCIAL SERVICES & SUPPLIES - 1.4%
Apollo Group, Inc. - Class A*........ 57,938 3,385,317
-------------
COMMUNICATIONS EQUIPMENT & SERVICES - 3.5%
Cisco Systems, Inc.*................. 212,796 5,926,369
Research In Motion, Ltd.*............ 14,775 2,954,852
-------------
8,881,221
-------------
COMPUTERS & PERIPHERALS - 7.0%
Apple, Inc.*......................... 60,310 7,360,233
Dell, Inc.*.......................... 150,784 4,304,883
Hewlett-Packard Co................... 99,146 4,423,895
MICROS Systems, Inc.*(a)............. 29,356 1,596,966
-------------
17,685,977
-------------
CONSTRUCTION & ENGINEERING - 1.7%
McDermott International, Inc.*....... 52,054 4,326,728
-------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 5.4%
ABB, Ltd............................. 120,646 2,709,087
Acuity Brands, Inc................... 30,832 1,858,553
Amphenol Corp. - Class A(a).......... 69,233 2,468,156
Cooper Industries, Ltd. - Class A.... 54,056 3,086,057
Emerson Electric Co.................. 74,105 3,468,114
-------------
13,589,967
-------------
ENERGY EQUIPMENT & SERVICES - 2.7%
Cameron International Corp. *........ 48,588 3,472,585
National-Oilwell Varco, Inc. *....... 32,097 3,345,791
-------------
6,818,376
-------------
FINANCIAL - DIVERSIFIED - 7.7%
Ameriprise Financial, Inc............ 37,538 2,386,291
Blackstone Group LP (The)*(a)........ 101,201 2,962,153
Goldman Sachs Group, Inc. (The)...... 24,696 5,352,858
JPMorgan Chase & Co.................. 102,450 4,963,703
Merrill Lynch & Co., Inc............. 43,557 3,640,494
-------------
19,305,499
-------------
-------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
-------------------------------------------------------------
FOOD & DRUG RETAILING - 1.4%
Longs Drug Stores Corp.............. 32,869 $ 1,726,280
Safeway, Inc........................ 55,475 1,887,814
-------------
3,614,094
-------------
HEALTH CARE EQUIPMENT & SUPPLIES - 1.0%
Zimmer Holdings, Inc.*.............. 28,049 2,381,080
-------------
HEALTH CARE PROVIDERS & SERVICES - 6.4%
Health Net, Inc.*................... 88,252 4,659,705
Manor Care, Inc.(a)................. 33,705 2,200,599
McKesson Corp....................... 42,909 2,559,093
UnitedHealth Group, Inc............. 82,498 4,218,948
VCA Antech, Inc.*................... 67,665 2,550,294
-------------
16,188,639
-------------
HOTELS, RESTAURANTS & LEISURE - 1.3%
Darden Restaurants, Inc.(a)......... 75,871 3,337,565
-------------
HOUSEHOLD PRODUCTS - 2.6%
Clorox Co........................... 74,768 4,643,093
Colgate-Palmolive Co................ 27,732 1,798,420
-------------
6,441,513
-------------
INSURANCE - 2.2%
American International Group, Inc... 35,094 2,457,633
Assurant, Inc....................... 52,245 3,078,275
-------------
5,535,908
-------------
INTERNET SOFTWARE & SERVICES - 3.4%
Amazon.com, Inc.*(a)................ 25,555 1,748,218
eBay, Inc.*......................... 124,329 4,000,907
Google, Inc.-Class A*............... 5,137 2,688,603
-------------
8,437,728
-------------
IT CONSULTING & SERVICES - 2.5%
Accenture, Ltd.-Class A............. 101,753 4,364,186
Fiserv, Inc. *...................... 35,548 2,019,127
-------------
6,383,313
-------------
MACHINERY - 1.6%
Komatsu, Ltd........................ 79,364 2,293,478
Terex Corp.*........................ 21,350 1,735,755
-------------
4,029,233
-------------
MEDIA - 2.5%
Grupo Televisa S.A. (ADR)........... 131,244 3,623,647
McGraw-Hill Cos., Inc. (The)........ 38,398 2,614,136
-------------
6,237,783
-------------
METALS & MINING - 2.2%
Precision Castparts Corp............ 45,561 5,529,283
-------------
OIL & GAS - 2.6%
Occidental Petroleum Corp........... 50,754 2,937,641
Valero Energy Corp.................. 48,608 3,590,187
-------------
6,527,828
-------------
See notes to financial statements
5
MET INVESTORS SERIES TRUST
MET/AIM CAPITAL APPRECIATION PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
----------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
----------------------------------------------------------------
PHARMACEUTICALS - 7.3%
Abbott Laboratories.................... 50,523 $ 2,705,507
Forest Laboratories, Inc.*............. 48,698 2,223,064
Merck & Co., Inc....................... 135,554 6,750,589
Roche Holdings AG...................... 21,840 3,866,043
Shire Plc.............................. 110,478 2,735,534
-------------
18,280,737
-------------
REAL ESTATE - 0.7%
CB Richard Ellis Group, Inc. - Class A* 50,490 1,842,885
-------------
RETAIL - MULTILINE - 3.6%
Family Dollar Stores, Inc.(a).......... 172,275 5,912,478
J.C. Penney Co., Inc................... 43,090 3,118,854
-------------
9,031,332
-------------
RETAIL - SPECIALTY - 5.3%
Aeropostale, Inc.*..................... 50,500 2,104,840
Best Buy Co., Inc...................... 45,646 2,130,299
DSW, Inc. - Class A*(a)................ 34,997 1,218,596
Nordstrom, Inc......................... 52,553 2,686,509
OfficeMax, Inc.(a)..................... 63,265 2,486,314
PetSmart, Inc.......................... 82,822 2,687,574
-------------
13,314,132
-------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS - 3.0%
Microchip Technology, Inc.............. 70,810 2,622,802
Texas Instruments, Inc................. 133,677 5,030,266
-------------
7,653,068
-------------
SOFTWARE - 2.7%
Adobe Systems, Inc.*................... 60,934 2,446,500
Electronic Arts, Inc.*................. 31,799 1,504,729
Microsoft Corp......................... 8,331 245,514
VeriFone Holdings, Inc.*(a)............ 71,548 2,522,067
-------------
6,718,810
-------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 2.6%
Amdocs, Ltd.*.......................... 162,913 6,487,196
-------------
TELECOMMUNICATION SERVICES - WIRELESS - 2.9%
America Movil S.A. de C.V. (ADR)....... 41,133 2,547,367
China Mobile (Hong Kong), Ltd.......... 222,539 2,402,078
KDDI Corp.............................. 307 2,269,459
-------------
7,218,904
-------------
TEXTILES, APPAREL & LUXURY GOODS - 1.6%
Carter's, Inc.*(a)..................... 84,223 2,184,745
Phillips-Van Heusen Corp............... 31,535 1,910,075
-------------
4,094,820
-------------
TOTAL COMMON STOCKS
(Cost $212,086,140) 246,655,179
-------------
-------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-------------------------------------------------------------------
SHORT-TERM INVESTMENT - 0.7%
State Street Bank & Trust Co.,
Repurchase Agreement
dated 06/29/07 at 2.550% to be
repurchased at $1,768,376 on 07/02/07
collateralized by $1,410,000 U.S.
Treasury Bond at 8.000% due 11/15/21
with a value of $1,808,325.
(Cost - $1,768,000).................... $ 1,768,000 $ 1,768,000
-------------
TOTAL INVESTMENTS - 98.9%
(Cost $213,854,140) 248,423,179
Other Assets and Liabilities (net) - 1.1% 2,837,322
-------------
TOTAL NET ASSETS - 100.0% $ 251,260,501
=============
PORTFOLIO FOOTNOTES:
* Non-income producing security.
(a) A portion or all of the security was held on loan. As of June 30, 2007, the
market value of the securities loaned was $20,012,052 and the collateral
received consisted of cash in the amount of $20,485,526.
ADR - American Depositary Receipt
See notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
MET/AIM CAPITAL APPRECIATION PORTFOLIO
ASSETS
Investments, at value (Note 2)* $246,655,179
Repurchase Agreement 1,768,000
Cash 910
Cash denominated in foreign currencies** 42,382
Collateral for securities on loan 20,485,526
Receivable for investments sold 6,309,819
Receivable for Trust shares sold 71,173
Dividends receivable 156,337
------------
Total assets 275,489,326
------------
LIABILITIES
Payables for:
Investments purchased 3,082,886
Trust shares redeemed 325,895
Distribution and services fees--Class E 2,600
Collateral for securities on loan 20,485,526
Investment advisory fee payable (Note 3) 153,131
Administration fee payable 3,254
Custodian and accounting fees payable 24,648
Accrued expenses 150,885
------------
Total liabilities 24,228,825
------------
NET ASSETS $251,260,501
============
NET ASSETS REPRESENTED BY:
Paid in surplus $249,288,480
Accumulated net realized loss (32,674,979)
Unrealized appreciation on investments and foreign currency 34,573,011
Undistributed net investment income 73,989
------------
Total $251,260,501
============
NET ASSETS
Class A $229,749,544
============
Class E 21,510,957
============
CAPITAL SHARES OUTSTANDING
Class A 19,403,543
============
Class E 1,844,046
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 11.84
============
Class E 11.67
============
- --------------------------------------------------------------------------------------
* Investments at cost, excluding Repurchase Agreements $212,086,140
**Cost of cash denominated in foreign currencies 42,036
See notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
MET/AIM CAPITAL APPRECIATION PORTFOLIO
INVESTMENT INCOME:
Dividends (1) $ 1,022,404
Interest (2) 82,153
-----------
Total investment income 1,104,557
-----------
EXPENSES:
Investment advisory fee (Note 3) 792,957
Administration fees 9,177
Custody and accounting fees 40,105
Distribution fee--Class E 5,245
Transfer agent fees 3,460
Audit 10,917
Legal 12,952
Trustee fees and expenses 3,264
Shareholder reporting 5,649
Insurance 4,144
Other 976
-----------
Total expenses 888,846
Less broker commission recapture (12,317)
-----------
Net expenses 876,529
-----------
Net investment income 228,028
-----------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain (loss) on:
Investments 7,314,603
Foreign currency (15,319)
-----------
Net realized gain on investments and foreign currency 7,299,284
-----------
Net change in unrealized appreciation on:
Investments 11,801,200
Foreign currency 3,303
-----------
Net change in unrealized appreciation on investments and foreign currency 11,804,503
-----------
Net realized and change in unrealized gain on investments and foreign currency 19,103,787
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $19,331,815
===========
- ---------------------------------------------------------------------------------------------------
(1)Dividend income is net withholding taxes of: $ 24,921
(2)Interest income includes securities lending income of: 7,302
See notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
MET/AIM CAPITAL APPRECIATION PORTFOLIO
Period Ended Period Ended Year Ended
June 30, 2007 December 31, October 31,
(Unaudited) 2006* 2006
------------- ------------ ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 228,028 $ 29,661 $ 246,850
Net realized gain on investments and foreign currency 7,299,284 2,393,248 35,572,379
Net change in unrealized appreciation (depreciation) on
investments and foreign currency 11,804,503 2,617,154 (14,597,601)
------------ ------------ ------------
Net increase in net assets resulting from operations 19,331,815 5,040,063 21,221,628
------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (177,306) (346,880) (509,091)
From net realized gains
Class A (486,768) (24,152,283) (1,300,681)
------------ ------------ ------------
Net decrease in net assets resulting from distributions (664,074) (24,499,163) (1,809,772)
------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class A 37,773,353 295,231 5,271,240
Class E 21,544,523 -- --
Net asset value of shares issued through dividend reinvestment
Class A 664,074 24,499,163 1,809,772
Class E -- -- --
Cost of shares repurchased
Class A (25,211,566) (8,861,548) (62,981,331)
Class E (495,087) -- --
------------ ------------ ------------
Net increase (decrease) in net assets from capital share
transactions 34,275,297 15,932,846 (55,900,319)
------------ ------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 52,943,038 (3,526,254) (36,488,463)
Net assets at beginning of period 198,317,463 201,843,717 238,332,180
------------ ------------ ------------
Net assets at end of period $251,260,501 $198,317,463 $201,843,717
============ ============ ============
Net assets at end of period includes undistributed net investment
income $ 73,989 $ 23,267 $ 239,804
============ ============ ============
* For the period November 1, 2006 through December 31, 2006.
See notes to financial statements
9
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS A
MET/AIM CAPITAL APPRECIATION PORTFOLIO -----------------------------------------------------------------------
PERIOD ENDED
JUNE 30, PERIOD ENDED FOR THE YEARS ENDED OCTOBER 31
2007 DECEMBER 31, ------------------------------------------
(UNAUDITED) 2006(C) 2006 2005 2004++ 2003++
------------ ------------ ------ ------ ------ ------
NET ASSET VALUE, BEGINNING OF PERIOD.............. $10.83 $12.04 $11.11 $ 9.98 $ 9.63 $ 8.04
------ ------ ------ ------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income (Loss)...................... 0.01 (a) 0.00 +(a) 0.01 (a) 0.04 (a) (0.02) (0.02)
Net Realized/Unrealized Gain (Loss) on Investments 1.04 0.31 1.01 1.10 0.37 1.61
------ ------ ------ ------ ------ ------
Total from Investment Operations.................. 1.05 0.31 1.02 1.14 0.35 1.59
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.............. (0.01) (0.02) (0.02) (0.01) -- --
Distributions from Net Realized Capital Gains..... (0.03) (1.50) (0.07) -- -- --
------ ------ ------ ------ ------ ------
Total Distributions............................... (0.04) (1.52) (0.09) (0.01) -- --
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD.................... $11.84 $10.83 $12.04 $11.11 $ 9.98 $ 9.63
====== ====== ====== ====== ====== ======
TOTAL RETURN 9.70% 2.52% 9.18% 11.47% 3.63 % 19.78 %
Ratio of Expenses to Average Net Assets........... 0.82%* 0.88%* 0.92% 0.85% 0.85 %(b) 0.85 %
Ratio of Expenses to Average Net Assets Before
Reimbursement and Rebates....................... 0.83%* 0.93%* N/A N/A N/A N/A
Ratio of Net Investment Income (Loss) to Average
Net Assets...................................... 0.22%* 0.09%* 0.11% 0.34% (0.18)% (0.25)%
Portfolio Turnover Rate........................... 30.8% 12.4% 113.0% 83.0% 71.0 % 49.0 %
Net Assets, End of Period (in millions)........... $229.7 $198.3 $ 202 $ 238 $ 234 $ 178
MET/AIM CAPITAL APPRECIATION PORTFOLIO --------
--------
2002++
-------
NET ASSET VALUE, BEGINNING OF PERIOD.............. $ 9.11
-------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income (Loss)...................... (0.03)
Net Realized/Unrealized Gain (Loss) on Investments (1.04)
-------
Total from Investment Operations.................. (1.07)
-------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.............. --
Distributions from Net Realized Capital Gains..... --
-------
Total Distributions............................... --
-------
NET ASSET VALUE, END OF PERIOD.................... $ 8.04
=======
TOTAL RETURN (11.75)%
Ratio of Expenses to Average Net Assets........... 0.85 %
Ratio of Expenses to Average Net Assets Before
Reimbursement and Rebates....................... N/A
Ratio of Net Investment Income (Loss) to Average
Net Assets...................................... (0.28)%
Portfolio Turnover Rate........................... 65.0 %
Net Assets, End of Period (in millions)........... $ 172
CLASS E
------------
PERIOD ENDED
JUNE 30,
2007(D)
(UNAUDITED)
------------
NET ASSET VALUE, BEGINNING OF PERIOD............................. $11.41
------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income............................................ 0.00 +(a)
Net Realized/Unrealized Gain on Investments...................... 0.26
------
Total from Investment Operations................................. 0.26
------
LESS DISTRIBUTIONS
Dividends from Net Investment Income............................. --
Distributions from Net Realized Capital Gains.................... --
------
Total Distributions.............................................. --
------
NET ASSET VALUE, END OF PERIOD................................... $11.67
======
TOTAL RETURN 2.28%
Ratio of Expenses to Average Net Assets.......................... 0.95%*
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates........................................................ 0.96%*
Ratio of Net Investment Income to Average Net Assets............. 0.09%*
Portfolio Turnover Rate.......................................... 30.8%
Net Assets, End of Period (in millions).......................... $ 21.5
* Annualized
+ Rounds to less than $0.005 per share
N/A Not Applicable
(a) Per share amount based on average shares outstanding during the period.
(b) The investment manager waived a portion of its management fee for the
period.
(c) Fiscal Year End changed on November 1, 2006 from October 31 to December 31.
(d) Commencement of operations - 04/28/2007.
++ Audited by other Independent Registered Public Accounting Firm.
See notes to financial statements
10
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is Met/AIM Capital Appreciation Portfolio,
which is non-diversified. Shares in the Trust are not offered directly to the
general public and are currently available only to separate accounts
established by certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A and E Shares are
offered by the Portfolio. Class B Shares are not currently offered by the
Portfolio included in this report. Shares of each Class of the Portfolio
represent an equal pro rata interest in the Portfolio and generally give the
shareholder the same voting, dividend, liquidation, and other rights.
Investment income, realized and unrealized capital gains and losses, the common
expenses of the Portfolio and certain Portfolio-level expense reductions, if
any, are allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the Portfolio. Each class of
shares differs in its respective distribution expenses and certain other
class-specific expense reductions.
On May 24, 2006, the Board of Trustees of the Trust approved the change of the
fiscal year end from October 31st to December 31 for the Portfolio. The
Portfolio's change of the fiscal year end was effective on November 1, 2006.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
11
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date.
The value of the security so purchased is subject to market fluctuations during
this period. The Portfolio segregates assets having an aggregate value at least
equal to the amount of the when issued or delayed delivery purchase commitments
until payment is made.
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
The Portfolio utilizes the provisions of the federal income tax laws that
provide for the carryforward of capital losses for eight years, offsetting such
losses against any future net realized capital gains. At December 31, 2006, the
accumulated capital loss carryforwards and expiration dates by the Portfolio
were as follows:
Expiring Expiring Expiring
Portfolio Total 12/31/2008 12/31/2009 12/31/2010
- --------- ----------- ---------- ----------- -----------
Met/AIM Capital Appreciation Portfolio $39,623,952 $2,432,996 $25,303,918 $11,887,038
On May 1, 2006, the TST Portfolio was reorganized into the Portfolio, a series
of Met Investors Series Trust. The Portfolio acquired capital losses of
$51,774,317. The losses incurred by the Portfolio are subject to an annual
limitation of $10,410,524.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. SECURITIES LENDING - The Portfolio may lend its securities to certain
qualified brokers who borrow securities in order to complete certain
transactions. By lending its investment securities, the Portfolio attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term of the loan would
accrue to the account of the Portfolio. Risks of delay in recovery of the
securities or even loss of rights in the collateral may occur should the
borrower of the securities fail financially. Risks may also arise to the extent
that the value of the collateral decreases below the value of the securities
loaned.
Upon entering into a securities lending transaction, the Portfolio receives
cash or other securities as collateral in an amount equal to or exceeding 102%
of the current market value of the loaned securities. Any cash received as
collateral is generally invested by State Street Bank and Trust Company ("State
Street"), acting in its capacity as securities lending agent (the "Agent"), in
the State Street Navigator Securities Lending Prime Portfolio which is a money
market fund registered under the 1940 Act. A portion of the dividends received
on the collateral is rebated to the borrower of the securities and the
remainder is split between the Agent and the Portfolio. On loans collateralized
by cash, the cash collateral is invested in a money market fund or short term
securities. A portion of the income generated upon investment of the collateral
is remitted to the Borrowers and the remainder is allocated between the fund
and the lending agent. On loans collateralized by U.S. Treasuries, a fee is
received from the Borrower and is allocated between the fund and the lending
agent.
G. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Portfolio enters into a repurchase agreement, the value of the collateral
securities including accrued interest will be equal to or exceed the value of
the repurchase agreement and, for repurchase agreements that mature in more
than one day, the seller will agree that the value of the collateral securities
including accrued interest will continue to be at least equal to the value of
the repurchase agreement.
H. DIRECTED BROKERAGE AGREEMENT - The Trust has entered into a directed
brokerage arrangement with State Street Global Markets ("SSGM"). Under this
arrangement, the Portfolio directs certain trades to SSGM in return for a
recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to
each Portfolio are shown separately as an expense reduction on the Statement of
Operations of the Portfolio.
I. FOREIGN CURRENCY TRANSLATION - The books and records of the Portfolio are
maintained in U.S. dollars. Foreign currencies, investments and other assets
and liabilities are translated into U.S. dollars on a daily basis using
prevailing exchange rates. Purchases and sales of securities are translated at
the rates of exchange prevailing when such securities were acquired or sold.
Income is translated at rates of exchange prevailing when interest is accrued
or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in
forward foreign currency contracts, sales of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities
transactions, and the difference between the amounts of dividends, interest,
and foreign withholding taxes recorded on the Portfolio's books, and the U.S.
dollar equivalent of the amounts actually received or paid. Net unrealized
foreign exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at fiscal year end, from
changes in the exchange rates of foreign currency held, and from changes in the
contract value of forward foreign currency contracts.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with AIM Capital Management, Inc., (the "Adviser") for investment advisory
services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- ----------------------------
Met/AIM Capital Appreciation Portfolio $792,957 0.80% First $100 Million
0.75% $100 Million to $200 Million
0.70% $200 Million to $1 Billion
0.65% Over $1 Billion
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
ordinary course of the Portfolio's business, but including amounts payable
pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act are
limited to the following respective expense ratios as a percentage of the
Portfolio's average daily net assets:
Maximum Expense Ratio
under current Expense
Limitation Agreement
----------------------
Portfolio Class A Class B Class E
--------- ------- ------- -------
Met/AIM Capital Appreciation Portfolio 1.25% 1.50%* 1.40%
* Classes not offered during the period.
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratio as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
The amount waived for the period ended June 30, 2007 is shown as investment
advisory fee waiver in the Statement of Operations of the Portfolio.
Effective May 1, 2006, when the total of all the subadvised assets with AIM
Capital Management, Inc. ("AIM"), which currently includes the assets of
Met/AIM Capital Appreciation Portfolio and Met/AIM Small Cap Growth Portfolio,
equal or exceed $750 million the Met/AIM Capital Appreciation Portfolio's
advisory fee will be reduced by .025 basis points at the point in the scale.
And when the total of all the subadvised assets with AIM, which currently
includes the assets of Met/AIM Capital Appreciation Portfolio and Met/AIM Small
Cap Growth Portfolio, exceed $1.5 billion the Met/AIM Capital Appreciation
Portfolio's advisory fee reduction will increase to a total of 0.05 basis
points.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued Net Increase
Through (Decrease)
Beginning Shares Dividend Shares in Shares Ending
Shares Sold Reinvestment Repurchased Outstanding Shares
---------- --------- ------------- ----------- ------------ ----------
Met/AIM Capital Appreciation Portfolio
Class A
06/30/2007 18,310,216 3,261,468 57,846 (2,225,987) 1,093,327 19,403,543
11/01/2006-12/31/2006 16,762,213 24,492 2,253,833 (730,322) 1,548,003 18,310,216
11/01/2005-10/31/2006 21,452,931 442,282 148,097 (5,281,097) (4,690,718) 16,762,213
Class E
04/28/2007-06/30/2007 -- 1,886,460 -- (42,414) 1,844,046 1,844,046
14
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
Met/AIM Capital Appreciation Portfolio $-- $66,436,174 $-- $87,606,767
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
- --------- ------------ ------------ -------------- --------------
Met/AIM Capital Appreciation Portfolio $213,854,140 $36,754,339 $(2,185,300) $34,569,039
6. SECURITY LENDING
As of June 30, 2007, the Portfolio had loaned securities which were
collateralized by short-term investments. The value of securities on loan and
the value of the related collateral were as follows:
Value of Value of
Securities Collateral
----------- -----------
Met/AIM Capital Appreciation Portfolio $20,012,052 $20,485,526
7. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31,
2006, October 31, 2006 and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
-------------------------- --------------------------- -------------------------------
2006* 2006** 2005 2006* 2006** 2005 2006* 2006** 2005
-------- -------- -------- ----------- ---------- ---- ----------- ---------- --------
Met/AIM Capital
Appreciation Portfolio $346,880 $509,091 $322,782 $24,152,283 $1,300,681 $-- $24,499,163 $1,809,772 $322,782
* For the period November 1, 2006 through December 31, 2006
** For the year ended October 31, 2006
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
------------- ------------- ------------ ------------------ ------------
Met/AIM Capital Appreciation Portfolio $221,018 $443,023 $22,264,191 $(39,623,952) $(16,695,720)
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
8. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
15
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
9. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
16
MET INVESTORS SERIES TRUST
Met/AIM Small Cap
Growth Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
MET/AIM SMALL CAP GROWTH PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY AIM CAPITAL MANAGEMENT, INC.
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
ECONOMIC OVERVIEW & OUTLOOK
Equity markets rebounded strongly during the second quarter, following the
tumultuous months of February and March when the Shanghai stock market plunged
and subprime mortgage lending practices were brought to light. Despite concerns
over a slowing economy, rising energy prices and fallout from the subprime
market, the major market indexes performed surprisingly well during the period,
boosted by global economic growth and stronger than expected corporate earnings.
Mid caps, as measured by the Russell Midcap(R) Index, outperformed large and
small caps, as measured by the Russell Top 200(R) Index and the Russell 2000
Index, respectively./1/ In terms of investment style, growth stocks,
represented by the Russell 3000(R) Growth Index, outperformed value stocks,
represented by the Russell 3000(R) Value Index./1/ Energy and materials were
the best performing sectors of the stock market, as measured by the S&P 500(R)
Index, while financials and consumer discretionary were the weakest performing
sectors during the period./1/
PORTFOLIO OVERVIEW
For the six months ended June 30, 2007, the Met/AIM Small Cap Growth Portfolio
had positive returns and outperformed both the Russell 2000(R) Index and the
Russell 2000(R) Growth Index on a net basis.
The Portfolio outperformed the Russell 2000(R) Growth Index benchmark index by
the widest margin in the information technology sector. Within this sector, the
Portfolio benefited from solid stock selection in several industries, including
internet software/services and software.
The Portfolio also benefited from outperformance in several other sectors,
including financials, industrials, energy and healthcare.
The only sector in which the Portfolio underperformed versus the Russell
2000(R) Growth Index was the consumer discretionary sector. Within this sector,
underperformance was largely due to stock selection in the specialty retail,
diversified consumer services and media industries.
The Portfolio performed in-line with the Russell 2000(R) Growth Index in the
materials and utilities sectors.
During the period, exposure was added to the industrials, materials and
consumer staples sectors, and decreased in the energy, consumer discretionary
and information technology sectors.
These Portfolio changes resulted in a positioning that is expected to benefit
from moderate global economic growth, while maintaining significant exposure to
defensive growth stocks as the economic cycle shows signs of maturing. At the
close of the period, the portfolio was overweight in the information
technology, telecom and consumer staples sectors, and underweight in the
consumer discretionary sector versus the Russell 2000(R) Growth Index.
The views and opinions expressed are those of the portfolio manager at the time
of publication and are subject to change. There is no guarantee that these
views will come to pass.
JULIET ELLIS
JUAN HARTSFIELD
Portfolio Manager
AIM CAPITAL MANAGEMENT, INC.
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
- --------
/1/Lipper, Inc.
LOGO
This information is provided by AIM Capital Management, Inc., as the subadvisor
for the Met/AIM Capital Appreciation Portfolio. Past performance cannot
guarantee future comparable results. Portfolio characteristics are subject to
change. If this material will be incorporated into the sales material for a
security, it is the responsibility of the distributor or offeror of that
security to ensure that such material complies with all applicable regulations
and is filed with the appropriate regulatory bodies if so required.
A I M Capital Management, Inc. 07/07.
The Russell Top 200(R) Index, Russell 2000(R) Index, Russell 3000(R) Growth
Index and Russell 3000(R) Value Index are trademark/service marks of The Frank
Russell Company. Russell(R) is a trademark of the Frank Russell Company.
The S&P 500(R) Index is an unmanaged index considered representative of the
U.S. stock market.
The Russell 2000(R) Index is comprised of the smallest 2,000 stocks in the
Russell 3000(R) Index. It is widely recognized as representative of small cap
stocks.
The Russell Midcap(R) Index measures the performance of the 800 smallest
companies in the Russell 1000 Index. These stocks represent approximately 25%
of the total market capitalization of the Russell 1000 index.
The Russell Top 200(R) Index measures the performance of the largest 200
companies in the Russell 1000 Index.
The Russell 3000(R) Value Index measures the performance of those Russell 3000
Index companies with lower price-to-book ratios and lower forecasted growth
values.
The Russell 3000(R) Growth Index measures the performance of those Russell 3000
Index companies with higher price-to-book ratios and higher forecasted growth
values.
All data provided by AIM Management Group, Inc. unless otherwise noted.
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
MET/AIM SMALL CAP GROWTH PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY AIM CAPITAL MANAGEMENT, INC.
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
----------------------------------------------------------
General Cable Corp. 1.76%
----------------------------------------------------------
aQuantive, Inc. 1.69%
----------------------------------------------------------
SBA Communications Corp. 1.27%
----------------------------------------------------------
Affiliated Managers Group, Inc. 1.18%
----------------------------------------------------------
Blackboard, Inc. 1.14%
----------------------------------------------------------
Bucyrus International, Inc. - Class A 1.13%
----------------------------------------------------------
Carpenter Technology Corp. 1.11%
----------------------------------------------------------
Korn/Ferry International 1.08%
----------------------------------------------------------
Unit Corp. 1.07%
----------------------------------------------------------
Varian Semiconductor Equipment Associates, Inc. 1.04%
----------------------------------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
[CHART]
Basic Materials 1.0%
Communications 11.1%
Cyclical 13.2%
Non- Cyclical 25.2%
Energy 6.0%
Financials 8.1%
Industrials 17.8%
Technology 16.1%
Utilities 1.5%
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
MET/AIM SMALL CAP GROWTH PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY AIM CAPITAL MANAGEMENT, INC.
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
MET/AIM SMALL CAP GROWTH PORTFOLIO MANAGED BY
AIM CAPITAL MANAGEMENT, INC. VS. RUSSELL 2000(R) INDEX/1/ AND RUSSELL 2000(R)
GROWTH INDEX/2/
Growth Based on $10,000+
[CHART]
Met/AIM Small Russell 2000(R)
Cap Growth Portfolio Russell 2000(R) Index Growth Index
-------------------- --------------------- --------------
10/9/2001 $10,000 $10,000 $10,000
12/31/2001 11,890 11,891 12,671
12/31/2002 8,620 9,456 8,837
12/31/2003 11,969 13,923 13,126
12/31/2004 12,739 16,474 15,005
12/31/2005 13,791 17,223 15,629
12/31/2006 15,747 20,387 17,714
6/30/2007 17,706 21,702 19,367
-----------------------------------------------------------------
Average Annual Return/3/
(for the period ended 6/30/07)
-----------------------------------------------------------------
Since
1 Year 3 Year 5 Year Inception/4/
-----------------------------------------------------------------
Met/AIM Small Cap Growth
Portfolio--Class A 20.58% 12.80% 12.20% 7.78%
- -- Class B 20.30% 12.67% 12.02% 10.49%
Class E 20.47% 12.80% 12.16% 8.66%
-----------------------------------------------------------------
- - - Russell 2000(R) Index/1/ 16.43% 13.45% 13.88% 14.79%
-----------------------------------------------------------------
- -- Russell 2000(R) Growth Index/2/ 16.83% 11.76% 13.08% 12.10%
-----------------------------------------------------------------
+The chart reflects the performance of Class B shares of the Portfolio. The
performance of Class B shares will differ from that of the other Classes
because of the difference in expenses paid by policyholders investing in the
different share classes.
/1/The Russell 2000(R) Index is an unmanaged index which measures the
performance of the 2,000 smallest companies in the Russell 3000(R) Index, which
represents approximately 8% of the total market capitalization of the Russell
3000(R) Index. As of the latest reconstitution, the average market
capitalization was approximately $898.3 million; the median market
capitalization was approximately $705.4 million. The largest company in the
index had a market capitalization of $2.5 billion. The Index does not include
fees or expenses and is not available for direct investment.
/2/The Russell 2000(R) Growth Index is an unmanaged index which measures the
performance of those Russell 2000 companies with higher price-to-book ratios
and higher forecasted growth values. The Index does not include fees or
expenses and is not available for direct investment.
/3/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/4/Inception of the Class A shares is 1/2/02. Inception of the Class B shares
is 10/9/01. Inception of the Class E shares is 4/01/02. Index returns are based
on an inception date of 10/9/01.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
3
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-06/30/07
MET/AIM SMALL CAP GROWTH PORTFOLIO ------------- ------------- ---------------
Class A
Actual $1,000.00 $1,126.00 $4.74
Hypothetical (5% return before expenses) 1,000.00 1,020.33 4.51
- ------------------------------------------ ------------- ------------- ---------------
Class B
Actual $1,000.00 $1,124.40 $6.06
Hypothetical (5% return before expenses) 1,000.00 1,019.09 5.76
- ------------------------------------------ ------------- ------------- ---------------
Class E
Actual $1,000.00 $1,124.80 $5.53
Hypothetical (5% return before expenses) 1,000.00 1,019.59 5.26
- ------------------------------------------ ------------- ------------- ---------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.90% ,
1.15% , and 1.05% for the Class A, Class B, and Class E, respectively,
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period).
4
MET INVESTORS SERIES TRUST
MET/AIM SMALL CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
--------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
--------------------------------------------------------------
COMMON STOCKS - 96.9%
ADVERTISING - 0.8%
inVentiv Health, Inc.*............... 172,182 $ 6,303,583
-------------
AEROSPACE & DEFENSE - 1.3%
TransDigm Group, Inc.*(a)............ 174,885 7,075,847
United Industrial Corp.(a)........... 66,739 4,003,005
-------------
11,078,852
-------------
AUTO COMPONENTS - 0.9%
Tenneco Automotive, Inc.*(a)......... 211,045 7,395,017
-------------
BANKS - 2.2%
East West Bancorp, Inc.(a)........... 87,070 3,385,281
SVB Financial Group*(a).............. 133,272 7,078,076
Texas Capital Bancshares, Inc.*(a)... 172,805 3,862,192
UCBH Holdings, Inc.(a)............... 220,247 4,023,913
-------------
18,349,462
-------------
BIOTECHNOLOGY - 1.2%
BioMarin Pharmaceutical, Inc.*(a).... 226,874 4,070,119
Myriad Genetics, Inc.*(a)............ 162,893 6,057,991
-------------
10,128,110
-------------
COMMERCIAL SERVICES & SUPPLIES - 6.0%
Advisory Board Co.*(a)............... 64,713 3,595,454
aQuantive, Inc.*(a).................. 217,396 13,869,865
Cogent, Inc.*(a)..................... 368,967 5,420,125
CoStar Group, Inc.*(a)............... 131,897 6,974,713
Euronet Worldwide, Inc.*(a).......... 240,822 7,022,370
Global Payments, Inc.(a)............. 94,393 3,742,683
Korn/Ferry International*(a)......... 336,796 8,844,263
-------------
49,469,473
-------------
COMMUNICATIONS EQUIPMENT & SERVICES - 2.3%
NETGEAR, Inc.*(a).................... 165,836 6,011,555
Nice Systems, Ltd. (ADR)*(a)......... 204,183 7,093,317
Polycom, Inc.*(a).................... 159,603 5,362,661
-------------
18,467,533
-------------
CONSTRUCTION MATERIALS - 0.9%
Eagle Materials, Inc.(a)............. 143,823 7,054,518
-------------
CONTAINERS & PACKAGING - 0.8%
Greif, Inc. - Class A(a)............. 113,349 6,756,734
-------------
EDUCATION - 0.3%
DeVry, Inc........................... 36,640 1,252,472
Strayer Education, Inc............... 10,100 1,329,827
-------------
2,582,299
-------------
ELECTRIC UTILITIES - 1.4%
ITC Holdings Corp.(a)................ 99,050 4,024,401
Pike Electric Corp.*(a).............. 342,352 7,661,838
-------------
11,686,239
-------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 6.7%
Acuity Brands, Inc.(a)............... 74,931 4,516,841
Coherent, Inc.*(a)................... 192,235 5,865,090
-----------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
-----------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - CONTINUED
General Cable Corp.*(a).................... 190,206 $ 14,408,104
Orbotech, Ltd.*(a)......................... 146,894 3,278,674
Regal-Beloit Corp.(a)...................... 135,144 6,289,602
Thomas & Betts Corp.*...................... 141,793 8,223,994
Trimble Navigation, Ltd.*(a)............... 210,144 6,766,637
WESCO International, Inc.*(a).............. 95,536 5,775,151
-------------
55,124,093
-------------
ENERGY EQUIPMENT & SERVICES - 4.1%
Actuant Corp. - Class A(a)................. 96,423 6,080,434
Dril-Quip, Inc.*(a)........................ 139,475 6,269,401
FMC Technologies, Inc.*(a)................. 105,019 8,319,605
Input/Output, Inc.*(a)..................... 363,152 5,668,803
TETRA Technology, Inc.*(a)................. 328,794 7,085,511
-------------
33,423,754
-------------
FINANCIAL - DIVERSIFIED - 3.2%
Affiliated Managers Group, Inc.*(a)........ 74,944 9,649,790
Greenhill & Co., Inc.(a)................... 96,726 6,646,044
Jackson Hewitt Tax Service, Inc.(a)........ 128,540 3,613,259
National Financial Partners Corp.(a)....... 128,382 5,945,370
-------------
25,854,463
-------------
FOOD & DRUG RETAILING - 1.7%
Longs Drug Stores Corp.(a)................. 140,637 7,386,255
Performance Food Group Co.*(a)............. 201,293 6,540,010
-------------
13,926,265
-------------
FOOD PRODUCTS - 0.7%
Ralcorp Holdings, Inc.*(a)................. 106,968 5,717,440
-------------
HEALTH CARE EQUIPMENT & SUPPLIES - 6.6%
Accuray, Inc.*(a).......................... 34,711 769,890
Advanced Magnetics Inc.*................... 48,043 2,794,181
American Medical Systems Holdings, Inc.*(a) 350,857 6,329,460
Cepheid, Inc.*............................. 158,604 2,315,618
Gen-Probe, Inc.*(a)........................ 115,810 6,997,240
Home Diagnostics, Inc.*.................... 192,800 2,269,256
Integra LifeSciences Holdings*(a).......... 129,248 6,387,436
Kyphon, Inc.*(a)........................... 112,238 5,404,260
Mentor Corp.(a)............................ 117,569 4,782,707
NuVasive, Inc.*(a)......................... 278,544 7,523,473
Palomar Medical Technologies, Inc.*(a)..... 61,115 2,121,302
Wright Medical Group, Inc.*(a)............. 258,173 6,227,133
-------------
53,921,956
-------------
HEALTH CARE PROVIDERS & SERVICES - 5.0%
Genesis HealthCare Corp.*(a)............... 122,851 8,405,465
LifePoint Hospitals, Inc.*(a).............. 171,147 6,619,966
Magellan Health Services, Inc.*(a)......... 121,864 5,663,020
PAREXEL International Corp.*(a)............ 159,665 6,715,510
Pediatrix Medical Group, Inc.*(a).......... 100,657 5,551,234
VCA Antech, Inc.*(a)....................... 215,688 8,129,281
-------------
41,084,476
-------------
See notes to financial statements
5
MET INVESTORS SERIES TRUST
MET/AIM SMALL CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
---------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
---------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE - 3.6%
Choice Hotels International, Inc.(a)..... 124,240 $ 4,909,965
Jack in the Box, Inc.*(a)................ 83,447 5,919,730
Live Nation, Inc.*(a).................... 234,612 5,250,617
National CineMedia, Inc.*(a)............. 149,322 4,182,509
P.F. Chang's China Bistro, Inc.*(a)...... 139,021 4,893,539
RARE Hospitality International, Inc.*(a). 157,780 4,223,771
-------------
29,380,131
-------------
HOUSEHOLD DURABLES - 1.7%
Interface, Inc. - Class A(a)............. 357,948 6,750,899
Tempur-Pedic International, Inc.(a)...... 263,942 6,836,098
-------------
13,586,997
-------------
HOUSEHOLD PRODUCTS - 1.0%
Church & Dwight, Inc.(a)................. 168,005 8,141,522
-------------
INDUSTRIAL - DIVERSIFIED - 1.0%
Chemed Corp.(a).......................... 117,927 7,817,381
-------------
INDUSTRIAL CONGLOMERATES - 0.9%
Ceradyne, Inc.*(a)....................... 103,202 7,632,820
-------------
INSURANCE - 2.3%
HCC Insurance Holdings, Inc.(a).......... 182,582 6,100,064
ProAssurance Corp.*(a)................... 115,889 6,451,541
Security Capital Assurance, Ltd.(a)...... 193,037 5,959,052
-------------
18,510,657
-------------
INTERNET SOFTWARE & SERVICES - 3.2%
DealerTrack Holdings, Inc.*(a)........... 161,235 5,939,897
F5 Networks, Inc.*(a).................... 104,950 8,458,970
Shutterfly, Inc.*(a)..................... 165,276 3,561,698
ValueClick, Inc.*(a)..................... 274,098 8,074,927
-------------
26,035,492
-------------
LEISURE EQUIPMENT & PRODUCTS - 0.7%
Marvel Entertainment, Inc.*(a)........... 213,790 5,447,369
-------------
MACHINERY - 1.1%
Bucyrus International, Inc. - Class A(a). 130,625 9,245,638
-------------
METALS & MINING - 1.1%
Carpenter Technology Corp.(a)............ 69,953 9,115,575
-------------
OIL & GAS - 3.3%
Bill Barrett Corp.*(a)................... 172,808 6,364,518
Core Laboratories N.V.*(a)............... 70,294 7,148,197
Unit Corp.*(a)........................... 139,124 8,752,291
Whiting Petroleum Corp.*(a).............. 118,609 4,806,037
-------------
27,071,043
-------------
PHARMACEUTICALS - 3.0%
Human Genome Sciences, Inc.*(a).......... 279,841 2,496,182
Medicines Co. (The)*(a).................. 216,254 3,810,395
Medicis Pharmaceutical Corp. - Class A(a) 171,681 5,243,138
Santarus, Inc.*(a)....................... 327,895 1,695,217
Sciele Pharma, Inc.*(a).................. 240,931 5,676,334
United Therapeutics Corp.*(a)............ 86,334 5,504,656
-------------
24,425,922
-------------
----------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
----------------------------------------------------------------
REAL ESTATE - 0.6%
BioMed Realty Trust, Inc. (REIT)(a)....... 193,384 $ 4,857,806
-------------
RETAIL - SPECIALTY - 4.2%
Bebe Stores, Inc.(a)...................... 253,525 4,058,935
Children's Place Retail Stores, Inc.*(a).. 92,189 4,760,640
Dick's Sporting Goods, Inc.*(a)........... 117,658 6,844,166
DSW, Inc. - Class A*(a)................... 158,369 5,514,409
HOT Topic, Inc.*(a)....................... 576,399 6,265,457
Zumiez, Inc.*(a).......................... 183,814 6,944,493
-------------
34,388,100
-------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS - 9.6%
Cirrus Logic, Inc.*(a).................... 721,830 5,991,189
Diodes, Inc.*(a).......................... 165,755 6,923,586
Emulex Corp.*(a).......................... 368,144 8,040,265
FormFactor, Inc.*(a)...................... 124,345 4,762,414
Microsemi Corp.*(a)....................... 338,151 8,098,716
MPS Group, Inc.*(a)....................... 365,578 4,887,778
Power Integrations, Inc.*(a).............. 237,993 6,235,417
Silicon Laboratories, Inc.*(a)............ 176,893 6,122,267
SiRF Technology Holdings, Inc.*(a)........ 161,217 3,343,641
Tessera Technologies, Inc.*(a)............ 194,995 7,907,047
Varian Semiconductor Equipment Associates,
Inc.*(a)................................ 212,889 8,528,333
Varian, Inc.*(a).......................... 144,763 7,937,355
-------------
78,778,008
-------------
SOFTWARE - 7.0%
ANSYS, Inc.*(a)........................... 264,985 7,022,103
Blackboard, Inc.*(a)...................... 221,385 9,324,736
Eclipsys Corp.*(a)........................ 309,756 6,133,169
Informatica Corp.*(a)..................... 427,884 6,319,847
JDA Software Group, Inc.*................. 220,008 4,318,757
Lawson Software, Inc.*(a)................. 804,255 7,954,082
MICROS Systems, Inc.*(a).................. 135,722 7,383,277
Omniture, Inc.*(a)........................ 107,470 2,463,212
THQ, Inc.*(a)............................. 225,789 6,891,080
-------------
57,810,263
-------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 0.7%
NeuStar, Inc. - Class A*(a)............... 193,573 5,607,810
-------------
TELECOMMUNICATION SERVICES - WIRELESS - 2.1%
Dobson Communications Corp. - Class A*(a). 647,293 7,191,425
SBA Communications Corp.*(a).............. 310,824 10,440,578
-------------
17,632,003
-------------
TEXTILES, APPAREL & LUXURY GOODS - 0.8%
Warnaco Group, Inc. (The)*(a)............. 164,373 6,466,434
-------------
TRANSPORTATION - 2.9%
American Commercial Lines, Inc.*(a)....... 194,342 5,062,609
Forward Air Corp.(a)...................... 163,267 5,565,772
Hub Group, Inc. - Class A*(a)............. 184,347 6,481,641
See notes to financial statements
6
MET INVESTORS SERIES TRUST
MET/AIM SMALL CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
----------------------------------------------------------------------
SECURITY SHARES/PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
----------------------------------------------------------------------
TRANSPORTATION - CONTINUED
Knight Transportation, Inc.(a)............. 337,166 $ 6,534,277
-------------
23,644,299
-------------
Total Common Stocks
(Cost $646,716,778) 793,919,537
-------------
SHORT-TERM INVESTMENT - 3.4%
State Street Bank & Trust Co.,
Repurchase Agreement dated 06/29/07
at 4.850% to be repurchased at
$27,957,295 on 07/02/07 collateralized
by $28,875,000 FHLB at 4.375% due
09/17/10 with a value of $28,506,555.
(Cost - $27,946,000)..................... $27,946,000 27,946,000
-------------
TOTAL INVESTMENTS - 100.3%
(Cost $674,662,778) 821,865,537
-------------
Other Assets and Liabilities (net) - (0.3)% (2,165,692)
-------------
TOTAL NET ASSETS - 100.0% $ 819,699,845
=============
PORTFOLIO FOOTNOTES:
* Non-income producing security.
(a) A portion or all of the security was held on loan. As of June 30, 2007, the
market value of the securities loaned was $204,191,361 and the collateral
received consisted of cash in the amount of $209,227,276.
ADR - American Depositary Receipt
FHLB - Federal Home Loan Bank
REIT - Real Estate Investment Trust
See notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
MET/AIM SMALL CAP GROWTH PORTFOLIO
ASSETS
Investments, at value (Note 2)* $ 793,919,537
Repurchase Agreement 27,946,000
Cash 396
Collateral for securities on loan 209,227,276
Receivable for investments sold 9,131,707
Receivable for Trust shares sold 831,533
Dividends receivable 255,929
Interest receivable 7,530
--------------
Total assets 1,041,319,908
--------------
LIABILITIES
Payables for:
Investments purchased 11,104,769
Trust shares redeemed 422,921
Distribution and services fees - Class B 63,747
Distribution and services fees - Class E 2,025
Collateral for securities on loan 209,227,276
Investment advisory fee payable (Note 3) 572,335
Administration fee payable 8,733
Custodian and accounting fees payable 140,758
Accrued expenses 77,499
--------------
Total liabilities 221,620,063
--------------
NET ASSETS $ 819,699,845
==============
NET ASSETS REPRESENTED BY:
Paid in surplus $ 642,408,820
Accumulated net realized gain 32,152,275
Unrealized appreciation on investments and foreign
currency 147,202,759
Accumulated net investment loss (2,064,009)
--------------
Total $ 819,699,845
==============
NET ASSETS
Class A $ 491,991,666
==============
Class B 311,093,514
==============
Class E 16,614,665
==============
CAPITAL SHARES OUTSTANDING
Class A 32,751,953
==============
Class B 20,960,855
==============
Class E 1,109,896
==============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 15.02
==============
Class B 14.84
==============
Class E 14.97
==============
- ------------------------------------------------------------------------------
* Investments at cost, excluding Repurchase Agreements $ 646,716,778
See notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
MET/AIM SMALL CAP GROWTH PORTFOLIO
INVESTMENT INCOME:
Dividends (1) $ 790,939
Interest (2) 675,772
-----------
Total investment income 1,466,711
-----------
EXPENSES:
Investment advisory fee (Note 3) 3,023,221
Administration fees 25,982
Custody and accounting fees 22,900
Distribution fee - Class B 373,883
Distribution fee - Class E 11,720
Transfer agent fees 14,078
Audit 12,123
Legal 7,784
Trustee fees and expenses 7,964
Shareholder reporting 30,615
Insurance 4,757
Other 2,118
-----------
Total expenses 3,537,145
Less broker commission recapture (6,425)
-----------
Net expenses 3,530,720
-----------
Net investment loss (2,064,009)
-----------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON
INVESTMENTS, FUTURES CONTRACTS AND FOREIGN CURRENCY:
Net realized gain (loss) on:
Investments 32,476,947
Futures contracts 71,162
Foreign currency (20)
-----------
Net realized gain on investments, futures contracts and
foreign currency 32,548,089
-----------
Net change in unrealized appreciation on:
Investments 51,170,101
Foreign currency 6
-----------
Net change in unrealized appreciation on investments and
foreign currency 51,170,107
-----------
Net realized and change in unrealized gain on
investments, futures contracts and foreign currency 83,718,196
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $81,654,187
===========
- ----------------------------------------------------------------------------
(1)Dividend income is net withholding taxes of: $ 3
(2)Interest income includes securities lending income of: 130,428
See notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
MET/AIM SMALL CAP GROWTH PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment loss $ (2,064,009) $ (4,174,292)
Net realized gain on investments, futures contracts and foreign
currency 32,548,089 53,011,811
Net change in unrealized appreciation on investments and foreign
currency 51,170,107 30,569,147
------------ ------------
Net increase in net assets resulting from operations 81,654,187 79,406,666
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net realized gains
Class A (5,267,476) (36,089,546)
Class B (4,315,129) (43,349,536)
Class E (224,880) (2,000,985)
------------ ------------
Net decrease in net assets resulting from distributions (9,807,485) (81,440,067)
------------ ------------
CAPITAL SHARE TRANSACTIONS (NOTES 4 AND 8):
Proceeds from shares sold
Class A 137,958,139 118,659,501
Class B 18,249,357 16,982,858
Class E 2,349,574 2,951,893
Net asset value of shares issued through acquisition
Class A -- 9,138,167
Class B -- --
Class E -- --
Net asset value of shares issued through dividend reinvestment
Class A 5,267,476 36,089,546
Class B 4,315,129 43,349,536
Class E 224,880 2,000,985
Cost of shares repurchased
Class A (19,877,315) (51,306,019)
Class B (42,008,278) (54,585,272)
Class E (3,003,727) (2,768,455)
------------ ------------
Net increase in net assets from capital share transactions 103,475,235 120,512,740
------------ ------------
TOTAL INCREASE IN NET ASSETS 175,321,937 118,479,339
Net assets at beginning of period 644,377,908 525,898,569
------------ ------------
Net assets at end of period $819,699,845 $644,377,908
============ ============
Net assets at end of period includes distributions in excess of
net investment income $ (2,064,009) $ --
============ ============
See notes to financial statements
10
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR
PERIOD ENDED:
CLASS A
MET/AIM SMALL CAP GROWTH PORTFOLIO --------------------------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 -----------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002(B)
-------------- ------ ------ ------ ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD.... $13.53 $13.66 $12.84 $12.03 $ 8.65 $ 11.85
------ ------ ------ ------ ------ -------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Loss..................... (0.03)(a) (0.08)(a) (0.07)(a) (0.09)(a) (0.08)(a) (0.11)(a)
Net Realized/Unrealized Gain (Loss) on
Investments........................... 1.73 1.97 1.18 0.90 3.46 (3.09)
------ ------ ------ ------ ------ -------
Total from Investment Operations........ 1.70 1.89 1.11 0.81 3.38 (3.20)
------ ------ ------ ------ ------ -------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.... -- -- -- -- -- --
Distributions from Net Realized Capital
Gains................................. (0.21) (2.02) (0.29) -- -- --
------ ------ ------ ------ ------ -------
Total Distributions..................... (0.21) (2.02) (0.29) -- -- --
------ ------ ------ ------ ------ -------
NET ASSET VALUE, END OF PERIOD.......... $15.02 $13.53 $13.66 $12.84 $12.03 $ 8.65
====== ====== ====== ====== ====== =======
TOTAL RETURN 12.60 % 13.91 % 8.59 % 6.73 % 39.08 % (27.00)%
Ratio of Expenses to Average Net
Assets**.............................. 0.90 %* 0.97 % 0.99 % 1.03 % 1.04 % 1.05 %*
Ratio of Expenses to Average Net Assets
After Broker Rebates**................ N/A N/A N/A N/A N/A 1.03 %*
Ratio of Expenses to Average Net Assets
Before Reimbursement and Rebates...... 0.90 %* 0.98 % 0.96 %(c) 1.02 %(c) 1.16 % 2.10 %*
Ratio of Net Investment Loss to Average
Net Assets............................ (0.47)%* (0.58)% (0.53)% (0.74)% (0.78)% (0.64)%*
Portfolio Turnover Rate................. 19.5 % 56.4 % 74.8 % 94.9 % 29.8 % 19.5 %
Net Assets, End of Period (in millions). $492.0 $329.3 $215.4 $92.5 $6.2 $6.7
CLASS B
--------------------------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 -----------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002
-------------- ------ ------ ------ ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD.... $13.39 $13.51 $12.74 $11.97 $ 8.62 $11.89
------ ------ ------ ------ ------ -------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Loss..................... (0.05)(a) (0.11)(a) (0.10)(a) (0.12)(a) (0.11)(a) (0.08)(a)
Net Realized/Unrealized Gain (Loss) on
Investments........................... 1.71 2.01 1.16 0.89 3.46 (3.19)
------ ------ ------ ------ ------ -------
Total from Investment Operations........ 1.66 1.90 1.06 0.77 3.35 (3.27)
------ ------ ------ ------ ------ -------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.... -- -- -- -- -- --
Distributions from Net Realized Capital
Gains................................. (0.21) (2.02) (0.29) -- -- --
------ ------ ------ ------ ------ -------
Total Distributions..................... (0.21) (2.02) (0.29) -- -- --
------ ------ ------ ------ ------ -------
NET ASSET VALUE, END OF PERIOD.......... $14.84 $13.39 $13.51 $12.74 $11.97 $ 8.62
====== ====== ====== ====== ====== =======
TOTAL RETURN 12.44 % 14.18 % 8.27 % 6.43 % 38.86 % (27.50)%
Ratio of Expenses to Average Net
Assets**.............................. 1.15 %* 1.21 % 1.25 % 1.29 % 1.30 % 1.30 %
Ratio of Expenses to Average Net Assets
After Broker Rebates**................ N/A N/A N/A N/A N/A 1.28 %
Ratio of Expenses to Average Net Assets
Before Reimbursement and Rebates...... 1.15 %* 1.23 % 1.20 %(c) 1.23 %(c) 1.36 % 2.32 %
Ratio of Net Investment Loss to Average
Net Assets............................ (0.74)%* (0.83)% (0.80)% (1.03)% (1.04)% (0.87)%
Portfolio Turnover Rate................. 19.5 % 56.4 % 74.8 % 94.9 % 29.8 % 19.5 %
Net Assets, End of Period (in millions). $311.1 $299.7 $297.1 $309.7 $206.3 $47.1
* Annualized
** Prior to 05/01/2003, broker rebates were excluded from the calculation of
the expense limitation.
N/A Not Applicable
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--01/02/2002.
(c) Excludes effect of Deffered Expense Reimbursement.
See notes to financial statements
11
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
MET/AIM SMALL CAP GROWTH PORTFOLIO -------------------------
FOR THE PERIOD
ENDED
JUNE 30, 2007 ----------
(UNAUDITED) 2006
-------------- ------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $13.50 $13.60
------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Loss................................................... (0.05)(a) (0.10)(a)
Net Realized/Unrealized Gain (Loss) on Investments.................... 1.73 2.02
------ ------
Total from Investment Operations...................................... 1.68 1.92
------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. -- --
Distributions from Net Realized Capital Gains......................... (0.21) (2.02)
------ ------
Total Distributions................................................... (0.21) (2.02)
------ ------
NET ASSET VALUE, END OF PERIOD........................................ $14.97 $13.50
====== ======
TOTAL RETURN 12.48 % 14.25 %
Ratio of Expenses to Average Net Assets**............................. 1.05 %* 1.11 %
Ratio of Expenses to Average Net Assets After Broker Rebates**........ N/A N/A
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 1.05 %* 1.13 %
Ratio of Net Investment Loss to Average Net Assets.................... (0.64)%* (0.73)%
Portfolio Turnover Rate............................................... 19.5 % 56.4 %
Net Assets, End of Period (in millions)............................... $16.6 $15.4
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS E
MET/AIM SMALL CAP GROWTH PORTFOLIO -------------------------------------------
FOR THE YEARS ENDED DECEMBER 31,
-------------------------------------------
2005 2004 2003 2002(B)
------ ------ ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $12.80 $12.01 $ 8.64 $ 11.54
------ ------ ------ -------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Loss................................................... (0.09)(a) (0.11)(a) (0.10)(a) (0.05)(a)
Net Realized/Unrealized Gain (Loss) on Investments.................... 1.18 0.90 3.47 (2.85)
------ ------ ------ -------
Total from Investment Operations...................................... 1.09 0.79 3.37 (2.90)
------ ------ ------ -------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. -- -- -- --
Distributions from Net Realized Capital Gains......................... (0.29) -- -- --
------ ------ ------ -------
Total Distributions................................................... (0.29) -- -- --
------ ------ ------ -------
NET ASSET VALUE, END OF PERIOD........................................ $13.60 $12.80 $12.01 $ 8.64
====== ====== ====== =======
TOTAL RETURN 8.46 % 6.58 % 39.00 % (25.13)%
Ratio of Expenses to Average Net Assets**............................. 1.15 % 1.18 % 1.20 % 1.20 %*
Ratio of Expenses to Average Net Assets After Broker Rebates**........ N/A N/A N/A 1.18 %*
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 1.11 %(c) 1.13 %(c) 1.25 % 2.23 %*
Ratio of Net Investment Loss to Average Net Assets.................... (0.70)% (0.93)% (0.94)% (0.77)%*
Portfolio Turnover Rate............................................... 74.8 % 94.9 % 29.8 % 19.5 %
Net Assets, End of Period (in millions)............................... $13.4 $12.4 $8.6 $1.8
* Annualized
** Prior to 05/01/2003, broker rebates were excluded from the calculation of
the expense limitation.
N/A Not Applicable
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--04/01/2002.
(c) Excludes effect of Deferred Expense Reimbursement.
See notes to financial statements
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is Met/AIM Small Cap Growth Portfolio, which
is diversified. Shares in the Trust are not offered directly to the general
public and are currently available only to separate accounts established by
certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A, B and E Shares are
offered by the Portfolio. Shares of each Class of the Portfolio represent an
equal pro rata interest in the Portfolio and generally give the shareholder the
same voting, dividend, liquidation, and other rights. Investment income,
realized and unrealized capital gains and losses, the common expenses of the
Portfolio and certain Portfolio-level expense reductions, if any, are allocated
on a pro rata basis to each class based on the relative net assets of each
class to the total net assets of the Portfolio. Each class of shares differs in
its respective distribution expenses and certain other class-specific expense
reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date. The value of the
security so purchased is subject to market fluctuations during this period. The
Portfolio segregates assets having an aggregate value at least equal to the
amount of the when issued or delayed delivery purchase commitments until
payment is made.
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. SECURITIES LENDING - The Portfolio may lend its securities to certain
qualified brokers who borrow securities in order to complete certain
transactions. By lending its investment securities, the Portfolio attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term of the loan would
accrue to the account of the Portfolio. Risks of delay in recovery of the
securities or even loss of rights in the collateral may occur should the
borrower of the securities fail financially. Risks may also arise to the extent
that the value of the collateral decreases below the value of the securities
loaned.
Upon entering into a securities lending transaction, the Portfolio receives
cash or other securities as collateral in an amount equal to or exceeding 102%
of the current market value of the loaned securities. Any cash received as
collateral is generally invested by State Street Bank and Trust Company ("State
Street"), acting in its capacity as securities lending agent (the "Agent"), in
the State Street Navigator Securities Lending Prime Portfolio which is a money
market fund registered under the 1940 Act. A portion of the dividends received
on the collateral is rebated to the borrower of the securities and the
remainder is split between the Agent and the Portfolio. On loans collateralized
by cash, the cash collateral is invested in a money market fund or short term
securities. A portion of the income generated upon investment of the collateral
is remitted to the Borrowers and the remainder is allocated between the fund
and the lending agent. On loans collateralized by U.S. Treasuries, a fee is
received from the Borrower and is allocated between the fund and the lending
agent.
G. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
H. DIRECTED BROKERAGE AGREEMENT - The Trust has entered into a directed
brokerage arrangement with State Street Global Markets ("SSGM"). Under this
arrangement, the Portfolio directs certain trades to SSGM in return for a
recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to
each Portfolio are shown separately as an expense reduction on the Statement of
Operations of the Portfolio.
I. FOREIGN CURRENCY TRANSLATION - The books and records of the Portfolio are
maintained in U.S. dollars. Foreign currencies, investments and other assets
and liabilities are translated into U.S. dollars on a daily basis using
prevailing exchange rates. Purchases and sales of securities are translated at
the rates of exchange prevailing when such securities were acquired or sold.
Income is translated at rates of exchange prevailing when interest is accrued
or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in
forward foreign currency contracts, sales of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities
transactions, and the difference between the amounts of dividends, interest,
and foreign withholding taxes recorded on the Portfolio's books, and the U.S.
dollar equivalent of the amounts actually received or paid. Net unrealized
foreign exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at fiscal year end, from
changes in the exchange rates of foreign currency held, and from changes in the
contract value of forward foreign currency contracts.
14
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with AIM Capital Management, Inc., (the "Adviser") for investment advisory
services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- --------------------
Met/AIM Small Cap Growth Portfolio $3,023,221 0.88% First $500 Million
0.83% Over $500 Million
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Maximum Expense Ratio
under current Expense
Limitation Agreement
----------------------
Portfolio Class A Class B Class E
--------- ------- ------- -------
Met/AIM Small Cap Growth Portfolio 1.05% 1.30% 1.20%
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratio as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
The amount waived and expenses reimbursed for the period ended June 30, 2007 is
shown as investment advisory fee waiver in the Statement of Operations of the
Portfolio.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
15
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Net
Shares Issued Shares Issued Increase
in Connection Through (Decrease)
Beginning Shares with Acquisition Dividend Shares in Shares Ending
Shares Sold (Note 8) Reinvestment Repurchased Outstanding Shares
- - ---------- --------- ---------------- ------------- ----------- ----------- ----------
Met/AIM Small Cap Growth Portfolio
Class A
06/30/2007 24,328,070 9,443,607 -- 365,036 (1,384,760) 8,423,883 32,751,953
12/31/2006 15,763,026 8,980,141 670,445 2,655,666 (3,741,208) 8,565,044 24,328,070
Class B
06/30/2007 22,380,780 1,254,862 -- 302,604 (2,977,391) (1,419,925) 20,960,855
12/31/2006 21,984,528 1,275,548 -- 3,232,721 (4,112,017) 396,252 22,380,780
Class E
06/30/2007 1,144,249 160,281 -- 15,627 (210,261) (34,353) 1,109,896
12/31/2006 987,075 217,495 -- 148,096 (208,417) 157,174 1,144,249
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
Met/AIM Small Cap Growth Portfolio $-- $218,899,687 $-- $133,616,024
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation Depreciation Appreciation
- --------- ------------ ------------ ------------ --------------
Met/AIM Small Cap Growth Portfolio $674,662,778 $161,472,483 $(14,269,724) $147,202,759
6. SECURITY LENDING
As of June 30, 2007, the Portfolio had loaned securities which were
collateralized by short term investments. The value of securities on loan and
the value of the related collateral were as follows:
Value of Value of
Securities Collateral
------------ ------------
Met/AIM Small Cap Growth Portfolio $204,191,361 $209,227,276
7. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
- - ---------------- ----------------------- -----------------------
2006 2005 2006 2005 2006 2005
- - ----------- ---- ----------- ----------- ----------- -----------
Met/AIM Small Cap Growth Portfolio $15,555,529 $-- $65,884,537 $10,822,850 $81,440,066 $10,822,850
16
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
7. DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
------------- ------------- ------------ ------------------ ------------
Met/AIM Small Cap Growth Portfolio $1,389,889 $8,419,138 $95,635,293 $-- $105,444,320
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
8. ACQUISITIONS
On May 1, 2006, Met/AIM Small Cap Growth Portfolio ("Met/AIM") acquired all of
the net assets of Style Focus Series: Small Cap Growth Portfolio, a series of
The Travelers Series Trust ("Style Focus"), pursuant to a plan of
reorganization approved by Style Focus shareholders on March 14, 2006. The
acquisition was accomplished by a tax-free exchange of 670,445 Class A shares
of Met/AIM (valued at $9.1 million) in exchange for the 715,654 Class A shares
of Style Focus outstanding on April 28, 2006. Style Focus Class A net assets at
that date ($9.1 million), including $1,296,475 of unrealized appreciation were
combined with those of Met/AIM Class A. The cost of securities acquired in the
tax-free exchange by Met/AIM from Style Focus was $7,888,935. The aggregate
Class A net assets of Met/AIM and Style Focus immediately before the
acquisition were $271,272,413 and $9,138,167, respectively. The aggregate Class
A net assets of Met/AIM immediately after the acquisition were $280,410,580.
9. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
10. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
17
MET INVESTORS SERIES TRUST
MetLife Aggressive
Strategy Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
METLIFE AGGRESSIVE STRATEGY PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY MET INVESTORS ADVISORY, LLC
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
For the six months ended June 30, 2007, the MetLife Aggressive Strategy
Portfolio gained 6.98%. This compares to a 7.56% return for the Dow Jones
Wilshire 5000 Index and a 7.97% return for the blended benchmark (the
Aggressive Blended Benchmark is comprised of the following mix: 76% Wilshire
5000, 19% MSCI EAFE(R) Index, and 5% CG 90-Day T-Bill).
The U.S. equity markets continued the positive momentum from the beginning of
the year as strong gains culminated in early June with records highs for the
Dow and S&P 500 Indexes. The primary driver of the rally was strong corporate
profits resulting from strong overseas demand and a weaker dollar. Stock
markets moved higher both in the U.S. and abroad despite signs of a slowing
economy in the U.S. and ongoing concerns about inflation. Other concerns also
included credit-related problems such as the ongoing subprime lending issue and
some high-profile losses in the hedge fund industry. Despite the concerns
mentioned above investors pointed towards strong economic growth outside the
U.S. and a boom in merger activity (a 90% increase over the second quarter of
2006) as positive signs for the global economy overall. The bond market
experienced rising yields as investors sought slightly higher premiums on high
yield and mortgage related debt securities. The Federal Reserve stayed on hold,
indicating a reluctance to cut U.S. rates due to concerns about inflation.
During the period strong performance in the small and mid cap sectors due to
favorable market conditions contributed to performance specifically the Met/AIM
Small Cap Growth Portfolio and the Turner Mid-Cap Growth Portfolio. Another
notable positive was our position in the Third Avenue Small Cap Value Portfolio
whose out-performance was driven by appreciation from various holdings within
the oil, gas and energy sectors.
Also contributing to overall performance were the Davis Venture Value and the
Van Kampen Comstock Portfolios. Stock selection within the financials sector
and a modest overweight to the energy sector drove performance for the Davis
Venture Value Portfolio while stock picks within the technology sector
increased returns for the Van Kampen Comstock Portfolio. On the international
side, the MFS Research International Portfolio added to performance due to
continued strength in foreign markets. The MFS(R) Emerging Markets Equity
Portfolio also contributed to absolute returns as emerging-markets stocks
continued to rally.
Equity performance was adversely impacted by exposure to the healthcare sector
for the Legg Mason Partners Aggressive Growth Portfolio. A general
underweighting in energy stocks hurt performance for the Legg Mason Value
Equity Portfolio and the Lord Abbett Growth and Income Portfolio. Finally, the
Jennison Growth Portfolio's stock selection in the consumer discretionary
sector detracted from performance. On the fixed income side, the PIMCO Total
Return Portfolio was also a detractor due to above-index duration as interest
rates rose over the period.
A correction in the real estate securities market occurred after a significant
period of out-performance. The Neuberger Berman Real Estate Portfolio, as a
result, was the largest detractor from absolute performance during the period.
The allocation to real estate has provided significant returns over the past
few years and the asset class continues to offer diversification benefits for
the Portfolio.
The Portfolio allocations were adjusted in early May 2007. Specifically, we
added real estate exposure for greater diversification and rebalanced the
growth and value sectors of the large cap equity component of the Portfolio.
MET INVESTORS ADVISORY, LLC
The views expressed above are those of the investment advisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
--------------------------------------------------------------------
Van Kampen Comstock Portfolio (Class A) 11.86%
--------------------------------------------------------------------
Davis Venture Value Portfolio (Class A) 11.03%
--------------------------------------------------------------------
Lord Abbett Growth and Income Portfolio (Class A) 11.00%
--------------------------------------------------------------------
Legg Mason Partners Aggressive Growth Portfolio (Class A) 9.94%
--------------------------------------------------------------------
Third Avenue Small Cap Value Portfolio (Class A) 8.97%
--------------------------------------------------------------------
Legg Mason Value Equity Portfolio (Class A) 8.91%
--------------------------------------------------------------------
Harris Oakmark Focused Value Portfolio (Class A) 8.20%
--------------------------------------------------------------------
Harris Oakmark International Portfolio (Class A) 5.87%
--------------------------------------------------------------------
MFS(R) Research International Portfolio (Class A) 5.09%
--------------------------------------------------------------------
MFS(R) Emerging Markets Portfolio (Class A) 4.15%
--------------------------------------------------------------------
Met/AIM Small Growth Portfolio (Class A) 4.07%
--------------------------------------------------------------------
Jennison Growth Portfolio (Class A) 2.99%
--------------------------------------------------------------------
RCM Technology Portfolio (Class A) 2.12%
--------------------------------------------------------------------
Turner Mid-Cap Growth Portfolio (Class A) 2.06%
--------------------------------------------------------------------
Goldman Sachs Mid-Cap Value Portfolio (Class A) 1.96%
--------------------------------------------------------------------
Neuberger Berman Real Estate Portfolio (Class A) 1.78%
--------------------------------------------------------------------
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
METLIFE AGGRESSIVE STRATEGY PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY MET INVESTORS ADVISORY, LLC
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
METLIFE AGGRESSIVE STRATEGY PORTFOLIO VS. WILSHIRE 5000 EQUITY INDEX/1/ AND
AGGRESSIVE BLENDED BENCHMARK/2/
Growth Based on $10,000+
[CHART]
MetLife Aggressive Wilshire 5000 Aggresive
Strategy Portfolio Equity Index Blended Benchmark
------------------ ------------- -----------------
11/3/2004 $10,000 $10,000 $10,000
12/31/2004 10,715 10,843 10,713
12/31/2005 11,828 11,535 11,537
12/31/2006 13,440 13,354 13,528
6/30/2007 14,378 14,363 15,702
---------------------------------------------------------------
Average Annual Return/3/
(for the period ended 6/30/07)
---------------------------------------------------------------
1 Year Since Inception/4/
---------------------------------------------------------------
MetLife Aggressive Strategy
Portfolio--Class A 18.23% 17.03%
- -- Class B 17.89% 14.64%
---------------------------------------------------------------
- -- Wilshire 5000 Equity Index/1/ 20.46% 14.54%
---------------------------------------------------------------
- - - Aggressive Blended Benchmark/2/ 20.98% 15.26%
---------------------------------------------------------------
+The chart reflects the performance of Class B shares of the Portfolio. The
performance of Class B shares will differ from that of the other Classes
because of the difference in expenses paid by policyholders investing in the
different share classes.
/1/The Wilshire 5000 Equity Index is an unmanaged index which measures the
performance of all U.S. headquartered equity securities with readily available
price data. The market capitalized weighted index is compromised of
approximately 82% New York Stock Exchange, 2% American Stock Exchange and 16%
OTC (1995). The Index was created in 1974 and backdated to 1971, with a base
index of December 1980 (base index equals 1,044.596). Dividends are reinvested
on the "ex" dividend date and the rebalancing of share weights is done on a
monthly basis. No attempt has been made to adjust the market capitalization of
the index to take into account cross holding between corporations. The Index
does not include fees or expenses and is not available for direct investment.
/2/The Aggressive Blended Benchmark is comprised of 76% Wilshire 5000 Equity
Index, 19% Morgan Stanley Capital International Europe Australasia and Far East
Index ("MSCI EAFE(R) Index") and 5% Citigroup 3-Month Treasury Bill Index.
The MSCI EAFE(R) Index is an unmanaged free float-adjusted market
capitalization index that is designed to measure developed market equity
performance, excluding the US & Canada. The Index does not include fees or
expenses and is not available for direct investment.
The Citigroup 3-Month Treasury Bill Index--equal dollar amounts of three-month
Treasury bills are purchased at the beginning of each of three consecutive
months. As each bill matures, all proceeds are rolled over or reinvested in a
new three-month bill. The income used to calculate the monthly return is
derived by subtracting the original amount invested from the maturity value.
The Index does not include fees or expenses and is not available for direct
investment.
/3/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/4/Inception of the Class B shares is 11/4/04. Inception of the Class A shares
is 5/2/05. Index returns are based on an inception date of 10/31/04.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
2
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
METLIFE AGGRESSIVE STRATEGY PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,070.40 $0.51
Hypothetical (5% return before expenses) 1,000.00 1,024.30 0.50
- ------------------------------------------ ------------- ------------- --------------
Class B
Actual $1,000.00 $1,069.80 $1.80
Hypothetical (5% return before expenses) 1,000.00 1,023.06 1.76
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.10% and
0.35% for the Class A and Class B, respectively, multiplied by the average
account value over the period, multiplied by 181/365 (to reflect the one-half
year period).
3
MET INVESTORS SERIES TRUST
METLIFE AGGRESSIVE STRATEGY PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
------------------------------------------------------------------
INVESTMENT COMPANY SECURITIES - 100.0%
Davis Venture Value Portfolio
(Class A)*............................. 2,626,288 $ 98,091,841
Goldman Sachs Mid-Cap Value Portfolio
(Class A).............................. 1,210,638 17,457,406
Harris Oakmark Focused Value Portfolio
(Class A)*............................. 290,382 72,790,098
Harris Oakmark International Portfolio
(Class A).............................. 2,772,830 52,212,390
Jennison Growth Portfolio (Class A)*..... 2,081,297 26,619,790
Legg Mason Partners Aggressive Growth
Portfolio (Class A).................... 11,380,356 88,425,368
Legg Mason Value Equity Portfolio
(Class A).............................. 6,759,007 79,215,564
Lord Abbett Growth and Income Portfolio
(Class A).............................. 3,332,559 97,810,601
Met/AIM Small Cap Growth Portfolio
(Class A).............................. 2,409,815 36,195,415
MFS(R) Emerging Markets Equity Portfolio
(Class A).............................. 3,066,313 36,949,072
MFS(R) Research International Portfolio
(Class A).............................. 3,220,871 45,221,023
Neuberger Berman Real Estate Portfolio
(Class A).............................. 1,038,378 15,856,030
RCM Technology Portfolio (Class A)....... 3,283,125 18,845,140
Third Avenue Small Cap Value Portfolio
(Class A).............................. 4,605,089 79,760,146
Turner Mid-Cap Growth Portfolio
(Class A).............................. 1,309,410 18,357,923
Van Kampen Comstock Portfolio
(Class A).............................. 8,623,130 105,460,876
------------
Total Investment Company Securities
(Cost $806,030,922) 889,268,683
------------
TOTAL INVESTMENTS - 100.0%
(Cost $806,030,922) 889,268,683
------------
Other Assets and Liabilities (net) - 0.0% (299,623)
------------
TOTAL NET ASSETS - 100.0% $888,969,060
============
PORTFOLIO FOOTNOTES:
* A Portfolio of Metropolitan Series Fund, Inc.
See notes to financial statements
4
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
METLIFE AGGRESSIVE STRATEGY PORTFOLIO
ASSETS
Investments, at value (Note 2)* $889,268,683
Receivable for Trust shares sold 439,199
------------
Total assets 889,707,882
------------
LIABILITIES
Payables for:
Investments purchased 204,825
Trust shares redeemed 234,373
Distribution and services fees--Class B 183,646
Investment advisory fee payable (Note 3) 65,305
Administration fee payable 1,901
Custodian and accounting fees payable 23,580
Accrued expenses 25,192
------------
Total liabilities 738,822
------------
NET ASSETS $888,969,060
============
NET ASSETS REPRESENTED BY:
Paid in surplus $739,774,048
Accumulated net realized gain 61,367,590
Unrealized appreciation on investments 83,237,761
Undistributed net investment income 4,589,661
------------
Total $888,969,060
============
NET ASSETS
Class A $ 255,193
============
Class B 888,713,867
============
CAPITAL SHARES OUTSTANDING
Class A 19,490
============
Class B 67,940,770
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 13.09
============
Class B 13.08
============
- ----------------------------------------------------------------
*Investments at cost $806,030,922
See notes to financial statements
5
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
METLIFE AGGRESSIVE STRATEGY PORTFOLIO
INVESTMENT INCOME:
Dividends from underlying Portfolios $ 6,095,342
-----------
Total investment income 6,095,342
-----------
EXPENSES:
Investment advisory fee (Note 3) 386,326
Administration fees 11,901
Custody and accounting fees 5,016
Distribution fee--Class B 1,080,740
Transfer agent fees 3,860
Audit 7,415
Legal 7,452
Trustee fees and expenses 6,767
Insurance 379
Other 1,209
-----------
Total expenses 1,511,065
Less fees waived and expenses reimbursed by the Manager (5,386)
-----------
Net expenses 1,505,679
-----------
Net investment income 4,589,663
-----------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
CAPITAL GAIN DISTRIBUTIONS FROM UNDERLYING PORTFOLIOS:
Net realized gain on:
Investments 19,072,568
Capital gain distributions from underlying Portfolios 42,744,019
-----------
Net realized gain on investments and capital gain distributions
from underlying Portfolios 61,816,587
-----------
Net change in unrealized depreciation on:
Investments (7,705,258)
-----------
Net change in unrealized depreciation on investments (7,705,258)
-----------
Net realized and change in unrealized gain on investments 54,111,329
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $58,700,992
===========
See notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
METLIFE AGGRESSIVE STRATEGY PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 4,589,663 $ 11,122,847
Net realized gain on investments and capital gain distributions
from underlying Portfolios 61,816,587 52,452,182
Net change in unrealized appreciation (depreciation) on investments (7,705,258) 35,313,603
------------ ------------
Net increase in net assets resulting from operations 58,700,992 98,888,632
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (5,064) (271)
Class B (11,117,773) (73,934)
From net realized gains
Class A (20,518) (1,057)
Class B (52,826,561) (5,375,233)
------------ ------------
Net decrease in net assets resulting from distributions (63,969,916) (5,450,495)
------------ ------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class A 84,875 228,293
Class B 63,137,224 170,137,151
Net asset value of shares issued through dividend reinvestment
Class A 25,582 1,328
Class B 63,944,334 5,449,167
Cost of shares repurchased
Class A (108,937) (69,933)
Class B (89,029,017) (74,797,308)
------------ ------------
Net increase in net assets from capital share transactions 38,054,061 100,948,698
------------ ------------
TOTAL INCREASE IN NET ASSETS 32,785,137 194,386,835
Net assets at beginning of period 856,183,923 661,797,088
------------ ------------
Net assets at end of period $888,969,060 $856,183,923
============ ============
Net assets at end of period includes undistributed net investment
income $ 4,589,661 $ 11,122,835
============ ============
See notes to financial statements
7
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS A
METLIFE AGGRESSIVE STRATEGY PORTFOLIO --------------------------------
FOR THE PERIOD FOR THE YEARS ENDED
ENDED DECEMBER 31,
JUNE 30, 2007 -----------------
(UNAUDITED) 2006 2005(B)
-------------- ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD.................................... $13.21 $11.68 $10.27
------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................... 0.14 (a) 0.22 (a) 0.77 (a)
Net Realized/Unrealized Gain on Investments............................. 0.77 1.42 0.79
------ ------ ------
Total from Investment Operations........................................ 0.91 1.64 1.56
------ ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................... (0.20) (0.02) (0.11)
Distributions from Net Realized Capital Gains........................... (0.83) (0.09) (0.04)
------ ------ ------
Total Distributions..................................................... (1.03) (0.11) (0.15)
------ ------ ------
NET ASSET VALUE, END OF PERIOD.......................................... $13.09 $13.21 $11.68
====== ====== ======
TOTAL RETURN 7.04% 14.10% 15.12%
Ratio of Expenses to Average Net Assets................................. 0.10%* 0.10% 0.12%*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates 0.10%* 0.11% 0.12%*
Ratio of Net Investment Income to Average Net Assets.................... 2.11%* 1.75% 1.08%*
Portfolio Turnover Rate................................................. 13.5% 26.0% 18.3%
Net Assets, End of Period (in millions)................................. $0.3 $0.3 $0.1
CLASS B
-------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 ----------------------------
(UNAUDITED) 2006 2005 2004(C)
-------------- ------ ------- -------
NET ASSET VALUE, BEGINNING OF PERIOD.................................... $13.18 $11.68 $10.69 $10.00
------ ------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................... 0.07 (a) 0.18 (a) 0.20 (a) 0.08 (a)
Net Realized/Unrealized Gain on Investments............................. 0.83 1.41 0.91 0.64
------ ------ ------ ------
Total from Investment Operations........................................ 0.90 1.59 1.11 0.72
------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................... (0.17) (0.00)+ (0.08) (0.03)
Distributions from Net Realized Capital Gains........................... (0.83) (0.09) (0.04) --
------ ------ ------ ------
Total Distributions..................................................... (1.00) (0.09) (0.12) (0.03)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD.......................................... $13.08 $13.18 $11.68 $10.69
====== ====== ====== ======
TOTAL RETURN 6.98% 13.64% 10.38% 7.15%
Ratio of Expenses to Average Net Assets................................. 0.35%* 0.35% 0.35% 0.35%*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates 0.35%* 0.36% 0.37% 0.52%*
Ratio of Net Investment Income to Average Net Assets.................... 1.06%* 1.45% 1.80% 4.77%*
Portfolio Turnover Rate................................................. 13.5% 26.0% 18.3% 0.0%(d)
Net Assets, End of Period (in millions)................................. $888.7 $855.9 $661.7 $304.5
* Annualized
+ Rounds to less than $0.005 per share
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--05/02/2005.
(c) Commencement of operations--11/04/2004.
(d) For the period ended 12/31/2004, the portfolio turnover calculation is
zero, due to no sales activity.
See notes to financial statements
8
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is MetLife Aggressive Strategy Portfolio,
which is non-diversified. Shares in the Trust are not offered directly to the
general public and are currently available only to separate accounts
established by certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A and B Shares are
offered by the Portfolio. Class E Shares are not currently offered by the
Portfolio included in this report. Shares of each Class of the Portfolio
represent an equal pro rata interest in the Portfolio and generally give the
shareholder the same voting, dividend, liquidation, and other rights.
Investment income, realized and unrealized capital gains and losses, the common
expenses of the Portfolio and certain Portfolio-level expense reductions, if
any, are allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the Portfolio. Each class of
shares differs in its respective distribution expenses and certain other
class-specific expense reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date.
9
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The value of the security so purchased is subject to market fluctuations during
this period. The Portfolio segregates assets having an aggregate value at least
equal to the amount of the when issued or delayed delivery purchase commitments
until payment is made.
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into a management
agreement for investment advisory services in connection with the investment
management of the Portfolio.
Under the terms of the Portfolio's management agreement, the Portfolio pays the
Manager a monthly fee based upon annual rates applied to the Portfolio's
average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- --------------------------
MetLife Aggressive Strategy Portfolio $386,326 0.10% First $500 Million
0.075% $500 Million to $1 Billion
0.05% Over $1 Billion
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Expenses Deferred in
- - -------------------------------
2004 2005 2006 2007
- - Maximum Expense Ratio ------- -------- ------- ------
under current Expense Subject to repayment
Limitation Agreement until December 31,
- - --------------------- -------------------------------
Portfolio Class A Class B Class E 2009 2010 2011 2012
- --------- ------- ------- ------- ------- -------- ------- ------
MetLife Aggressive Strategy Portfolio 0.10% 0.35% 0.25%* $32,989 $122,410 $98,966 $5,386
* Class not offered during the period.
10
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
The amount waived and expenses reimbursed for the period ended June 30, 2007 is
shown as investment advisory fee waiver in the Statement of Operations of the
Portfolio.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued Net Increase
Through (Decrease)
Beginning Shares Dividend Shares in Shares Ending
Shares sold Reinvestment Repurchased Outstanding Shares
- - ---------- ---------- ------------- ----------- ------------ ----------
MetLife Aggressive Strategy Portfolio
Class A
06/30/2007 19,506 6,365 1,991 (8,372) (16) 19,490
12/31/2006 6,826 18,200 107 (5,627) 12,680 19,506
Class B
06/30/2007 64,934,609 4,779,702 4,980,088 (6,753,629) 3,006,161 67,940,770
12/31/2006 56,661,492 13,918,370 438,741 (6,083,994) 8,273,117 64,934,609
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
- - ------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
- - --------------- -------------- --------------- --------------
MetLife Aggressive Strategy Portfolio $-- $139,240,045 $-- $117,828,985
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
- --------- ------------ ------------ -------------- --------------
MetLife Aggressive Strategy Portfolio $806,030,922 $85,917,609 $(2,679,848) $83,237,761
6. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
- - ------------------- ---------------------- ---------------------
2006 2005 2006 2005 2006 2005
- - -------- ---------- ---------- -------- ---------- ----------
MetLife Aggressive Strategy Portfolio $777,025 $6,470,051 $4,673,469 $262,878 $5,450,494 $6,732,929
11
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
6. DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
- - ------------- ------------- ------------ ------------------ ------------
MetLife Aggressive Strategy Portfolio $11,375,507 $52,594,305 $90,494,124 $-- $154,463,936
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
7. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
8. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
9. OTHER MATTERS
The Portfolio does not invest in the Underlying Portfolios for the purpose of
exercising management or control; however, investments by the Portfolio within
its principal investment strategies may represent a significant portion of the
Underlying Portfolio's net assets. Transactions in the Underlying Portfolios
during the period ended June 30, 2007 in which the Portfolio had ownership of
at least 5% of the outstanding voting securities at the end of the period are
as follows:
Number of Number of
shares held at Shares purchased Shares sold shares held at
Security Description December 31, 2006 during the period during the period June 30, 2007
- -------------------- ----------------- ----------------- ----------------- --------------
Legg Mason Partners Aggressive Growth Portfolio - Class A 10,292,644 1,792,020 (704,308) 11,380,356
Legg Mason Value Equity Portfolio - Class A 6,178,766 1,005,602 (425,361) 6,759,007
MFS(R) Emerging Markets Equity Portfolio - Class A 3,447,292 105,626 (486,605) 3,066,313
RCM Technology Portfolio - Class A 6,507,944 425,386 (3,650,205) 3,283,125
Van Kampen Comstock Portfolio - Class A 7,839,026 1,297,449 (513,345) 8,623,130
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
9. OTHER MATTERS - CONTINUED
Net Realized Gain
(Loss) on Capital
Net Realized Gain Gain Distributions Income earned
(Loss) on Investments from Affiliates from affiliate
Security Description during the period during the period during the period Ending Value
- -------------------- --------------------- ------------------ ----------------- ------------
Legg Mason Partners Aggressive Growth Portfolio - Class A $ 372,182 $7,925,416 $ 194,618 $ 88,425,368
Legg Mason Value Equity Portfolio - Class A 423,999 76,851 2,279 79,215,564
MFS(R) Emerging Markets Equity Portfolio - Class A 442,470 -- 28,794 36,949,072
RCM Technology Portfolio - Class A 3,579,548 1,340,692 -- 18,845,140
Van Kampen Comstock Portfolio - Class A 1,114,732 1,978,590 1,479,962 105,460,876
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
13
MET INVESTORS SERIES TRUST
MetLife Balanced
Strategy Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
METLIFE BALANCED STRATEGY PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY MET INVESTORS ADVISORY, LLC
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
For the six months ended June 30, 2007, the MetLife Balanced Strategy Portfolio
gained 5.83%. This compares to a 6.53% return of the MSCI Global Capital
Markets Index and a 5.82% return for the blended benchmark (the Balanced
Blended Benchmark is comprised of the following mix: 52% Wilshire 5000, 30%
Lehman Brothers Universal, 13% MSCI EAFE(R) Index, and 5% CG 90-Day T-Bill).
The U.S. equity markets continued the positive momentum from the beginning of
the year as strong gains culminated in early June with records highs for the
Dow and S&P 500(R) Indexes. The primary driver of the rally was strong
corporate profits resulting from strong overseas demand and a weaker dollar.
Stock markets moved higher both in the U.S. and abroad despite signs of a
slowing economy in the U.S. and ongoing concerns about inflation. Other
concerns also included credit-related problems such as the ongoing subprime
lending issue and some high-profile losses in the hedge fund industry. Despite
the concerns mentioned above investors pointed towards strong economic growth
outside the U.S. and a boom in merger activity (a 90% increase over the second
quarter of 2006) as positive signs for the global economy overall. The bond
market experienced rising yields as investors sought slightly higher premiums
on high yield and mortgage related debt securities. The Federal Reserve stayed
on hold, indicating a reluctance to cut U.S. rates due to concerns about
inflation.
On the equity side, strong performance in the small and mid cap sectors due to
favorable market conditions contributed to performance specifically the T. Rowe
Price Mid-Cap Growth Portfolio and the Lazard Mid-Cap Portfolio. Another
notable positive was our position in the Third Avenue Small Cap Value Portfolio
whose out-performance was driven by appreciation from various holdings within
the oil, gas and energy sectors.
Also contributing to overall performance were the Davis Venture Value and the
Van Kampen Comstock Portfolios. Stock selection within the financials sector
and a modest overweight to the energy sector drove performance for the Davis
Venture Value Portfolio while stock picks within the technology sector
increased returns for the Van Kampen Comstock Portfolio. On the international
side, the MFS Research International Portfolio added to performance due to
continued strength in foreign markets.
During the period our portfolio allocations to the international debt,
convertibles and high yield sectors of the bond market were moderate
contributors to performance. The Loomis Sayles Global Markets Portfolio and the
Lord Abbett Bond Debenture Portfolio, both of which combine fixed income and
equity, or equity-like, securities, were contributors to returns.
Equity performance was adversely impacted by exposure to the healthcare sector
for the Legg Mason Partners Aggressive Growth Portfolio. A general
underweighting in energy stocks hurt performance for the Legg Mason Value
Equity Portfolio and the Lord Abbett Growth and Income Portfolio. Finally, the
Jennison Growth Portfolio's stock selection in the consumer discretionary
sector detracted from performance.
The Western Asset Management U.S. Government Portfolio detracted from
performance due to slightly longer duration relative to the benchmark as well
as structural exposure to agency mortgages. The PIMCO Total Return Portfolio
was also a detractor due to above-index duration as interest rates rose over
the period.
A correction in the real estate securities market occurred after a significant
period of out-performance. The Neuberger Berman Real Estate Portfolio, as a
result, was the largest detractor from absolute performance during the period.
The allocation to real estate has provided significant returns over the past
few years and the asset class continues to offer diversification benefits for
the Portfolio.
The Portfolio allocations were adjusted in early May 2007. Specifically, we
further diversified the fixed income component and rebalanced the growth and
value sectors of the large cap equity component of the Portfolio.
MET INVESTORS ADVISORY, LLC
The views expressed above are those of the investment advisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
-----------------------------------------------------------------------
PIMCO Total Return Portfolio (Class A) 10.81%
-----------------------------------------------------------------------
Davis Venture Value Portfolio (Class A) 8.05%
-----------------------------------------------------------------------
Van Kampen Comstock Portfolio (Class A) 7.95%
-----------------------------------------------------------------------
Lord Abbett Growth and Income Portfolio (Class A) 7.04%
-----------------------------------------------------------------------
Legg Mason Value Equity Portfolio (Class A) 6.96%
-----------------------------------------------------------------------
Third Avenue Small Cap Value Portfolio (Class A) 5.01%
-----------------------------------------------------------------------
Lord Abbett Bond Debenture Portfolio (Class A) 4.96%
-----------------------------------------------------------------------
Western Asset Management U.S. Government Portfolio (Class A) 4.95%
-----------------------------------------------------------------------
Harris Oakmark Focused Value Portfolio (Class A) 4.11%
-----------------------------------------------------------------------
Loomis Sayles Global Markets Portfolio (Class A) 4.11%
-----------------------------------------------------------------------
Legg Mason Partners Aggressive Growth Portfolio (Class A) 4.00%
-----------------------------------------------------------------------
Harris Oakmark International Portfolio (Class A) 3.94%
-----------------------------------------------------------------------
PIMCO Inflation Protected Bond Portfolio (Class A) 3.92%
-----------------------------------------------------------------------
MFS(R) Research International Portfolio (Class A) 3.07%
-----------------------------------------------------------------------
Lazard Mid-Cap Portfolio (Class A) 3.06%
-----------------------------------------------------------------------
MFS(R) Emerging Markets Portfolio (Class A) 2.09%
-----------------------------------------------------------------------
Turner Mid-Cap Growth Portfolio (Class A) 2.07%
-----------------------------------------------------------------------
T. Rowe Price Mid-Cap Growth Portfolio (Class A) 2.07%
-----------------------------------------------------------------------
Met/AIM Small Cap Growth Portfolio (Class A) 2.04%
-----------------------------------------------------------------------
Oppenheimer Capital Appreciation Portfolio (Class A) 2.04%
-----------------------------------------------------------------------
Jennison Growth Portfolio (Class A) 2.01%
-----------------------------------------------------------------------
Goldman Sachs Mid-Cap Value Portfolio (Class A) 1.97%
-----------------------------------------------------------------------
BlackRock High Yield Portfolio (Class A) 1.97%
-----------------------------------------------------------------------
Neuberger Berman Real Estate Portfolio (Class A) 1.80%
-----------------------------------------------------------------------
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
METLIFE BALANCED STRATEGY PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY MET INVESTORS ADVISORY, LLC
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
METLIFE BALANCED STRATEGY PORTFOLIO VS. MSCI GLOBAL CAPITAL MARKETS INDEX/SM1/
AND BALANCED BLENDED BENCHMARK/2/
Growth Based on $10,000+
[CHART]
MSCI Global
MetLife Balanced Balanced Capital Markets
Strategy Portfolio Blended Benchmark Index/SM/
------------------ ----------------- ---------------
11/3/2004 $10,000 $10,000 $10,000
12/31/2004 10,419 10,501 10,701
12/31/2005 11,161 11,144 11,136
12/31/2006 12,497 12,627 12,811
6/30/2007 13,226 13,362 13,648
-------------------------------------------------------------------------
Average Annual Return
(for the period ended 6/30/07)/3/
-------------------------------------------------------------------------
1 Year Since Inception/4/
-------------------------------------------------------------------------
MetLife Balanced Strategy
Portfolio--Class A 15.73% 13.38%
- -- Class B 15.43% 11.10%
-------------------------------------------------------------------------
- -- MSCI Global Capital Markets Index/SM1/ 17.17% 12.44%
-------------------------------------------------------------------------
- - - Balanced Blended Benchmark/2/ 16.31% 11.49%
-------------------------------------------------------------------------
+The chart reflects the performance of Class B shares of the Portfolio. The
performance of Class B shares will differ from that of the other Classes
because of the difference in expenses paid by policyholders investing in the
different share classes.
/1/The MSCI Global Capital Markets Index/SM/ is designed to measure the
performance of the core capital markets asset classes comprising global
equities and fixed income. It is a market capitalization weighted composite of
the MSCI All Country World Index/SM/ and the MSCI Global Total Bond Index. The
MSCI All Country World Index/SM/ is an unmanaged free float-adjusted market
capitalization index that is designed to measure equity market performance in
the global developed and emerging markets. The MSCI All Country World Index/SM/
includes 49 country indices. The MSCI Global Total Bond Index/SM/ an unmanaged
index which is designed to measure the capitalization weighted performance of
sovereign, investment grade credit and high yield bond markets with appropriate
adjustments for investability and to eliminate double counting. The MSCI Global
Total Bond Index/SM/ includes the World Sovereign Debt Index, USD Total Bond
Index, Euro Dollar Credit Index, Euro Sterling Credit Index, Euro Credit Index,
Emerging Market Local Sovereign Index and High Yield Sovereign and Corporate
Indices. The Index does not include fees or expenses and is not available for
direct investment.
/2/The Balanced Blended Benchmark is comprised of 52% Wilshire 5000 Equity
Index, 30% Lehman Brothers Universal Index, 13% Morgan Stanley Capital
International Europe Australasia and Far East Index and 5% Citigroup 3-Month
Treasury Bill Index.
The Wilshire 5000 Equity Index is an unmanaged index which measures the
performance of all U.S. headquartered equity securities with readily available
price data. The market capitalized weighted index is compromised of
approximately 82% New York Stock Exchange, 2% American Stock Exchange and 16%
OTC (1995). The Index was created in 1974 and backdated to 1971, with a base
index of December 1980 (base index equals 1,044.596). Dividends are reinvested
on the "ex" dividend date and the rebalancing of share weights is done on a
monthly basis. No attempt has been made to adjust the market capitalization of
the index to take into account cross holding between corporations. The Index
does not include fees or expenses and is not available for direct investment.
The Lehman Brothers Universal Index represents the union of the U.S. Aggregate
Index, the U.S. High-Yield Corporate Index, the 144A Index, the Eurodollar
Index, the Emerging Markets Index, the non-EIRSA portion of the Commercial
Mortgage Backed Securities Index and the Commercial Mortgage Backed Securities
High Yield Index. Municipal debt, private placements, and non-dollar
denominated issues are excluded from the Universal Index. The only constituent
of the Index that includes floating-rate debt is the Emerging Markets Index.
Bonds and securities must be fixed rate, although it can carry a coupon that
steps up or changes according to a predetermined schedule; must be
dollar-denominated and including bonds with maturities up to ten years and
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
METLIFE BALANCED STRATEGY PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY MET INVESTORS ADVISORY, LLC
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
long-term indices composed of bonds with maturities longer than ten years. All
returns are market value weighted inclusive of accrued interest. Yield is
defined as the yield to worst, the lesser of the yield to maturity and yield to
call. Market Values are expressed in millions of dollars. The Index does not
include fees or expenses and is not available for direct investment.
The Morgan Stanley Capital International Europe, Australasia and Far East Index
("MSCI EAFE(R) Index") is an unmanaged free float-adjusted market
capitalization index that is designed to measure developed market equity
performance, excluding the US & Canada. The Index does not include fees or
expenses and is not available for direct investment.
The Citigroup 3-Month Treasury Bill Index--equal dollar amounts of three-month
Treasury bills are purchased at the beginning of each of three consecutive
months. As each bill matures, all proceeds are rolled over or reinvested in a
new three-month bill. The income used to calculate the monthly return is
derived by subtracting the original amount invested from the maturity value.
The Index does not include fees or expenses and is not available for direct
investment.
/3/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/4/Inception of the Class B shares is 11/4/04. Inception of the Class A shares
is 5/2/05. Index returns are based on an inception date of 10/31/04.
Effective July 1, 2007, Morgan Stanley Capital International, Inc. (MSCI)
discontinued the MSCI Global Capital Markets Index and the Portfolio will use
the Dow Jones Moderate Portfolio Index in future reports to policyholders as
the Portfolio's primary benchmark.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
3
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
METLIFE BALANCED STRATEGY PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,060.30 $0.31
Hypothetical (5% return before expenses) 1,000.00 1,024.50 0.30
- ------------------------------------------ ------------- ------------- --------------
Class B
Actual $1,000.00 $1,058.30 $1.58
Hypothetical (5% return before expenses) 1,000.00 1,023.26 1.56
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.06% and
0.31% for the Class A and Class B, respectively, multiplied by the average
account value over the period, multiplied by 181/365 (to reflect the one-half
year period).
4
MET INVESTORS SERIES TRUST
METLIFE BALANCED STRATEGY PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
---------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
---------------------------------------------------------------------
INVESTMENT COMPANY SECURITIES - 100.0%
BlackRock High Yield Portfolio
(Class A).............................. 14,595,107 $ 120,847,489
Davis Venture Value Portfolio (Class A)*. 13,233,667 494,277,446
Goldman Sachs Mid-Cap Value Portfolio
(Class A).............................. 8,392,007 121,012,745
Harris Oakmark Focused Value Portfolio
(Class A)*............................. 1,005,563 252,064,472
Harris Oakmark International Portfolio
(Class A).............................. 12,815,922 241,323,807
Jennison Growth Portfolio (Class A)*..... 9,615,521 122,982,514
Lazard Mid-Cap Portfolio (Class A)....... 13,357,749 187,542,794
Legg Mason Partners Aggressive Growth
Portfolio (Class A).................... 31,550,689 245,148,852
Legg Mason Value Equity Portfolio
(Class A).............................. 36,427,208 426,926,872
Loomis Sayles Global Markets Portfolio
(Class A).............................. 22,143,447 251,992,427
Lord Abbett Bond Debenture Portfolio
(Class A).............................. 24,725,372 304,122,075
Lord Abbett Growth and Income Portfolio
(Class A).............................. 14,696,888 431,353,666
Met/AIM Small Cap Growth Portfolio
(Class A).............................. 8,344,955 125,341,225
MFS(R) Emerging Markets Equity Portfolio
(Class A).............................. 10,620,103 127,972,238
MFS(R) Research International Portfolio
(Class A).............................. 13,390,946 188,008,887
Neuberger Berman Real Estate Portfolio
(Class A).............................. 7,214,741 110,169,098
Oppenheimer Capital Appreciation
Portfolio (Class A).................... 13,157,947 124,868,914
PIMCO Inflation Protected Bond Portfolio
(Class A).............................. 24,005,981 240,299,874
PIMCO Total Return Portfolio (Class A)... 58,086,287 663,345,401
T. Rowe Price Mid-Cap Growth Portfolio
(Class A).............................. 13,207,424 126,923,344
Third Avenue Small Cap Value Portfolio
(Class A).............................. 17,728,186 307,052,189
Turner Mid-Cap Growth Portfolio
(Class A).............................. 9,066,104 127,106,783
Van Kampen Comstock Portfolio (Class A).. 39,844,006 487,292,186
Western Asset Management U.S.
Government Portfolio (Class A)*........ 25,182,224 303,193,981
---------------
Total Investment Company Securities
(Cost $5,717,048,695) 6,131,169,279
---------------
TOTAL INVESTMENTS - 100.0%
(Cost $5,717,048,695) 6,131,169,279
---------------
Other Assets and Liabilities (net) - 0.0% (1,573,784)
---------------
TOTAL NET ASSETS - 100.0% $ 6,129,595,495
===============
PORTFOLIO FOOTNOTES:
* A Portfolio of Metropolitan Series Fund, Inc.
See notes to financial statements
5
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
METLIFE BALANCED STRATEGY PORTFOLIO
ASSETS
Investments, at value (Note 2)* $6,131,169,279
Receivable for Trust shares sold 6,666,373
--------------
Total assets 6,137,835,652
--------------
LIABILITIES
Due to bank 4
Payables for:
Investments purchased 5,231,435
Trust shares redeemed 1,434,938
Distribution and services fees--Class B 1,246,914
Investment advisory fee payable (Note 3) 280,243
Administration fee payable 1,901
Custodian and accounting fees payable 26,978
Accrued expenses 17,744
--------------
Total liabilities 8,240,157
--------------
NET ASSETS $6,129,595,495
==============
NET ASSETS REPRESENTED BY:
Paid in surplus $5,421,639,501
Accumulated net realized gain 220,234,643
Unrealized appreciation on investments 414,120,584
Undistributed net investment income 73,600,767
--------------
Total $6,129,595,495
==============
NET ASSETS
Class A $ 971,599
==============
Class B 6,128,623,896
==============
CAPITAL SHARES OUTSTANDING
Class A 79,342
==============
Class B 501,054,220
==============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 12.25
==============
Class B 12.23
==============
- ------------------------------------------------------------------
*Investments at cost $5,717,048,695
See notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
METLIFE BALANCED STRATEGY PORTFOLIO
INVESTMENT INCOME:
Dividends from underlying Portfolios $ 82,177,397
------------
Total investment income 82,177,397
------------
EXPENSES:
Investment advisory fee (Note 3) 1,577,098
Administration fees 11,901
Custody and accounting fees 4,524
Distribution fee--Class B 6,954,619
Transfer agent fees 3,860
Audit 8,548
Legal 7,452
Trustee fees and expenses 6,768
Other 1,806
------------
Total expenses 8,576,576
------------
Net investment income 73,600,821
------------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
CAPITAL GAIN DISTRIBUTIONS FROM UNDERLYING PORTFOLIOS:
Net realized gain on:
Investments 34,093,524
Capital gain distributions from underlying Portfolios 195,835,834
------------
Net realized gain on investments and capital gain distributions
from underlying Portfolios 229,929,358
------------
Net change in unrealized appreciation on:
Investments 10,499,322
------------
Net change in unrealized appreciation on investments 10,499,322
------------
Net realized and change in unrealized gain on investments 240,428,680
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $314,029,501
============
See notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
METLIFE BALANCED STRATEGY PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 73,600,821 $ 98,920,864
Net realized gain on investments and capital gain distributions
from underlying Portfolios 229,929,358 174,987,469
Net change in unrealized appreciation on investments 10,499,322 229,495,589
-------------- --------------
Net increase in net assets resulting from operations 314,029,501 503,403,922
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (16,665) (936)
Class B (98,904,253) (374,658)
From net realized gains
Class A (27,801) (3,323)
Class B (182,879,835) (25,593,222)
-------------- --------------
Net decrease in net assets resulting from distributions (281,828,554) (25,972,139)
-------------- --------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class A 216,698 566,990
Class B 821,088,237 1,208,693,056
Net asset value of shares issued through dividend reinvestment
Class A 44,466 4,259
Class B 281,784,088 25,967,880
Cost of shares repurchased
Class A (26,421) (60,323)
Class B (173,594,739) (74,700,257)
-------------- --------------
Net increase in net assets from capital share transactions 929,512,329 1,160,471,605
-------------- --------------
TOTAL INCREASE IN NET ASSETS 961,713,276 1,637,903,388
Net assets at beginning of period 5,167,882,219 3,529,978,831
-------------- --------------
Net assets at end of period $6,129,595,495 $5,167,882,219
============== ==============
Net assets at end of period includes undistributed net investment
income $ 73,600,767 $ 98,920,864
============== ==============
See notes to financial statements
8
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS A
METLIFE BALANCED STRATEGY PORTFOLIO ---------------------------------
FOR THE PERIOD FOR THE YEARS ENDED
ENDED DECEMBER 31,
JUNE 30, 2007 ------------------
(UNAUDITED) 2006 2005(B)
-------------- ------ ------
NET ASSET VALUE, BEGINNING OF PERIOD.................................... $12.17 $10.92 $10.04
------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................... 0.17 (a) 0.31 (a) 0.56 (a)
Net Realized/Unrealized Gain on Investments............................. 0.55 1.03 0.47
------ ------ ------
Total from Investment Operations........................................ 0.72 1.34 1.03
------ ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................... (0.24) (0.02) (0.13)
Distributions from Net Realized Capital Gains........................... (0.40) (0.07) (0.02)
------ ------ ------
Total Distributions..................................................... (0.64) (0.09) (0.15)
------ ------ ------
NET ASSET VALUE, END OF PERIOD.......................................... $12.25 $12.17 $10.92
====== ====== ======
TOTAL RETURN 6.03% 12.35% 10.21%
Ratio of Expenses to Average Net Assets................................. 0.06%* 0.08% 0.03%*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates 0.06%* 0.08%(e) 0.03%*
Ratio of Net Investment Income to Average Net Assets.................... 2.76%* 2.74% 7.70%*
Portfolio Turnover Rate................................................. 11.1% 20.7% 17.3%
Net Assets, End of Period (in millions)................................. $ 1.0 $ 0.7 $ 0.2
CLASS B
--------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 ----------------------------------
(UNAUDITED) 2006 2005 2004(C)
-------------- -------- -------- --------
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.15 $ 10.92 $ 10.31 $ 10.00
-------- -------- -------- --------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................... 0.16 (a) 0.26 (a) 0.22 (a) 0.28 (a)
Net Realized/Unrealized Gain on Investments............................. 0.54 1.04 0.52 0.14
-------- -------- -------- --------
Total from Investment Operations........................................ 0.70 1.30 0.74 0.42
-------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................... (0.22) (0.00)+ (0.11) (0.11)
Distributions from Net Realized Capital Gains........................... (0.40) (0.07) (0.02) --
-------- -------- -------- --------
Total Distributions..................................................... (0.62) (0.07) (0.13) (0.11)
-------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD.......................................... $ 12.23 $ 12.15 $ 10.92 $ 10.31
======== ======== ======== ========
TOTAL RETURN 5.83% 11.98% 7.12% 4.19%
Ratio of Expenses to Average Net Assets................................. 0.31%* 0.33% 0.31% 0.35%*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates 0.31%* 0.33%(e) 0.31% 0.38%*
Ratio of Net Investment Income to Average Net Assets.................... 2.65%* 2.31% 2.12% 17.21%*
Portfolio Turnover Rate................................................. 11.1% 20.7% 17.3% 0.0%(d)
Net Assets, End of Period (in millions)................................. $6,128.6 $5,167.2 $3,529.8 $1,561.2
* Annualized
+ Rounds to less than $0.005 per share.
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--05/02/2005.
(c) Commencement of operations--11/04/2004.
(d) For the period ended 12/31/2004, the portfolio turnover calculation is
zero, due to no sales activity.
(e) Excludes the effect of Deferred Expense Reimbursement--See Note 3 of
financial statements.
See notes to financial statements
9
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is MetLife Balanced Strategy Portfolio, which
is non-diversified. Shares in the Trust are not offered directly to the general
public and are currently available only to separate accounts established by
certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A and B Shares are
offered by the Portfolio. Class E Shares are not currently offered by the
Portfolio included in this report. Shares of each Class of the Portfolio
represent an equal pro rata interest in the Portfolio and generally give the
shareholder the same voting, dividend, liquidation, and other rights.
Investment income, realized and unrealized capital gains and losses, the common
expenses of the Portfolio and certain Portfolio-level expense reductions, if
any, are allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the Portfolio. Each class of
shares differs in its respective distribution expenses and certain other
class-specific expense reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date. The value of the
security so purchased is subject to market fluctuations during this period. The
Portfolio segregates assets having an aggregate value at least equal to the
amount of the when issued or delayed delivery purchase commitments until
payment is made.
10
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into a management
agreement for investment advisory services in connection with the investment
management of the Portfolio.
Under the terms of the Portfolio's management agreement, the Portfolio pays the
Manager a monthly fee based upon annual rates applied to the Portfolio's
average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- --------------------------
MetLife Balanced Strategy Portfolio $1,577,098 0.10% First $500 Million
0.075% $500 Million to $1 Billion
0.05% Over $1 Billion
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Maximum Expense Ratio
- under current Expense
- Limitation Agreement
- ---------------------
Portfolio Class A Class B Class E
--------- ------- ------- -------
MetLife Balanced Strategy Portfolio 0.10% 0.35% 0.25%*
* Class not offered during the period.
11
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued
Through Net Increase
Beginning Shares Dividend Shares in Shares Ending
Shares Sold Reinvestment Repurchased Outstanding Shares
- - ----------- ----------- ------------- ----------- ------------ -----------
MetLife Balanced Strategy Portfolio
Class A
06/30/2007 59,983 17,833 3,669 (2,143) 19,359 79,342
12/31/2006 14,717 50,189 373 (5,296) 45,266 59,983
Class B
06/30/2007 425,219,932 66,721,615 23,268,711 (14,156,038) 75,834,288 501,054,220
12/31/2006 323,282,018 106,250,407 2,277,884 (6,590,377) 101,937,914 425,219,932
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
- - ------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
- - --------------- -------------- --------------- --------------
MetLife Balanced Strategy Portfolio $-- $623,011,829 $-- $1,540,300,897
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
- --------- -------------- ------------ -------------- --------------
MetLife Balanced Strategy Portfolio $5,717,048,695 $434,070,016 $(19,949,432) $414,120,584
6. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
- - ---------------------- ---------------------- -----------------------
2006 2005 2006 2005 2006 2005
- - ---------- ----------- ----------- ---------- ----------- -----------
MetLife Balanced Strategy Portfolio $2,338,613 $38,754,270 $23,634,001 $1,056,753 $25,972,614 $39,811,023
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
6. DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
- - ------------- ------------- ------------ ------------------ ------------
MetLife Balanced Strategy Portfolio $99,521,858 $182,306,543 $393,926,646 $-- $675,755,047
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
7. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
8. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
9. OTHER MATTERS
The Portfolio does not invest in the Underlying Portfolios for the purpose of
exercising management or control; however, investments by the Portfolio within
its principal investment strategies may represent a significant portion of the
Underlying Portfolio's net assets. Transactions in the Underlying Portfolios
during the period during the period ended June 30, 2007 in which the Portfolio
had ownership of at least 5% of the outstanding voting securities at the end of
the period as follows:
Number of Shares Shares Number of
shares held at purchased sold shares held
December 31, during the during the at June 30,
Security Description 2006 period period 2007
- -------------------- -------------- ---------- ---------- -----------
BlackRock High Yield Portfolio - Class A -- 14,595,604 (497) 14,595,107
Davis Venture Value Portfolio - Class A 11,922,760 1,482,800 (171,893) 13,233,667
Goldman Sachs Mid-Cap Value Portfolio - Class A 7,224,084 1,586,272 (418,349) 8,392,007
Harris Oakmark Focused Value Portfolio - Class A 775,408 237,029 (6,874) 1,005,563
Harris Oakmark International Portfolio - Class A 11,150,265 2,374,215 (708,558) 12,815,922
Jennison Growth Portfolio - Class A 12,197,457 1,807,360 (4,389,296) 9,615,521
Lazard Mid-Cap Portfolio - Class A 11,483,418 2,515,785 (641,454) 13,357,749
Legg Mason Partners Aggressive Growth Portfolio - Class A 18,849,348 12,719,713 (18,372) 31,550,689
Legg Mason Value Equity Portfolio - Class A 28,268,286 8,586,675 (427,753) 36,427,208
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
9. OTHER MATTERS - CONTINUED
Number of Shares Shares Number of
shares held at purchased sold shares held
December 31, during the during the at June 30,
Security Description 2006 period period 2007
- -------------------- -------------- ---------- ----------- -----------
Loomis Sayles Global Markets Portfolio - Class A 20,276,086 2,309,694 (442,333) 22,143,447
Lord Abbett Bond Debenture Portfolio - Class A 28,572,434 5,454,608 (9,301,670) 24,725,372
Lord Abbett Growth and Income Portfolio Class A 10,593,171 4,113,719 (10,002) 14,696,888
Met/AIM Small Cap Growth Portfolio - Class A 7,740,698 984,794 (380,537) 8,344,955
MFS(R) Emerging Markets Equity Portfolio - Class A 10,506,245 1,136,947 (1,023,089) 10,620,103
MFS(R) Research International Portfolio - Class A 10,533,862 3,292,719 (435,635) 13,390,946
Neuberger Berman Real Estate Portfolio - Class A 5,746,286 2,052,316 (583,861) 7,214,741
Oppenheimer Capital Appreciation Portfolio - Class A 27,858,446 4,462,176 (19,162,675) 13,157,947
PIMCO Inflation Protected Bond Portfolio - Class A 34,238,719 6,897,337 (17,130,075) 24,005,981
PlMCO Total Return Portfolio - Class A 33,942,275 24,176,559 (32,547) 58,086,287
T. Rowe Price Mid-Cap Growth Portfolio - Class A 11,884,092 1,977,344 (654,012) 13,207,424
Third Avenue Small Cap Value Portfolio - Class A 14,893,642 3,033,833 (199,289) 17,728,186
Turner Mid-Cap Growth Portfolio - Class A 8,174,023 1,225,921 (333,840) 9,066,104
Van Kampen Comstock Portfolio - Class A 30,455,298 9,534,561 (145,853) 39,844,006
Western Asset Management U.S. Government Portfolio - Class A 20,399,346 4,802,113 (19,235) 25,182,224
Net Realized Gain
Net Realized (Loss) on Capital
Gain (Loss) Gain Distributions Income earned
on Investments from Affiliates from Affiliate
Security Description during the period during the period during the period Ending Value
- -------------------- ----------------- ------------------ ----------------- ------------
BlackRock High Yield Portfolio - Class A $ (15) $ -- $ -- $120,847,489
Davis Venture Value Portfolio - Class A 1,511,602 -- 3,618,727 494,277,446
Goldman Sachs Mid-Cap Value Portfolio - Class A 1,365,757 9,885,214 765,425 121,012,745
Harris Oakmark Focused Value Portfolio - Class A 249,884 27,127,482 1,230,381 252,064,472
Harris Oakmark International Portfolio - Class A 3,600,209 18,180,472 2,118,840 241,323,807
Jennison Growth Portfolio - Class A 8,946,429 6,184,629 737,497 122,982,514
Lazard Mid-Cap Portfolio - Class A 317,017 14,982,549 1,093,206 187,542,794
Legg Mason Partners Aggressive Growth Portfolio - Class A 9,699 15,522,827 381,182 245,148,852
Legg Mason Value Equity Portfolio - Class A 415,705 376,423 11,163 426,926,872
Loomis Sayles Global Markets Portfolio - Class A 291,224 -- -- 251,992,427
Lord Abbett Bond Debenture Portfolio - Class A (2,833,562) 501,812 21,759,239 304,122,075
Lord Abbett Growth and Income Portfolio - Class A 21,980 15,147,989 3,501,517 431,353,666
Met/AIM Small Cap Growth Portfolio - Class A 687,931 1,650,139 -- 125,341,225
MFS(R) Emerging Markets Equity Portfolio - Class A 971,060 -- 93,931 127,972,238
MFS(R) Research International Portfolio - Class A 1,388,622 24,716,306 2,536,801 188,008,887
Neuberger Berman Real Estate Portfolio - Class A 4,569,188 8,205,920 1,024,040 110,169,098
14
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
15
9. OTHER MATTERS - CONTINUED
Net Realized Gain
Net Realized (Loss) on Capital
Gain (Loss) Gain Distributions Income earned
on Investments from Affiliates from affiliate
Security Description during the period during the period during the period Ending Value
- -------------------- ----------------- ------------------ ----------------- ------------
Oppenheimer Capital Appreciation Portfolio - Class A $18,385,725 $17,836,142 $ 399,281 $124,868,914
PlMCO Inflation Protected Bond Portfolio - Class A (8,870,391) -- 9,343,346 240,299,874
PlMCO Total Return Portfolio - Class A 20,349 -- 16,111,596 663,345,401
T. Rowe Price Mid-Cap Growth Portfolio - Class A 1,215,283 5,358,764 280,971 126,923,344
Third Avenue Small Cap Value Portfolio - Class A 657,347 17,998,762 3,350,555 307,052,189
Turner Mid-Cap Growth Portfolio - Class A 849,428 3,943,119 -- 127,106,783
Van Kampen Comstock Portfolio - Class A 316,502 8,217,285 6,146,432 487,292,186
Western Asset Management U.S. Government Portfolio - Class A 6,551 -- 7,673,370 303,193,981
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
MET INVESTORS SERIES TRUST
MetLife Defensive
Strategy Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
METLIFE DEFENSIVE STRATEGY PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY MET INVESTORS ADVISORY, LLC
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
For the six months ended June 30, 2007, the MetLife Defensive Strategy
Portfolio gained 3.66%. This compares to a 6.53% return for the MSCI Global
Capital Markets Index and a 3.75% return for the blended benchmark (the blended
benchmark for this Portfolio is comprised of the following mix: 28% Wilshire
5000 Index, 55% Lehman Brothers Universal Index, 7% MSCI EAFE Index, and 10% CG
90-Day T-Bill Index).
The U.S. equity markets continued the positive momentum from the beginning of
the year as strong gains culminated in early June with records highs for the
Dow and S&P 500 Indexes. The primary driver of the rally was strong corporate
profits resulting from strong overseas demand and a weaker dollar. Stock
markets moved higher both in the U.S. and abroad despite signs of a slowing
economy in the U.S. and ongoing concerns about inflation. Other concerns also
included credit-related problems such as the ongoing subprime lending issue and
some high-profile losses in the hedge fund industry. Despite the concerns
mentioned above investors pointed towards strong economic growth outside the
U.S. and a boom in merger activity (a 90% increase over the second quarter of
2006) as positive signs for the global economy overall. The bond market
experienced rising yields as investors sought slightly higher premiums on high
yield and mortgage related debt securities. The Federal Reserve stayed on hold,
indicating a reluctance to cut U.S. rates due to concerns about inflation.
During the period our portfolio allocations to the Treasury Inflation Protected
Securities, international debt, convertibles and high yield sectors of the bond
market were positive contributors to performance. The Loomis Sayles Global
Markets Portfolio and the Lord Abbett Bond Debenture Portfolios, both of which
combine fixed income and equity, or equity-like, securities, were two of the
larger contributors to returns.
On the equity side, strong performance in the small and mid cap sectors due to
favorable market conditions contributed to performance specifically the T. Rowe
Price Mid-Cap Growth Portfolio and the Lazard Mid-Cap Portfolio. Another
notable positive was our position in the Third Avenue Small Cap Value Portfolio
whose out-performance was driven by appreciation from various holdings within
the oil, gas and energy sectors. Also adding to overall performance was the
MFS(R) Research International Portfolio due to continued strength in foreign
markets.
The Western Asset Management U.S. Government Portfolio detracted from
performance due to slightly longer duration relative to the benchmark as well
as structural exposure to agency mortgages. The PIMCO Total Return Portfolio
was also a detractor due to above-index duration as interest rates rose over
the period.
Equity performance was adversely impacted by a general underweighting in energy
stocks for the Legg Mason Value Equity Portfolio and the Lord Abbett Growth and
Income Portfolio. Finally, the Jennison Growth Portfolio's stock selection in
the consumer discretionary sector detracted from performance.
A correction in the real estate securities market occurred after a significant
period of out-performance. The Neuberger Berman Real Estate Portfolio, as a
result, was the largest detractor from absolute performance during the period.
The allocation to real estate has provided significant returns over the past
few years and the asset class continues to offer diversification benefits for
the Portfolio.
The Portfolio allocations were adjusted in early May 2007. Specifically, we
further diversified the fixed income component and rebalanced the growth and
value sectors of the large cap equity component of the Portfolio.
MET INVESTORS ADVISORY, LLC
The views expressed above are those of the investment advisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
- --------------------------------------------------------------------------------
HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
-----------------------------------------------------------------------
PIMCO Total Return Portfolio (Class A) 23.80%
-----------------------------------------------------------------------
Western Asset Management U.S. Government Portfolio (Class A) 10.96%
-----------------------------------------------------------------------
Lord Abbett Bond Debenture Portfolio (Class A) 10.00%
-----------------------------------------------------------------------
PIMCO Inflation Protected Bond Portfolio (Class A) 9.89%
-----------------------------------------------------------------------
Lord Abbett Growth and Income Portfolio (Class A) 5.06%
-----------------------------------------------------------------------
Van Kampen Comstock Portfolio (Class A) 4.99%
-----------------------------------------------------------------------
Loomis Sayles Global Markets Portfolio (Class A) 4.14%
-----------------------------------------------------------------------
MFS(R) Research International Portfolio (Class A) 4.11%
-----------------------------------------------------------------------
Third Avenue Small Cap Value Portfolio (Class A) 4.04%
-----------------------------------------------------------------------
Legg Mason Value Equity Portfolio (Class A) 4.01%
-----------------------------------------------------------------------
BlackRock High Yield Portfolio (Class A) 2.98%
-----------------------------------------------------------------------
T. Rowe Price Mid-Cap Growth Portfolio (Class A) 2.09%
-----------------------------------------------------------------------
Lazard Mid-Cap Portfolio (Class A) 2.05%
-----------------------------------------------------------------------
Oppenheimer Capital Appreciation Portfolio (Class A) 2.05%
-----------------------------------------------------------------------
Davis Venture Value Portfolio (Class A) 2.03%
-----------------------------------------------------------------------
Jennison Growth Portfolio (Class A) 2.02%
-----------------------------------------------------------------------
Goldman Sachs Mid-Cap Value Portfolio (Class A) 1.99%
-----------------------------------------------------------------------
Harris Oakmark International Portfolio (Class A) 1.98%
-----------------------------------------------------------------------
Neuberger Berman Real Estate Portfolio (Class A) 1.81%
-----------------------------------------------------------------------
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
METLIFE DEFENSIVE STRATEGY PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY MET INVESTORS ADVISORY, LLC
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
METLIFE DEFENSIVE STRATEGY PORTFOLIO VS. MSCI GLOBAL CAPITAL MARKETS
INDEX/SM1/ AND DEFENSIVE BLENDED BENCHMARK/2/
Growth Based on $10,000+
[CHART]
MSCI Global
MetLife Defensive Capital Markets Defensive
Strategy Portfolio Index/SM/ Blended Benchmark
------------------ --------------- -----------------
11/3/2004 $10,000 $10,000 $10,000
12/31/2004 10,134 10,701 10,289
12/31/2005 10,587 11,136 10,762
12/31/2006 11,499 12,811 11,773
6/30/2007 11,920 13,648 12,214
-------------------------------------------------------------------------
Average Annual Return
(for the period ended 6/30/07)/3/
-------------------------------------------------------------------------
1 Year Since Inception/4/
-------------------------------------------------------------------------
MetLife Defensive Strategy
Portfolio--Class A 11.26% 8.76%
- -- Class B 11.07% 6.84%
-------------------------------------------------------------------------
- -- MSCI Global Capital Markets Index/SM1/ 17.17% 12.44%
-------------------------------------------------------------------------
- - - Defensive Blended Benchmark/2/ 11.67% 7.80%
-------------------------------------------------------------------------
+The chart reflects the performance of Class B shares of the Portfolio. The
performance of Class B shares will differ from that of the other Classes
because of the difference in expenses paid by policyholders investing in the
different share classes.
/1/The MSCI Global Capital Markets Index/SM/ an unmanaged index which measure
the performance of the core capital markets asset classes comprising global
equities and fixed income. It is a market capitalization weighted composite of
the MSCI All Country World Index/SM/ and the MSCI Global Total Bond Index/SM/.
The MSCI All Country World Index/SM/ is an unmanaged free float-adjusted market
capitalization index that is designed to measure equity market performance in
the global developed and emerging markets. The MSCI All Country World Index
includes 49 country indices. The MSCI Global Total Bond Index an unmanaged
index which measures the capitalization weighted performance of sovereign,
investment grade credit and high yield bond markets with appropriate
adjustments for investability and to eliminate double counting. The MSCI Global
Total Bond Index/SM/ includes the World Sovereign Debt Index, USD Total Bond
Index, Euro Dollar Credit Index, Euro Sterling Credit Index, Euro Credit Index,
Emerging Market Local Sovereign Index and High Yield Sovereign and Corporate
Indices. The Index does not include fees or expenses and is not available for
direct investment.
/2/The Defensive Blended Benchmark is comprised of 28% Wilshire 5000 Equity
Index, 55% Lehman Brothers Universal Index, 7% Morgan Stanley Capital
International Europe Australasia and Far East Index and 10% Citigroup 3-Month
Treasury Bill Index.
The Wilshire 5000 Equity Index is an unmanaged index which measures the
performance of all U.S. headquartered equity securities with readily available
price data. The market capitalized weighted index is compromised of
approximately 82% New York Stock Exchange, 2% American Stock Exchange and 16%
OTC (1995). The Index was created in 1974 and backdated to 1971; with a base
index of December 1980 (base index equals 1,044.596). Dividends are reinvested
on the "ex" dividend date and the rebalancing of share weights is done on a
monthly basis. No attempt has been made to adjust the market capitalization of
the Index to take into account cross holding between corporations. The Index
does not include fees or expenses and is not available for direct investment.
The Lehman Brothers Universal Index represents the union of the U.S. Aggregate
Index, the U.S. High-Yield Corporate Index, the 144A Index, the Eurodollar
Index, the Emerging Markets Index, the non-EIRSA portion of the Commercial
Mortgage Backed Securities Index and the Commercial Mortgage Backed Securities
High Yield Index. Municipal debt, private placements, and non-dollar
denominated issues are excluded from the Universal Index. The only constituent
of the Index that includes floating-rate debt is the Emerging Markets Index.
Bonds and securities must be fixed rate, although it can carry a coupon that
steps up or changes according to a predetermined schedule; must be
dollar-denominated and including bonds with maturities up to ten years and
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
METLIFE DEFENSIVE STRATEGY PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY MET INVESTORS ADVISORY, LLC
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
long-term indices composed of bonds with maturities longer than ten years. All
returns are market value weighted inclusive of accrued interest. Yield is
defined as the yield to worst, the lesser of the yield to maturity and yield to
call. Market values are expressed in millions of dollars. The Index does not
include fees or expenses and is not available for direct investment.
The Morgan Stanley Capital International Europe, Australasia and Far East Index
("MSCI EAFE(R) Index") is an unmanaged free float-adjusted market
capitalization index that is designed to measure developed market equity
performance, excluding the US & Canada. The Index does not include fees or
expenses and is not available for direct investment.
The Citigroup 3-Month Treasury Bill Index--equal dollar amounts of three-month
Treasury bills are purchased at the beginning of each of three consecutive
months. As each bill matures, all proceeds are rolled over or reinvested in a
new three-month bill. The income used to calculate the monthly return is
derived by subtracting the original amount invested from the maturity value.
The Index does not include fees or expenses and is not available for direct
investment.
/3/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/4/Inception of the Class B shares is 11/4/04. Inception of the Class A shares
is 5/2/05. Index returns are based on an inception date of 10/31/04.
Effective July 1, 2007, Morgan Stanley Capital International, Inc. (MSCI)
discontinued the MSCI Global Capital Markets Index and the Portfolio will use
the Dow Jones Moderately Conservative Portfolio Index in future reports to
policyholders as the Portfolio's primary benchmark.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
3
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
METLIFE DEFENSIVE STRATEGY PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,037.50 $0.45
Hypothetical (5% return before expenses) 1,000.00 1,024.35 0.45
- ------------------------------------------ ------------- ------------- --------------
Class B
Actual $1,000.00 $1,036.60 $1.77
Hypothetical (5% return before expenses) 1,000.00 1,023.06 1.76
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.09% and
0.35% for the Class A and Class B, respectively, multiplied by the average
account value over the period, multiplied by 181/365 (to reflect the one-half
year period).
4
MET INVESTORS SERIES TRUST
METLIFE DEFENSIVE STRATEGY PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
-------------------------------------------------------------------
INVESTMENT COMPANY SECURITIES - 100.0%
BlackRock High Yield Portfolio
(Class A).............................. 2,418,657 $ 20,026,479
Davis Venture Value Portfolio
(Class A)*............................. 365,407 13,647,947
Goldman Sachs Mid-Cap Value Portfolio
(Class A).............................. 926,185 13,355,588
Harris Oakmark International Portfolio
(Class A).............................. 705,916 13,292,403
Jennison Growth Portfolio (Class A)*..... 1,061,118 13,571,699
Lazard Mid-Cap Portfolio (Class A)....... 983,349 13,806,217
Legg Mason Value Equity Portfolio
(Class A).............................. 2,300,429 26,961,023
Loomis Sayles Global Markets Portfolio
(Class A).............................. 2,443,047 27,801,874
Lord Abbett Bond Debenture Portfolio
(Class A).............................. 5,461,368 67,174,825
Lord Abbett Growth and Income Portfolio
(Class A).............................. 1,158,204 33,993,301
MFS(R) Research International Portfolio
(Class A).............................. 1,967,651 27,625,813
Neuberger Berman Real Estate Portfolio
(Class A).............................. 797,134 12,172,241
Oppenheimer Capital Appreciation
Portfolio (Class A).................... 1,452,825 13,787,312
PIMCO Inflation Protected Bond Portfolio
(Class A).............................. 6,639,260 66,458,995
PIMCO Total Return Portfolio (Class A)... 13,995,095 159,823,989
T. Rowe Price Mid-Cap Growth Portfolio
(Class A).............................. 1,458,159 14,012,907
Third Avenue Small Cap Value Portfolio
(Class A).............................. 1,567,785 27,154,038
Van Kampen Comstock Portfolio
(Class A).............................. 2,743,766 33,556,253
Western Asset Management U.S.
Government Portfolio (Class A)*........ 6,118,206 73,663,197
-------------
Total Investment Company Securities
(Cost $657,163,211) 671,886,101
-------------
TOTAL INVESTMENTS - 100.0%
(Cost $657,163,211) 671,886,101
-------------
Other Assets and Liabilities (net) - 0.0% (244,096)
-------------
TOTAL NET ASSETS - 100.0% $ 671,642,005
=============
PORTFOLIO FOOTNOTES:
* A Portfolio of Metropolitan Series Fund, Inc.
See notes to financial statements
5
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
METLIFE DEFENSIVE STRATEGY PORTFOLIO
ASSETS
Investments, at value (Note 2)* $671,886,101
Receivable for Trust shares sold 3,244,460
Receivable from investment manager (Note 3) 2,666
------------
Total assets 675,133,227
------------
LIABILITIES
Payables for:
Investments purchased 3,019,834
Trust shares redeemed 224,626
Distribution and services fees--Class B 137,312
Investment advisory fee payable (Note 3) 51,468
Administration fee payable 1,901
Custodian and accounting fees payable 29,118
Accrued expenses 26,963
------------
Total liabilities 3,491,222
------------
NET ASSETS $671,642,005
============
NET ASSETS REPRESENTED BY:
Paid in surplus $628,401,825
Accumulated net realized gain 15,649,639
Unrealized appreciation on investments 14,722,890
Undistributed net investment income 12,867,651
------------
Total $671,642,005
============
NET ASSETS
Class A $ 11,996
============
Class B 671,630,009
============
CAPITAL SHARES OUTSTANDING
Class A 1,089
============
Class B 61,013,785
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 11.02
============
Class B 11.01
============
- -------------------------------------------------------------------------------------
* Investments at cost $657,163,211
See notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
METLIFE DEFENSIVE STRATEGY PORTFOLIO
INVESTMENT INCOME:
Dividends from underlying Portfolios $ 13,920,583
------------
Total investment income 13,920,583
------------
EXPENSES:
Investment advisory fee (Note 3) 287,552
Administration fees 11,901
Custody and accounting fees 5,384
Distribution fee--Class B 751,871
Transfer agent fees 3,299
Audit 7,403
Legal 7,691
Trustee fees and expenses 6,767
Insurance 313
Other 1,920
------------
Total expenses 1,084,101
Less fees waived and expenses reimbursed by the Manager (31,173)
------------
Net expenses 1,052,928
------------
Net investment income 12,867,655
------------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
CAPITAL GAIN DISTRIBUTIONS FROM UNDERLYING PORTFOLIOS:
Net realized gain on:
Investments 5,084,512
Capital gain distributions from underlying Portfolios 13,667,608
------------
Net realized gain on investments and capital gain distributions
from underlying Portfolios 18,752,120
------------
Net change in unrealized depreciation on:
Investments (10,425,100)
------------
Net change in unrealized depreciation on investments (10,425,100)
------------
Net realized and change in unrealized gain on investments 8,327,020
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 21,194,675
============
See notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
METLIFE DEFENSIVE STRATEGY PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
------------- -------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 12,867,655 $ 12,711,991
Net realized gain on investments and capital gain distributions
from underlying Portfolios 18,752,120 12,100,809
Net change in unrealized appreciation (depreciation) on investments (10,425,100) 16,525,498
------------- -------------
Net increase in net assets resulting from operations 21,194,675 41,338,298
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (260) (20)
Class B (12,711,729) (31,278)
From net realized gains
Class A (268) (84)
Class B (14,262,173) (3,069,727)
------------- -------------
Net decrease in net assets resulting from distributions (26,974,430) (3,101,109)
------------- -------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class A -- --
Class B 237,233,881 262,994,999
Net asset value of shares issued through dividend reinvestment
Class A 528 104
Class B 26,973,902 3,101,005
Cost of shares repurchased
Class A -- --
Class B (128,302,371) (118,879,780)
------------- -------------
Net increase in net assets from capital share transactions 135,905,940 147,216,328
------------- -------------
TOTAL INCREASE IN NET ASSETS 130,126,185 185,453,517
Net assets at beginning of period 541,515,820 356,062,303
------------- -------------
Net assets at end of period $ 671,642,005 $ 541,515,820
============= =============
Net assets at end of period includes undistributed net investment
income $ 12,867,651 $ 12,711,985
============= =============
See notes to financial statements
8
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS A
METLIFE DEFENSIVE STRATEGY PORTFOLIO --------------------------------
FOR THE PERIOD FOR THE YEARS ENDED
ENDED DECEMBER 31,
JUNE 30, 2007 -----------------
(UNAUDITED) 2006 2005(B)
-------------- ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $11.10 $10.29 $ 9.82
------ ------ -----
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................. 0.23 (a) 0.36 (a) 0.17 (a)
Net Realized/Unrealized Gain on Investments........................... 0.20 0.56 0.43
------ ------ ----
Total from Investment Operations...................................... 0.43 0.91 0.60
------ ------ --
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. (0.25) (0.02) (0.11)
Distributions from Net Realized Capital Gains......................... (0.26) (0.08) (0.02)
------ ------ -----
Total Distributions................................................... (0.51) (0.10) (0.13)
------ ------ -----
NET ASSET VALUE, END OF PERIOD........................................ $11.02 $11.10 $10.29
====== ====== ======
TOTAL RETURN 3.75% 9.01% 6.07%
Ratio of Expenses to Average Net Assets............................... 0.09%* 0.11% 0.12%*
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 0.10%* 0.12% 0.12%*
Ratio of Net Investment Income to Average Net Assets.................. 4.22%* 3.44% 2.53%*
Portfolio Turnover Rate............................................... 25.3% 35.3% 36.1%
Net Assets, End of Period (in millions)............................... $--++ $--++ $--++
CLASS B
-------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 ----------------------------
(UNAUDITED) 2006 2005 2004(C)
-------------- ------ --- -------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $11.09 $10.29 $ 9.95 $10.00
------ ------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................. 0.24 (a) 0.29 (a) 0.19 (a) 0.42 (a)
Net Realized/Unrealized Gain (Loss) on Investments.................... 0.17 0.59 0.26 (0.29)
------ ------ ------ -----
Total from Investment Operations...................................... 0.41 0.88 0.45 0.13
------ ------ ------ --
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. (0.23) (0.00)+ (0.09) (0.18)
Distributions from Net Realized Capital Gains......................... (0.26) (0.08) (0.02) --
------ ------ ------ -
Total Distributions................................................... (0.49) (0.08) (0.11) (0.18)
------ ------ ------ -----
NET ASSET VALUE, END OF PERIOD........................................ $11.01 $11.09 $10.29 $ 9.95
====== ====== ====== =====
TOTAL RETURN 3.66% 8.63% 4.48% 1.34%
Ratio of Expenses to Average Net Assets............................... 0.35%* 0.35% 0.35% 0.35%*
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 0.36%* 0.39% 0.40% 0.71%*
Ratio of Net Investment Income to Average Net Assets.................. 4.28%* 2.79% 1.90% 26.11%*
Portfolio Turnover Rate............................................... 25.3% 35.3% 36.1% 0.0%(d)
Net Assets, End of Period (in millions)............................... $671.6 $541.5 $356.1 $129.8
* Annualized
+ Rounds to less than $0.005 per share.
++ Net Assets less than 1/10 of $1 Million.
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--05/02/2005.
(c) Commencement of operations--11/04/2004.
(d) For the period ended 12/31/2004, the portfolio turnover calculation is
zero, due to no sales activity.
See notes to financial statements
9
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is MetLife Defensive Strategy Portfolio,
which is non-diversified. Shares in the Trust are not offered directly to the
general public and are currently available only to separate accounts
established by certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A and B Shares are
offered by the Portfolio. Class E Shares are not currently offered by the
Portfolio included in this report. Shares of each Class of the Portfolio
represent an equal pro rata interest in the Portfolio and generally give the
shareholder the same voting, dividend, liquidation, and other rights.
Investment income, realized and unrealized capital gains and losses, the common
expenses of the Portfolio and certain Portfolio-level expense reductions, if
any, are allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the Portfolio. Each class of
shares differs in its respective distribution expenses and certain other
class-specific expense reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date.
10
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The value of the security so purchased is subject to market fluctuations during
this period. The Portfolio segregates assets having an aggregate value at least
equal to the amount of the when issued or delayed delivery purchase commitments
until payment is made.
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into a management
agreement for investment advisory services in connection with the investment
management of the Portfolio.
Under the terms of the Portfolio's management agreement, the Portfolio pays the
Manager a monthly fee based upon annual rates applied to the Portfolio's
average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- --------------------------
MetLife Defensive Strategy Portfolio $287,552 0.10% First $500 Million
0.075% $500 Million to $1 Billion
0.05% Over $1 Billion
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Expenses Deferred In
- - ---------------------------------
2004 2005 2006 2007
- - Maximum Expense Ratio ------- -------- -------- -------
under current Expense Subject to repayment
Limitation Agreement until December 31,
- - --------------------- ---------------------------------
Portfolio Class A Class B Class E 2009 2010 2011 2012
- --------- ------- ------- ------- ------- -------- -------- -------
MetLife Defensive Strategy Portfolio 0.10% 0.35% 0.25%* $32,988 $130,573 $170,658 $31,173
* Class not offered during the period.
11
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
The amount waived and expenses reimbursed for the period ended June 30, 2007 is
shown as investment advisory fee waiver in the Statement of Operations of the
Portfolio.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued
Through Net Increase
Beginning Shares Dividend Shares in Shares Ending
Shares Sold Reinvestment Repurchased Outstanding Shares
- - ---------- ---------- ------------- ----------- ------------ ----------
MetLife Defensive Strategy Portfolio
Class A
06/30/2007 1,041 -- 48 -- 48 1,089
12/31/2006 1,031 -- 10 -- 10 1,041
Class B
06/30/2007 48,829,008 21,265,592 2,445,503 (11,526,318) 12,184,777 61,013,785
12/31/2006 34,615,629 25,125,599 296,747 (11,208,967) 14,213,379 48,829,008
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
- - ------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
- - --------------- -------------- --------------- --------------
MetLife Defensive Strategy Portfolio $-- $289,467,521 $-- $153,980,300
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
- --------- ------------ ------------ -------------- --------------
MetLife Defensive Strategy Portfolio $657,163,211 $19,242,375 $(4,519,485) $14,722,890
6. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
- - ------------------- ---------------------- ---------------------
2006 2005 2006 2005 2006 2005
- - -------- ---------- ---------- ------ ---------- ----------
MetLife Defensive Strategy Portfolio $631,004 $3,629,504 $2,470,105 $-- $3,101,109 $3,629,504
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
6. DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
- - ------------- ------------- ------------ ------------------ -----------
MetLife Defensive Strategy Portfolio $13,196,308 $13,778,078 $22,045,549 $-- $49,019,935
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
7. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
8. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
9. OTHER MATTERS
The Portfolio does not invest in the Underlying Portfolios for the purpose of
exercising management or control; however, investments by the Portfolio within
its principal investment strategies may represent a significant portion of the
Underlying Portfolio's net assets. Transactions in the Underlying Portfolios
during the period ended June 30, 2007 in which the Portfolio had ownership of
at least 5% of the outstanding voting securities at the end of the period are
as follows:
Number of shares Number of shares
held at December 31, Shares purchased Shares sold during the held at June 30,
Security Description 2006 during the period period 2007
- -------------------- -------------------- ----------------- ---------------------- ----------------
BlackRock High Yield Portfolio - Class A -- 2,504,188 (85,531) 2,418,657
PIMCO Total Return Portfolio - Class A 8,564,117 6,631,204 (1,200,226) 13,995,095
Western Asset Management U.S. Government
Portfolio - Class A 6,501,906 2,401,712 (2,785,412) 6,118,206
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
9. OTHER MATTERS - CONTINUED
Net Realized Gain
(Loss) on Capital
Net Realized Gain Gain Distributions Income earned from
(Loss) on Investments from Affiliates Affiliates during the
Security Description during the period during the period period Ending Value
- -------------------- --------------------- ------------------ --------------------- ------------
BlackRock High Yield Portfolio - Class A $ (1,527) $ -- $ -- $ 20,026,479
PIMCO Total Return Portfolio - Class A 316,856 -- 4,241,629 159,823,989
Western Asset Management U.S. Government
Portfolio - Class A 162,983 -- 2,552,598 73,663,197
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
14
MET INVESTORS SERIES TRUST
MetLife Growth
Strategy Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
METLIFE GROWTH STRATEGY PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY MET INVESTORS ADVISORY, LLC
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
The MetLife Growth Strategy Portfolio performance for the six months ended
June 30, 2007 was a gain of 6.82%. This compares to a 6.53% return for the MSCI
Global Capital Markets Index and a 7.26% return for the blended benchmark (the
Growth Blended Benchmark is comprised of the following mix: 68% Wilshire 5000,
10% Lehman Brothers Universal, 17% MSCI EAFE, and 5% CG 90-Day T-Bill).
The U.S. equity markets continued the positive momentum from the beginning of
the year as strong gains culminated in early June with records highs for the
Dow and S&P 500 Indexes. The primary driver of the rally was strong corporate
profits resulting from strong overseas demand and a weaker dollar. Stock
markets moved higher both in the U.S. and abroad despite signs of a slowing
economy in the U.S. and ongoing concerns about inflation. Other concerns also
included credit-related problems such as the ongoing subprime lending issue and
some high-profile losses in the hedge fund industry. Despite the concerns
mentioned above investors pointed towards strong economic growth outside the
U.S. and a boom in merger activity (a 90% increase over the second quarter of
2006) as positive signs for the global economy overall. The bond market
experienced rising yields as investors sought slightly higher premiums on high
yield and mortgage related debt securities. The Federal Reserve stayed on hold,
indicating a reluctance to cut U.S. rates due to concerns about inflation.
During the period strong performance in the small and mid cap sectors due to
favorable market conditions contributed to performance specifically the Met/AIM
Small Cap Growth Portfolio and the T. Rowe Price Mid-Cap Growth Portfolio.
Another notable positive was our position in the Third Avenue Small Cap Value
Portfolio whose out-performance was driven by appreciation from various
holdings within the oil, gas and energy sectors.
Also contributing to overall performance were the Davis Venture Value and the
Van Kampen Comstock Portfolios. Stock selection within the financials sector
and a modest overweight to the energy sector drove performance for the Davis
Venture Value Portfolio while stock picks within the technology sector
increased returns for the Van Kampen Comstock Portfolio. On the international
side, the MFS Research International Portfolio added to performance due to
continued strength in foreign markets. The MFS(R) Emerging Markets Equity
Portfolio also contributed to absolute returns as emerging-markets stocks
continued to rally.
During the period our portfolio allocations to the international debt,
convertibles and high yield sectors of the bond market were moderate
contributors to performance. The Loomis Sayles Global Markets Portfolio which
combines fixed income and equity, or equity-like, securities, was a contributor
to returns.
Equity performance was adversely impacted by exposure to the healthcare sector
for the Legg Mason Partners Aggressive Growth Portfolio. A general
underweighting in energy stocks hurt performance for the Legg Mason Value
Equity Portfolio and the Lord Abbett Growth and Income Portfolio. Finally, the
Jennison Growth Portfolio's stock selection in the consumer discretionary
sector detracted from performance. On the fixed income side, the PIMCO Total
Return Portfolio was also a detractor due to above-index duration as interest
rates rose over the period.
A correction in the real estate securities market occurred after a significant
period of out-performance. The Neuberger Berman Real Estate Portfolio, as a
result, was the largest detractor from absolute performance during the period.
The allocation to real estate has provided significant returns over the past
few years and the asset class continues to offer diversification benefits for
the Portfolio.
The Portfolio allocations were adjusted in early May 2007. Specifically, we
further diversified the fixed income component and rebalanced the growth and
value sectors of the large cap equity component of the Portfolio.
MET INVESTORS ADVISORY, LLC
The views expressed above are those of the investment advisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
--------------------------------------------------------------------
Van Kampen Comstock Portfolio (Class A) 11.86%
--------------------------------------------------------------------
Davis Venture Value Portfolio (Class A) 11.03%
--------------------------------------------------------------------
Lord Abbett Growth and Income Portfolio (Class A) 11.00%
--------------------------------------------------------------------
Third Avenue Small Cap Value Portfolio (Class A) 7.98%
--------------------------------------------------------------------
Legg Mason Value Equity Portfolio (Class A) 6.93%
--------------------------------------------------------------------
Legg Mason Partners Aggressive Growth Portfolio (Class A) 5.97%
--------------------------------------------------------------------
Harris Oakmark Focused Value Portfolio (Class A) 5.11%
--------------------------------------------------------------------
Harris Oakmark International Portfolio (Class A) 4.90%
--------------------------------------------------------------------
Loomis Sayles Global Markets Portfolio (Class A) 4.09%
--------------------------------------------------------------------
MFS(R) Research International Portfolio (Class A) 4.07%
--------------------------------------------------------------------
MFS(R) Emerging Markets Portfolio (Class A) 3.12%
--------------------------------------------------------------------
Met/AIM Small Growth Portfolio (Class A) 3.05%
--------------------------------------------------------------------
PIMCO Total Return Portfolio (Class A) 2.94%
--------------------------------------------------------------------
RCM Technology Portfolio (Class A) 2.12%
--------------------------------------------------------------------
Turner Mid-Cap Growth Portfolio (Class A) 2.06%
--------------------------------------------------------------------
T. Rowe Price Mid-Cap Growth Portfolio (Class A) 2.06%
--------------------------------------------------------------------
Oppenheimer Capital Appreciation Portfolio (Class A) 2.03%
--------------------------------------------------------------------
Jennison Growth Portfolio (Class A) 2.00%
--------------------------------------------------------------------
Lord Abbett Bond Debenture Portfolio (Class A) 1.98%
--------------------------------------------------------------------
Goldman Sachs Mid-Cap Value Portfolio (Class A) 1.96%
--------------------------------------------------------------------
PIMCO Inflation Protected Bond Portfolio (Class A) 1.95%
--------------------------------------------------------------------
Neuberger Berman Real Estate Portfolio (Class A) 1.79%
--------------------------------------------------------------------
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
METLIFE GROWTH STRATEGY PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY MET INVESTORS ADVISORY, LLC
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
METLIFE GROWTH STRATEGY PORTFOLIO VS. MSCI GLOBAL CAPITAL MARKETS INDEX/SM1/
AND GROWTH BLENDED BENCHMARK/2/
Growth Based on $10,000+
[CHART]
MetLife Growth MSCI Global Growth
Strategy Portfolio Capital Markets Index/SM/ Blended Benchmark
------------------ ------------------------- -----------------
11/3/2004 $10,000 $10,000 $10,000
12/31/2004 10,630 10,701 10,643
12/31/2005 11,600 11,136 11,404
12/31/2006 13,176 12,811 13,222
6/30/2007 14,075 13,648 14,181
----------------------------------------------------------------------
Average Annual Return/3/
(for the period ended 6/30/07)
----------------------------------------------------------------------
1 Year Since Inception/4/
----------------------------------------------------------------------
MetLife Growth Strategy
Portfolio--Class A 17.97% 16.07%
- -- Class B 17.70% 13.73%
----------------------------------------------------------------------
- -- MSCI Global Capital Markets Index/SM1/ 17.17% 12.44%
----------------------------------------------------------------------
- - - Growth Blended Benchmark/2/ 19.41% 14.00%
----------------------------------------------------------------------
+The chart reflects the performance of Class B shares of the Portfolio. The
performance of Class B shares will differ from that of the other Classes
because of the difference in expenses paid by policyholders investing in the
different share classes.
/1/The MSCI Global Capital Markets Index/SM/ is an unmanaged index which
measures the performance of the core capital markets asset classes comprising
global equities and fixed income. It is a market capitalization weighted
composite of the MSCI All Country World Index/SM/ and the MSCI Global Total
Bond Index/SM/. The MSCI All Country World Index/SM/ is an unmanaged free
float-adjusted market capitalization index which measure equity market
performance in the global developed and emerging markets. The MSCI All Country
World Index includes 49 country indices. The MSCI Global Total Bond Index is an
unmanaged index which measures the capitalization weighted performance of
sovereign, investment grade credit and high yield bond markets with appropriate
adjustments for investability and to eliminate double counting. The MSCI Global
Total Bond Index includes the World Sovereign Debt Index, USD Total Bond Index,
Euro Dollar Credit Index, Euro Sterling Credit Index, Euro Credit Index,
Emerging Market Local Sovereign Index and High Yield Sovereign and Corporate
Indices. The Index does not include fees or expenses and is not available for
direct investment.
/2/The Growth Blended Benchmark is comprised of 68% Wilshire 5000 Equity Index,
10% Lehman Brothers Universal Index, 17% Morgan Stanley Capital International
Europe Australasia and Far East Index(the MSCI EAFE(R) Index) and 5% Citigroup
3-Month Treasury Bill Index.
The Wilshire 5000 Equity Index is an unmanaged index which measures the
performance of all U.S. headquartered equity securities with readily available
price data. The market capitalized weighted index is compromised of
approximately 82% New York Stock Exchange, 2% American Stock Exchange and 16%
OTC (1995). The Index was created in 1974 and backdated to 1971; with a base
index of December 1980 (base index equals 1,044.596). Dividends are reinvested
on the "ex" dividend date and the rebalancing of share weights is done on a
monthly basis. No attempt has been made to adjust the market capitalization of
the Index to take into account cross holding between corporations. The Index
does not include fees or expenses and is not available for direct investment.
The Lehman Brothers Universal Index represents the union of the U.S. Aggregate
Index, the U.S. High-Yield Corporate Index, the 144A Index, the Eurodollar
Index, the Emerging Markets Index, the non-EIRSA portion of the Commercial
Mortgage Backed Securities Index and the Commercial Mortgage Backed Securities
High Yield Index. Municipal debt, private placements, and non-dollar
denominated issues are excluded from the Universal Index. The only constituent
of the Index that includes floating-rate debt is the Emerging Markets Index.
Bonds and securities must be fixed rate, although it can carry a coupon that
steps up or changes according to a predetermined schedule; must be
dollar-denominated and including bonds with maturities up to ten years and
long-term indices composed of bonds with maturities longer than ten years. All
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
METLIFE GROWTH STRATEGY PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY MET INVESTORS ADVISORY, LLC
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
returns are market value weighted inclusive of accrued interest. Yield is
defined as the yield to worst, the lesser of the yield to maturity and yield to
call. Market values are expressed in millions of dollars. The Index does not
include fees or expenses and is not available for direct investment.
The MSCI EAFE(R) Index is an unmanaged free float-adjusted market
capitalization index that is designed to measure developed market equity
performance, excluding the US & Canada. The Index does not include fees or
expenses and is not available for direct investment.
The Citigroup 3-Month Treasury Bill Index--equal dollar amounts of three-month
Treasury bills are purchased at the beginning of each of three consecutive
months. As each bill matures, all proceeds are rolled over or reinvested in a
new three-month bill. The income used to calculate the monthly return is
derived by subtracting the original amount invested from the maturity value.
The Index does not include fees or expenses and is not available for direct
investment.
/3/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/4/Inception of the Class B shares is 11/4/04. Inception of the Class A shares
is 5/2/05. Index returns are based on an inception date of 10/31/04.
Effective July 1, 2007, Morgan Stanley Capital International, Inc. (MSCI)
discontinued the MSCI Global Capital Markets Index and the Portfolio will use
the Dow Jones Moderately Aggressive Portfolio Index in future reports to
policyholders as the Portfolio's primary benchmark.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
3
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
METLIFE GROWTH STRATEGY PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,069.90 $0.31
Hypothetical (5% return before expenses) 1,000.00 1,024.50 0.30
- ------------------------------------------ ------------- ------------- --------------
Class B
Actual $1,000.00 $1,068.20 $1.59
Hypothetical (5% return before expenses) 1,000.00 1,023.26 1.56
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.06% and
0.31% for the Class A and Class B, respectively, multiplied by the average
account value over the period, multiplied by 181/365 (to reflect the one-half
year period).
4
MET INVESTORS SERIES TRUST
METLIFE GROWTH STRATEGY PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
---------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
---------------------------------------------------------------------
INVESTMENT COMPANY SECURITIES - 100.0%
Davis Venture Value Portfolio (Class A)*. 20,782,548 $ 776,228,152
Goldman Sachs Mid-Cap Value Portfolio
(Class A).............................. 9,587,498 138,251,722
Harris Oakmark Focused Value Portfolio
(Class A)*............................. 1,435,256 359,775,687
Harris Oakmark International Portfolio
(Class A).............................. 18,302,593 344,637,826
Jennison Growth Portfolio (Class A)*..... 10,983,695 140,481,456
Legg Mason Partners Aggressive Growth
Portfolio (Class A).................... 54,063,785 420,075,612
Legg Mason Value Equity Portfolio
(Class A).............................. 41,608,060 487,646,458
Loomis Sayles Global Markets Portfolio
(Class A).............................. 25,286,264 287,757,681
Lord Abbett Bond Debenture Portfolio
(Class A).............................. 11,298,914 138,976,648
Lord Abbett Growth and Income Portfolio
(Class A).............................. 26,379,849 774,248,582
Met/AIM Small Cap Growth Portfolio
(Class A).............................. 14,294,768 214,707,418
MFS(R) Emerging Markets Equity Portfolio
(Class A).............................. 18,192,214 219,216,176
MFS(R) Research International Portfolio
(Class A).............................. 20,393,282 286,321,675
Neuberger Berman Real Estate Portfolio
(Class A).............................. 8,253,424 126,029,790
Oppenheimer Capital Appreciation
Portfolio (Class A).................... 15,027,812 142,613,938
PIMCO Inflation Protected Bond Portfolio
(Class A).............................. 13,719,629 137,333,482
PIMCO Total Return Portfolio (Class A)... 18,103,832 206,745,756
RCM Technology Portfolio (Class A)....... 25,953,010 148,970,276
T. Rowe Price Mid-Cap Growth Portfolio
(Class A).............................. 15,079,424 144,913,269
Third Avenue Small Cap Value Portfolio
(Class A).............................. 32,400,963 561,184,685
Turner Mid-Cap Growth Portfolio
(Class A).............................. 10,351,904 145,133,693
Van Kampen Comstock Portfolio
(Class A).............................. 68,269,697 834,938,399
---------------
Total Investment Company Securities
(Cost $6,478,477,790) 7,036,188,381
---------------
TOTAL INVESTMENTS - 100.0%
(Cost $6,478,477,790) 7,036,188,381
---------------
Other Assets and Liabilities (net) - 0.0% (1,788,906)
---------------
TOTAL NET ASSETS - 100.0% $ 7,034,399,475
===============
PORTFOLIO FOOTNOTES:
* A Portfolio of Metropolitan Series Fund, Inc.
See notes to financial statements
5
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
METLIFE GROWTH STRATEGY PORTFOLIO
ASSETS
Investments, at value (Note 2)* $7,036,188,381
Receivable for Trust shares sold 13,529,735
--------------
Total assets 7,049,718,116
--------------
LIABILITIES
Due to bank 2
Payables for:
Investments purchased 11,279,204
Trust shares redeemed 2,250,531
Distribution and services fees--Class B 1,421,193
Investment advisory fee payable (Note 3) 315,195
Administration fee payable 1,901
Custodian and accounting fees payable 26,757
Accrued expenses 23,858
--------------
Total liabilities 15,318,641
--------------
NET ASSETS $7,034,399,475
==============
NET ASSETS REPRESENTED BY:
Paid in surplus $6,138,008,635
Accumulated net realized gain 292,100,067
Unrealized appreciation on investments 557,710,591
Undistributed net investment income 46,580,182
--------------
Total $7,034,399,475
==============
NET ASSETS
Class A $ 3,268,597
==============
Class B 7,031,130,878
==============
CAPITAL SHARES OUTSTANDING
Class A 248,874
==============
Class B 536,178,867
==============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 13.13
==============
Class B 13.11
==============
- ---------------------------------------------------------------------------------------
* Investments at cost $6,478,477,790
See notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
METLIFE GROWTH STRATEGY PORTFOLIO
INVESTMENT INCOME:
Dividends from underlying Portfolios $ 55,995,756
------------
Total investment income 55,995,756
------------
EXPENSES:
Investment advisory fee (Note 3) 1,717,251
Administration fees 11,901
Custody and accounting fees 4,717
Distribution fee--Class B 7,652,858
Transfer agent fees 3,649
Audit 7,415
Legal 7,452
Trustee fees and expenses 6,767
Insurance 1,698
Other 1,866
------------
Total expenses 9,415,574
------------
Net investment income 46,580,182
------------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS AND CAPITAL GAIN DISTRIBUTIONS FROM UNDERLYING
PORTFOLIOS:
Net realized gain on:
Investments 31,443,156
Capital gain distributions from underlying Portfolios 265,068,145
------------
Net realized gain on investments and capital gain distributions from underlying Portfolios 296,511,301
------------
Net change in unrealized appreciation on:
Investments 64,811,263
------------
Net change in unrealized appreciation on investments 64,811,263
------------
Net realized and change in unrealized gain on investments 361,322,564
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $407,902,746
============
See notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
METLIFE GROWTH STRATEGY PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 46,580,182 $ 77,242,031
Net realized gain on investments and capital gain distributions from underlying Portfolios 296,511,301 214,501,402
Net change in unrealized appreciation on investments 64,811,263 277,263,022
-------------- --------------
Net increase in net assets resulting from operations 407,902,746 569,006,455
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (41,652) (3,101)
Class B (77,200,437) (325,651)
From net realized gains
Class A (103,576) (11,794)
Class B (218,474,004) (24,135,811)
-------------- --------------
Net decrease in net assets resulting from distributions (295,819,669) (24,476,357)
-------------- --------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class A 647,429 1,608,897
Class B 1,311,217,393 1,759,061,264
Net asset value of shares issued through dividend reinvestment
Class A 145,228 14,895
Class B 295,674,441 24,461,462
Cost of shares repurchased
Class A (178,570) (472,547)
Class B (198,063,730) (23,772,537)
-------------- --------------
Net increase in net assets from capital share transactions 1,409,442,191 1,760,901,434
-------------- --------------
TOTAL INCREASE IN NET ASSETS 1,521,525,268 2,305,431,532
Net assets at beginning of period 5,512,874,207 3,207,442,675
-------------- --------------
Net assets at end of period $7,034,399,475 $5,512,874,207
============== ==============
Net assets at end of period includes undistributed net investment income $ 46,580,182 $ 77,242,089
============== ==============
See notes to financial statements
8
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS A
METLIFE GROWTH STRATEGY PORTFOLIO --------------------------------
FOR THE PERIOD FOR THE YEARS ENDED
ENDED DECEMBER 31,
JUNE 30, 2007 -----------------
(UNAUDITED) 2006 2005(B)
-------------- ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD.................................... $12.89 $11.39 $10.19
------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................... 0.12 (a) 0.26 (a) 0.90 (a)
Net Realized/Unrealized Gain on Investments............................. 0.77 1.33 0.44
------ ------ ------
Total from Investment Operations........................................ 0.89 1.59 1.34
------ ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................... (0.19) (0.02) (0.12)
Distributions from Net Realized Capital Gains........................... (0.46) (0.07) (0.02)
------ ------ ------
Total Distributions..................................................... (0.65) (0.09) (0.14)
------ ------ ------
NET ASSET VALUE, END OF PERIOD.......................................... $13.13 $12.89 $11.39
====== ====== ======
TOTAL RETURN 6.99% 14.04% 13.20%
Ratio of Expenses to Average Net Assets................................. 0.06%* 0.08% 0.04%*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates 0.06%* 0.08%(e) 0.04%*
Ratio of Net Investment Income to Average Net Assets.................... 1.89%* 2.19% 11.87%*
Portfolio Turnover Rate................................................. 7.5% 19.8% 15.1%
Net Assets, End of Period (in millions)................................. $3.3 $2.6 $1.2
CLASS B
--------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 ----------------------------------
(UNAUDITED) 2006 2005 2004(C)
-------------- -------- -------- --------
NET ASSET VALUE, BEGINNING OF PERIOD.................................... $ 12.87 $ 11.40 $ 10.56 $ 10.00
-------- -------- -------- --------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................... 0.10 (a) 0.22 (a) 0.22 (a) 0.19 (a)
Net Realized/Unrealized Gain on Investments............................. 0.76 1.32 0.74 0.44
-------- -------- -------- --------
Total from Investment Operations........................................ 0.86 1.54 0.96 0.63
-------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................... (0.16) (0.00) + (0.10) (0.07)
Distributions from Net Realized Capital Gains........................... (0.46) (0.07) (0.02) --
-------- -------- -------- --------
Total Distributions..................................................... (0.62) (0.07) (0.12) (0.07)
-------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD.......................................... $ 13.11 $ 12.87 $ 11.40 $ 10.56
======== ======== ======== ========
TOTAL RETURN 6.82% 13.59% 9.12% 6.30%
Ratio of Expenses to Average Net Assets................................. 0.31%* 0.33% 0.31% 0.35%*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates 0.31%* 0.33%(e) 0.31% 0.39%*
Ratio of Net Investment Income to Average Net Assets.................... 1.52%* 1.81% 2.03% 11.59%*
Portfolio Turnover Rate................................................. 7.5% 19.8% 15.1% 0.0%(d)
Net Assets, End of Period (in millions)................................. $7,031.1 $5,510.3 $3,206.2 $1,379.4
* Annualized
+ Rounds to less than $0.005 per share
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--05/02/2005.
(c) Commencement of operations--11/04/2004.
(d) For the period ended 12/31/2004, the portfolio turnover calculation is
zero, due to no sales activity.
(e) Excludes the effect of Deferred Expense Reimbursement--See Note 3 of
financial statements.
See notes to financial statements
9
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is MetLife Growth Strategy Portfolio, which
is non-diversified. Shares in the Trust are not offered directly to the general
public and are currently available only to separate accounts established by
certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A and B Shares are
offered by the Portfolio. Class E Shares are not currently offered by the
Portfolio included in this report. Shares of each Class of the Portfolio
represent an equal pro rata interest in the Portfolio and generally give the
shareholder the same voting, dividend, liquidation, and other rights.
Investment income, realized and unrealized capital gains and losses, the common
expenses of the Portfolio and certain Portfolio-level expense reductions, if
any, are allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the Portfolio. Each class of
shares differs in its respective distribution expenses and certain other
class-specific expense reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date.
10
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The value of the security so purchased is subject to market fluctuations during
this period. The Portfolio segregates assets having an aggregate value at least
equal to the amount of the when issued or delayed delivery purchase commitments
until payment is made.
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into a management
agreement for investment advisory services in connection with the investment
management of the Portfolio.
Under the terms of the Portfolio's management agreement, the Portfolio pays the
Manager a monthly fee based upon annual rates applied to the Portfolio's
average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- --------------------------
MetLife Growth Strategy Portfolio $1,717,251 0.10% First $500 Million
0.075% $500 Million to $1 Billion
0.05% Over $1 Billion
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Maximum Expense Ratio
under current Expense
Limitation Agreement
- ----------------------
Portfolio Class A Class B Class E
--------- ------- ------- -------
MetLife Growth Strategy Portfolio 0.10% 0.35% 0.25%*
* Class not offered during the period.
11
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued
Through Net Increase
Beginning Shares Dividend Shares in Shares Ending
Shares Sold Reinvestment Repurchased Outstanding Shares
- - ----------- ----------- ------------- ----------- ------------ -----------
MetLife Growth Strategy Portfolio
Class A
06/30/2007 202,259 49,116 11,249 (13,750) 46,615 248,874
12/31/2006 105,896 134,827 1,235 (39,699) 96,363 202,259
Class B
06/30/2007 428,269,320 100,093,483 22,938,281 (15,122,217) 107,909,547 536,178,867
12/31/2006 281,356,823 146,888,669 2,028,314 (2,004,486) 146,912,497 428,269,320
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
MetLife Growth Strategy Portfolio $-- $1,890,206,976 $-- $464,629,750
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
- --------- -------------- ------------ -------------- --------------
MetLife Growth Strategy Portfolio $6,478,477,790 $572,624,437 $(14,913,846) $557,710,591
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
6. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
---------------------- ---------------------- -----------------------
2006 2005 2006 2005 2006 2005
---------- ----------- ----------- -------- ----------- -----------
MetLife Growth Strategy Portfolio $3,096,337 $33,556,016 $21,380,020 $932,296 $24,476,357 $34,488,312
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
------------- ------------- ------------ ------------------ ------------
MetLife Growth Strategy Portfolio $77,728,468 $218,090,718 $488,488,575 $-- $784,307,761
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
7. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
8. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
9. OTHER MATTERS
The Portfolio does not invest in the Underlying Portfolios for the purpose of
exercising management or control; however, investments by the Portfolio within
its principal investment strategies may represent a significant portion of the
Underlying Portfolio's net assets. Transactions in the Underlying Portfolios
during the period ended June 30, 2007 in which the portfolio had ownership of
at least 5% of the outstanding voting securities at the end of the period are
as follows:
Number of shares Number of shares
held at December 31, Shares purchased Shares sold during held at June 30,
Security Description 2006 during the period the period 2007
- -------------------- -------------------- ----------------- ------------------ ----------------
Davis Venture Value Portfolio - Class A 17,359,007 3,481,031 (57,490) 20,782,548
Goldman Sachs Mid-Cap Value Portfolio - Class A 7,648,585 2,289,815 (350,902) 9,587,498
Harris Oakmark Focused Value Portfolio - Class A 1,026,235 410,216 (1,195) 1,435,256
Harris Oakmark International Portfolio - Class A 14,758,066 4,303,157 (758,630) 18,302,593
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
9. OTHER MATTERS - CONTINUED
Number of shares
held at December 31, Shares purchased Shares sold during
Security Description 2006 during the period the period
- -------------------- -------------------- ----------------- ------------------
Jennison Growth Portfolio - Class A 21,526,640 4,311,961 (14,854,906)
Legg Mason Partners Aggressive Growth Portfolio - Class A 39,923,766 14,219,399 (79,380)
Legg Mason Value Equity Portfolio - Class A 29,929,082 11,860,275 (181,297)
Loomis Sayles Global Markets Portfolio - Class A 21,469,026 4,056,967 (239,729)
Lord Abbett Bond Debentures Portfolio - Class A 8,646,147 2,662,512 (9,745)
Lord Abbett Growth and Income Portfolio - Class A 18,697,973 7,704,226 (22,350)
Met/AIM Small Cap Growth Portfolio - Class A 12,290,696 2,456,169 (452,097)
MFS(R) Emerging Markets Equity Portfolio - Class A 16,680,256 2,946,321 (1,434,363)
MFS(R) Research International Portfolio - Class A 14,872,424 5,942,808 (421,950)
Neuberger Berman Real Estate Portfolio - Class A 6,085,515 2,743,045 (575,136)
Oppenheimer Capital Appreciation Portfolio - Class A 11,798,769 3,242,272 (13,229)
PIMCO Inflation Protected Bond Portfolio - Class A 25,906,124 6,768,245 (18,954,740)
PIMCO Total Return Portfolio - Class A -- 18,114,275 (10,443)
RCM Technology Portfolio - Class A 20,997,805 5,506,187 (550,982)
T. Rowe Price Mid-Cap Growth Portfolio - Class A 12,581,720 3,040,940 (543,236)
Third Avenue Small Cap Value Portfolio - Class A 25,230,710 7,215,928 (45,675)
Turner Mid-Cap Growth Portfolio - Class A 8,653,449 1,965,765 (267,310)
Van Kampen Comstock Portfolio - Class A 50,685,142 17,643,203 (58,648)
Number of shares
held at June 30,
Security Description 2007
- -------------------- ----------------
Jennison Growth Portfolio - Class A 10,983,695
Legg Mason Partners Aggressive Growth Portfolio - Class A 54,063,785
Legg Mason Value Equity Portfolio - Class A 41,608,060
Loomis Sayles Global Markets Portfolio - Class A 25,286,264
Lord Abbett Bond Debentures Portfolio - Class A 11,298,914
Lord Abbett Growth and Income Portfolio - Class A 26,379,849
Met/AIM Small Cap Growth Portfolio - Class A 14,294,768
MFS(R) Emerging Markets Equity Portfolio - Class A 18,192,214
MFS(R) Research International Portfolio - Class A 20,393,282
Neuberger Berman Real Estate Portfolio - Class A 8,253,424
Oppenheimer Capital Appreciation Portfolio - Class A 15,027,812
PIMCO Inflation Protected Bond Portfolio - Class A 13,719,629
PIMCO Total Return Portfolio - Class A 18,103,832
RCM Technology Portfolio - Class A 25,953,010
T. Rowe Price Mid-Cap Growth Portfolio - Class A 15,079,424
Third Avenue Small Cap Value Portfolio - Class A 32,400,963
Turner Mid-Cap Growth Portfolio - Class A 10,351,904
Van Kampen Comstock Portfolio - Class A 68,269,697
Net Realized Gain
(Loss) on Capital
Net Realized Gain Gain Distributions Income earned
(Loss) on Investments from Affiliates from Affiliate
Security Description during the period during the period during the period Ending Value
- -------------------- --------------------- ------------------ ----------------- ------------
Davis Venture Value Portfolio - Class A $ 516,630 $ -- $5,499,951 $776,228,152
Goldman Sachs Mid-Cap Value Portfolio - Class A 1,142,116 10,924,518 845,899 138,251,722
Harris Oakmark Focused Value Portfolio - Class A 20,004 37,501,253 1,700,750 359,775,687
Harris Oakmark International Portfolio - Class A 3,729,511 25,100,473 2,925,330 344,637,826
Jennison Growth Portfolio - Class A 23,896,280 11,394,040 1,358,704 140,481,456
Legg Mason Partners Aggressive Growth Portfolio - Class A 23,040 34,317,335 842,704 420,075,612
Legg Mason Value Equity Portfolio - Class A 186,302 416,214 428,557 487,646,458
Loomis Sayles Global Markets Portfolio - Class A 157,118 -- -- 287,757,681
Lord Abbett Bond Debenture Portfolio - Class A 2,294 158,437 6,870,038 138,976,648
Lord Abbett Growth and Income Portfolio - Class A 34,947 27,906,137 6,450,613 774,248,582
Met/AIM Small Cap Growth Portfolio - Class A 795,145 2,735,223 -- 214,707,418
MFS(R) Emerging Markets Equity Portfolio - Class A 1,392,681 -- 155,678 219,216,176
MFS(R) Research International Portfolio - Class A 1,441,255 36,421,334 3,738,167 286,321,675
Neuberger Berman Real Estate Portfolio - Class A 4,476,519 9,084,835 1,133,721 126,029,790
14
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
9. OTHER MATTERS - CONTINUED
Net Realized Gain
(Loss) on Capital
Net Realized Gain Gain Distributions Income earned
(Loss) on Investments from Affiliates from Affiliate
Security Description during the period during the period during the period Ending Value
- -------------------- --------------------- ------------------ ----------------- ------------
Oppenheimer Capital Appreciation Portfolio - Class A $ 17,081 $ 7,885,181 $ 176,518 $142,613,938
PIMCO Inflation Protected Bond Portfolio - Class A (8,888,336) -- 7,373,641 137,333,482
PIMCO Total Return Portfolio - Class A (2,715) -- -- 206,745,756
RCM Technology Portfolio - Class A 485,462 4,840,056 -- 148,970,276
T.Rowe Price Mid-Cap Growth Portfolio - Class A 1,024,742 5,922,205 310,513 144,913,269
Third Avenue Small Cap Value Portfolio - Class A 139,391 31,828,946 5,925,110 561,184,685
Turner Mid-Cap Growth Portfolio - Class A 731,544 4,358,901 -- 145,133,693
Van Kampen Comstock Portfolio - Class A 122,143 14,273,057 10,676,078 834,938,399
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
15
MET INVESTORS SERIES TRUST
MetLife Moderate
Strategy Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
METLIFE MODERATE STRATEGY PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY MET INVESTORS ADVISORY, LLC
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
The MetLife Moderate Strategy Portfolio performance for the six months ended
June 30, 2007 was a gain of 4.94%. This compares to a 6.53% return for the MSCI
Global Capital Markets Index and a 4.75% return for the blended benchmark (the
Moderate Blended Benchmark is comprised of the following mix: 40% Wilshire
5000, 45% Lehman Brothers Universal, 10% MSCI EAFE(R) Index, and 5% CG 90-Day
T-Bill).
The U.S. equity markets continued the positive momentum from the beginning of
the year as strong gains culminated in early June with record highs for the Dow
and S&P 500(R) Indexes. The primary driver of the rally was strong corporate
profits resulting from strong overseas demand and a weaker dollar. Stock
markets moved higher both in the U.S. and abroad despite signs of a slowing
economy in the U.S. and ongoing concerns about inflation. Other concerns also
included credit-related problems such as the ongoing subprime lending issue and
some high-profile losses in the hedge fund industry. Despite the concerns
mentioned above investors pointed towards strong economic growth outside the
U.S. and a boom in merger activity (a 90% increase over the second quarter of
2006) as positive signs for the global economy overall. The bond market
experienced rising yields as investors sought slightly higher premiums on high
yield and mortgage related debt securities. The Federal Reserve stayed on hold,
indicating a reluctance to cut U.S. rates due to concerns about inflation.
During the period our portfolio allocations to the Treasury Inflation Protected
Securities, international debt, convertibles and high yield sectors of the bond
market were contributors to performance. The Loomis Sayles Global Markets
Portfolio and the Lord Abbett Bond Debenture Portfolio, both of which combine
fixed income and equity, or equity-like, securities, were two of the larger
contributors to returns.
On the equity side, strong performance in the small and mid cap sectors due to
favorable market conditions contributed to performance specifically the T. Rowe
Price Mid-Cap Growth Portfolio and the Lazard Mid-Cap Portfolio. Another
notable positive was our position in the Third Avenue Small Cap Value Portfolio
whose out-performance was driven by appreciation from various holdings within
the oil, gas and energy sectors.
Also contributing to overall performance was the Davis Venture Value Portfolio
as stock selection within the financials sector and a modest overweight to the
energy sector drove performance. On the international side, the MFS(R) Research
International Portfolio added to performance due to continued strength in
foreign markets.
The Western Asset Management U.S. Government Portfolio detracted from
performance due to slightly longer duration relative to the benchmark as well
as structural exposure to agency mortgages. The PIMCO Total Return Portfolio
was also a detractor due to above-index duration as interest rates rose over
the period.
Equity performance was adversely impacted by a general underweighting in energy
stocks for the Legg Mason Value Equity Portfolio and the Lord Abbett Growth and
Income Portfolio. Finally, the Jennison Growth Portfolio's stock selection in
the consumer discretionary sector detracted from performance.
A correction in the real estate securities market occurred after a significant
period of out-performance. The Neuberger Berman Real Estate Portfolio, as a
result, was the largest detractor from absolute performance during the period.
The allocation to real estate has provided significant returns over the past
few years and the asset class continues to offer diversification benefits for
the Portfolio.
The Portfolio allocations were adjusted in early May 2007. Specifically, we
further diversified the fixed income component and rebalanced the growth and
value sectors of the large cap equity component of the Portfolio.
MET INVESTORS ADVISORY, LLC
The views expressed above are those of the investment advisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
-----------------------------------------------------------------------
PIMCO Total Return Portfolio (Class A) 17.77%
-----------------------------------------------------------------------
Lord Abbett Bond Debenture Portfolio (Class A) 7.96%
-----------------------------------------------------------------------
Western Asset Management U.S. Government Portfolio (Class A) 7.94%
-----------------------------------------------------------------------
Lord Abbett Growth and Income Portfolio (Class A) 7.06%
-----------------------------------------------------------------------
Van Kampen Comstock Portfolio (Class A) 6.98%
-----------------------------------------------------------------------
PIMCO Inflation Protected Bond Portfolio (Class A) 6.88%
-----------------------------------------------------------------------
Davis Venture Value Portfolio (Class A) 6.07%
-----------------------------------------------------------------------
Legg Mason Value Equity Portfolio (Class A) 5.99%
-----------------------------------------------------------------------
Loomis Sayles Global Markets Portfolio (Class A) 4.12%
-----------------------------------------------------------------------
Third Avenue Small Cap Value Portfolio (Class A) 4.02%
-----------------------------------------------------------------------
T. Rowe Price Mid-Cap Growth Portfolio (Class A) 3.11%
-----------------------------------------------------------------------
MFS(R) Research International Portfolio (Class A) 3.08%
-----------------------------------------------------------------------
Lazard Mid-Cap Portfolio (Class A) 3.07%
-----------------------------------------------------------------------
MFS(R) Emerging Markets Portfolio (Class A) 2.09%
-----------------------------------------------------------------------
Turner Mid-Cap Growth Portfolio (Class A) 2.08%
-----------------------------------------------------------------------
Oppenheimer Capital Appreciation Portfolio (Class A) 2.04%
-----------------------------------------------------------------------
Jennison Growth Portfolio (Class A) 2.01%
-----------------------------------------------------------------------
Goldman Sachs Mid-Cap Value Portfolio (Class A) 1.98%
-----------------------------------------------------------------------
BlackRock High Yield Portfolio (Class A) 1.98%
-----------------------------------------------------------------------
Harris Oakmark International Portfolio (Class A) 1.97%
-----------------------------------------------------------------------
Neuberger Berman Real Estate Portfolio (Class A) 1.80%
-----------------------------------------------------------------------
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
METLIFE MODERATE STRATEGY PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY MET INVESTORS ADVISORY, LLC
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
METLIFE MODERATE STRATEGY PORTFOLIO VS. MSCI GLOBAL MARKETS INDEX/1/
AND MODERATE BLENDED BENCHMARK/2/
Growth Based on $10,000+
[CHART]
MetLife Moderate MSCI Global Moderate
Strategy Portfolio Capital Markets Index Blended Benchmark
------------------ --------------------- -----------------
11/3/2004 $10,000 $10,000 $10,000
12/31/2004 10,255 10,701 10,394
12/31/2005 10,851 11,136 10,951
12/31/2006 11,961 12,811 12,194
6/30/2007 12,552 13,648 12,773
-----------------------------------------------------------------------
Average Annual Return
(for the period ended 6/30/07)/3/
-----------------------------------------------------------------------
1 Year Since Inception/4/
-----------------------------------------------------------------------
MetLife Moderate Strategy
Portfolio--Class A 13.68% 11.12%
- -- Class B 13.48% 8.93%
-----------------------------------------------------------------------
- -- MSCI Global Capital Markets Index/1/ 17.17% 12.44%
-----------------------------------------------------------------------
- - - Moderate Blended Benchmark/2/ 14.02% 9.62%
-----------------------------------------------------------------------
+The chart reflects the performance of Class B shares of the Portfolio. The
performance of Class B shares will differ from that of the other Classes
because of the difference in expenses paid by policyholders investing in the
different share classes.
/1/The MSCI Global Capital Markets Index/SM/ is an unmanaged index which
measures the performance of the core capital markets asset classes comprising
global equities and fixed income. It is a market capitalization weighted
composite of the MSCI All Country World Index/SM/ and the MSCI Global Total
Bond Index/SM/. The MSCI All Country World Index/SM/ is an unmanaged free
float-adjusted market capitalization index which measure equity market
performance in the global developed and emerging markets. The MSCI All Country
World Index includes 49 country indices. The MSCI Global Total Bond Index is an
unmanaged index which measures the capitalization weighted performance of
sovereign, investment grade credit and high yield bond markets with appropriate
adjustments for investability and to eliminate double counting. The MSCI Global
Total Bond Index includes the World Sovereign Debt Index, USD Total Bond Index,
Euro Dollar Credit Index, Euro Sterling Credit Index, Euro Credit Index,
Emerging Market Local Sovereign Index and High Yield Sovereign and Corporate
Indices. The Index does not include fees or expenses and is not available for
direct investment.
/2/The Moderate Blended Benchmark is comprised of 40% Wilshire 5000 Equity
Index, 45% Lehman Brothers Universal Index, 10% Morgan Stanley Capital
International Europe Australasia and Far East Index (the MSCI EAFE(R) Index)
and 5% Citigroup 3-Month Treasury Bill Index.
The Wilshire 5000 Equity Index is an unmanaged index which measures the
performance of all U.S. headquartered equity securities with readily available
price data. The market capitalized weighted index is compromised of
approximately 82% New York Stock Exchange, 2% American Stock Exchange and 16%
OTC (1995). The Index was created in 1974 and backdated to 1971; with a base
index of December 1980 (base index equals 1,044.596). Dividends are reinvested
on the "ex" dividend date and the rebalancing of share weights is done on a
monthly basis. No attempt has been made to adjust the market capitalization of
the Index to take into account cross holding between corporations. The Index
does not include fees or expenses and is not available for direct investment.
The Lehman Brothers Universal Index represents the union of the U.S. Aggregate
Index, the U.S. High-Yield Corporate Index, the 144A Index, the Eurodollar
Index, the Emerging Markets Index, the non-EIRSA portion of the Commercial
Mortgage Backed Securities Index and the Commercial Mortgage Backed Securities
High Yield Index. Municipal debt, private placements, and non-dollar
denominated issues are excluded from the Universal Index. The only constituent
of the Index that includes floating-rate debt is the Emerging Markets Index.
Bonds and securities must be fixed rate, although it can carry a coupon that
steps up or changes according to a predetermined schedule; must
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
METLIFE MODERATE STRATEGY PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY MET INVESTORS ADVISORY, LLC
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
be dollar-denominated and including bonds with maturities up to ten years and
long-term indices composed of bonds with maturities longer than ten years. All
returns are market value weighted inclusive of accrued interest. Yield is
defined as the yield to worst, the lesser of the yield to maturity and yield to
call. Market values are expressed in millions of dollars. The Index does not
include fees or expenses and is not available for direct investment.
The MSCI EAFE(R) Index is an unmanaged free float-adjusted market
capitalization index that is designed to measure developed market equity
performance, excluding the US & Canada. The Index does not include fees or
expenses and is not available for direct investment.
The Citigroup 3-Month Treasury Bill Index--equal dollar amounts of three-month
Treasury bills are purchased at the beginning of each of three consecutive
months. As each bill matures, all proceeds are rolled over or reinvested in a
new three-month bill. The income used to calculate the monthly return is
derived by subtracting the original amount invested from the maturity value.
The Index does not include fees or expenses and is not available for direct
investment.
/3/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/4/Inception of the Class B shares is 11/4/04. Inception of the Class A shares
is 5/2/05. Index returns are based on an inception date of 10/31/04.
Effective July 1, 2007, Morgan Stanley Capital International, Inc. (MSCI)
discontinued the MSCI Global Capital Markets Index and the Portfolio will use
the Dow Jones Moderate Portfolio Index in future reports to policyholders as
the Portfolio's primary benchmark.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
3
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
METLIFE MODERATE STRATEGY PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,050.40 $0.41
Hypothetical (5% return before expenses) 1,000.00 1,024.40 0.40
- ------------------------------------------ ------------- ------------- --------------
Class B
Actual $1,000.00 $1,049.40 $1.68
Hypothetical (5% return before expenses) 1,000.00 1,023.16 1.66
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.08% and
0.33% for the Class A and Class B, respectively, multiplied by the average
account value over the period, multiplied by 181/365 (to reflect the one-half
year period).
4
MET INVESTORS SERIES TRUST
METLIFE MODERATE STRATEGY PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
---------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
---------------------------------------------------------------------
INVESTMENT COMPANY SECURITIES - 100.0%
BlackRock High Yield Portfolio
(Class A).............................. 4,762,920 $ 39,436,980
Davis Venture Value Portfolio
(Class A)*............................. 3,238,577 120,960,855
Goldman Sachs Mid-Cap Value Portfolio
(Class A).............................. 2,738,548 39,489,858
Harris Oakmark International Portfolio
(Class A).............................. 2,091,271 39,378,641
Jennison Growth Portfolio (Class A)*..... 3,137,627 40,130,253
Lazard Mid-Cap Portfolio (Class A)....... 4,358,435 61,192,424
Legg Mason Value Equity Portfolio
(Class A).............................. 10,187,472 119,397,177
Loomis Sayles Global Markets Portfolio
(Class A).............................. 7,224,800 82,218,230
Lord Abbett Bond Debenture Portfolio
(Class A).............................. 12,910,095 158,794,165
Lord Abbett Growth and Income
Portfolio (Class A).................... 4,796,006 140,762,763
MFS(R) Emerging Markets Equity Portfolio
(Class A).............................. 3,466,176 41,767,417
MFS(R) Research International Portfolio
(Class A).............................. 4,370,172 61,357,222
Neuberger Berman Real Estate Portfolio
(Class A).............................. 2,355,073 35,961,971
Oppenheimer Capital Appreciation
Portfolio (Class A).................... 4,293,547 40,745,762
PIMCO Inflation Protected Bond
Portfolio (Class A).................... 13,713,955 137,276,688
PIMCO Total Return Portfolio
(Class A).............................. 31,025,748 354,314,041
T. Rowe Price Mid-Cap Growth Portfolio
(Class A).............................. 6,463,027 62,109,694
Third Avenue Small Cap Value Portfolio
(Class A).............................. 4,628,154 80,159,620
Turner Mid-Cap Growth Portfolio
(Class A).............................. 2,957,970 41,470,737
Van Kampen Comstock Portfolio
(Class A).............................. 11,376,494 139,134,517
Western Asset Management U.S.
Government Portfolio (Class A)*........ 13,150,728 158,334,762
---------------
Total Investment Company Securities
(Cost $1,897,228,622) 1,994,393,777
---------------
TOTAL INVESTMENTS - 100.0%
(Cost $1,897,228,622) 1,994,393,777
---------------
Other Assets and Liabilities (net) - 0.0% (570,070)
---------------
TOTAL NET ASSETS - 100.0% $ 1,993,823,707
===============
PORTFOLIO FOOTNOTES:
* A Portfolio of Metropolitan Series Fund, Inc.
See notes to financial statements
5
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
METLIFE MODERATE STRATEGY PORTFOLIO
ASSETS
Investments, at value (Note 2)* $1,994,393,777
Receivable for Trust shares sold 1,649,141
--------------
Total assets 1,996,042,918
--------------
LIABILITIES
Due to bank 11
Payables for:
Investments purchased 1,003,828
Trust shares redeemed 645,314
Distribution and services fees--Class B 404,983
Investment advisory fee payable (Note 3) 111,790
Administration fee payable 1,901
Custodian and accounting fees payable 26,412
Accrued expenses 24,972
--------------
Total liabilities 2,219,211
--------------
NET ASSETS $1,993,823,707
==============
NET ASSETS REPRESENTED BY:
Paid in surplus $1,811,951,784
Accumulated net realized gain 53,627,406
Unrealized appreciation on investments 97,165,155
Undistributed net investment income 31,079,362
--------------
Total $1,993,823,707
==============
NET ASSETS
Class A $ 907,302
==============
Class B 1,992,916,405
==============
CAPITAL SHARES OUTSTANDING
Class A 78,411
==============
Class B 172,436,574
==============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 11.57
==============
Class B 11.56
==============
- ---------------------------------------------------------------------------------------
* Investments at cost $1,897,228,622
See notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
METLIFE MODERATE STRATEGY PORTFOLIO
INVESTMENT INCOME:
Dividends from underlying Portfolios $34,015,094
-----------
Total investment income 34,015,094
-----------
EXPENSES:
Investment advisory fee (Note 3) 637,057
Administration fees 11,901
Custody and accounting fees 4,929
Distribution fee--Class B 2,254,370
Transfer agent fees 3,860
Audit 7,402
Legal 7,453
Trustee fees and expenses 6,763
Insurance 607
Other 1,381
-----------
Total expenses 2,935,723
-----------
Net investment income 31,079,371
-----------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
CAPITAL GAIN DISTRIBUTIONS FROM UNDERLYING PORTFOLIOS:
Net realized gain on:
Investments 13,562,037
Capital gain distributions from underlying Portfolios 45,575,533
-----------
Net realized gain on investments and capital gain distributions
from underlying Portfolios 59,137,570
-----------
Net change in unrealized depreciation on:
Investments (5,408,850)
-----------
Net change in unrealized depreciation on investments (5,408,850)
-----------
Net realized and change in unrealized gain on investments 53,728,720
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $84,808,091
===========
See notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
METLIFE MODERATE STRATEGY PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 31,079,371 $ 38,182,429
Net realized gain on investments and capital gain distributions
from underlying Portfolios 59,137,570 44,977,262
Net change in unrealized appreciation (depreciation) on investments (5,408,850) 60,325,311
-------------- --------------
Net increase in net assets resulting from operations 84,808,091 143,485,002
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (20,253) (607)
Class B (38,162,190) (120,374)
From net realized gains
Class A (23,866) (2,551)
Class B (49,140,175) (10,360,885)
-------------- --------------
Net decrease in net assets resulting from distributions (87,346,484) (10,484,417)
-------------- --------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class A 54,754 604,886
Class B 331,273,592 442,249,084
Net asset value of shares issued through dividend reinvestment
Class A 44,119 3,158
Class B 87,302,365 10,481,259
Cost of shares repurchased
Class A (107,514) (57,690)
Class B (103,483,325) (75,367,914)
-------------- --------------
Net increase in net assets from capital share transactions 315,083,991 377,912,783
-------------- --------------
TOTAL INCREASE IN NET ASSETS 312,545,598 510,913,368
Net assets at beginning of period 1,681,278,109 1,170,364,741
-------------- --------------
Net assets at end of period $1,993,823,707 $1,681,278,109
============== ==============
Net assets at end of period includes undistributed net investment
income $ 31,079,362 $ 38,182,434
============== ==============
See notes to financial statements
8
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
METLIFE MODERATE STRATEGY PORTFOLIO
CLASS A
-------------------------------------
FOR THE PERIOD FOR THE YEARS ENDED
ENDED DECEMBER 31,
JUNE 30, 2007 ---------------------
(UNAUDITED) 2006 2005(B)
-------------- -------- --------
NET ASSET VALUE, BEGINNING OF PERIOD....................................... $ 11.58 $ 10.57 $ 9.91
-------- -------- --------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income...................................................... 0.21 (a) 0.19 (a) 1.25 (a)
Net Realized/Unrealized Gain (Loss) on Investments......................... 0.37 0.93 (0.44)
-------- -------- --------
Total from Investment Operations........................................... 0.58 1.12 0.81
-------- -------- --------
LESS DISTRIBUTIONS
Dividends from Net Investment Income....................................... (0.27) (0.02) (0.13)
Distributions from Net Realized Capital Gains.............................. (0.32) (0.09) (0.02)
-------- -------- --------
Total Distributions........................................................ (0.59) (0.11) (0.15)
-------- -------- --------
NET ASSET VALUE, END OF PERIOD............................................. $ 11.57 $ 11.58 $ 10.57
======== ======== ========
TOTAL RETURN 5.04% 10.62% 8.16%
Ratio of Expenses to Average Net Assets.................................... 0.08%* 0.09% 0.09%*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates... 0.08%* 0.09%(e) 0.09%*
Ratio of Net Investment Income to Average Net Assets....................... 3.53%* 1.76% 17.59%*
Portfolio Turnover Rate.................................................... 12.1% 22.2% 22.6%
Net Assets, End of Period (in millions).................................... $0.9 $0.9 $0.3
CLASS B
------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 --------------------------------
(UNAUDITED) 2006 2005 2004(C)
-------------- -------- -------- -------
NET ASSET VALUE, BEGINNING OF PERIOD....................................... $ 11.56 $ 10.57 $ 10.11 $10.00
-------- -------- -------- ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income...................................................... 0.20 (a) 0.30 (a) 0.22 (a) 0.36 (a)
Net Realized/Unrealized Gain (Loss) on Investments......................... 0.37 0.78 0.37 (0.11)
-------- -------- -------- ------
Total from Investment Operations........................................... 0.57 1.08 0.59 0.25
-------- -------- -------- ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income....................................... (0.25) (0.00)+ (0.11) (0.14)
Distributions from Net Realized Capital Gains.............................. (0.32) (0.09) (0.02) --
-------- -------- -------- ------
Total Distributions........................................................ (0.57) (0.09) (0.13) (0.14)
-------- -------- -------- ------
NET ASSET VALUE, END OF PERIOD............................................. $ 11.56 $ 11.56 $ 10.57 $10.11
======== ======== ======== ======
TOTAL RETURN 4.94% 10.23% 5.81% 2.55%
Ratio of Expenses to Average Net Assets.................................... 0.33%* 0.35% 0.35% 0.35%*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates... 0.33%* 0.35%(e) 0.35% 0.45%*
Ratio of Net Investment Income to Average Net Assets....................... 3.44%* 2.70% 2.14% 22.53%*
Portfolio Turnover Rate.................................................... 12.1% 22.2% 22.6% 0.0%(d)
Net Assets, End of Period (in millions).................................... $1,992.9 $1,680.4 $1,170.1 $500.3
* Annualized
+ Rounds to less than $0.005 per share
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--05/02/2005.
(c) Commencement of operations--11/04/2004.
(d) For the period ended 12/31/2004, the portfolio turnover calculation is
zero, due to no sales activity.
(e) Excludes the effect of Deferred Expense Reimbursement--See Note 3 of
financial statements.
See notes to financial statements
9
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is MetLife Moderate Strategy Portfolio, which
is non-diversified. Shares in the Trust are not offered directly to the general
public and are currently available only to separate accounts established by
certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A and B Shares are
offered by the Portfolio. Class E Shares are not currently offered by the
Portfolio included in this report. Shares of each Class of the Portfolio
represent an equal pro rata interest in the Portfolio and generally give the
shareholder the same voting, dividend, liquidation, and other rights.
Investment income, realized and unrealized capital gains and losses, the common
expenses of the Portfolio and certain Portfolio-level expense reductions, if
any, are allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the Portfolio. Each class of
shares differs in its respective distribution expenses and certain other
class-specific expense reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date.
10
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The value of the security so purchased is subject to market fluctuations during
this period. The Portfolio segregates assets having an aggregate value at least
equal to the amount of the when issued or delayed delivery purchase commitments
until payment is made.
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into a management
agreement for investment advisory services in connection with the investment
management of the Portfolio.
Under the terms of the Portfolio's management agreement, the Portfolio pays the
Manager a monthly fee based upon annual rates applied to the Portfolio's
average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- --------------------------
MetLife Moderate Strategy Portfolio $637,057 0.10% First $500 Million
0.075% $500 Million to $1 Billion
0.05% Over $1 Billion
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Maximum Expense Ratio
under current Expense
Limitation Agreement
---------------------
Portfolio Class A Class B Class E
--------- ------- ------- -------
MetLife Moderate Strategy Portfolio 0.10% 0.35% 0.25%*
* Class not offered during the period.
11
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued Net Increase
Through (Decrease)
Beginning Shares Dividend Shares in Shares Ending
Shares Sold Reinvestment Repurchased Outstanding Shares
- - ----------- ---------- ------------- ----------- ------------ -----------
MetLife Moderate Strategy Portfolio
Class A
06/30/2007 79,091 4,698 3,830 (9,208) (680) 78,411
12/31/2006 27,826 56,251 290 (5,276) 51,265 79,091
Class B
06/30/2007 145,307,558 28,419,287 7,584,914 (8,875,185) 27,129,016 172,436,574
12/31/2006 110,699,660 40,511,591 963,351 (6,867,044) 34,607,898 145,307,558
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
MetLife Moderate Strategy Portfolio $-- $525,648,324 $-- $221,212,816
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
- --------- -------------- ------------ -------------- --------------
MetLife Moderate Strategy Portfolio $1,897,228,622 $107,213,718 $(10,048,563) $97,165,155
6. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
---------------------- ---------------------- -----------------------
2006 2005 2006 2005 2006 2005
---------- ----------- ---------- ---- ----------- -----------
MetLife Moderate Strategy Portfolio $1,408,284 $13,969,899 $9,076,133 $-- $10,484,417 $13,969,899
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
6. DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
------------- ------------- ------------ ------------------ ------------
MetLife Moderate Strategy Portfolio $38,452,790 $48,893,510 $97,064,017 $-- $184,410,317
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
7. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
8. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
9. OTHER MATTERS
The Portfolio does not invest in the Underlying Portfolios for the purpose of
exercising management or control; however, investments by the Portfolio within
its principal investment strategies may represent a significant portion of the
Underlying Portfolio's net assets. Transactions in the Underlying Portfolios
during the period ended June 30, 2007 in which the Portfolio had ownership of
at least 5% of the outstanding voting securities at the end of the period are
as follows:
Number of shares Shares purchased Shares sold during the
Security Description held at December 31, 2006 during the period period
- -------------------- ------------------------- ----------------- ----------------------
BlackRock High Yield Portfolio - Class A -- 4,771,989 (9,069)
Goldman Sachs Mid-Cap Value Portfolio - Class A 2,366,356 554,803 (182,611)
Lazard Mid-Cap Portfolio - Class A 3,761,793 879,151 (282,509)
Legg Mason Value Equity Portfolio - Class A 7,717,501 2,740,250 (270,279)
Loomis Sayles Global Markets Portfolio - Class A 6,641,854 857,465 (274,519)
Lord Abbett Bond Debenture Portfolio - Class A 10,695,668 2,326,070 (111,643)
MFS(R) Emerging Markets Equity Portfolio - Class A 3,441,818 422,104 (397,746)
PIMCO Inflation Protected Bond Portfolio - Class A 19,222,860 3,840,607 (9,349,512)
PIMCO Total Return Portfolio - Class A 20,842,894 10,418,464 (235,610)
T. Rowe Price Mid-Cap Growth Portfolio - Class A 5,839,669 1,056,428 (433,070)
Turner Mid-Cap Growth Portfolio - Class A 2,677,882 441,336 (161,248)
Van Kampen Comstock Portfolio - Class A 8,551,077 3,036,671 (211,254)
Western Asset Management U.S. Government
Portfolio - Class A 10,689,721 2,576,197 (115,190)
Number of
shares held at
Security Description June 30, 2007
- -------------------- --------------
BlackRock High Yield Portfolio - Class A 4,762,920
Goldman Sachs Mid-Cap Value Portfolio - Class A 2,738,548
Lazard Mid-Cap Portfolio - Class A 4,358,435
Legg Mason Value Equity Portfolio - Class A 10,187,472
Loomis Sayles Global Markets Portfolio - Class A 7,224,800
Lord Abbett Bond Debenture Portfolio - Class A 12,910,095
MFS(R) Emerging Markets Equity Portfolio - Class A 3,466,176
PIMCO Inflation Protected Bond Portfolio - Class A 13,713,955
PIMCO Total Return Portfolio - Class A 31,025,748
T. Rowe Price Mid-Cap Growth Portfolio - Class A 6,463,027
Turner Mid-Cap Growth Portfolio - Class A 2,957,970
Van Kampen Comstock Portfolio - Class A 11,376,494
Western Asset Management U.S. Government
Portfolio - Class A 13,150,728
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
9. OTHER MATTERS - CONTINUED
Net Realized Gain
(Loss) on Capital
Net Realized Gain Gain Distributions Income earned from
(Loss) on Investments from Affiliates Affiliates during the
Security Description during the period during the period period Ending Value
- -------------------- --------------------- ------------------ --------------------- ------------
BlackRock High Yield Portfolio - Class A $ (427) $ -- $ -- $ 39,436,980
Goldman Sachs Mid-Cap Value Portfolio - Class A 492,501 3,186,889 246,765 39,489,858
Lazard Mid-Cap Portfolio - Class A 126,950 4,830,146 352,433 61,192,424
Legg Mason Value Equity Portfolio - Class A 270,087 101,109 2,998 119,397,177
Loomis Sayles Global Markets Portfolio - Class A 187,898 -- -- 82,218,230
Lord Abbett Bond Debenture Portfolio - Class A (21,239) 184,873 8,016,350 158,794,165
MFS(R) Emerging Markets Equity Portfolio - Class A 369,048 -- 30,283 41,767,417
PIMCO Inflation Protected Bond Portfolio - Class A (4,449,496) -- 5,163,238 137,276,688
PIMCO Total Return Portfolio - Class A 95,156 -- 9,737,903 354,314,041
T. Rowe Price Mid-Cap Growth Portfolio - Class A 799,064 2,591,468 135,875 62,109,694
Turner Mid-Cap Growth Portfolio - Class A 393,316 1,271,086 -- 41,470,737
Van Kampen Comstock Portfolio - Class A 469,116 2,270,472 1,698,285 139,134,517
Western Asset Management U.S. Government Portfolio -
Class A 23,904 -- 3,957,495 158,334,762
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
14
MET INVESTORS SERIES TRUST
MFS(R) Emerging Markets
Equity Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
MFS(R) EMERGING MARKETS EQUITY PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY MASSACHUSETTS FINANCIAL SERVICES COMPANY
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
SUMMARY OF RESULTS
For the six months ended June 30, 2007, the MFS(R) Emerging Markets Equity
Portfolio provided a total return of 14.74% for Class A. This compares with a
return of 17.75% for the Portfolio's benchmark, the MSCI Emerging Markets
Index/SM/.
DETRACTORS FROM PERFORMANCE
The portfolio's underweighted position in the industrial goods and services
sector detracted from relative performance. Not holding ship-building firm
Hyundai Heavy (South Korea), whose stock price more than doubled over the
reporting period, hurt relative results.
Security selection in the utilities and communications sector also dampened
relative returns. Not holding strong-performing wireless communications company
America Movil (Mexico) weighed on performance.
The combination of an overweighted position and security selection in the
health care sector had a negative impact on results. The portfolio's
positioning in pharmaceutical firm Gedeon Richter/(g)/ (Hungary) and generic
drug manufacturer Teva Pharmaceutical (Israel) hurt performance as both stocks
lagged the benchmark.
Stocks in other sectors that hurt results included microchip and electronics
manufacturer Samsung Electronics (South Korea), global software services firm
HCL Technologies/(aa)/ (India), and banking and financial services firm Nossa
Caixa-Nosso Banco/(g) /(Brazil).
The Portfolio's cash position detracted from relative performance. The
Portfolio holds some cash to buy new holdings and to provide liquidity. In a
period when equity markets increased, as measured by the portfolio's benchmark,
holding cash hurts performance versus the benchmark, which has no cash position.
CONTRIBUTORS TO PERFORMANCE
Security selection and an overweighted position in the basic materials sector
boosted relative performance. Iron ore producer Companhia Vale do Rio Doce
(Brazil), mining companies Grupo Mexico SAB De CV (Mexico) and Southern
Copper/(aa)/ (U.S.), and industrial conglomerate LG Group (South Korea) were
among the portfolio's top contributors. Underweighting steel products and
electronics manufacturer Posco/(g)/ (South Korea) also helped.
Stocks in other sectors that contributed to performance included brewing
company Companhia de Bebidas das Americas (Brazil) and petrochemical firm
Reliance Industries (India). Underweighting technology consulting firm Infosys/
(g)/ (India) and avoiding poor-performing gas and oil exploration firm
Surgutneftegaz/(g) /(Russia) also helped.
/(aa)/ Security is not a benchmark constituent.
/(g)/ Security was not held in the portfolio at period end.
NICHOLAS SMITHIE
Portfolio Manager, Investment Officer
MASSACHUSETTS FINANCIAL SERVICES COMPANY
Mr. Smithie joined MFS(R) in 1998 as an equity research analyst and has managed
the portfolio since its inception. Prior to joining MFS(R), he worked for
two-and-a-half years as a Global Emerging Markets Portfolio Manager for
Gartmore Investment Management, two years as an Assistant Manager in the
Developing Country Finance Group for West Merchant Bank, one year as a
Consultant for Republic National Bank of New York, and four years as a
Chartered Account for Coopers & Lybrand.
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
-------------------------------------------------------------
Gazprom (ADR) 7.20%
-------------------------------------------------------------
Petroleo Brasileiro S.A. (ADR) 5.13%
-------------------------------------------------------------
Samsung Electronics Co., Ltd. 4.26%
-------------------------------------------------------------
Companhia Vale do Rio Doce (ADR) 4.19%
-------------------------------------------------------------
Taiwan Semiconductor Manufacturing Co., Ltd. (ADR) 2.65%
-------------------------------------------------------------
China Mobile (Hong Kong), Ltd. (ADR) 2.58%
-------------------------------------------------------------
Kookmin Bank 2.04%
-------------------------------------------------------------
Teva Pharmaceuticals Industries, Ltd. 2.03%
-------------------------------------------------------------
HCL Technologies, Ltd. 1.96%
-------------------------------------------------------------
PetroChina Co., Ltd. 1.93%
-------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
LOGO
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
MFS(R) EMERGING MARKETS EQUITY PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY MASSACHUSETTS FINANCIAL SERVICES COMPANY
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
MFS(R) EMERGING MARKETS EQUITY PORTFOLIO MANAGED BY
MASSACHUSETTS FINANCIAL SERVICES COMPANY VS. MSCI EMERGING MARKETS FREE
INDEX/SM1/
Growth Based on $10,000+
[CHART]
MFS(R) Emerging MSCI Emerging
Markets Equity Portfolio Markets Free Index/SM/
------------------------ ----------------------
5/1/2006 $10,000 $10,000
6/30/2006 8,740 8,930
9/30/2006 9,040 9,366
12/31/2006 10,604 11,014
6/30/2007 12,167 12,969
---------------------------------------------------------------------
Average Annual Return/2/
(for the period ended 6/30/07)
---------------------------------------------------------------------
Since
1 year Inception/3/
---------------------------------------------------------------------
MFS(R) Emerging Markets Equity
- -- Portfolio--Class A 39.21% 18.30%
Class B 38.83% 17.91%
---------------------------------------------------------------------
- - - MSCI Emerging Markets Free Index/SM1/ 45.45% 25.19%
---------------------------------------------------------------------
+The chart reflects the performance of Class A shares of the Portfolio. The
performance of Class A shares will differ from that of the Class B shares
because of the difference in expenses paid by policyholders investing in the
different share class.
/1/The Morgan Stanley Capital International (MSCI) Emerging Market Free (EMF)
Index/SM/ is an unmanaged market capitalization weighted equity index composed
of companies that are representative of the market structure of the following
26 countries: Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt,
Hungary, India, Indonesia, Israel, Jordan, Korea, Malaysia, Mexico, Morocco,
Pakistan, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand,
Turkey, and Venezuela. "Free" MSCI indices exclude those shares not purchasable
by foreign investors. The Index does not include fees or expenses and is not
available for direct investment.
/2/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/3/Inception of Class A and Class B shares is 5/1/06. Index returns are based
on an inception date of 4/30/06.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
2
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
MFS(R) EMERGING MARKETS EQUITY PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,147.40 $6.18
Hypothetical (5% return before expenses) 1,000.00 1,019.04 5.81
- ------------------------------------------ ------------- ------------- --------------
Class B
Actual $1,000.00 $1,145.80 $7.45
Hypothetical (5% return before expenses) 1,000.00 1,017.85 7.00
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 1.16% and
1.40% for the Class A and Class B, respectively, multiplied by the average
account value over the period, multiplied by 181/365 (to reflect the one-half
year period).
3
MET INVESTORS SERIES TRUST
MFS(R) EMERGING MARKETS EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
----------------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
----------------------------------------------------------------------------
COMMON STOCKS - 91.8%
ARGENTINA - 0.9%
Banco Macro S.A. (ADR)............................ 75,040 $ 2,466,565
Telecom Argentina S.A. (ADR)*..................... 106,630 2,657,219
-------------
5,123,784
-------------
BERMUDA - 1.3%
Credicorp, Ltd.................................... 73,050 4,468,469
First Pacific Co.................................. 4,122,000 2,985,926
-------------
7,454,395
-------------
BRAZIL - 14.3%
Aracruz Celulose S.A. (ADR)(a).................... 70,660 4,680,518
Banco Bradesco S.A. (ADR)(a)...................... 407,150 9,816,387
Companhia Vale do Rio Doce (ADR).................. 548,370 24,429,883
EDP - Energias do Brasil S.A...................... 157,410 3,227,920
Equatorial Energia S.A............................ 289,850 2,892,346
Petroleo Brasileiro S.A. (ADR).................... 246,600 29,905,182
Tele Norte Leste Participacoes S.A................ 86,300 3,432,158
Unibanco-Uniao de Bancos Brasilieros S.A. (ADR)... 44,480 5,020,458
-------------
83,404,852
-------------
CANADA - 1.8%
Addax Petroleum Corp.............................. 187,200 7,012,409
First Uranium Corp. (144A)*(b).................... 301,920 3,392,360
-------------
10,404,769
-------------
CAYMAN ISLANDS - 0.2%
Stella International Holdings..................... 562,000 1,125,351
-------------
CHILE - 1.5%
Banco Santander Chile S.A. (ADR)(a)............... 48,490 2,402,195
Enersis S.A. (ADR)................................ 317,710 6,370,085
-------------
8,772,280
-------------
CHINA - 0.6%
Huaneng Power International, Inc.................. 3,002,000 3,496,031
-------------
CZECH REPUBLIC - 1.1%
CEZ............................................... 121,300 6,271,385
-------------
EGYPT - 2.0%
Egyptian Co. for Mobile Services.................. 98,373 3,095,106
Orascom Telecom Holding SAE....................... 412,697 5,297,651
Telecom Egypt..................................... 992,010 3,064,557
-------------
11,457,314
-------------
HONG KONG - 6.9%
ASM Pacific Technology, Ltd....................... 957,000 6,934,736
China Mobile (Hong Kong), Ltd..................... 1,390,500 15,009,010
Citic Pacific, Ltd................................ 659,000 3,325,439
CNOOC, Ltd........................................ 1,573,000 1,787,226
PetroChina Co., Ltd............................... 7,592,000 11,232,842
Regal Real Estate Investment Trust (REIT)*........ 5,895,000 2,005,980
-------------
40,295,233
-------------
----------------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
----------------------------------------------------------------------------
HUNGARY - 0.9%
OTP Bank Nyrt. (GDR).............................. 43,960 $ 5,077,380
-------------
INDONESIA - 2.2%
PT Astra International Tbk........................ 1,379,000 2,576,422
PT Bank Central Asia Tbk.......................... 3,759,500 2,265,654
PT Hanjaya Mandala Sampoerna Tbk.................. 1,582,000 2,413,664
PT Telekomunikasi Indonesia....................... 5,170,000 5,581,866
-------------
12,837,606
-------------
ISRAEL - 3.5%
Israel Chemicals, Ltd............................. 681,270 5,408,030
Makhteshim-Agan Industries, Ltd................... 448,730 3,242,455
Teva Pharmaceutical Industries, Ltd. (ADR)........ 287,320 11,851,950
-------------
20,502,435
-------------
LUXEMBOURG - 1.3%
Tenaris S.A. (ADR)................................ 111,550 5,461,488
Ternium S.A. (ADR)(a)............................. 78,560 2,379,582
-------------
7,841,070
-------------
MALAYSIA - 3.9%
AMMB Holdings Berhad.............................. 2,320,000 2,900,048
British American Tobacco Malaysia Berhad.......... 215,000 2,801,292
Genting Berhad.................................... 1,272,400 3,038,245
Malayan Banking Berhad............................ 880,800 3,058,467
Resorts World Berhad.............................. 3,144,600 3,148,705
Telekom Malaysia Berhad........................... 912,000 2,718,817
Tenaga Nasional Berhad............................ 1,589,000 5,240,972
-------------
22,906,546
-------------
MEXICO - 6.2%
Consorcio ARA S.A. de C.V.(a)..................... 1,017,700 1,641,056
Corporacion Moctezuma S.A. de C.V................. 920,500 2,977,170
Grupo Continental S.A.(a)......................... 1,146,360 2,549,686
Grupo Mexico S.A. de C.V.......................... 1,276,500 7,854,948
Grupo Televisa S.A. (ADR)......................... 204,600 5,649,006
Kimberly-Clark de Mexico S.A. de C.V. - Class A(a) 1,078,020 4,695,470
Sare Holding SAB de C.V.*(a)...................... 1,464,300 2,415,486
TV Azteca S.A. de C.V............................. 2,932,500 2,595,349
Wal-Mart de Mexico S.A. de C.V.(a)................ 1,485,000 5,642,411
-------------
36,020,582
-------------
PERU - 0.6%
Compania de Minas Buenaventura S.A. (ADR)(a)...... 86,440 3,238,042
-------------
PHILIPPINES - 3.5%
Ayala Corp........................................ 217,032 2,548,542
Filinvest Land, Inc.*............................. 47,330,300 2,191,624
First Philippine Holdings Corp.................... 2,283,840 4,428,060
Manila Water Co................................... 20,130,000 5,417,386
Philippine Long Distance Telephone Co............. 96,860 5,536,252
-------------
20,121,864
-------------
See notes to financial statements
4
MET INVESTORS SERIES TRUST
MFS(R) EMERGING MARKETS EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
----------------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
----------------------------------------------------------------------------
POLAND - 0.9%
KGHM Polska Miedz S.A............................. 60,470 $ 2,298,706
Telekomunikacja Polska S.A........................ 366,290 3,194,914
-------------
5,493,620
-------------
RUSSIA - 10.4%
Gazprom (ADR)..................................... 993,590 41,631,421
Gazprom Neft (ADR)(a)............................. 43,610 876,561
GMK Norilsk Nickel (ADR).......................... 26,630 5,911,860
Mobile Telesystems (ADR).......................... 102,450 6,205,397
Vimpel - Communications (ADR)(a).................. 57,050 6,010,788
-------------
60,636,027
-------------
SOUTH AFRICA - 9.9%
ABSA Group, Ltd................................... 289,380 5,375,419
African Bank Investments, Ltd..................... 1,208,190 5,092,998
Bidvest Group, Ltd................................ 130,280 2,650,432
Ellerine Holdings, Ltd............................ 237,347 2,341,524
FirstRand, Ltd.................................... 1,805,960 5,747,798
Foschini, Ltd..................................... 339,730 2,928,345
Gold Fields, Ltd.................................. 175,120 2,709,484
Impala Platinum Holdings, Ltd..................... 187,480 5,701,993
Massmart Holdings, Ltd............................ 279,904 3,417,360
Nedbank Group, Ltd................................ 136,717 2,544,823
Sanlam, Ltd....................................... 1,925,480 6,114,685
Standard Bank Group, Ltd.......................... 489,590 6,789,451
Tiger Brands, Ltd................................. 109,590 2,810,482
Truworths International, Ltd...................... 686,210 3,541,865
-------------
57,766,659
-------------
SOUTH KOREA - 8.9%
Hana Financial Group, Inc......................... 47,660 2,316,444
Hyundai Mobis..................................... 24,661 2,338,539
Kookmin Bank...................................... 135,956 11,909,881
Korea Exchange Bank............................... 178,300 2,643,448
LG Chem, Ltd...................................... 50,930 4,292,684
Samsung Electronics Co., Ltd...................... 40,622 24,817,056
Shinhan Financial Group Co., Ltd.................. 60,310 3,655,153
-------------
51,973,205
-------------
TAIWAN - 6.3%
Acer, Inc......................................... 1,505,000 3,079,043
Cathay Financial Holding Co., Ltd................. 1,981,135 4,748,619
Chunghwa Telecom Co., Ltd......................... 2,125,000 4,064,680
Far EasTone Telecommunications Co., Ltd.*......... 2,332,000 2,905,815
----------------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
----------------------------------------------------------------------------
TAIWAN - CONTINUED
High Tech Computer Corp........................... 132,400 $ 2,372,842
Lite-On Technology Corp........................... 43,000 55,629
Taiwan Semiconductor Manufacturing Co., Ltd. (ADR) 1,387,310 15,440,764
United Microelectronics Corp...................... 6,887,000 4,174,072
-------------
36,841,464
-------------
THAILAND - 1.0%
Siam Cement Public Compay, Ltd.................... 769,200 5,969,774
-------------
TURKEY - 1.0%
Asya Katilim Bankasi A.S.*........................ 314,713 1,921,410
Turkiye Garanti Bankasi A.S.(a)................... 726,680 4,038,007
-------------
5,959,417
-------------
UNITED STATES - 0.7%
Southern Copper Corp.(a).......................... 41,480 3,909,905
-------------
Total Common Stocks (Cost $467,165,835) 534,900,990
-------------
PREFERRED STOCKS - 2.1%
BRAZIL - 1.4%
AES Tiete S.A..................................... 49,006,000 1,903,293
Eletropaulo Metropolitana de Sao Paulo S.A........ 53,610,000 3,522,641
Usinas Siderurgicas de Minas Gerais S.A. - Class A 49,100 2,796,852
-------------
8,222,786
-------------
COLOMBIA - 0.4%
BanColombia S.A................................... 77,520 2,544,982
-------------
RUSSIA - 0.3%
Transneft OAO(c).................................. 870 1,420,847
-------------
Total Preferred Stocks (Cost $10,155,701) 12,188,615
-------------
WARRANTS - 3.4%
INDIA - 2.9%
Oil & Natural Gas Corp., Ltd.*.................... 97,115 2,158,478
HCL Technologies, Ltd.*........................... 1,347,537 11,420,376
Steel Authority of India*......................... 948,433 3,063,439
NETHERLANDS ANTILLES - 0.5%
ITC, Ltd.*(c)..................................... 763,249 2,908,742
-------------
Total Warrants (Cost $17,758,887) 19,551,035
-------------
See notes to financial statements
5
MET INVESTORS SERIES TRUST
MFS(R) EMERGING MARKETS EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
--------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------------
SHORT-TERM INVESTMENT - 1.5%
Cargill, Inc. (144A)(b)
5.370%, due 07/02/07
(Cost - $9,000,314).................... $ 9,003,000 $ 9,000,314
-------------
TOTAL INVESTMENTS - 98.8%
(Cost $504,080,737) 575,640,954
Other Assets and Liabilities (net) - 1.2% 6,806,660
-------------
TOTAL NET ASSETS - 100.0% $ 582,447,614
=============
PORTFOLIO FOOTNOTES:
* Non-income producing security.
(a) A portion or all of the security was held on loan. As of June 30, 2007, the
market value of the securities loaned was $32,987,519 and the collateral
received consisted of cash in the amount of $33,870,715.
(b) Securities that may be resold to "qualified institutional buyers" under
Rule 144A or securities offered pursuant to Section 4(2) of the Securities
Act of 1933, as amended. These securities have been determined to be liquid
under the guidelines established by the Board of Trustees. These securities
represent in the aggregate $12,392,674 of net assets.
(c) Securities that may be resold to "qualified institutional buyers" under
Rule 144A or securities offered pursuant to Section 4(2) of the Securities
Act of 1933, as amended. These securities have been determined to be
illiquid by the Portfolio's adviser. These securities represent in the
aggregate $4,329,589 of net assets.
ADR - American Depositary Receipt
GDR - Global Depositary Receipt
REIT - Real Estate Investment Trust
SUMMARY OF TOTAL FOREIGN SECURITIES BY INDUSTRY CLASSIFICATION AT 6/30/2007
PERCENT OF
INDUSTRY VALUE (000) NET ASSETS
---------------------------------------------------------------
Auto Components $ 2,339 0.4%
Automobiles 2,576 0.4%
Banks 72,490 12.5%
Beverages 2,550 0.5%
Chemicals 12,943 2.2%
Computers & Peripherals 16,928 2.9%
Construction Materials 8,947 1.5%
Electric Utilities 37,353 6.4%
Energy 5,417 0.9%
Energy Equipment & Services 5,462 1.0%
Financial - Diversified 22,551 3.9%
Food & Drug Retailing 3,417 0.6%
Food Products 2,810 0.5%
Hotels, Restaurants & Leisure 3,149 0.5%
Household Products 4,696 0.8%
Industrial - Diversified 62,012 10.6%
Insurance 10,863 1.9%
Media 8,244 1.4%
Metals & Mining 61,775 10.6%
Oil & Gas 54,394 9.4%
Paper & Forest Products 4,681 0.8%
Pharmaceuticals 11,852 2.0%
Real Estate 8,254 1.4%
Retail - Multiline 5,642 1.0%
Retail - Specialty 9,937 1.7%
Semiconductor Equipment & Products 51,367 8.8%
Telecommunication Services - Diversified 29,966 5.1%
Telecommunication Services - Wireless 35,902 6.2%
Tobacco 8,124 1.4%
-------- ----
Total $566,641 97.3%
======== ====
See notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
MFS(R) EMERGING MARKETS EQUITY PORTFOLIO
ASSETS
Investments, at value (Note 2)* $575,640,954
Cash 531
Cash denominated in foreign currencies** 216,863
Collateral for securities on loan 33,870,715
Receivable for investments sold 9,911,458
Receivable for Trust shares sold 708,119
Dividends receivable 1,480,396
------------
Total assets 621,829,036
------------
LIABILITIES
Payables for:
Investments purchased 1,183,258
Trust shares redeemed 3,463,893
Distribution and services fees - Class B 5,489
Collateral for securities on loan 33,870,715
Investment advisory fee payable (Note 3) 468,936
Administration fee payable 6,325
Custodian and accounting fees payable 329,957
Accrued expenses 52,849
------------
Total liabilities 39,381,422
------------
NET ASSETS $582,447,614
============
NET ASSETS REPRESENTED BY:
Paid in surplus $492,319,879
Accumulated net realized gain 14,934,219
Unrealized appreciation on investments and foreign currency 71,572,361
Undistributed net investment income 3,621,155
------------
Total $582,447,614
============
NET ASSETS
Class A $557,424,089
============
Class B 25,023,525
============
CAPITAL SHARES OUTSTANDING
Class A 46,268,428
============
Class B 2,083,536
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 12.05
============
Class B 12.01
============
- -------------------------------------------------------------------------------------
* Investments at cost $504,080,737
**Cost of cash denominated in foreign currencies 216,753
See notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
MFS(R) EMERGING MARKETS EQUITY PORTFOLIO
INVESTMENT INCOME:
Dividends (1) $ 6,532,597
Interest (2) 234,754
-----------
Total investment income 6,767,351
-----------
EXPENSES:
Investment advisory fee (Note 3) 2,291,045
Administration fees 17,219
Custody and accounting fees 222,338
Distribution fee - Class B 27,190
Transfer agent fees 9,936
Audit 13,917
Legal 7,309
Trustee fees and expenses 7,667
Shareholder reporting 11,910
Insurance 8,185
Other 1,223
-----------
Total expenses 2,617,939
-----------
Net investment income 4,149,412
-----------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY:
Net realized gain (loss) on:
Investments 26,248,698
Foreign currency (363,096)
-----------
Net realized gain on investments and foreign currency 25,885,602
-----------
Net change in unrealized appreciation on:
Investments 35,493,876
Foreign currency 14,837
-----------
Net change in unrealized appreciation on investments and foreign
currency 35,508,713
-----------
Net realized and change in unrealized gain on investments and
foreign currency 61,394,315
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $65,543,727
===========
- --------------------------------------------------------------------------------------
(1)Dividend income is net withholding taxes of: $ 644,168
(2)Interest income includes securities lending income of: 81,695
See notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENT OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
MFS(R) EMERGING MARKETS EQUITY PORTFOLIO
Period Ended
June 30, 2007
(Unaudited)
-------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 4,149,412
Net realized gain (loss) on investments, futures contracts and foreign currency 25,885,602
Net change in unrealized appreciation on investments and foreign currency 35,508,713
-------------
Net increase in net assets resulting from operations 65,543,727
------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (326,330)
Class B (17,936)
-------------
Net decrease in net assets resulting from distributions (344,266)
------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class A 169,226,759
Class B 18,596,187
Net asset value of shares issued through dividend reinvestment
Class A 326,330
Class B 17,936
Cost of shares repurchased
Class A (42,728,803)
Class B (19,957,765)
-------------
Net increase in net assets from capital share transactions 125,480,644
------------
TOTAL INCREASE IN NET ASSETS 190,680,105
Net assets at beginning of period 391,767,509
------------
Net assets at end of period $582,447,614
============
Net assets at end of period includes undistributed (distributions in excess of) net investment income $ 3,621,155
============
MFS(R) EMERGING MARKETS EQUITY PORTFOLIO
Period Ended
December 31,
2006*
------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 3,668,949
Net realized gain (loss) on investments, futures contracts and foreign currency (11,386,298)
Net change in unrealized appreciation on investments and foreign currency 36,063,648
------------
Net increase in net assets resulting from operations 28,346,299
------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (3,226,406)
Class B (192,792)
------------
Net decrease in net assets resulting from distributions (3,419,198)
------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class A 353,715,433
Class B 21,642,640
Net asset value of shares issued through dividend reinvestment
Class A 3,226,406
Class B 192,792
Cost of shares repurchased
Class A (11,256,399)
Class B (680,464)
------------
Net increase in net assets from capital share transactions 366,840,408
------------
TOTAL INCREASE IN NET ASSETS 391,767,509
Net assets at beginning of period --
------------
Net assets at end of period $391,767,509
============
Net assets at end of period includes undistributed (distributions in excess of) net investment income $ (183,991)
============
* For the period 5/01/2006 (Commencement of Operations) through 12/31/2006.
See notes to financial statements
9
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS A
MFS(R) EMERGING MARKETS EQUITY PORTFOLIO ------------------------
FOR THE PERIOD FOR THE YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
(UNAUDITED) 2006(B)
-------------- ------------
NET ASSET VALUE, BEGINNING OF PERIOD.................................... $10.51 $10.00
------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................... 0.10 (a) 0.12 (a)
Net Realized/Unrealized Gain on Investments............................. 1.45 0.48
------ ------
Total from Investment Operations........................................ 1.55 0.60
------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................... (0.01) (0.09)
Distributions from Net Realized Capital Gains........................... -- --
------ ------
Total Distributions..................................................... (0.01) (0.09)
------ ------
NET ASSET VALUE, END OF PERIOD.......................................... $12.05 $10.51
====== ======
TOTAL RETURN 14.74% 6.04%
Ratio of Expenses to Average Net Assets................................. 1.16%* 1.30%*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates 1.16%* 1.49%*
Ratio of Net Investment Income to Average Net Assets.................... 1.86%* 1.91%*
Portfolio Turnover Rate................................................. 52.8% 58.2%
Net Assets, End of Period (in millions)................................. $557.4 $368.3
CLASS B
------------------------
FOR THE PERIOD FOR THE YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
(UNAUDITED) 2006(B)
-------------- ------------
NET ASSET VALUE, BEGINNING OF PERIOD.................................... $10.49 (a) $10.00
------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................... 0.09 (a) 0.07 (a)
Net Realized/Unrealized Gain on Investments............................. 1.44 0.51
------ ------
Total from Investment Operations........................................ 1.53 0.58
------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................... (0.01) (0.09)
Distributions from Net Realized Capital Gains........................... -- --
------ ------
Total Distributions..................................................... (0.01) (0.09)
------ ------
NET ASSET VALUE, END OF PERIOD.......................................... $12.01 $10.49
====== ======
TOTAL RETURN 14.58% 5.78%
Ratio of Expenses to Average Net Assets................................. 1.40%* 1.55%*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates 1.40%* 1.92%*
Ratio of Net Investment Income to Average Net Assets.................... 1.63%* 1.12%*
Portfolio Turnover Rate................................................. 52.8% 58.2%
Net Assets, End of Period (in millions)................................. $ 25.0 $ 23.4
* Annualized
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--05/01/2006.
See notes to financial statements
10
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is MFS(R) Emerging Markets Equity Portfolio,
which is diversified. Shares in the Trust are not offered directly to the
general public and are currently available only to separate accounts
established by certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A and B Shares are
offered by the Portfolio. Class E Shares are not currently offered by the
Portfolio included in this report. Shares of each Class of the Portfolio
represent an equal pro rata interest in the Portfolio and generally give the
shareholder the same voting, dividend, liquidation, and other rights.
Investment income, realized and unrealized capital gains and losses, the common
expenses of the Portfolio and certain Portfolio-level expense reductions, if
any, are allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the Portfolio. Each class of
shares differs in its respective distribution expenses and certain other
class-specific expense reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date.
11
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The value of the security so purchased is subject to market fluctuations during
this period. The Portfolio segregates assets having an aggregate value at least
equal to the amount of the when issued or delayed delivery purchase commitments
until payment is made.
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
The Portfolio utilizes the provisions of the federal income tax laws that
provide for the carryforward of capital losses for eight years, offsetting such
losses against any future net realized capital gains. At December 31, 2006, the
accumulated capital loss carryforwards and expiration dates by the Portfolio
were as follows:
Expiring
Portfolio Total 12/31/2013
--------- ---------- ----------
MFS(R) Emerging Markets Equity Portfolio $9,995,276 $9,995,276
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. FORWARD FOREIGN CURRENCY CONTRACTS - The Portfolio may enter into forward
foreign currency contracts to hedge their portfolio holdings against future
movements in certain foreign currency exchange rates. A forward currency
contract is a commitment to purchase or sell a foreign currency at a future
date at a set price. The forward currency contracts are valued at the forward
rate and are marked-to-market daily. The change in market value is recorded by
the Portfolio as an unrealized gain or loss. When the contract is closed, the
Portfolio recognizes a realized gain or loss equal to the difference between
the value of the contract at the time it was opened and the value at the time
it was closed.
The use of forward foreign currency contracts does not eliminate fluctuations
in the underlying prices of the securities of the Portfolio, but it does
establish a rate of exchange that can be achieved in the future. Although
forward foreign currency contracts to sell limit the risk of loss due to a
decline in the value of the currency holdings, they also limit any potential
gain that might result should the value of the currency increase. In addition,
the Portfolio could be exposed to risks if the counterparties to the contracts
are unable to meet the terms of the contracts.
G. SECURITIES LENDING - The Portfolio may lend its securities to certain
qualified brokers who borrow securities in order to complete certain
transactions. By lending its investment securities, the Portfolio attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term of the loan would
accrue to the account of the Portfolio. Risks of delay in recovery of the
securities or even loss of rights in the collateral may occur should the
borrower of the securities fail financially. Risks may also arise to the extent
that the value of the collateral decreases below the value of the securities
loaned.
Upon entering into a securities lending transaction, the Portfolio receives
cash or other securities as collateral in an amount equal to or exceeding 102%
of the current market value of the loaned securities. Any cash received as
collateral is generally invested by State Street Bank and Trust Company ("State
Street"), acting in its capacity as securities lending agent (the "Agent"), in
the State Street Navigator Securities Lending Prime Portfolio which is a money
market fund registered under the 1940 Act. A portion of the dividends received
on the collateral is rebated to the borrower of the securities and the
remainder is split between the Agent and the Portfolio. On loans collateralized
by cash, the cash collateral is invested in a money market fund or short term
securities. A portion of the income generated upon investment of the collateral
is remitted to the Borrowers and the remainder is allocated between the fund
and the lending agent. On loans collateralized by U.S. Treasuries, a fee is
received from the Borrower and is allocated between the fund and the lending
agent.
H. FOREIGN CURRENCY TRANSLATION - The books and records of the Portfolio are
maintained in U.S. dollars. Foreign currencies, investments and other assets
and liabilities are translated into U.S. dollars on a daily basis using
prevailing exchange rates. Purchases and sales of securities are translated at
the rates of exchange prevailing when such securities were acquired or sold.
Income is translated at rates of exchange prevailing when interest is accrued
or dividends are recorded.
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The Portfolio does not isolate that portion of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in
forward foreign currency contracts, sales of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities
transactions, and the difference between the amounts of dividends, interest,
and foreign withholding taxes recorded on the Portfolio's books, and the U.S.
dollar equivalent of the amounts actually received or paid. Net unrealized
foreign exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at fiscal year end, from
changes in the exchange rates of foreign currency held, and from changes in the
contract value of forward foreign currency contracts.
I. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
J. FORWARD COMMITMENTS, WHEN-ISSUED AND DELAYED DELIVERY SECURITIES - The
Portfolio may purchase securities on a when-issued or delayed delivery basis
and may purchase or sell securities on a forward commitment basis. Settlement
of such transactions normally occurs within a month or more after the purchase
or sale commitment is made. The Portfolio may purchase securities under such
conditions only with the intention of actually acquiring them, but may enter
into a separate agreement to sell the securities before the settlement date.
Since the value of securities purchased may fluctuate prior to settlement, the
Portfolio may be required to pay more at settlement than the security is worth.
In addition, the purchaser is not entitled to any of the interest earned prior
to settlement. Upon making a commitment to purchase a security on a
when-issued, delayed delivery or forward commitment basis, the Portfolio will
hold liquid assets in a segregated account at the Portfolio's custodian bank
worth at least the equivalent of the amount due. The liquid assets will be
monitored on a daily basis and adjusted as necessary to maintain the necessary
value.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with Massachusetts Financial Services Company, (the "Adviser") for investment
advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- ----------------------------
MFS(R) Emerging Markets Equity Portfolio $2,291,045 1.05% First $250 Million
1.00% $250 Million to $500 Million
0.85% $500 Million to $1 Billion
0.75% Over $1 Billion
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
ordinary course of the Portfolio's business, but including amounts payable
pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act are
limited to the following respective expense ratios as a percentage of the
Portfolio's average daily net assets:
Expenses Deferred in
--------------------
2006 2007
Maximum Expense Ratio -------- ----
under current Expense Subject to repayment
Limitation Agreement until December 31,
--------------------- --------------------
Portfolio Class A Class B Class E 2011 2012
--------- ------- ------- ------- -------- ----
MFS(R) Emerging Markets Equity Portfolio 1.30% 1.55% 1.45%* $375,934 $--
* Class not offered during the period.
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratio as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued Net Increase
Through (Decrease)
Beginning Shares Dividend Shares in Shares Ending
Shares Sold Reinvestment Repurchased Outstanding Shares
- - ---------- ---------- ------------- ----------- ------------ ----------
MFS(R) Emerging Markets Equity Portfolio
Class A
06/30/2007 35,045,066 15,042,796 28,701 (3,848,135) 11,223,362 46,268,428
05/01/2006-12/31/2006 -- 35,926,965 307,569 (1,189,468) 35,045,066 35,045,066
Class B
06/30/2007 2,233,523 1,698,154 1,582 (1,849,723) (149,987) 2,083,536
05/01/2006-12/31/2006 -- 2,290,108 18,414 (74,999) 2,233,523 2,233,523
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
MFS(R) Emerging Markets Equity Portfolio $-- $356,230,828 $-- $236,827,020
14
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
5. INVESTMENT TRANSACTIONS - CONTINUED
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
- --------- ------------ ------------ -------------- --------------
MFS(R) Emerging Markets Equity Portfolio $504,080,737 $77,831,632 $(6,271,415) $71,560,217
6. SECURITY LENDING
As of June 30, 2007, the Portfolio had loaned securities which were
collateralized by short-term investments. The value of securities on loan and
the value of the related collateral were as follows:
Value of Value of
Securities Collateral
----------- -----------
MFS(R) Emerging Markets Equity Portfolio $32,987,519 $33,870,715
7. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the period ended December 31, 2006
was as follows:
Ordinary Long-Term
Income Capital Gain Total
- ---------- ------------ ----------
2006 2006 2006
---------- ------------ ----------
MFS(R) Emerging Markets Equity Portfolio $3,419,198 $-- $3,419,198
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
- - ------------- ------------- ------------ ------------------ -----------
MFS(R) Emerging Markets Equity Portfolio $344,265 $-- $34,579,285 $(9,995,276) $24,928,274
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
8. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
9. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
15
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
16
MET INVESTORS SERIES TRUST
MFS(R) Research
International Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
MFS(R) RESEARCH INTERNATIONAL PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY MASSACHUSETTS FINANCIAL SERVICES COMPANY
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
SUMMARY OF RESULTS
For the six months ended June 30, 2007, the MFS(R) Research International
Portfolio provided a total return of 10.44% for Class B. This compares with a
return of 11.09% for the Portfolio's benchmark, the MSCI EAFE(R) Index.
DETRACTORS FROM PERFORMANCE
Stock selection in the financial services sector detracted from performance
relative to the MSCI EAFE(R) Index. Aeon Credit Service (Japan), BOC Hong Kong,
and banking and financial services firm Sumitomo Mitsui Financial (Japan) were
among the portfolio's top detractors.
Stock selection in the leisure and autos and housing sectors also held back
relative performance. In the leisure sector, video game software company
Konami/(g)/ (Japan) hurt results. In the autos and housing sector, our
positioning in Honda Motor (Japan) and not owning strong-performing car maker
DaimlerChrysler (Germany) had a negative impact on relative returns.
Stocks in other sectors that dampened relative performance included electronics
manufacturers Samsung Electronics/(aa)/ (South Korea) and Funai Electric/(aa)/
(Japan). Not owning cellular phones maker Nokia (Finland) and mining operator
Rio Tinto (Australia), both benchmark constituents, also hurt as these stocks
outperformed the benchmark over the reporting period.
CONTRIBUTORS TO PERFORMANCE
Stock selection in the utilities and communications sector was the principal
contributor to performance relative to the MSCI EAFE(R) Index. Our holdings of
power and gas company E.ON/(aa)/ (Germany) was among the portfolio's top
contributors.
Stock selection in the basic materials sector aided relative returns. Mining
giant BHP Billiton (United Kingdom), industrial and medical gases producer
Linde (Germany), and steel products manufacturer Posco/(aa)(g)/ (South Korea)
helped drive the sector's positive results.
Stock selection in the health care sector also turned in a favorable relative
performance. Healthcare products maker Bayer (Germany) was the portfolio's top
contributing individual stock.
Elsewhere, our holdings of electronics and electrical engineering company
Siemens (Germany), mechanical engineering company GEA/(aa)/ (Germany), sporting
goods maker Adidas (Germany), and electrical distribution equipment
manufacturer Schneider Electric (France) bolstered relative performance. Not
owning weak-performing car maker Toyota (Japan) was another positive factor.
/(aa)/ Security is not a benchmark constituent.
/(g)/ Security was not held in the portfolio at period end.
TEAM MANAGED
The Portfolio is managed by a committee of research analysts under the general
supervision of Thomas Melendez and Jose Luiz Garcia.
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
MFS(R) RESEARCH INTERNATIONAL PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY MASSACHUSETTS FINANCIAL SERVICES COMPANY
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
--------------------------------
HSBC Holdings Plc 3.03%
--------------------------------
BHP Billiton Plc 2.65%
--------------------------------
Royal Dutch Shell Plc 2.63%
--------------------------------
E.On AG 2.45%
--------------------------------
Total S.A. 2.26%
--------------------------------
Linde AG 2.23%
--------------------------------
Nestle S.A. 2.17%
--------------------------------
Credit Agricole S.A. 1.95%
--------------------------------
WPP Group Plc 1.90%
--------------------------------
Vodafone Group Plc 1.86%
--------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
MFS(R) RESEARCH INTERNATIONAL PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY MASSACHUSETTS FINANCIAL SERVICES COMPANY
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
MFS(R) RESEARCH INTERNATIONAL PORTFOLIO MANAGED BY
MASSACHUSETTS FINANCIAL SERVICES COMPANY VS. MSCI EAFE(R) INDEX/1/
Growth Based on $10,000+
[CHART]
MFS(R) Research
MSCI EAFE(R) Index/1/ International Portfolio
--------------------- -----------------------
2/12/2001 $10,000 $10,000
12/31/2001 8,205 8,486
12/31/2002 6,920 7,484
12/31/2003 9,630 9,882
12/31/2004 11,622 11,814
12/31/2005 13,251 13,754
12/31/2006 16,809 17,406
6/30/2007 18,674 19,223
-------------------------------------------------------------
Average Annual Return
(for the period ended 6/30/07)/2/
-------------------------------------------------------------
1 Year 3 Year 5 Year Since Inception/3/
-------------------------------------------------------------
MFS(R) Research
International
Portfolio--Class A 27.39% 23.27% 18.34% 12.26%
- -- Class B 27.21% 22.98% 18.08% 10.79%
Class E 27.26% 23.13% 18.18% 16.50%
-------------------------------------------------------------
- - - MSCI EAFE(R) Index/1/ 27.53% 22.75% 18.21% 9.54%
-------------------------------------------------------------
+The chart reflects the performance of Class B shares of the Portfolio. The
performance of Class B shares will differ from that of the other Classes
because of the difference in expenses paid by policyholders investing in the
different share classes.
/1/The Morgan Stanley Capital International Europe, Australasia and Far East
Index ("MSCI EAFE(R) Index") is an unmanaged free float-adjusted market
capitalization index that is designed to measure developed market equity
performance, excluding the US & Canada. The Index does not include fees or
expenses and is not available for direct investment.
/2/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/3/Inception of the Class A shares is 5/1/01. Inception of the Class B shares
is 2/12/01. Inception of the Class E shares is 10/31/01. Index returns are
based on an inception date of 2/12/01.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
3
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
MFS(R) RESEARCH INTERNATIONAL PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,105.30 $4.02
Hypothetical (5% return before expenses) 1,000.00 1,020.98 3.86
- ------------------------------------------ ------------- ------------- --------------
Class B
Actual $1,000.00 $1,104.40 $5.32
Hypothetical (5% return before expenses) 1,000.00 1,019.74 5.11
- ------------------------------------------ ------------- ------------- --------------
Class E
Actual $1,000.00 $1,104.50 $4.80
Hypothetical (5% return before expenses) 1,000.00 1,020.23 4.61
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.77% ,
1.02% , and 0.92% for the Class A, Class B, and Class E, respectively,
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period).
4
MET INVESTORS SERIES TRUST
MFS(R) RESEARCH INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
---------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
---------------------------------------------------------------
COMMON STOCKS - 98.9%
AUSTRALIA - 2.0%
Billabong International, Ltd.(a).... 341,908 $ 5,184,755
Macquarie Bank, Ltd.(a)............. 116,816 8,422,320
Suncorp-Metway, Ltd................. 1,149,564 19,633,144
---------------
33,240,219
---------------
AUSTRIA - 0.7%
Erste Bank der Oesterreichischen
Sparkassen AG..................... 161,422 12,587,948
---------------
BELGIUM - 0.8%
Umicore............................. 62,210 13,451,106
---------------
BRAZIL - 1.5%
CSU Cardsystem S.A.*................ 538,490 3,206,791
Petroleo Brasileiro S.A. (ADR)...... 45,140 5,474,128
Unibanco-Uniao de Bancos Brasilieros
S.A. (ADR)........................ 151,240 17,070,459
---------------
25,751,378
---------------
CANADA - 0.5%
Rogers Communications, Inc.......... 118,620 5,065,789
Telus Corp.......................... 60,800 3,645,542
---------------
8,711,331
---------------
CYPRUS - 0.4%
Bank of Cyprus Public Co., Ltd...... 405,990 6,836,155
---------------
FRANCE - 11.8%
Axa(a).............................. 712,420 30,536,582
BNP Paribas(a)...................... 209,535 24,934,964
Credit Agricole S.A.(a)............. 811,672 32,886,107
Gaz de France S.A.(a)............... 151,700 7,635,605
LVMH Moet Hennessy Louis Vuitton
S.A.(a)........................... 199,420 22,958,386
Pernod Ricard S.A.(a)............... 39,009 8,620,703
Schneider Electric S.A.(a).......... 168,170 23,523,221
Suez S.A.(a)........................ 161,622 9,222,414
Total S.A.(a)....................... 470,360 38,139,902
---------------
198,457,884
---------------
GERMANY - 14.2%
Adidas AG(a)........................ 431,580 27,247,214
Bayer AG(a)......................... 277,450 20,995,564
Bayerische Motoren Werke (BMW)
AG(a)............................. 364,110 23,596,615
Continental AG(a)................... 107,821 15,192,383
Deutsche Postbank AG(a)............. 124,690 10,954,820
E.On AG(a).......................... 246,290 41,338,148
GEA Group AG*....................... 371,810 12,923,295
Linde AG(a)......................... 311,390 37,524,795
SAP AG(a)........................... 352,890 18,110,593
Siemens AG(a)....................... 216,700 31,141,546
---------------
239,024,973
---------------
-------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
-------------------------------------------------------------------
GREECE - 0.5%
Hellenic Telecommunications Organization
SA.................................... 278,540 $ 8,614,659
---------------
HONG KONG - 1.3%
BOC Hong Kong Holdings, Ltd.(a)......... 5,226,000 12,352,712
Li & Fung, Ltd.(a)...................... 2,574,000 9,326,283
---------------
21,678,995
---------------
INDIA - 1.2%
HCL Technologies, Ltd................... 474,890 4,083,960
Steel Authority of India, Ltd........... 5,159,845 16,699,225
---------------
20,783,185
---------------
IRELAND - 0.8%
CRH Plc................................. 273,540 13,483,989
---------------
ISRAEL - 0.5%
Makhteshim-Agan Industries, Ltd......... 1,244,840 8,995,025
---------------
ITALY - 3.7%
Banche Popolari Unite SCPA(a)........... 684,088 17,342,637
Finmeccanica S.p.A(a)................... 485,820 14,879,764
Saipem S.p.A.(a)........................ 225,350 7,693,950
UniCredito Italiano S.p.A............... 2,599,370 23,131,055
---------------
63,047,406
---------------
JAPAN - 15.4%
Aeon Credit Service Co., Ltd.(a)........ 643,900 10,191,217
Astellas Pharma, Inc.................... 263,200 11,423,839
Bridgestone Corp.(a).................... 1,323,600 28,317,100
East Japan Railway Co................... 2,196 16,862,010
FANUC, Ltd.............................. 96,300 9,898,601
Fast Retailing Co., Ltd.(a)............. 99,100 7,029,241
Funai Electric Co., Ltd.(a)............. 105,100 6,102,943
Honda Motor Co., Ltd.(a)................ 552,800 20,098,550
Inpex Holdings, Inc..................... 710 6,602,068
Kao Corp................................ 573,000 14,805,532
Konica Minolta Holdings, Inc.(a)........ 775,500 11,406,301
Lawson, Inc............................. 250,400 8,633,020
Mitsubishi Corp......................... 355,600 9,271,047
Mitsubishi UFJ Financial Group, Inc..... 663 7,290,233
Mitsui & Co., Ltd....................... 254,000 5,028,327
Nippon Electric Glass Co., Ltd.(a)...... 501,000 8,777,030
Nippon Television Network Corp.......... 270 36,747
Nomura Holdings, Inc.(a)................ 1,057,300 20,474,448
OMRON Corp.............................. 570,800 14,927,945
Sapporo Hokuyo Holdings, Inc............ 628 6,905,442
Sumitomo Mitsui Financial Group,
Inc.(a)............................... 2,437 22,659,152
Tohoku Electric Power Co., Inc.(a)...... 231,800 5,177,956
Tokyo Gas Co., Ltd...................... 1,473,000 6,963,505
---------------
258,882,254
---------------
See notes to financial statements
5
MET INVESTORS SERIES TRUST
MFS(R) RESEARCH INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
---------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
---------------------------------------------------------------------
MEXICO - 1.0%
America Movil S.A. de C.V. (ADR)....... 69,010 $ 4,273,789
Grupo Televisa S.A. (ADR).............. 267,540 7,386,779
Kimberly-Clark de Mexico S.A. de
C.V. - Class A(a).................... 1,151,620 5,016,046
---------------
16,676,614
---------------
NETHERLANDS - 2.8%
ASML Holding N.V.*..................... 10,380 285,734
Heineken N.V........................... 331,330 19,439,747
Koninklijke (Royal) Philips Electronics
N.V.................................. 487,270 20,633,944
TNT N.V................................ 147,218 6,631,745
---------------
46,991,170
---------------
NORWAY - 1.9%
Statoil ASA(a)......................... 598,090 18,514,474
Telenor ASA*(a)........................ 700,810 13,680,325
---------------
32,194,799
---------------
PHILIPPINES - 0.6%
Philippine Long Distance Telephone Co.. 170,570 9,749,314
---------------
RUSSIA - 0.6%
Gazprom (ADR).......................... 207,490 8,693,831
TMK OAO - (GDR) (144A)(b)(c)........... 56,490 2,044,938
---------------
10,738,769
---------------
SINGAPORE - 0.5%
Venture Corp., Ltd..................... 806,000 8,274,537
---------------
SOUTH AFRICA - 0.8%
Sasol, Ltd............................. 145,470 5,489,316
Standard Bank Group, Ltd............... 581,630 8,065,827
---------------
13,555,143
---------------
SOUTH KOREA - 2.2%
Hana Financial Group, Inc.............. 251,630 12,230,106
Nong Shim Co., Ltd..................... 15,108 4,294,394
Samsung Electronics Co., Ltd........... 32,305 19,735,981
---------------
36,260,481
---------------
SPAIN - 1.4%
Antena 3 de Television S.A.*(a)........ 349,580 7,269,817
Telefonica S.A.(a)..................... 720,790 16,004,305
---------------
23,274,122
---------------
SWITZERLAND - 9.4%
Actelion, Ltd.*........................ 244,603 10,893,994
EFG International...................... 250,220 11,502,322
Nestle S.A............................. 96,429 36,546,249
Novartis AG............................ 400,550 22,498,253
Roche Holdings AG...................... 156,660 27,731,425
Syngenta AG............................ 91,770 17,855,311
UBS AG................................. 523,333 31,217,900
---------------
158,245,454
---------------
---------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
---------------------------------------------------------------------
THAILAND - 0.7%
PTT Public Co., Ltd...................... 766,000 $ 5,990,442
Siam Cement Public Co., Ltd.............. 633,600 4,917,380
---------------
10,907,822
---------------
UNITED KINGDOM - 21.7%
ARM Holdings Plc(a)...................... 4,462,130 13,034,946
Barclays Plc............................. 1,948,000 27,005,927
BG Group Plc............................. 468,210 7,678,740
BHP Billiton Plc......................... 1,613,200 44,694,020
Bunzl Plc................................ 585,030 8,089,879
GlaxoSmithKline Plc...................... 858,410 22,464,030
HSBC Holdings Plc........................ 2,792,865 51,122,295
Intertek Group Plc....................... 105,100 2,058,493
NXT Plc.................................. 337,030 13,497,382
Reckitt Benckiser Plc.................... 284,664 15,571,058
Royal Bank of Scotland Group Plc......... 2,391,689 30,216,249
Royal Dutch Shell Plc.................... 1,090,770 44,385,831
Smiths Group Plc......................... 255,396 6,060,134
Standard Chartered Plc................... 507,810 16,551,783
TI Automotive, Ltd. - Class A(c)(d)*..... 45,100 0
Vodafone Group Plc....................... 9,341,570 31,401,784
WPP Group Plc............................ 2,140,240 31,984,024
---------------
365,816,575
---------------
Total Common Stocks
(Cost $1,439,158,571) 1,666,231,307
---------------
PREFERRED STOCK - 0.2%
BRAZIL - 0.2%
Universo Online S.A.*
(Cost - $3,600,139)...................... 580,500 3,456,967
---------------
SHORT-TERM INVESTMENTS - 1.3%
State Street Bank & Trust Co.,
Repurchase Agreement dated 06/29/07
at 3.400% to be repurchased at
$8,816,517 on 07/02/07 collateralized
by 9,680,000 FHLMC at 5.300% due
05/12/20 with a value of
$8,990,300............................. $ 8,814,020 8,814,020
State Street Bank & Trust Co., Repurchase
Agreement dated 06/29/07 at 3.400% to
be repurchased at $4,604,748 on
07/02/07 collateralized by 5,210,000
FNMA at 6.000% due 04/18/36 with a
value of $4,695,512.................... 4,603,444 4,603,444
See notes to financial statements
6
MET INVESTORS SERIES TRUST
MFS(R) RESEARCH INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
------------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - CONTINUED
State Street Bank & Trust Co.,
Repurchase Agreement dated 06/29/07
at 3.400% to be repurchased at
$8,252,874 on 07/02/07 collateralized
by 8,990,000 FNMA at 4.375% due
10/15/15 with a value of
$8,416,888............................... $ 8,250,536 $ 8,250,536
---------------
Total Short-Term Investments
(Cost $21,668,000) 21,668,000
---------------
TOTAL INVESTMENTS - 100.4%
(Cost $1,464,426,710) 1,691,356,274
---------------
Other Assets and Liabilities (net) - (0.4)% (6,221,600)
---------------
TOTAL NET ASSETS - 100.0% $ 1,685,134,674
===============
PORTFOLIO FOOTNOTES:
* Non-income producing security.
(a) A portion or all of the security was held on loan. As of June 30, 2007, the
market value of the securities loaned was $358,256,739 and the collateral
received consisted of cash in the amount of $366,442,254 and securities in
the amount of $10,025,001.
(b) Securities that may be resold to "qualified institutional buyers" under
Rule 144A or securities offered pursuant to Section 4(2) of the Securities
Act of 1933, as amended. These securities have been determined to be
illiquid under the guidelines established by the Board of Trustees. These
securities represent in the aggregate $2,044,938 of net assets.
(c) Illiquid securities representing in the aggregate 0.12% of net assets.
(d) Security valued at fair value using methods determined in good faith by or
at the direction of the Board of Directors.
ADR - American Depositary Receipt
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
GDR - Global Depositary Receipt
SUMMARY OF TOTAL FOREIGN SECURITIES BY INDUSTRY CLASSIFICATION AS OF 6/30/07
PERCENT OF
DESCRIPTION VALUE (000) NET ASSETS
---------------------------------------------------------------
Advertising $ 3,457 0.2%
Aerospace & Defense 20,940 1.2%
Air Freight & Logistics 6,632 0.4%
Auto Components 43,509 2.6%
Automobiles 43,695 2.6%
Banks 359,406 21.3%
Beverages 28,060 1.7%
Chemicals 60,769 3.6%
Commercial Services & Supplies 43,355 2.6%
Construction Materials 18,401 1.1%
Electric Utilities 46,516 2.8%
Electrical Equipment & Services 64,563 3.8%
Electronic Equipment & Instruments 31,980 1.9%
Energy Equipment & Services 7,694 0.5%
Financial - Diversified 85,386 5.1%
Food & Drug Retailing 8,633 0.5%
Food Products 40,841 2.4%
Gas Utilities 6,963 0.4%
Household Durables 26,737 1.6%
Household Products 35,393 2.1%
Industrial - Diversified 10,752 0.6%
Insurance 30,537 1.8%
IT Consulting & Services 4,084 0.2%
Leisure Equipment & Products 11,406 0.7%
Machinery 37,525 2.2%
Media 14,693 0.9%
Metals & Mining 74,844 4.4%
Multi-Utilities 9,222 0.6%
Oil & Gas 139,911 8.3%
Pharmaceuticals 95,012 5.6%
Retail - Multiline 13,497 0.8%
Retail - Specialty 12,214 0.7%
Road & Rail 16,862 1.0%
Semiconductor Equipment & Products 33,057 2.0%
Software 18,111 1.1%
Telecommunication Services - Diversified 56,760 3.4%
Telecommunication Services - Wireless 35,676 2.1%
Textiles, Apparel & Luxury Goods 50,206 3.0%
Trading Companies & Distributors 22,389 1.3%
---------- ----
Total $1,669,688 99.1%
========== ====
See notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
MFS(R) RESEARCH INTERNATIONAL PORTFOLIO
ASSETS
Investments, at value (Note 2)* $1,669,688,274
Repurchase Agreement 21,668,000
Cash 760
Cash denominated in foreign currencies** 1,258,914
Collateral for securities on loan 376,467,255
Receivable for investments sold 34,572,461
Receivable for Trust shares sold 2,128,735
Dividends receivable 3,205,506
Interest receivable 4,093
--------------
Total assets 2,108,993,998
--------------
LIABILITIES
Payables for:
Investments purchased 43,668,109
Trust shares redeemed 1,159,370
Distribution and services fees - Class B 157,926
Distribution and services fees - Class E 3,507
Collateral for securities on loan 376,467,255
Interest payable 362,679
Investment advisory fee payable (Note 3) 955,567
Administration fee payable 17,517
Custodian and accounting fees payable 961,415
Accrued expenses 105,979
--------------
Total liabilities 423,859,324
--------------
NET ASSETS $1,685,134,674
==============
NET ASSETS REPRESENTED BY:
Paid in surplus $1,355,911,633
Accumulated net realized gain 81,041,285
Unrealized appreciation on investments and foreign currency 226,953,289
Undistributed net investment income 21,228,467
--------------
Total $1,685,134,674
==============
NET ASSETS
Class A $ 878,795,816
==============
Class B 777,589,178
==============
Class E 28,749,680
==============
CAPITAL SHARES OUTSTANDING
Class A 62,581,605
==============
Class B 55,720,915
==============
Class E 2,055,449
==============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 14.04
==============
Class B 13.96
==============
Class E 13.99
==============
- -------------------------------------------------------------------------------
*Investments at cost, excluding Repurchase Agreements $1,442,758,710
**Cost of cash denominated in foreign currencies 1,262,304
See notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
MFS(R) RESEARCH INTERNATIONAL PORTFOLIO
INVESTMENT INCOME:
Dividends (1) $ 27,255,614
Interest (2) 1,199,063
------------
Total investment income 28,454,677
------------
EXPENSES:
Investment advisory fee (Note 3) 5,240,078
Administration fees 53,152
Custody and accounting fees 275,860
Distribution fee - Class B 840,415
Distribution fee - Class E 20,658
Transfer agent fees 15,678
Audit 12,841
Legal 7,460
Trustee fees and expenses 7,190
Shareholder reporting 63,773
Insurance 8,959
Other 2,231
------------
Total expenses 6,548,295
------------
Net investment income 21,906,382
------------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain (loss) on:
Investments 90,703,290
Foreign currency (143,867)
------------
Net realized gain on investments and foreign currency 90,559,423
------------
Net change in unrealized appreciation on:
Investments 37,625,572
Foreign currency 10,216
------------
Net change in unrealized appreciation on investments and foreign currency 37,635,788
------------
Net realized and change in unrealized gain on investments and foreign currency 128,195,211
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $150,101,593
============
- ----------------------------------------------------------------------------------------------------
(1)Dividend income is net withholding taxes of: $ 2,813,557
(2)Interest income includes securities lending income of: 951,169
See notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
MFS(R) RESEARCH INTERNATIONAL PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 21,906,382 $ 14,454,189
Net realized gain on investments, futures contracts, and foreign currency 90,559,423 236,718,905
Net change in unrealized appreciation on investments and foreign currency 37,635,788 43,982,595
-------------- --------------
Net increase in net assets resulting from operations 150,101,593 295,155,689
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (11,952,402) (13,435,603)
Class B (8,291,779) (8,751,963)
Class E (387,237) (332,015)
From net realized gains
Class A (116,453,430) (52,821,172)
Class B (93,873,760) (38,133,462)
Class E (4,070,346) (1,377,849)
-------------- --------------
Net decrease in net assets resulting from distributions (235,028,954) (114,852,064)
-------------- --------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class A 146,594,859 242,793,374
Class B 178,504,686 160,368,287
Class E 4,633,995 13,027,252
Net asset value of shares issued through dividend reinvestment
Class A 128,405,832 66,256,775
Class B 102,165,539 46,885,425
Class E 4,457,583 1,709,864
Cost of shares repurchased
Class A (54,414,379) (326,242,508)
Class B (90,749,160) (106,127,551)
Class E (5,308,496) (5,495,919)
-------------- --------------
Net increase in net assets from capital share transactions 414,290,459 93,174,999
-------------- --------------
TOTAL INCREASE IN NET ASSETS 329,363,098 273,478,624
Net assets at beginning of period 1,355,771,576 1,082,292,952
-------------- --------------
Net assets at end of period $1,685,134,674 $1,355,771,576
============== ==============
Net assets at end of period includes undistributed net investment income $ 21,228,467 $ 19,953,503
============== ==============
See notes to financial statements
10
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS A
MFS(R) RESEARCH INTERNATIONAL PORTFOLIO ----------------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 -------------------------------------------
(UNAUDITED) 2006 2005 2004 2003
-------------- ------ ------ ------ ------
NET ASSET VALUE, BEGINNING OF PERIOD............................ $15.04 $13.00 $11.72 $ 9.81 $ 7.49
------ ------ ------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income........................................... 0.22 (a) 0.19 (a) 0.14 (a) 0.08 (a) 0.06 (a)
Net Realized/Unrealized Gain (Loss) on Investments.............. 1.28 3.17 1.83 1.85 2.34
------ ------ ------ ------ ------
Total from Investment Operations................................ 1.50 3.36 1.97 1.93 2.40
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income............................ (0.23) (0.27) (0.07) -- (0.08)
Distributions from Net Realized Capital Gains................... (2.27) (1.05) (0.62) (0.02) --
------ ------ ------ ------ ------
Total Distributions............................................. (2.50) (1.32) (0.69) (0.02) (0.08)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD.................................. $14.04 $15.04 $13.00 $11.72 $ 9.81
====== ====== ====== ====== ======
TOTAL RETURN 10.53% 26.91% 16.77% 19.72% 32.20%
Ratio of Expenses to Average Net Assets**....................... 0.77%* 0.94% 0.93% 1.06% 1.09%
Ratio of Expenses to Average Net Assets After Broker Rebates**.. N/A N/A N/A N/A 1.09%
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates....................................................... 0.77%* 0.95% 0.93%(b) 0.94%(b) 1.11%
Ratio of Net Investment Income to Average Net Assets............ 3.05%* 1.34% 1.18% 0.75% 0.68%
Portfolio Turnover Rate......................................... 34.2% 104.1% 84.5% 98.5% 99.0%
Net Assets, End of Period (in millions)......................... $878.8 $706.0 $624.2 $304.0 $67.3
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
MFS(R) RESEARCH INTERNATIONAL PORTFOLIO --------
--------
2002
-------
NET ASSET VALUE, BEGINNING OF PERIOD............................ $ 8.48
-------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income........................................... 0.06 (a)
Net Realized/Unrealized Gain (Loss) on Investments.............. (1.04)
-------
Total from Investment Operations................................ (0.98)
-------
LESS DISTRIBUTIONS
Dividends from Net Investment Income............................ (0.01)
Distributions from Net Realized Capital Gains................... --
-------
Total Distributions............................................. (0.01)
-------
NET ASSET VALUE, END OF PERIOD.................................. $ 7.49
=======
TOTAL RETURN (11.52)%
Ratio of Expenses to Average Net Assets**....................... 1.00 %
Ratio of Expenses to Average Net Assets After Broker Rebates**.. 1.00 %
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates....................................................... 1.86 %
Ratio of Net Investment Income to Average Net Assets............ 0.73 %
Portfolio Turnover Rate......................................... 114.1 %
Net Assets, End of Period (in millions)......................... $9.4
CLASS B
----------------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 -------------------------------------------
(UNAUDITED) 2006 2005 2004 2003
-------------- ------ ------ ------ ------
NET ASSET VALUE, BEGINNING OF PERIOD............................ $14.95 $12.94 $11.68 $ 9.79 $ 7.47
------ ------ ------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income........................................... 0.21 (a) 0.15 (a) 0.11 (a) 0.05 (a) 0.05 (a)
Net Realized/Unrealized Gain (Loss) on Investments.............. 1.27 3.15 1.81 1.86 2.33
------ ------ ------ ------ ------
Total from Investment Operations................................ 1.48 3.30 1.92 1.91 2.38
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income............................ (0.20) (0.24) (0.04) -- (0.06)
Distributions from Net Realized Capital Gains................... (2.27) (1.05) (0.62) (0.02) --
------ ------ ------ ------ ------
Total Distributions............................................. (2.47) (1.29) (0.66) (0.02) (0.06)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD.................................. $13.96 $14.95 $12.94 $11.68 $ 9.79
====== ====== ====== ====== ======
TOTAL RETURN 10.44% 26.56% 16.42% 19.56% 32.40%
Ratio of Expenses to Average Net Assets**....................... 1.02%* 1.19% 1.19% 1.32% 1.33%
Ratio of Expenses to Average Net Assets After Broker Rebates**.. N/A N/A N/A N/A 1.33%
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates....................................................... 1.02%* 1.20% 1.19%(b) 1.18%(b) 1.39%
Ratio of Net Investment Income to Average Net Assets............ 2.85%* 1.12% 0.90% 0.47% 0.56%
Portfolio Turnover Rate......................................... 34.2% 104.1% 84.5% 98.5% 99.0%
Net Assets, End of Period (in millions)......................... $777.6 $623.0 $443.5 $396.0 $186.0
--------
--------
2002
-------
NET ASSET VALUE, BEGINNING OF PERIOD............................ $ 8.48
-------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income........................................... 0.03 (a)
Net Realized/Unrealized Gain (Loss) on Investments.............. (1.03)
-------
Total from Investment Operations................................ (1.00)
-------
LESS DISTRIBUTIONS
Dividends from Net Investment Income............................ (0.01)
Distributions from Net Realized Capital Gains................... --
-------
Total Distributions............................................. (0.01)
-------
NET ASSET VALUE, END OF PERIOD.................................. $ 7.47
=======
TOTAL RETURN (11.80)%
Ratio of Expenses to Average Net Assets**....................... 1.25 %
Ratio of Expenses to Average Net Assets After Broker Rebates**.. 1.25 %
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates....................................................... 2.07 %
Ratio of Net Investment Income to Average Net Assets............ 0.34 %
Portfolio Turnover Rate......................................... 114.1 %
Net Assets, End of Period (in millions)......................... $67.1
* Annualized
** Prior to 05/01/2003, broker rebates were excluded from the calculation of
the expense limitation.
N/A Not Applicable
(a) Per share amounts based on average shares outstanding during the period.
(b) Excludes effect of Deferred Expense Reimbursement--See Note 3 of financial
statements.
See notes to financial statements
11
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS E
MFS(R) RESEARCH INTERNATIONAL PORTFOLIO ----------------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 -------------------------------------------
(UNAUDITED) 2006 2005 2004 2003
-------------- ------ ------ ------ ------
NET ASSET VALUE, BEGINNING OF PERIOD............................ $14.99 $12.96 $11.70 $ 9.80 $ 7.48
------ ------ ------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income........................................... 0.21 (a) 0.16 (a) 0.13 (a) 0.07 (a) 0.05 (a)
Net Realized/Unrealized Gain (Loss) on Investments.............. 1.28 3.17 1.81 1.85 2.34
------ ------ ------ ------ ------
Total from Investment Operations................................ 1.49 3.33 1.94 1.92 2.39
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income............................ (0.22) (0.25) (0.06) -- (0.07)
Distributions from Net Realized Capital Gains................... (2.27) (1.05) (0.62) (0.02) --
------ ------ ------ ------ ------
Total Distributions............................................. (2.49) (1.30) (0.68) (0.02) (0.07)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD.................................. $13.99 $14.99 $12.96 $11.70 $ 9.80
====== ====== ====== ====== ======
TOTAL RETURN 10.45% 26.79% 16.52% 19.64% 32.09%
Ratio of Expenses to Average Net Assets**....................... 0.92%* 1.09% 1.09% 1.22% 1.23%
Ratio of Expenses to Average Net Assets After Broker Rebates**.. N/A N/A N/A N/A 1.23%
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates....................................................... 0.92%* 1.10% 1.09%(b) 1.09%(b) 1.28%
Ratio of Net Investment Income to Average Net Assets............ 2.83%* 1.18% 1.07% 0.72% 0.59%
Portfolio Turnover Rate......................................... 34.2% 104.1% 84.5% 98.5% 99.0%
Net Assets, End of Period (in millions)......................... $28.7 $26.7 $14.6 $11.3 $6.9
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
MFS(R) RESEARCH INTERNATIONAL PORTFOLIO --------
--------
2002
-------
NET ASSET VALUE, BEGINNING OF PERIOD............................ $ 8.48
-------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income........................................... 0.03 (a)
Net Realized/Unrealized Gain (Loss) on Investments.............. (1.02)
-------
Total from Investment Operations................................ (0.99)
-------
LESS DISTRIBUTIONS
Dividends from Net Investment Income............................ (0.01)
Distributions from Net Realized Capital Gains................... --
-------
Total Distributions............................................. (0.01)
-------
NET ASSET VALUE, END OF PERIOD.................................. $ 7.48
=======
TOTAL RETURN (11.65)%
Ratio of Expenses to Average Net Assets**....................... 1.15 %
Ratio of Expenses to Average Net Assets After Broker Rebates**.. 1.15 %
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates....................................................... 1.82 %
Ratio of Net Investment Income to Average Net Assets............ 0.34 %
Portfolio Turnover Rate......................................... 114.1 %
Net Assets, End of Period (in millions)......................... $1.8
* Annualized
** Prior to 05/01/2003, broker rebates were excluded from the calculation of
the expense limitation.
N/A Not Applicable
(a) Per share amounts based on average shares outstanding during the period.
(b) Excludes effect of Deferred Expense Reimbursement--See Note 3 of financial
statements.
See notes to financial statements
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is MFS(R) Research International Portfolio,
which is diversified. Shares in the Trust are not offered directly to the
general public and are currently available only to separate accounts
established by certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A, B and E Shares are
offered by the Portfolio. Shares of each Class of the Portfolio represent an
equal pro rata interest in the Portfolio and generally give the shareholder the
same voting, dividend, liquidation, and other rights. Investment income,
realized and unrealized capital gains and losses, the common expenses of the
Portfolio and certain Portfolio-level expense reductions, if any, are allocated
on a pro rata basis to each class based on the relative net assets of each
class to the total net assets of the Portfolio. Each class of shares differs in
its respective distribution expenses and certain other class-specific expense
reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date. The value of the
security so purchased is subject to market fluctuations during this period. The
Portfolio segregates assets having an aggregate value at least equal to the
amount of the when issued or delayed delivery purchase commitments until
payment is made.
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
The Portfolio utilizes the provisions of the federal income tax laws that
provide for the carryforward of capital losses for eight years, offsetting such
losses against any future net realized capital gains. At December 31, 2006, the
accumulated capital loss carryforwards and expiration dates by the Portfolio
were as follows:
Expiring Expiring Expiring
Portfolio Total 12/31/2008 12/31/2009 12/31/2010
- --------- ----------- ----------- ----------- ----------
MFS(R) Research International Portfolio $29,955,270 $11,883,462 $11,694,451 $6,377,357
MFS(R) Research International Portfolio acquired losses of $37,816,349 in the
merger with J.P. Morgan International Equity Portfolio on April 28th 2003 which
are subject to an annual limitation of $2,138,073.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. FUTURES CONTRACTS - A futures contract is an agreement involving the
delivery of a particular asset on a specified future date at an agreed upon
price. These contracts are generally used to provide the return of an index
without purchasing all of the securities underlying the index or as a temporary
substitute for purchasing or selling specific securities.
Upon entering into a futures contract, the Portfolio is required to make
initial margin deposits with the broker or segregate liquid investments to
satisfy the broker's margin requirements. Initial margin deposits are recorded
as assets and held in a segregated account at the custodian. During the period
the futures contract is open, changes in the value of the contract are
recognized as unrealized gains or losses by "marking to market" the contract on
a daily basis to reflect the value of the contract's settlement price at the
end of each day's trading. Variation margin payments are made or received and
recognized as assets due from or liabilities to the broker depending upon
whether unrealized gains or losses, respectively, are incurred. When the
contract is closed, the Portfolio records a realized gain or loss equal to the
difference between the proceeds from (or cost of) the closing transaction and
its basis in the contract.
Risks of entering into futures contracts include the possibility that there may
be an illiquid market and that the change in the value of the contract may not
correlate with changes in the value of the underlying securities.
G. FORWARD FOREIGN CURRENCY CONTRACTS - The Portfolio may enter into forward
foreign currency contracts to hedge their portfolio holdings against future
movements in certain foreign currency exchange rates. A forward currency
contract is a commitment to purchase or sell a foreign currency at a future
date at a set price. The forward currency contracts are valued at the forward
rate and are marked-to-market daily. The change in market value is recorded by
the Portfolio as an unrealized gain or loss. When the contract is closed, the
Portfolio recognizes a realized gain or loss equal to the difference between
the value of the contract at the time it was opened and the value at the time
it was closed.
The use of forward foreign currency contracts does not eliminate fluctuations
in the underlying prices of the securities of the Portfolio, but it does
establish a rate of exchange that can be achieved in the future. Although
forward foreign currency contracts to sell limit the risk of loss due to a
decline in the value of the currency holdings, they also limit any potential
gain that might result should the value of the currency increase. In addition,
the Portfolio could be exposed to risks if the counterparties to the contracts
are unable to meet the terms of the contracts.
H. SECURITIES LENDING - The Portfolio may lend its securities to certain
qualified brokers who borrow securities in order to complete certain
transactions. By lending its investment securities, the Portfolio attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term
14
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
of the loan would accrue to the account of the Portfolio. Risks of delay in
recovery of the securities or even loss of rights in the collateral may occur
should the borrower of the securities fail financially. Risks may also arise to
the extent that the value of the collateral decreases below the value of the
securities loaned.
Upon entering into a securities lending transaction, the Portfolio receives
cash or other securities as collateral in an amount equal to or exceeding 102%
of the current market value of the loaned securities. Any cash received as
collateral is generally invested by State Street Bank and Trust Company ("State
Street"), acting in its capacity as securities lending agent (the "Agent"), in
the State Street Navigator Securities Lending Prime Portfolio which is a money
market fund registered under the 1940 Act. A portion of the dividends received
on the collateral is rebated to the borrower of the securities and the
remainder is split between the Agent and the Portfolio. On loans collateralized
by cash, the cash collateral is invested in a money market fund or short term
securities. A portion of the income generated upon investment of the collateral
is remitted to the Borrowers and the remainder is allocated between the fund
and the lending agent. On loans collateralized by U.S. Treasuries, a fee is
received from the Borrower and is allocated between the fund and the lending
agent.
I. FOREIGN CURRENCY TRANSLATION - The books and records of the Portfolio are
maintained in U.S. dollars. Foreign currencies, investments and other assets
and liabilities are translated into U.S. dollars on a daily basis using
prevailing exchange rates. Purchases and sales of securities are translated at
the rates of exchange prevailing when such securities were acquired or sold.
Income is translated at rates of exchange prevailing when interest is accrued
or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in
forward foreign currency contracts, sales of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities
transactions, and the difference between the amounts of dividends, interest,
and foreign withholding taxes recorded on the Portfolio's books, and the U.S.
dollar equivalent of the amounts actually received or paid. Net unrealized
foreign exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at fiscal year end, from
changes in the exchange rates of foreign currency held, and from changes in the
contract value of forward foreign currency contracts.
J. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
K. FORWARD COMMITMENTS, WHEN-ISSUED AND DELAYED DELIVERY SECURITIES - The
Portfolio may purchase securities on a when-issued or delayed delivery basis
and may purchase or sell securities on a forward commitment basis. Settlement
of such transactions normally occurs within a month or more after the purchase
or sale commitment is made. The Portfolio may purchase securities under such
conditions only with the intention of actually acquiring them, but may enter
into a separate agreement to sell the securities before the settlement date.
Since the value of securities purchased may fluctuate prior to settlement, the
Portfolio may be required to pay more at settlement than the security is worth.
In addition, the purchaser is not entitled to any of the interest earned prior
to settlement. Upon making a commitment to purchase a security on a
when-issued, delayed delivery or forward commitment basis, the Portfolio will
hold liquid assets in a segregated account at the Portfolio's custodian bank
worth at least the equivalent of the amount due. The liquid assets will be
monitored on a daily basis and adjusted as necessary to maintain the necessary
value.
L. DIRECTED BROKERAGE AGREEMENT - The Trust has entered into a directed
brokerage arrangement with State Street Global Markets ("SSGM"). Under this
arrangement, the Portfolio directs certain trades to SSGM in return for a
recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to
each Portfolio are shown separately as an expense reduction on the Statement of
Operations of the Portfolio.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with Massachusetts Financial Services Company, (the "Adviser") for investment
advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
15
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- ----------------------------
MFS(R) Research International Portfolio $5,240,078 0.80% First $200 Million
0.75% $200 Million to $500 Million
0.70% $500 Million to $1 Billion
0.65% Over $1 Billion
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Maximum Expense Ratio
under current Expense
Limitation Agreement
----------------------
Portfolio Class A Class B Class E
--------- ------- ------- -------
MFS(R) Research International Portfolio 1.00% 1.25% 1.15%
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratio as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
16
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued Net Increase
Through (Decrease)
Beginning Shares Dividend Shares in Shares Ending
Shares Sold Reinvestment Repurchased Outstanding Shares
- - ---------- ---------- ------------- ----------- ------------ ----------
MFS(R) Research International Portfolio
Class A
06/30/2007 46,936,805 9,926,131 9,427,741 (3,709,072) 15,644,800 62,581,605
12/31/2006 48,011,738 17,434,338 4,857,536 (23,366,806) (1,074,933) 46,936,805
Class B
06/30/2007 41,673,081 12,789,782 7,545,461 (6,287,409) 14,047,834 55,720,915
12/31/2006 34,281,448 11,688,539 3,452,535 (7,749,441) 7,391,633 41,673,081
Class E
06/30/2007 1,781,915 316,262 328,488 (371,216) 273,534 2,055,449
12/31/2006 1,123,040 944,161 125,725 (411,011) 658,875 1,781,915
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
MFS(R) Research International Portfolio $-- $645,063,071 $-- $508,503,440
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
- --------- -------------- ------------ -------------- --------------
MFS(R) Research International Portfolio $1,464,426,710 $252,947,191 $(26,017,627) $226,929,564
6. SECURITY LENDING
As of June 30, 2007, the Portfolio had loaned securities which were
collateralized by short term investments. The value of securities on loan and
the value of the related collateral were as follows:
Value of Value of
Securities Collateral
------------ ------------
MFS(R) Research International Portfolio $358,256,739 $376,467,255
17
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
7. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
----------------------- ----------------------- ------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ------------ -----------
MFS(R) Research International Portfolio $71,841,110 $30,734,372 $43,010,954 $22,914,081 $114,852,064 $53,648,453
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
------------- ------------- ------------ ------------------ ------------
MFS(R) Research International Portfolio $128,029,701 $106,999,121 $187,673,870 $(8,552,292) $414,150,401
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
8. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
9. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
18
MET INVESTORS SERIES TRUST
MFS(R)
Value Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
MFS(R) VALUE PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY MASSACHUSETTS FINANCIAL SERVICES COMPANY
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
SUMMARY OF RESULTS
For the six months ended June 30, 2007, the MFS(R) Value Portfolio had a total
return of 8.00%. This compares with a return of 6.23% for the Portfolio's
benchmark, the Russell 1000(R) Value Index.
CONTRIBUTORS TO PERFORMANCE
Stock selection and an underweighting in the weak-performing financial services
sector boosted performance relative to the Russell 1000(R) Value Index.
Avoiding financial services firm Wachovia and insurance firm American
International Group helped results as both stocks underperformed the benchmark
over the reporting period.
The combination of stock selection and an overweighted position in the
industrial goods and services sector aided relative returns. Top-contributing
holdings included agricultural equipment maker Deere, industrial machinery and
equipment manufacturer W.W. Grainger, and defense contractor Northrop Grumman.
Security selection in the consumer staples sector also benefited the
Portfolio's performance. Avoiding weak-performing household products maker
Procter & Gamble for a majority of the period positively affected the Portfolio.
Elsewhere, our holdings of integrated oil company TOTAL/*/, communications
services firm Vodafone/*/, global chemical company PPG Industries, and retailer
Nike/*/ were among the Portfolio's top contributing stocks.
DETRACTORS FROM PERFORMANCE
Stock selection in the health care sector negatively affected the Portfolio's
performance relative to the Russell 1000(R) Value Index. Our position in
weak-performing health care products maker Johnson & Johnson was among the
largest detractors from performance for the reporting period.
In the energy sector, an underweighted position in strong-performing oil and
gas giants Chevron and Exxon Mobil dampened relative results. Not owning
standout performers Valero Energy, Marathon Oil and Occidental Petroleum also
held back relative returns.
Stocks in other sectors that held back performance included an underweighted
position in telecommunications firm AT&T, and overweighted positions in
financial services company Allstate, home improvements product maker Masco and
defense contractor Lockheed Martin*.
/*/Security is not a benchmark constituent.
TEAM MANAGED
The Portfolio is co-managed by Mr. Nevin P. Chitkara and Mr. Steven R. Gorham.
Mr. Chitkara is an Investment Officer of MFS(R) and has been in the investment
management area of MFS(R) since 1997. Mr. Gorham is also an Investment Officer
of MFS(R) and has served as portfolio manager since 2002. Mr. Gorham has been
in the investment management area of MFS(R) since 1992.
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
------------------------------------------
Lockheed Martin Corp. 3.63%
------------------------------------------
Allstate Corp. (The) 3.47%
------------------------------------------
Altria Group, Inc. 3.46%
------------------------------------------
Bank of America Corp. 3.28%
------------------------------------------
Citigroup, Inc. 2.94%
------------------------------------------
Exxon Mobil Corp. 2.77%
------------------------------------------
Total S.A. 2.58%
------------------------------------------
Johnson & Johnson 2.36%
------------------------------------------
Goldman Sachs Group, Inc. (The) 2.25%
------------------------------------------
Northrop Grumman Corp. 2.21%
------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
[CHART]
Financials 29.5%
Non-Cyclical 19.0%
Industrials 13.1%
Energy 12.9%
Cyclical 7.0%
Communications 5.9%
Basic Materials 5.0%
Technology 3.8%
Utilities 3.8%
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
MFS(R) VALUE PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY MASSACHUSETTS FINANCIAL SERVICES COMPANY
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
MFS(R) VALUE PORTFOLIO MANAGED BY
MASSACHUSETTS FINANCIAL SERVICES COMPANY VS. RUSSELL 1000(R) VALUE INDEX/1/
Growth Based on $10,000+
[CHART]
MFS(R) Value Russell Value(R)
Portfolio - Class A 1000 Index
--------------------- ------------------
7/20/1998 $10,000 $10,000
12/31/1998 9,506 10,495
12/31/1999 9,978 11,266
12/30/2000 11,136 12,057
12/31/2001 11,194 11,383
12/31/2002 9,727 9,617
12/31/2003 12,121 12,504
12/30/2004 14,058 14,566
12/31/2005 14,963 15,593
12/31/2006 18,157 19,063
6/30/2007 19,609 20,251
----------------------------------------------------------------
Average Annual Return/2/
(for the period ended 6/30/07)
----------------------------------------------------------------
1 Year 3 Year 5 Year Since Inception/3/
----------------------------------------------------------------
MFS(R) Value Portfolio--
- -- Class A 23.35% 15.97% 12.44% 7.87%
----------------------------------------------------------------
Russell 1000(R) Value
- - - Index/1/ 21.87% 15.93% 13.31% 8.23%
----------------------------------------------------------------
+The chart reflects the performance of Class A shares of the Portfolio. This is
currently the only active Class in the Portfolio.
/1/The Russell 1000(R) Value Index is an unmanaged index which measures the
performance of those Russell 1000(R) Index companies with lower price-to-book
ratios and lower forecasted growth values. The Index does not include fees or
expenses and is not available for direct investment.
/2/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gains distributions.
/3/Inception of Class A shares is 7/20/1998. Index returns are based on an
inception due of 7/31/1998.
Past Performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
2
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
MFS(R) VALUE PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,080.00 $4.64
Hypothetical (5% return before expenses) 1,000.00 1,020.33 4.51
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.90%
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period).
3
MET INVESTORS SERIES TRUST
MFS(R) VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
-------------------------------------------------------------
COMMON STOCKS - 98.5%
AEROSPACE & DEFENSE - 7.5%
Lockheed Martin Corp................. 51,710 $ 4,867,462
Northrop Grumman Corp................ 38,040 2,962,175
United Technologies Corp............. 30,910 2,192,446
-------------
10,022,083
-------------
AUTO COMPONENTS - 0.6%
Johnson Controls, Inc................ 7,090 820,809
-------------
BANKS - 5.7%
Bank of America Corp................. 90,097 4,404,842
Bank of New York Co., Inc............ 29,160 1,208,390
SunTrust Banks, Inc.................. 24,310 2,084,340
-------------
7,697,572
-------------
BEVERAGES - 2.0%
Diageo Plc........................... 73,910 1,533,730
PepsiCo, Inc......................... 17,130 1,110,880
-------------
2,644,610
-------------
BUILDING PRODUCTS - 1.6%
Masco Corp........................... 75,500 2,149,485
-------------
CHEMICALS - 4.2%
Air Products & Chemicals, Inc........ 12,410 997,392
Dow Chemical Co. (The)............... 10,820 478,460
PPG Industries, Inc.................. 25,270 1,923,300
Praxair, Inc......................... 15,170 1,092,088
Syngenta AG.......................... 6,030 1,173,232
-------------
5,664,472
-------------
COMMERCIAL SERVICES & SUPPLIES - 0.5%
WPP Group Plc........................ 40,990 612,560
-------------
COMMUNICATIONS EQUIPMENT & SERVICES - 0.3%
Cisco Systems, Inc.*................. 14,520 404,382
-------------
COMPUTERS & PERIPHERALS - 0.8%
Hewlett-Packard Co................... 23,530 1,049,909
-------------
CONTAINERS & PACKAGING - 0.2%
Smurfit-Stone Container Corp.*....... 18,530 246,634
-------------
ELECTRIC UTILITIES - 3.7%
Dominion Resources, Inc.............. 22,830 1,970,457
Entergy Corp......................... 9,250 992,988
FPL Group, Inc....................... 22,230 1,261,330
PPL Corp............................. 7,500 350,925
Public Service Enterprise Group, Inc. 5,230 459,089
-------------
5,034,789
-------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.1%
Cooper Industries, Ltd. - Class A.... 3,450 196,961
-------------
------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES - 0.4%
Noble Corp................................... 6,080 $ 592,922
-------------
FINANCIAL - DIVERSIFIED - 15.4%
American Express Co.......................... 22,650 1,385,727
Citigroup, Inc............................... 76,850 3,941,637
Fannie Mae................................... 41,510 2,711,848
Franklin Resources, Inc...................... 7,170 949,810
Freddie Mac.................................. 12,090 733,863
Goldman Sachs Group, Inc. (The).............. 13,940 3,021,495
Lehman Brothers Holdings, Inc................ 14,190 1,057,439
Mellon Financial Corp........................ 27,480 1,209,120
Merrill Lynch & Co., Inc..................... 10,300 860,874
PNC Financial Services Group, Inc............ 20,990 1,502,464
Prudential Financial, Inc.................... 1,370 133,205
State Street Corp............................ 9,630 658,692
UBS AG....................................... 41,228 2,459,336
-------------
20,625,510
-------------
FOOD PRODUCTS - 1.9%
Kellogg Co................................... 25,530 1,322,199
Nestle S.A................................... 3,272 1,240,076
-------------
2,562,275
-------------
HEALTH CARE EQUIPMENT & SUPPLIES - 2.3%
Johnson & Johnson............................ 51,310 3,161,722
-------------
HEALTH CARE PROVIDERS & SERVICES - 1.7%
UnitedHealth Group, Inc...................... 11,990 613,169
WellPoint, Inc.*............................. 21,840 1,743,487
-------------
2,356,656
-------------
HOMEBUILDERS - 0.3%
Toll Brothers, Inc.*......................... 15,640 390,687
-------------
HOTELS, RESTAURANTS & LEISURE - 0.8%
Royal Caribbean Cruises, Ltd................. 25,560 1,098,569
-------------
HOUSEHOLD PRODUCTS - 1.7%
Procter & Gamble Co. (The)................... 36,920 2,259,135
-------------
INDUSTRIAL - DIVERSIFIED - 1.2%
General Electric Co.......................... 18,410 704,735
Rockwell Automation, Inc..................... 12,630 877,027
-------------
1,581,762
-------------
INSURANCE - 7.9%
AFLAC, Inc................................... 11,430 587,502
Allstate Corp. (The)......................... 75,770 4,660,613
Chubb Corp. (The)............................ 24,190 1,309,646
Genworth Financial, Inc. - Class A........... 56,580 1,946,352
Hartford Financial Services Group, Inc. (The) 21,570 2,124,861
-------------
10,628,974
-------------
See notes to financial statements
4
MET INVESTORS SERIES TRUST
MFS(R) VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
--------------------------------------------------------------------------
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
--------------------------------------------------------------------------
IT CONSULTING & SERVICES - 1.1%
Accenture, Ltd. - Class A......................... 33,400 $ 1,432,526
-------------
MACHINERY - 1.5%
Deere & Co........................................ 12,250 1,479,065
Eaton Corp........................................ 3,370 313,410
Timken Co. (The).................................. 5,840 210,882
-------------
2,003,357
-------------
MEDIA - 1.5%
Citadel Broadcasting Corp......................... 1,259 8,119
EW Scripps Co..................................... 5,880 268,657
New York Times Co. - Class A...................... 7,940 201,676
Viacom, Inc. - Class A*........................... 23,985 998,496
Walt Disney Co. (The)............................. 16,510 563,651
-------------
2,040,599
-------------
OIL & GAS - 12.3%
Apache Corp....................................... 14,550 1,187,134
Chevron Corp...................................... 10,714 902,547
ConocoPhillips.................................... 30,730 2,412,305
Devon Energy Corp................................. 20,390 1,596,333
EOG Resources, Inc................................ 12,760 932,246
Exxon Mobil Corp.................................. 44,340 3,719,239
Hess Corp......................................... 25,900 1,527,064
Royal Dutch Shell Plc (ADR)....................... 9,050 734,860
Total S.A. (ADR).................................. 42,770 3,463,515
-------------
16,475,243
-------------
PAPER & FOREST PRODUCTS - 0.1%
Bowater, Inc...................................... 3,500 87,325
-------------
PHARMACEUTICALS - 4.5%
Abbott Laboratories............................... 8,490 454,640
Eli Lilly & Co.................................... 19,040 1,063,955
GlaxoSmithKline Plc............................... 26,760 700,292
Merck & Co., Inc.................................. 27,630 1,375,974
Wyeth............................................. 42,960 2,463,326
-------------
6,058,187
-------------
RETAIL - MULTILINE - 2.2%
CVS Caremark Corp................................. 29,058 1,059,164
Macy's, Inc....................................... 48,570 1,932,115
-------------
2,991,279
-------------
RETAIL - SPECIALTY - 2.4%
Hanesbrands, Inc.*................................ 2,727 73,711
Lowe's Cos., Inc.................................. 8,280 254,113
NIKE, Inc. - Class B.............................. 31,930 1,861,200
Sherwin-Williams Co............................... 8,620 572,972
Staples, Inc...................................... 22,380 531,077
-------------
3,293,073
-------------
----------------------------------------------------------------------------
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
----------------------------------------------------------------------------
ROAD & RAIL - 1.1%
Burlington Northern Santa Fe Corp................. 13,770 $ 1,172,378
Norfolk Southern Corp............................. 5,650 297,020
-------------
1,469,398
-------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS - 1.4%
Intel Corp........................................ 77,590 1,843,538
-------------
SOFTWARE - 1.6%
Oracle Corp.*..................................... 106,700 2,103,057
-------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 2.2%
Embarq Corp....................................... 12,773 809,425
Sprint Nextel Corp................................ 65,250 1,351,327
Telus Corp........................................ 3,150 185,852
Verizon Communications, Inc....................... 14,550 599,024
-------------
2,945,628
-------------
TELECOMMUNICATION SERVICES - WIRELESS - 1.4%
AT&T, Inc......................................... 10,450 433,675
Vodafone Group Plc................................ 417,995 1,405,095
-------------
1,838,770
-------------
TOBACCO - 3.5%
Altria Group, Inc................................. 66,250 4,646,775
-------------
TRADING COMPANIES & DISTRIBUTORS - 0.9%
W.W. Grainger, Inc................................ 12,580 1,170,569
-------------
Total Common Stocks
(Cost $109,826,349) 132,201,802
-------------
SHORT-TERM INVESTMENT - 1.8%
COMMERICAL PAPER - 1.8%
CRC Funding LLC 5.360%, due 07/02/07 (Cost -
$2,397,643) $2,398,000 2,397,643
-------------
TOTAL INVESTMENTS - 100.3% (Cost $112,223,992) 134,599,445
-------------
Other Assets and Liabilities (net) - (0.3)% (348,642)
-------------
TOTAL NET ASSETS - 100.0% $ 134,250,803
=============
PORTFOLIO FOOTNOTES:
* Non-income producing security.
ADR - American Depositary Receipt
See notes to financial statements
5
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
MFS(R) VALUE PORTFOLIO
ASSETS
Investments, at value (Note 2)* $134,599,445
Cash 696
Receivable for investments sold 140,528
Receivable for Trust shares sold 129,177
Dividends receivable 226,034
------------
Total assets 135,095,880
------------
LIABILITIES
Payables for:
Investments purchased 147,021
Trust shares redeemed 493,345
Investment advisory fee payable (Note 3) 79,867
Administration fee payable 2,009
Custodian and accounting fees payable 56,860
Accrued expenses 65,975
------------
Total liabilities 845,077
------------
NET ASSETS $134,250,803
============
NET ASSETS REPRESENTED BY:
Paid in surplus $107,055,230
Accumulated net realized gain 3,901,778
Unrealized appreciation on investments and foreign currency 22,375,721
Undistributed net investment income 918,074
------------
Total $134,250,803
============
NET ASSETS
Class A $134,250,803
============
CAPITAL SHARES OUTSTANDING
Class A 8,894,788
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 15.09
============
- -------------------------------------------------------------------------------------
* Investments at cost $112,223,992
See notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
MFS(R) VALUE PORTFOLIO
INVESTMENT INCOME:
Dividends (1) $1,399,617
Interest 53,016
----------
Total investment income 1,452,633
----------
EXPENSES:
Investment advisory fee (Note 3) 438,576
Administration fees 6,028
Deferred expense reimbursement 14,252
Custody and accounting fees 40,853
Transfer agent fees 3,112
Audit 12,043
Legal 7,141
Trustee fees and expenses 4,215
Shareholder reporting 12,240
Insurance 2,495
Other 1,190
----------
Total expenses 542,145
----------
Net investment income 910,488
----------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on:
Investments 4,015,904
----------
Net realized gain on investments 4,015,904
----------
Net change in unrealized appreciation (depreciation) on:
Investments 4,462,455
Foreign currency (408)
----------
Net change in unrealized appreciation on investments and foreign
currency 4,462,047
----------
Net realized and change in unrealized gain on investments and
foreign currency 8,477,951
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $9,388,439
==========
- -------------------------------------------------------------------------------------
(1)Dividend income is net withholding taxes of: $ 25,775
See notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
MFS(R) VALUE PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 910,488 $ 1,276,261
Net realized gain on investments and foreign currency 4,015,904 6,663,986
Net change in unrealized appreciation on investments and foreign
currency 4,462,047 9,705,328
------------ ------------
Net increase in net assets resulting from operations 9,388,439 17,645,575
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (786) (1,271,877)
From net realized gains
Class A (2,376,175) (4,729,373)
------------ ------------
Net decrease in net assets resulting from distributions (2,376,961) (6,001,250)
------------ ------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class A 23,656,432 27,866,602
Net asset value of shares issued through dividend reinvestment
Class A 2,376,961 6,001,250
Cost of shares repurchased
Class A (6,910,147) (16,053,852)
------------ ------------
Net increase in net assets from capital share transactions 19,123,246 17,814,000
------------ ------------
TOTAL INCREASE IN NET ASSETS 26,134,724 29,458,325
Net assets at beginning of period 108,116,079 78,657,754
------------ ------------
Net assets at end of period $134,250,803 $108,116,079
============ ============
Net assets at end of period includes undistributed net investment
income $ 918,074 $ 8,372
============ ============
See notes to financial statements
8
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS A
MFS(R) VALUE PORTFOLIO ------------------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 ---------------------------------------------
(UNAUDITED) 2006 2005 2004++ 2003++ 2002++
-------------- ------ ------ ------ ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD........................ $14.24 $12.44 $12.32 $10.83 $ 8.80 $ 10.83
------ ------ ------ ------ ------ -------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income....................................... 0.11 (a) 0.20 (a) 0.17 (a) 0.14 0.13 0.12
Net Realized/Unrealized Gain (Loss) on Investments.......... 1.02 2.45 0.63 1.59 2.04 (1.53)
------ ------ ------ ------ ------ -------
Total from Investment Operations............................ 1.13 2.65 0.80 1.73 2.17 (1.41)
------ ------ ------ ------ ------ -------
LESS DISTRIBUTIONS
Dividends from Net Investment Income........................ (0.00)+ (0.18) (0.15) (0.14) (0.14) (0.21)
Distributions from Net Realized Capital Gains............... (0.28) (0.67) (0.53) (0.10) -- (0.41)
------ ------ ------ ------ ------ -------
Total Distributions......................................... (0.28) (0.85) (0.68) (0.24) (0.14) (0.62)
------ ------ ------ ------ ------ -------
NET ASSET VALUE, END OF PERIOD.............................. $15.09 $14.24 $12.44 $12.32 $10.83 $ 8.80
====== ====== ====== ====== ====== =======
TOTAL RETURN 8.00% 21.33% 6.44% 15.97% 24.61% (13.14)%
Ratio of Expenses to Average Net Assets..................... 0.90%* 1.00% 0.99% 1.00% 1.00% 1.00 %
Ratio of Expenses to Average Net Assets Before Reimbursement
and Rebates............................................... 0.90%* 1.02% 1.00% 1.14% 1.08% 1.13 %
Ratio of Net Investment Income to Average Net Assets........ 1.51%* 1.46% 1.36% 1.30% 1.44% 1.38 %
Portfolio Turnover Rate..................................... 11.5% 39.2% 23.0% 47.0% 57.0% 60.0 %
Net Assets, End of Period (in millions)..................... $134.3 $108.1 $79.0 $47.0 $40.0 $31.0
* Annualized
+ Rounds to less than $0.005 per share
(a) Per share amounts based on average shares outstanding during the period.
++ Audited by other Independent Registered Public Accounting Firm.
See notes to financial statements
9
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is MFS(R) Value Portfolio, which is
diversified. Shares in the Trust are not offered directly to the general public
and are currently available only to separate accounts established by certain
affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A Shares are offered
by the Portfolio. Class B and E Shares are not currently offered by the
Portfolio included in this report. Shares of each Class of the Portfolio
represent an equal pro rata interest in the Portfolio and generally give the
shareholder the same voting, dividend, liquidation, and other rights.
Investment income, realized and unrealized capital gains and losses, the common
expenses of the Portfolio and certain Portfolio-level expense reductions, if
any, are allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the Portfolio. Each class of
shares differs in its respective distribution expenses and certain other
class-specific expense reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date.
10
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The value of the security so purchased is subject to market fluctuations during
this period. The Portfolio segregates assets having an aggregate value at least
equal to the amount of the when issued or delayed delivery purchase commitments
until payment is made.
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. DIRECTED BROKERAGE AGREEMENT - The Trust has entered into a directed
brokerage arrangement with State Street Global Markets ("SSGM"). Under this
arrangement, the Portfolio directs certain trades to SSGM in return for a
recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to
each Portfolio are shown separately as an expense reduction on the Statement of
Operations of the Portfolio.
G. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
H. FOREIGN CURRENCY TRANSLATION - The books and records of the Portfolio are
maintained in U.S. dollars. Foreign currencies, investments and other assets
and liabilities are translated into U.S. dollars on a daily basis using
prevailing exchange rates. Purchases and sales of securities are translated at
the rates of exchange prevailing when such securities were acquired or sold.
Income is translated at rates of exchange prevailing when interest is accrued
or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in
forward foreign currency contracts, sales of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities
transactions, and the difference between the amounts of dividends, interest,
and foreign withholding taxes recorded on the Portfolio's books, and the U.S.
dollar equivalent of the amounts actually received or paid. Net unrealized
foreign exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at fiscal year end, from
changes in the exchange rates of foreign currency held, and from changes in the
contract value of forward foreign currency contracts.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with Massachusetts Financial Services Company, (the "Adviser") for investment
advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
11
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- -----------------------------
MFS(R) Value Portfolio $438,576 0.725% First $250 Million
0.675% $250 Million to $1.25 Billion
0.60% $1.25 Billion to $1.5 Billion
0.50% Over $1.5 Billion
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Maximum Expense Ratio
under current Expense
Limitation Agreement
---------------------
Portfolio Class A Class B Class E
--------- ------- ------- -------
MFS(R) Value Portfolio 1.00% 1.25%* 1.15%*
* Classes not offered during the period.
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratio as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
The following amounts were repaid to the Manager during the period ended June
30, 2007.
MFS(R) Value Portfolio $14,252
All prior subsidies have been repaid to the Manager.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued
Through Net Increase
Beginning Shares Dividend Shares in Shares Ending
Shares Sold Reinvestment Repurchased Outstanding Shares
- - --------- --------- ------------- ----------- ------------ ---------
MFS(R) Value Portfolio
Class A
06/30/2007 7,593,967 1,603,113 160,497 (462,789) 1,300,821 8,894,788
12/31/2006 6,321,249 2,047,062 421,100 (1,195,444) 1,272,718 7,593,967
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
MFS(R) Value Portfolio $-- $31,281,649 $-- $13,828,814
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
--------- ------------ ------------ -------------- --------------
MFS(R) Value Portfolio $112,223,992 $22,767,139 $(391,686) $22,375,453
6. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
--------------------- --------------------- ---------------------
2006 2005 2006 2005 2006 2005
---------- ---------- ---------- ---------- ---------- ----------
MFS(R) Value Portfolio $1,505,763 $1,312,624 $4,495,487 $2,691,799 $6,001,250 $4,004,423
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
------------- ------------- ------------ ------------------ -----------
MFS(R) Value Portfolio $146,148 $2,230,804 $17,807,143 $-- $20,184,095
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
7. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
8. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
14
MET INVESTORS SERIES TRUST
Neuberger Berman
Real Estate Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
NEUBERGER BERMAN REAL ESTATE PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY NEUBERGER BERMAN MANAGEMENT, INC.
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
PORTFOLIO HIGHLIGHTS
Real estate investment trusts suffered through a difficult first half 2007 as
the FTSE NAREIT Equity REITs Index declined almost 6% at a time when stocks
generally provided positive returns. Key factors in the weakness of U.S. real
estate shares included higher credit spreads on commercial mortgage debt,
higher interest rates and "sector rotation" on the part of investors to more
global real estate companies away from domestically focused names. In this
environment, the Neuberger Berman Real Estate Portfolio modestly underperformed
its FTSE NAREIT benchmark.
The early weeks of the year were favorable for real estate stocks, as continued
earnings growth and extensive merger and acquisition activity helped them
advance modestly. However, real estate investment trusts (REITs) began to sell
off in February, along with the rest of the equity markets, on news of weakness
in the subprime lending sector. Later, further credit deterioration among
subprime loans widened credit spreads on securitized debt including commercial
mortgage securities. As a result, investors became more concerned that higher
borrowing costs might reduce mergers and acquisitions (M&A) activity, which has
been supportive of the public real estate markets. In addition, with relatively
healthy economic growth abroad, generalist investors sought global real estate
exposure, particularly at the expense of large-capitalization REITs, which
endured a sell-off in the second quarter.
Among the REIT sectors, Shopping Center stocks performed poorly amid concerns
about a potential consumer slowdown due to pressures from the weak housing
market, higher oil prices and stiffer lending rates. Health care issues also
lagged, as investors worried that higher interest rates would affect profits in
this rate-sensitive sector. The self storage sector trailed all other sectors.
The lodging/resorts sector outperformed for the period, providing positive
performance amid continued deal activity. The purchase of Hilton Hotels,
although not a REIT, reflected the overall interest from private buyers in
hotel shares. Specialty stocks also provided gains.
During the six-month reporting period, the Portfolio benefited from the strong
performance of a particular holding in the diversified sector, as well as an
underweight in the weak self storage sector. On the downside, stock selection
in Shopping Centers and an underweight in the outperforming specialty area
hampered results. An overweight and stock selection in the office sector was
also a negative. We continue to maintain an overweight in the Industrial and
Office sectors, where we expect good fundamentals, including rising occupancy
levels and rents as well as favorable earnings growth, for the balance of the
year.
OUTLOOK
Looking forward, the subprime mortgage market continues to be a significant
concern. With the presence of higher short-term interest rates, tighter lending
standards and softening housing markets, we anticipate that defaults and
delinquencies will increase. However, it bears noting that the payment history
for commercial real estate debt is favorable. Moreover, commercial real estate
fundamentals and credit quality have been strong and are likely to remain as
such.
Indeed, the majority of property markets in the United States can be described
as a "landlord's market." The core property sectors--Apartments, Office,
Industrial and Regional Malls/Shopping Centers--continued to show rising rents
and occupancy levels. Non-core areas--Health Care, Lodging/Resorts and Self
Storage--also exhibit sound fundamentals. In our view, the current environment
should translate into 7-8% earnings growth for REITs in 2007-08. In addition,
after a record setting six months for REIT transactions, we think that M&A
activity will continue to be strong.
Overall, we believe that attractive valuation levels and sound industry
fundamentals should begin to outweigh negative investor sentiment and continued
deterioration in the sub-prime residential mortgage market. REITs currently
trade at 7-10% discounts to net asset value, offer dividend yields of 4-5% and
are delivering above trend earnings growth. Still, we note that the domestic
REIT market is no longer a focal point of interest for many generalist
investors, which may limit gains in the coming quarters.
STEVEN R. BROWN
Portfolio Manager
NEUBERGER BERMAN MANAGEMENT, INC.
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
NEUBERGER BERMAN REAL ESTATE PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY NEUBERGER BERMAN MANAGEMENT, INC.
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
-----------------------------------------------------
SL Green Realty Corp. (REIT) 5.72%
-----------------------------------------------------
ProLogis (REIT) 5.13%
-----------------------------------------------------
Brookfield Asset Management, Inc.--Class A 4.93%
-----------------------------------------------------
AMB Property Corp. (REIT) 4.88%
-----------------------------------------------------
Vornado Realty Trust (REIT) 4.67%
-----------------------------------------------------
Simon Property Group, Inc. (REIT) 4.12%
-----------------------------------------------------
Kimco Realty Corp. (REIT) 4.08%
-----------------------------------------------------
Brookfield Properties Corp. 3.85%
-----------------------------------------------------
Boston Properties, Inc. (REIT) 3.65%
-----------------------------------------------------
Archstone-Smith Trust (REIT) 3.55%
-----------------------------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
[CHART]
Office 24.1%
Apartments 20.5%
Regional Malls 12.1%
Industrials 11.9%
Diversified 11.3%
Lodging 8.4%
Community Centers 8.3%
Health Care Providers & Services 3.4%
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
NEUBERGER BERMAN REAL ESTATE PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY NEUBERGER BERMAN MANAGEMENT, INC.
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
NEUBERGER BERMAN REAL ESTATE PORTFOLIO MANAGED BY
NEUBERGER BERMAN MANAGEMENT, INC. VS. FTSE NAREIT EQUITY REIT INDEX/1/
Growth Based on $10,000+
[CHART]
Neuberger Berman FTSE NAREIT
Real Estate Portfolio Equity REIT Index
---------------------- -------------------
5/1/2004 $10,000 $10,000
12/31/2004 12,975 13,751
12/31/2005 14,739 15,418
12/31/2006 20,326 20,750
6/30/2007 18,783 19,528
-----------------------------------------------------------------
Average Annual Return/2/
(for the period ended 6/30/07)
-----------------------------------------------------------------
1 Year 3 Year Since Inception/3/
-----------------------------------------------------------------
Neuberger Berman Real Estate
- -- Portfolio--Class A 9.72% 21.97% 22.02%
Class B 9.42% 21.69% 21.71%
Class E 9.56% 21.84% 21.85%
-----------------------------------------------------------------
- - - FTSE NAREIT Equity REIT Index/1/ 12.57% 21.13% 23.67%
-----------------------------------------------------------------
+The chart reflects the performance of Class A shares of the Portfolio. The
performance of Class A shares will differ from that of the Class B and Class E
shares because of the difference in expenses paid by policyholders investing in
the different share class.
/1/The FTSE NAREIT Equity REIT Index is an unmanaged index that reflects
performance of all publicly traded equity REITs. The Index does not include
fees or expenses and is not available for direct investment.
/2/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/3/Inception of Class A, B and E shares is 5/1/04. Index returns are based on
an inception date of 4/30/04.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
3
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
NEUBERGER BERMAN REAL ESTATE PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $ 924.10 $2.86
Hypothetical (5% return before expenses) 1,000.00 1,021.82 3.01
- ------------------------------------------ ------------- ------------- --------------
Class B
Actual $1,000.00 $ 922.70 $4.00
Hypothetical (5% return before expenses) 1,000.00 1,020.63 4.21
- ------------------------------------------ ------------- ------------- --------------
Class E
Actual $1,000.00 $ 923.50 $3.53
Hypothetical (5% return before expenses) 1,000.00 1,021.12 3.71
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.60% ,
0.84% , and 0.74% for the Class A, Class B, and Class E, respectively,
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period).
4
MET INVESTORS SERIES TRUST
NEUBERGER BERMAN REAL ESTATE PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
------------------------------------------------------------------------------
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
------------------------------------------------------------------------------
COMMON STOCKS - 95.7%
APARTMENTS - 19.6%
Apartment Investment & Management Co. (REIT) -
Class A(a)...................................... 340,900 $ 17,188,178
Archstone-Smith Trust (REIT)(a)................... 827,800 48,931,258
AvalonBay Communities, Inc. (REIT)(a)............. 297,300 35,343,024
Camden Property Trust (REIT)(a)................... 595,978 39,912,647
Equity Residential (REIT)......................... 846,500 38,625,795
Essex Property Trust, Inc. (REIT)(a).............. 133,600 15,537,680
Home Properties, Inc. (REIT)...................... 620,800 32,238,144
Post Properties, Inc. (REIT)(a)................... 501,600 26,148,408
UDR, Inc. (REIT)(a)............................... 613,000 16,121,900
---------------
270,047,034
---------------
COMMUNITY CENTERS - 8.0%
Developers Diversified Realty Corp. (REIT)(a)..... 688,200 36,275,022
Kimco Realty Corp. (REIT)(a)...................... 1,476,000 56,191,320
Regency Centers Corp. (REIT)(a)................... 248,200 17,498,100
---------------
109,964,442
---------------
DIVERSIFIED - 10.8%
Crystal River Capital, Inc. (REIT)(a)............. 669,600 16,257,888
Digital Realty Trust, Inc. (REIT)(a).............. 527,800 19,887,504
Duke Realty Corp. (REIT)(a)....................... 1,342,700 47,894,109
Peoples Choice Financial Corp.(b)................. 60,000 90,000
Vornado Realty Trust (REIT)(a).................... 586,100 64,377,224
---------------
148,506,725
---------------
HEALTH CARE PROVIDERS & SERVICES - 3.2%
Nationwide Health Properties, Inc. (REIT)......... 444,700 12,095,840
Ventas, Inc. (REIT)............................... 903,400 32,748,250
---------------
44,844,090
---------------
INDUSTRIALS - 11.4%
AMB Property Corp. (REIT)......................... 1,262,200 67,174,284
ProLogis (REIT)................................... 1,241,600 70,647,040
Public Storage, Inc. (REIT)(a).................... 242,500 18,628,850
---------------
156,450,174
---------------
LODGING - 8.1%
Host Hotels & Resorts, Inc. (REIT)................ 1,556,266 35,980,870
Starwood Hotels & Resorts Worldwide, Inc.......... 628,800 42,173,616
Sunstone Hotel Investors, Inc. (REIT)(a).......... 1,161,300 32,969,307
---------------
111,123,793
---------------
OFFICE - 23.0%
Alexandria Real Estate Equities, Inc. (REIT)(a)... 488,600 47,306,252
Boston Properties, Inc. (REIT).................... 491,900 50,237,747
- -------------------------------------------------------------------------------
SHARES/PAR VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
- -------------------------------------------------------------------------------
OFFICE - CONTINUED
Brookfield Asset Management, Inc. - Class A (a)... 1,700,100 $ 67,833,990
Brookfield Properties Corp........................ 2,180,400 53,005,524
Corporate Office Properties Trust (REIT)(a)....... 487,300 19,984,173
SL Green Realty Corp. (REIT)(a)................... 635,960 78,789,084
---------------
317,156,770
---------------
REGIONAL MALLS - 11.6%
Acadia Realty Trust (REIT) (a).................... 614,500 15,946,275
General Growth Properties, Inc. (REIT)(a)......... 86,000 4,553,700
Macerich Co. (The) (REIT)(a)...................... 413,700 34,097,154
Simon Property Group, Inc. (REIT)................. 610,100 56,763,704
Taubman Centers, Inc. (REIT)(a)................... 966,100 47,928,221
---------------
159,289,054
---------------
Total Common Stocks (Cost $1,351,698,035) 1,317,382,082
---------------
SHORT-TERM INVESTMENT - 3.2%
State Street Bank & Trust Co., Repurchase
Agreement dated 06/29/07 at 3.400% to
be repurchased at $44,087,488 on 07/02/07
collateralized by $45,540,000 FHLB 4.375% due
09/17/10 with a value of $44,958,910. (Cost -
$44,075,000).................................... $ 44,075,000 44,075,000
---------------
TOTAL INVESTMENTS - 98.9% (Cost $1,395,773,035) 1,361,457,082
---------------
Other Assets and Liabilities (net) - 1.1% 15,771,360
---------------
TOTAL NET ASSETS - 100.0% $ 1,377,228,442
===============
PORTFOLIO FOOTNOTES:
(a) A portion or all of the security was held on loan. As of June 30, 2007, the
market value of the securities loaned was $341,479,674 and the collateral
received consisted of cash in the amount of $349,121,292.
(b) Security is valued in good faith by or under the direction of the Board of
Directors.
FHLB - Federal Home Loan Bank
REIT - Real Estate Investment Trust
See notes to financial statements
5
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
NEUBERGER BERMAN REAL ESTATE PORTFOLIO
ASSETS
Investments, at value (Note 2)* $1,317,382,082
Repurchase Agreement 44,075,000
Cash 133
Collateral for securities on loan 349,121,292
Receivable for investments sold 16,260,412
Receivable for Trust shares sold 4,518,989
Dividends receivable 4,923,364
Interest receivable 8,325
--------------
Total assets 1,736,289,597
--------------
LIABILITIES
Payables for:
Investments purchased 6,591,843
Trust shares redeemed 2,259,656
Distribution and services fees - Class B 125,406
Distribution and services fees - Class E 13,704
Collateral for securities on loan 349,121,292
Investment advisory fee payable (Note 3) 724,049
Administration fee payable 15,801
Custodian and accounting fees payable 78,187
Accrued expenses 131,217
--------------
Total liabilities 359,061,155
--------------
NET ASSETS $1,377,228,442
==============
NET ASSETS REPRESENTED BY:
Paid in surplus $1,269,064,609
Accumulated net realized gain 114,968,169
Unrealized depreciation on investments (28,186,134)
Undistributed net investment income 21,381,798
--------------
Total $1,377,228,442
==============
NET ASSETS
Class A $ 694,127,314
==============
Class B 577,873,620
==============
Class E 105,227,508
==============
CAPITAL SHARES OUTSTANDING
Class A 45,468,794
==============
Class B 37,987,126
==============
Class E 6,909,209
==============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 15.27
==============
Class B 15.21
==============
Class E 15.23
==============
- ---------------------------------------------------------------------
*Investments at cost, excluding Repurchase Agreements $1,351,698,035
See notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
NEUBERGER BERMAN REAL ESTATE PORTFOLIO
INVESTMENT INCOME:
Dividends (1) $ 23,207,943
Interest (2) 868,394
-------------
Total investment income 24,076,337
-------------
EXPENSES:
Investment advisory fee (Note 3) 4,435,661
Administration fees 52,671
Custody and accounting fees 35,296
Distribution fee - Class B 813,798
Distribution fee - Class E 94,149
Transfer agent fees 16,310
Audit 12,046
Legal 7,691
Trustee fees and expenses 4,915
Shareholder reporting 64,646
Insurance 7,645
Other 1,920
-------------
Total expenses 5,546,748
Less broker commission recapture (297,100)
-------------
Net expenses 5,249,648
-------------
Net investment income 18,826,689
-------------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on:
Investments 117,199,726
-------------
Net realized gain on investments 117,199,726
-------------
Net change in unrealized depreciation on:
Investments (255,718,248)
-------------
Net change in unrealized depreciation on investments (255,718,248)
-------------
Net realized and change in unrealized loss on investments (138,518,522)
-------------
NET DECREASE IN NET ASSETS FROM OPERATIONS $(119,691,833)
=============
- ----------------------------------------------------------------------------------------
(1)Dividend income is net withholding taxes of: $ 137,254
(2)Interest income includes securities lending income of: 106,479
See notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
NEUBERGER BERMAN REAL ESTATE PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 18,826,689 $ 14,976,766
Net realized gain on investments 117,199,726 119,171,000
Net change in unrealized appreciation (depreciation) on investments (255,718,248) 167,340,570
-------------- --------------
Net increase (decrease) in net assets resulting from operations (119,691,833) 301,488,336
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (6,686,776) (3,003,924)
Class B (5,558,981) (4,375,268)
Class E (1,163,894) (830,399)
From net realized gains
Class A (53,582,923) (14,269,723)
Class B (53,757,599) (23,475,259)
Class E (10,322,197) (4,196,589)
-------------- --------------
Net decrease in net assets resulting from distributions (131,072,370) (50,151,162)
-------------- --------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class A 200,257,052 377,334,044
Class B 108,858,876 208,985,370
Class E 24,621,121 49,222,003
Net asset value of shares issued through dividend reinvestment
Class A 60,269,699 17,273,647
Class B 59,316,580 27,850,527
Class E 11,486,091 5,026,988
Cost of shares repurchased
Class A (74,461,637) (84,613,376)
Class B (103,359,327) (47,011,738)
Class E (29,069,655) (7,221,172)
-------------- --------------
Net increase in net assets from capital share transactions 257,918,800 546,846,293
-------------- --------------
TOTAL INCREASE IN NET ASSETS 7,154,597 798,183,467
Net assets at beginning of period 1,370,073,845 571,890,378
-------------- --------------
Net assets at end of period $1,377,228,442 $1,370,073,845
============== ==============
Net assets at end of period includes undistributed net investment
income $ 21,381,798 $ 15,964,760
============== ==============
See notes to financial statements
8
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS A
NEUBERGER BERMAN REAL ESTATE PORTFOLIO ---------------------------------------------
FOR THE PERIOD FOR THE YEARS ENDED
ENDED DECEMBER 31,
JUNE 30, 2007 ------------------------------
(UNAUDITED) 2006 2005 2004(B)
-------------- ------ ------- -------
NET ASSET VALUE, BEGINNING OF PERIOD................... $18.13 $14.15 $12.47 $10.00
------ ------ ------- -------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income.................................. 0.24 (a) 0.28 (a) 0.30 (a) 0.55 (a)
Net Realized/Unrealized Gain (Loss) on Investments..... (1.42) 4.81 1.40 2.42
------ ------ ------- -------
Total from Investment Operations....................... (1.18) 5.09 1.70 2.97
------ ------ ------- -------
LESS DISTRIBUTIONS
Dividends from Net Investment Income................... (0.19) (0.19) -- (0.22)
Distributions from Net Realized Capital Gains.......... (1.49) (0.92) (0.02) (0.28)
------ ------ ------- -------
Total Distributions.................................... (1.68) (1.11) (0.02) (0.50)
------ ------ ------- -------
NET ASSET VALUE, END OF PERIOD......................... $15.27 $18.13 $14.15 $12.47
====== ====== ======= =======
TOTAL RETURN (7.59)% 37.90% 13.61% 29.73%
Ratio of Expenses to Average Net Assets................ 0.60%* 0.66% 0.69% 0.84%*
Ratio of Expenses to Average Net Assets Before
Reimbursement and Rebates............................ 0.64%* 0.70% 0.70% 0.84%*
Ratio of Net Investment Income to Average Net Assets... 2.73%* 1.74% 2.27% 6.76%*
Portfolio Turnover Rate................................ 60.0% 73.0% 13.5% 52.3%
Net Assets, End of Period (in millions)................ $694.1 $627.5 $ 204.1 $ 77.1
CLASS B
---------------------------------------------
FOR THE PERIOD FOR THE YEARS ENDED
ENDED DECEMBER 31,
JUNE 30, 2007 ------------------------------
(UNAUDITED) 2006 2005 2004(B)
-------------- ------ ------- -------
NET ASSET VALUE, BEGINNING OF PERIOD................... $18.06 $14.11 $12.47 $10.00
------ ------ ------- -------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income.................................. 0.22 (a) 0.23 (a) 0.26 (a) 0.26 (a)
Net Realized/Unrealized Gain (Loss) on Investments..... (1.43) 4.81 1.40 2.69
------ ------ ------- -------
Total from Investment Operations....................... (1.21) 5.04 1.66 2.95
------ ------ ------- -------
LESS DISTRIBUTIONS
Dividends from Net Investment Income................... (0.15) (0.17) -- (0.20)
Distributions from Net Realized Capital Gains.......... (1.49) (0.92) (0.02) (0.28)
------ ------ ------- -------
Total Distributions.................................... (1.64) (1.09) (0.02) (0.48)
------ ------ ------- -------
NET ASSET VALUE, END OF PERIOD......................... $15.21 $18.06 $14.11 $12.47
====== ====== ======= =======
TOTAL RETURN (7.73)% 37.58% 13.29% 29.55%
Ratio of Expenses to Average Net Assets................ 0.84%* 0.92% 0.94% 0.98%*
Ratio of Expenses to Average Net Assets Before
Reimbursement and Rebates............................ 0.89%* 0.95% 0.95% 0.98%*
Ratio of Net Investment Income to Average Net Assets... 2.43%* 1.43% 2.00% 3.45%*
Portfolio Turnover Rate................................ 60.0% 73.0% 13.5% 52.3%
Net Assets, End of Period (in millions)................ $577.9 $623.4 $316.4 $167.2
* Annualized
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--05/01/2004.
See notes to financial statements
9
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS E
NEUBERGER BERMAN REAL ESTATE PORTFOLIO --------------------------------------------
FOR THE PERIOD FOR THE YEARS ENDED
ENDED DECEMBER 31,
JUNE 30, 2007 -----------------------------
(UNAUDITED) 2006 2005 2004(B)
-------------- ------- ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD.................................... $18.08 $ 14.13 $12.47 $10.00
------ ------- ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................... 0.22 (a) 0.25 (a) 0.28 (a) 0.33 (a)
Net Realized/Unrealized Gain (Loss) on Investments...................... (1.41) 4.80 1.40 2.64
------ ------- ------ ------
Total from Investment Operations........................................ (1.19) 5.05 1.68 2.97
------ ------- ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................... (0.17) (0.18) -- (0.22)
Distributions from Net Realized Capital Gains........................... (1.49) (0.92) (0.02) (0.28)
------ ------- ------ ------
Total Distributions..................................................... (1.66) (1.10) (0.02) (0.50)
------ ------- ------ ------
NET ASSET VALUE, END OF PERIOD.......................................... $15.23 $ 18.08 $14.13 $12.47
====== ======= ====== ======
TOTAL RETURN (7.65)% 37.62% 13.45% 29.69%
Ratio of Expenses to Average Net Assets................................. 0.74 %* 0.82% 0.84% 0.91%*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates 0.79 %* 0.85% 0.84% 0.91%*
Ratio of Net Investment Income to Average Net Assets.................... 2.52 %* 1.55% 2.14% 4.19%*
Portfolio Turnover Rate................................................. 60.0 % 73.0% 13.5% 52.3%
Net Assets, End of Period (in millions)................................. $105.2 $119.2 $51.3 $20.9
* Annualized
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--05/01/2004.
See notes to financial statements
10
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is Neuberger Berman Real Estate Portfolio,
which is non-diversified. Shares in the Trust are not offered directly to the
general public and are currently available only to separate accounts
established by certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A, B and E Shares are
offered by the Portfolio. Shares of each Class of the Portfolio represent an
equal pro rata interest in the Portfolio and generally give the shareholder the
same voting, dividend, liquidation, and other rights. Investment income,
realized and unrealized capital gains and losses, the common expenses of the
Portfolio and certain Portfolio-level expense reductions, if any, are allocated
on a pro rata basis to each class based on the relative net assets of each
class to the total net assets of the Portfolio. Each class of shares differs in
its respective distribution expenses and certain other class-specific expense
reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date. The value of the
security so purchased is subject to market fluctuations during this period. The
Portfolio segregates assets having an aggregate value at least equal to the
amount of the when issued or delayed delivery purchase commitments until
payment is made.
11
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. SECURITIES LENDING - The Portfolio may lend its securities to certain
qualified brokers who borrow securities in order to complete certain
transactions. By lending its investment securities, the Portfolio attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term of the loan would
accrue to the account of the Portfolio. Risks of delay in recovery of the
securities or even loss of rights in the collateral may occur should the
borrower of the securities fail financially. Risks may also arise to the extent
that the value of the collateral decreases below the value of the securities
loaned.
Upon entering into a securities lending transaction, the Portfolio receives
cash or other securities as collateral in an amount equal to or exceeding 102%
of the current market value of the loaned securities. Any cash received as
collateral is generally invested by State Street Bank and Trust Company ("State
Street"), acting in its capacity as securities lending agent (the "Agent"), in
the State Street Navigator Securities Lending Prime Portfolio which is a money
market fund registered under the 1940 Act. A portion of the dividends received
on the collateral is rebated to the borrower of the securities and the
remainder is split between the Agent and the Portfolio. On loans collateralized
by cash, the cash collateral is invested in a money market fund or short term
securities. A portion of the income generated upon investment of the collateral
is remitted to the Borrowers and the remainder is allocated between the fund
and the lending agent. On loans collateralized by U.S. Treasuries, a fee is
received from the Borrower and is allocated between the fund and the lending
agent.
G. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
H. DIRECTED BROKERAGE AGREEMENT - The Trust has entered into a directed
brokerage arrangement with State Street Global Markets ("SSGM"). Under this
arrangement, the Portfolio directs certain trades to SSGM in return for a
recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to
each Portfolio are shown separately as an expense reduction on the Statement of
Operations of the Portfolio.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with Neuberger Berman Management, Inc., (the "Adviser") for investment advisory
services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- ----------------------------
Neuberger Berman Real Estate Portfolio $4,435,661 0.70% First $200 Million
0.65% $200 Million to $750 Million
0.55% Over $750 Million
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Maximum Expense Ratio
under current Expense
Limitation Agreement
----------------------
Portfolio Class A Class B Class E
--------- ------- ------- -------
Neuberger Berman Real Estate Portfolio 0.90% 1.15% 1.05%
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratio as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
The amount waived and expenses reimbursed for the period ended June 30, 2007 is
shown as investment advisory fee waiver in the Statement of Operations of the
Portfolio.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
During the period ended June 30, 2007 the Portfolio paid brokerage commissions
to affiliated brokers/dealers:
Portfolio Affiliate Commission
--------- --------- ----------
Neuberger Berman Real Estate Portfolio Lehman Brothers, Inc. $374,049
Neuberger Berman Real Estate Portfolio Neuberger Berman LLC 580
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued
Through Net Increase
Beginning Shares Dividend Shares in Shares Ending
Shares Sold Reinvestment Repurchased Outstanding Shares
- - ---------- ---------- ------------- ----------- ------------ ----------
Neuberger Berman Real Estate Portfolio
Class A
06/30/2007 34,618,782 11,414,652 3,495,922 (4,060,562) 10,850,012 45,468,794
12/31/2006 14,430,021 24,423,136 1,179,894 (5,414,269) 20,188,761 34,618,782
Class B
06/30/2007 34,517,272 6,030,206 3,452,653 (6,013,005) 3,469,854 37,987,126
12/31/2006 22,419,627 13,082,413 1,906,265 (2,891,033) 12,097,645 34,517,272
Class E
06/30/2007 6,591,029 1,372,190 667,795 (1,721,805) 318,180 6,909,209
12/31/2006 3,634,437 3,058,397 343,843 (445,648) 2,956,592 6,591,029
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
Neuberger Berman Real Estate Portfolio $-- $980,947,090 $-- $855,380,264
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Depreciation
- --------- -------------- ------------ -------------- --------------
Neuberger Berman Real Estate Portfolio $1,395,773,035 $59,402,267 $(93,718,220) $(34,315,953)
6. SECURITY LENDING
As of June 30, 2007, the Portfolio had loaned securities which were
collateralized by short-term investments. The value of securities on loan and
the value of the related collateral were as follows:
Value of Value of
Securities Collateral
------------ ------------
Neuberger Berman Real Estate Portfolio $341,479,674 $349,121,292
7. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
---------------- ---------------------- --------------------
2006 2005 2006 2005 2006 2005
----------- ---- ----------- -------- ----------- --------
Neuberger Berman Real Estate Portfolio $36,643,847 $-- $13,507,315 $677,197 $50,151,162 $677,197
14
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
7. DISTRIBUTIONS TO SHAREHOLDERS (CONTINUED)
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
------------- ------------- ------------ ------------------ ------------
Neuberger Berman Real Estate Portfolio $66,523,218 $64,970,777 $227,434,973 $-- $358,928,968
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
8. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
9. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
15
MET INVESTORS SERIES TRUST
Oppenheimer Capital
Appreciation Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
OPPENHEIMER CAPITAL APPRECIATION PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY OPPENHEIMERFUNDS, INC.
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
For the six month period ending June 30, 2007, the Portfolio outperformed both
the S&P 500(R) Index and the Russell 1000(R) Growth Index/1/.
During the reporting period, global economic growth, stable corporate earnings
and low inflation rates supported stock prices. However, related gains were
achieved in a somewhat volatile environment characterized by competing economic
forces. On the one hand, continued growth in the United States and the rest of
the world enabled many companies to report revenues and earnings that met or
exceeded expectations. Emerging markets produced especially strong returns,
fueled in large part by private equity investors with significant capital to
deploy. Conversely, the market was concerned about the prospect of rising
interest rates, volatile energy prices and potential inflation. In addition,
troubles with sub-prime mortgage lenders undermined the confidence of
investors, who worried that the impact of bad loans to credit-challenged
consumers could weigh on other parts of the market. Overall, however, solid
earnings and strong levels of liquidity generally proved positive for stocks.
Relative to the S&P 500(R) Index, the strongest contributors to return were
financials and information technology. Although financials yielded negative
market returns, strong stock selection delivered positive results to the
Portfolio, with relative outperformance supported by a sector underweight.
Similarly, both stock and sector selection contributed to relative returns in
technology. In contrast, a handful of our individual investments in the
consumer discretionary sector were disappointments and detracted from overall
performance.
Two large recent additions to the Portfolio were Boeing Co., the world's
leading aerospace company and the largest manufacturer of commercial jetliners
and military aircraft, and Costco Wholesale Corp., the largest wholesale retail
club operator in the United States. In our view, Boeing was selling for a
reasonable valuation, especially given what we believe is the company's
competitive advantage in the production of wide-body aircrafts. While we have
seen Costco as a successful retailer, more recently we have been encouraged by
its prospects for higher profit margins over the next few years--a step we felt
it has previously been unwilling to take in order to keep prices down.
One of the Portfolio's top performers was Apple, Inc. This computer and
personal electronics maker benefited from three ongoing trends: continued
growth in market share, strong sales of the IPOD digital music player, and the
eagerly anticipated release of the IPHONE. Another strong performer was
Monsanto Co., an agricultural company
- --------
/1/ The Russell 1000(R) Growth Index is an unmanaged index that measures the
performance of those Russell 1000 Companies with higher price-to-book ratios
and higher forecasted growth values. The Index does not include fees or
expenses and is not available for direct investment.
whose seed and genomic products help farmers increase crop yields. The company
has benefited from high corn prices, which in turn have encouraged farmers to
look for ways to increase the productivity of their land. In the energy sector,
Schlumberger Ltd. continued to perform well. High oil prices have encouraged
companies to invest in new technologies to extract oil more efficiently, and
Schlumberger has been a direct beneficiary of this trend.
Corporate Executive Board (CEB), an information provider to large corporations
and nonprofit organizations, trailed our expectations. After the company
experienced some sales problems, it reported worse-than-expected earnings,
which weighed heavily on CEB's shares. Another underperformer was semiconductor
manufacturer Advanced Micro Devices, Inc. (AMD), which we sold from the
Portfolio during the period. AMD was facing a very tough competitive
environment, losing market share and struggling with a pricing war with its
much larger rival, Intel Corp. Also hurting performance was coffeehouse giant
Starbucks Corp., whose earnings lagged on higher-than-expected costs.
Regardless of the overall market backdrop, we will continue to follow our
bottom-up investment approach and favor companies that offer the potential for
sustainable earnings growth and at valuations that we believe are appropriate.
The Portfolio remains broadly diversified, and we continue to seek stocks
across a variety of sectors.
WILLIAM L. WILBY, CFA AND
MARC L. BAYLIN, CFA
Portfolio Managers
OPPENHEIMERFUNDS, INC.
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
OPPENHEIMER CAPITAL APPRECIATION PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY OPPENHEIMERFUNDS, INC.
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
---------------------------------------------
Google, Inc.--Class A 3.47%
---------------------------------------------
Cisco Systems, Inc. 3.25%
---------------------------------------------
Schlumberger, Ltd. 2.19%
---------------------------------------------
Monsanto Co. 2.13%
---------------------------------------------
Apple, Inc. 2.03%
---------------------------------------------
Boeing Co. (The) 1.88%
---------------------------------------------
Corning, Inc. 1.80%
---------------------------------------------
United Technologies Corp. 1.75%
---------------------------------------------
American International Group, Inc. 1.64%
---------------------------------------------
eBay, Inc. 1.61%
---------------------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
[CHART]
Communications 21.0%
Non-Cyclical 18.2%
Technology 17.4%
Financials 12.0%
Cyclical 11.2%
Industrials 8.8%
Energy 7.3%
Basic Materials 4.1%
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
OPPENHEIMER CAPITAL APPRECIATION PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY OPPENHEIMERFUNDS, INC.
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
OPPENHEIMER CAPITAL APPRECIATION PORTFOLIO MANAGED BY
OPPENHEIMERFUNDS, INC. VS. S&P 500(R) INDEX/1/
Growth Based on $10,000+
[CHART]
Oppenheimer Capital S&P 500(R)
Appreciation Portfolio Index
------------------------ ------------
2/12/2001 $10,000 $10,000
12/31/2001 8,573 8,509
12/31/2002 6,453 6,628
12/31/2003 8,294 8,531
12/31/2004 8,825 9,458
12/31/2005 9,241 9,923
12/31/2006 9,944 11,491
6/30/2007 10,858 12,291
-----------------------------------------------------
Average Annual Return/2/
(for the period ended 6/30/07)
-----------------------------------------------------
Since
1 Year 3 Year 5 Year Inception/3/
-----------------------------------------------------
Oppenheimer Capital
Appreciation
Portfolio--Class A 18.06% 8.91% 9.37% 4.65%
- -- Class B 17.77% 8.66% 9.11% 1.30%
Class E 17.97% -- -- 12.66%
-----------------------------------------------------
- - - S&P 500(R) Index/1/ 20.59% 11.68% 10.71% 3.27%
-----------------------------------------------------
+The chart reflects the performance of Class B shares of the Portfolio. The
performance of Class B shares will differ from that of the other Classes
because of the difference in expenses paid by policyholders investing in the
different share classes.
/1/The S&P 500(R) Index is an unmanaged index consisting of 500 stocks chosen
for market size, liquidity, and industry group representation. It is a
market-value weighted index (stock price times number of shares outstanding),
with each stock's weight in the Index proportionate to its market value. The
Index does not include fees or expenses and is not available for direct
investment.
/2/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/3/Inception of Class A shares is 1/2/02. Inception of the Class B shares is
2/12/01. Inception of the Class E shares is 5/1/05. Index returns are based on
an inception date of 2/12/01.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
3
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
OPPENHEIMER CAPITAL APPRECIATION PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,000.00 $3.02
Hypothetical (5% return before expenses) 1,000.00 1,021.77 3.06
- ------------------------------------------ ------------- ------------- --------------
Class B
Actual $1,000.00 $1,000.00 $4.26
Hypothetical (5% return before expenses) 1,000.00 1,020.53 4.31
- ------------------------------------------ ------------- ------------- --------------
Class E
Actual $1,000.00 $1,000.00 $3.77
Hypothetical (5% return before expenses) 1,000.00 1,021.03 3.81
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.61% ,
0.86% , and 0.76% for the Class A, Class B, and Class E, respectively,
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period).
4
MET INVESTORS SERIES TRUST
OPPENHEIMER CAPITAL APPRECIATION PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
----------------------------------------------------------------------------
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
----------------------------------------------------------------------------
COMMON STOCKS - 98.6%
AEROSPACE & DEFENSE - 5.9%
Boeing Co. (The).................................. 182,740 $ 17,572,279
Empresa Brasileira de Aeronautica S.A. (ADR)...... 133,400 6,431,214
General Dynamics Corp.(a)......................... 121,290 9,487,304
Lockheed Martin Corp.............................. 14,840 1,396,889
Rockwell Collins, Inc............................. 58,710 4,147,274
United Technologies Corp.......................... 231,480 16,418,876
-------------
55,453,836
-------------
BANKS - 0.8%
Northern Trust Corp............................... 113,730 7,306,015
-------------
BEVERAGES - 1.4%
Fomento Economico Mexicano SAB de C.V............. 1,084,900 4,257,920
PepsiCo, Inc...................................... 140,920 9,138,662
-------------
13,396,582
-------------
BIOTECHNOLOGY - 0.8%
Gilead Sciences, Inc.*............................ 199,240 7,724,535
-------------
CHEMICALS - 3.6%
Monsanto Co....................................... 296,100 19,998,594
Praxair, Inc...................................... 185,330 13,341,907
-------------
33,340,501
-------------
COMMERCIAL SERVICES & SUPPLIES - 2.7%
Automatic Data Processing, Inc.................... 218,220 10,577,124
Corporate Executive Board Co.(a).................. 121,630 7,895,003
Kinder Morgan Management LLC*(a).................. 81,420 4,225,698
Robert Half International, Inc.................... 59,420 2,168,830
-------------
24,866,655
-------------
COMMUNICATIONS EQUIPMENT & SERVICES - 6.1%
Cisco Systems, Inc.*.............................. 1,094,100 30,470,685
QUALCOMM, Inc..................................... 268,070 11,631,557
Research In Motion, Ltd.*......................... 74,360 14,871,257
-------------
56,973,499
-------------
COMPUTERS & PERIPHERALS - 4.4%
Apple, Inc.*...................................... 155,770 19,010,171
EMC Corp.*........................................ 778,930 14,098,633
Network Appliance, Inc.*.......................... 278,320 8,126,944
-------------
41,235,748
-------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 2.0%
ABB, Ltd.......................................... 366,276 8,224,670
Broadcom Corp. - Class A*(a)...................... 347,750 10,171,687
-------------
18,396,357
-------------
ENERGY EQUIPMENT & SERVICES - 2.2%
Schlumberger, Ltd................................. 241,820 20,540,191
-------------
----------------------------------------------------------------------------
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
----------------------------------------------------------------------------
FINANCIAL - DIVERSIFIED - 7.8%
Blackstone Group LP (The)*(a)..................... 42,380 $ 1,240,463
Chicago Mercantile Exchange Holdings, Inc......... 26,180 13,989,545
Fortress Investment Group LLC - Class A........... 94,690 2,255,516
Franklin Resources, Inc. (a)...................... 50,280 6,660,592
Goldman Sachs Group, Inc. (The)................... 61,190 13,262,932
Legg Mason, Inc................................... 93,200 9,169,016
Prudential Financial, Inc......................... 136,470 13,268,978
UBS AG............................................ 218,845 13,054,558
-------------
72,901,600
-------------
FOOD & DRUG RETAILING - 0.7%
Sysco Corp........................................ 200,110 6,601,629
-------------
FOOD PRODUCTS - 2.1%
Cadbury Schweppes Plc............................. 587,870 7,990,517
Nestle S.A........................................ 31,374 11,890,635
-------------
19,881,152
-------------
HEALTH CARE EQUIPMENT & SUPPLIES - 2.8%
C.R. Bard, Inc.................................... 37,490 3,097,799
St. Jude Medical, Inc.*........................... 172,720 7,166,153
Thermo Fisher Scientific, Inc.*................... 242,700 12,552,444
Varian Medical Systems, Inc.*..................... 88,260 3,751,932
-------------
26,568,328
-------------
HEALTH CARE PROVIDERS & SERVICES - 1.9%
Henry Schein, Inc.*............................... 97,660 5,217,974
WellPoint, Inc.*.................................. 157,170 12,546,881
-------------
17,764,855
-------------
HOTELS, RESTAURANTS & LEISURE - 1.3%
Las Vegas Sands Corp.*(a)......................... 159,680 12,197,955
-------------
HOUSEHOLD PRODUCTS - 1.2%
Reckitt Benckiser Plc............................. 212,020 11,597,448
-------------
INSURANCE - 2.4%
American International Group, Inc................. 218,960 15,333,769
Hartford Financial Services Group, Inc. (The)..... 68,650 6,762,711
-------------
22,096,480
-------------
INTERNET SOFTWARE & SERVICES - 6.4%
eBay, Inc.*....................................... 468,270 15,068,929
F5 Networks, Inc.*................................ 73,430 5,918,458
Google, Inc. - Class A*........................... 62,160 32,533,301
Yahoo!, Inc.*..................................... 230,040 6,240,985
-------------
59,761,673
-------------
IT CONSULTING & SERVICES - 2.0%
Affiliated Computer Services, Inc. - Class A*..... 208,180 11,807,970
Cognizant Technology Solutions Corp. - Class
A*(a)........................................... 87,360 6,559,862
-------------
18,367,832
-------------
See notes to financial statements
5
MET INVESTORS SERIES TRUST
OPPENHEIMER CAPITAL APPRECIATION PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
----------------------------------------------------------------------------
VALUE
SECURITY DESCRIPTION SHARES (NOTE 2)
----------------------------------------------------------------------------
MACHINERY - 0.6%
Joy Global, Inc................................... 95,710 $ 5,582,764
-------------
MEDIA - 1.6%
Comcast Corp. - Class A*(a)....................... 530,125 14,822,295
-------------
METALS & MINING - 0.5%
Allegheny Technologies, Inc.(a)................... 40,630 4,261,274
-------------
OIL & GAS - 4.5%
Occidental Petroleum Corp......................... 215,470 12,471,404
Range Resources Corp.............................. 195,100 7,298,691
Smith International, Inc.(a)...................... 235,930 13,834,935
XTO Energy, Inc................................... 145,280 8,731,328
-------------
42,336,358
-------------
PHARMACEUTICALS - 7.2%
Allergan, Inc..................................... 97,300 5,608,372
Celgene Corp.*(a)................................. 136,780 7,841,597
Covance, Inc.*.................................... 97,630 6,693,513
Genentech, Inc.*.................................. 122,680 9,281,969
Medco Health Solutions, Inc.*..................... 125,940 9,822,060
Roche Holdings AG................................. 77,909 13,791,189
Schering - Plough Corp............................ 150,840 4,591,570
Shionogi & Co., Ltd............................... 211,000 3,430,354
Shire Plc......................................... 263,060 6,513,602
-------------
67,574,226
-------------
REAL ESTATE - 0.9%
CB Richard Ellis Group, Inc. - Class A*(a)........ 229,200 8,365,800
-------------
RETAIL - MULTILINE - 4.2%
Costco Wholesale Corp............................. 249,900 14,624,148
J.C. Penney Co., Inc.(a).......................... 178,000 12,883,640
Target Corp....................................... 192,750 12,258,900
-------------
39,766,688
-------------
RETAIL - SPECIALTY - 3.3%
Staples, Inc...................................... 541,410 12,847,660
Starbucks Corp.*.................................. 232,230 6,093,715
Tiffany & Co...................................... 104,770 5,559,096
TJX Cos., Inc. (The).............................. 243,850 6,705,875
-------------
31,206,346
-------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS - 2.2%
ASML Holding N.V.*(a)............................. 235,100 6,453,495
Microchip Technology, Inc.(a)..................... 205,180 7,599,867
SiRF Technology Holdings, Inc. *(a)............... 78,451 1,627,074
Texas Instruments, Inc............................ 136,370 5,131,603
-------------
20,812,039
-------------
SOFTWARE - 4.8%
Activision, Inc.*................................. 147,560 2,754,945
Adobe Systems, Inc.*.............................. 268,340 10,773,851
Autodesk, Inc.*(a)................................ 261,240 12,299,179
Microsoft Corp.................................... 308,090 9,079,412
-----------------------------------------------------------------------------
SHARES/PAR VALUE
SECURITY DESCRIPTION AMOUNT (NOTE 2)
-----------------------------------------------------------------------------
SOFTWARE - CONTINUED
Red Hat, Inc.*(a)................................. 266,220 $ 5,931,382
Salesforce.com, Inc.*(a).......................... 90,850 3,893,831
-------------
44,732,600
-------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 4.7%
Amdocs, Ltd.*(a).................................. 273,330 10,884,001
Corning, Inc.*.................................... 660,050 16,864,277
Telefonaktiebolaget LM Ericsson (ADR)............. 248,500 9,912,665
XM Satellite Radio Holdings, Inc. - Class A*(a)... 517,800 6,094,506
-------------
43,755,449
-------------
TELECOMMUNICATION SERVICES - WIRELESS - 3.5%
America Movil S.A. de C.V. (ADR).................. 140,700 8,713,551
American Tower Corp. - Class A*................... 248,050 10,418,100
Crown Castle International Corp.*(a).............. 201,150 7,295,711
NII Holdings, Inc.*............................... 81,860 6,609,376
-------------
33,036,738
-------------
TEXTILES, APPAREL & LUXURY GOODS - 1.2%
Polo Ralph Lauren Corp............................ 117,820 11,559,320
-------------
TRADING COMPANIES & DISTRIBUTORS - 0.9%
Fastenal Co.(a)................................... 208,380 8,722,787
-------------
Total Common Stocks
(Cost $770,919,734) 923,507,555
-------------
SHORT-TERM INVESTMENT - 1.4%
State Street Bank & Trust Co., Repurchase
Agreement dated 06/29/07 at 3.400% to be
repurchased at $13,102,711 on 07/02/07
collateralized by $13,535,000 FHLB at 4.375%
due 09/17/10 with a value of $13,362,293. (Cost
- $13,099,000).................................. $ 13,099,000 13,099,000
-------------
TOTAL INVESTMENTS - 100.0% (Cost $784,018,734) 936,606,555
-------------
Other Assets and Liabilities (net) - 0.0% 119,499
-------------
TOTAL NET ASSETS - 100.0% $ 936,726,054
=============
PORTFOLIO FOOTNOTES:
* Non-income producing security.
(a) A portion or all of the security was held on loan. As of June 30, 2007, the
market value of the securities loaned was $102,453,112 and the collateral
received consisted of cash in the amount of $94,243,201 and securities in
the amount of $10,555,754.
ADR - American Depositary Receipt
FHLB - Federal Home Loan Bank
See notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
OPPENHEIMER CAPITAL APPRECIATION PORTFOLIO
ASSETS
Investments, at value (Note 2)* $ 923,507,555
Repurchase Agreement 13,099,000
Cash 98
Cash denominated in foreign currencies** 1,393,720
Collateral for securities on loan 104,798,955
Receivable for investments sold 9,099,039
Receivable for Trust shares sold 724,956
Dividends receivable 594,741
Interest receivable 2,474
--------------
Total assets 1,053,220,538
--------------
LIABILITIES
Payables for:
Investments purchased 10,552,945
Trust shares redeemed 352,662
Distribution and services fees--Class B 113,026
Distribution and services fees--Class E 401
Collateral for securities on loan 104,798,955
Investment advisory fee payable (Note 3) 447,420
Administration fee payable 10,302
Custodian and accounting fees payable 125,225
Accrued expenses 93,548
--------------
Total liabilities 116,494,484
--------------
NET ASSETS $ 936,726,054
==============
NET ASSETS REPRESENTED BY:
Paid in surplus $ 721,284,786
Accumulated net realized gain 61,860,088
Unrealized appreciation on investments and foreign currency 152,596,596
Undistributed net investment income 984,584
--------------
Total $ 936,726,054
==============
NET ASSETS
Class A $ 387,990,964
==============
Class B 545,578,530
==============
Class E 3,156,560
==============
CAPITAL SHARES OUTSTANDING
Class A 40,869,279
==============
Class B 57,928,253
==============
Class E 333,034
==============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 9.49
==============
Class B 9.42
==============
Class E 9.48
==============
- ---------------------------------------------------------------------------------------
* Investments at cost, excluding Repurchase Agreements $ 770,919,734
**Cost of cash denominated in foreign currencies 1,382,919
See notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
OPPENHEIMER CAPITAL APPRECIATION PORTFOLIO
INVESTMENT INCOME:
Dividends (1) $ 4,346,232
Interest (2) 426,351
-----------
Total investment income 4,772,583
-----------
EXPENSES:
Investment advisory fee (Note 3) 2,938,231
Administration fees 37,688
Custody and accounting fees 40,150
Distribution fee--Class B 671,048
Distribution fee--Class E 2,182
Transfer agent fees 14,567
Audit 12,048
Legal 7,396
Trustee fees and expenses 7,252
Shareholder reporting 47,540
Insurance 7,686
Other 2,216
-----------
Total expenses 3,788,004
-----------
Net investment income 984,579
-----------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS,
FUTURES CONTRACTS AND FOREIGN CURRENCY:
Net realized gain (loss) on:
Investments 67,129,467
Futures contracts 1,052,145
Foreign currency (220,401)
-----------
Net realized gain on investments, futures contracts and foreign
currency 67,961,211
-----------
Net change in unrealized appreciation (depreciation) on:
Investments 23,869,421
Foreign currency (1,332)
-----------
Net change in unrealized appreciation on investments and foreign
currency 23,868,089
-----------
Net realized and change in unrealized gain on investments, futures
contracts and foreign currency 91,829,300
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $92,813,879
===========
- --------------------------------------------------------------------------------------
(1)Dividend income is net withholding taxes of: $ 216,930
(2)Interest income includes securities lending income of: 53,359
See notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
OPPENHEIMER CAPITAL APPRECIATION PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 984,579 $ 889,964
Net realized gain on investments, futures contracts and foreign
currency 67,961,211 66,520,504
Net change in unrealized appreciation on investments and foreign
currency 23,868,089 21,838,339
-------------- --------------
Net increase in net assets resulting from operations 92,813,879 89,248,807
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (795,251) (2,452,789)
Class B -- (430,203)
Class E (1,393) (5,722)
From net realized gains
Class A (35,526,271) (5,591,128)
Class B (33,915,743) (3,832,768)
Class E (192,506) (13,989)
-------------- --------------
Net decrease in net assets resulting from distributions (70,431,164) (12,326,599)
-------------- --------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class A 72,236,016 186,305,855
Class B 18,880,532 56,420,742
Class E 1,291,397 2,225,834
Net asset value of shares issued through dividend reinvestment
Class A 36,321,522 8,043,917
Class B 33,915,743 4,262,971
Class E 193,899 19,711
Cost of shares repurchased
Class A (234,994,451) (396,094,179)
Class B (55,847,118) (61,013,326)
Class E (879,780) (734,339)
-------------- --------------
Net decrease in net assets from capital share transactions (128,882,240) (200,562,814)
-------------- --------------
TOTAL DECREASE IN NET ASSETS (106,499,525) (123,640,606)
Net assets at beginning of period 1,043,225,579 1,166,866,185
-------------- --------------
Net assets at end of period $ 936,726,054 $1,043,225,579
============== ==============
Net assets at end of period includes undistributed net investment
income $ 984,584 $ 796,649
============== ==============
See notes to financial statements
9
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD
ENDED:
CLASS A
OPPENHEIMER CAPITAL APPRECIATION PORTFOLIO --------------------------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 -----------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002(B)
-------------- ------ ------- ------- ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD.............. $ 9.27 $ 8.69 $ 8.36 $ 8.33 $ 6.47 $ 8.57
------ ------ ------- ------- ------ -------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income............................. 0.02 (a) 0.02 (a) 0.03 (a) 0.07 (a) 0.01(a) 0.01 (a)
Net Realized/Unrealized Gain (Loss) on Investments 0.82 0.66 0.39 0.47 1.85 (2.11)
------ ------ ------- ------- ------ -------
Total from Investment Operations.................. 0.84 0.68 0.42 0.54 1.86 (2.10)
------ ------ ------- ------- ------ -------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.............. (0.01) (0.03) (0.01) (0.06) -- (0.00)+
Distributions from Net Realized Capital Gains..... (0.61) (0.07) (0.08) (0.45) -- --
------ ------ ------- ------- ------ -------
Total Distributions............................... (0.62) (0.10) (0.09) (0.51) -- (0.00)+
------ ------ ------- ------- ------ -------
NET ASSET VALUE, END OF PERIOD.................... $ 9.49 $ 9.27 $ 8.69 $ 8.36 $ 8.33 $ 6.47
====== ====== ======= ======= ====== =======
TOTAL RETURN 9.27% 7.81% 4.99% 6.70% 28.75% (24.47)%
Ratio of Expenses to Average Net Assets**......... 0.61%* 0.65% 0.69% 0.68% 0.72% 0.75 %
Ratio of Expenses to Average Net Assets After
Broker Rebates**................................ N/A N/A N/A N/A 0.72% N/A
Ratio of Expenses to Average Net Assets Before
Reimbursement and Rebates....................... 0.61%* 0.65% 0.64%(c) 0.69%(c) 0.75%(c) 0.99 %
Ratio of Net Investment Income to Average Net
Assets.......................................... 0.34%* 0.22% 0.42% 0.90% 0.07% 0.17 %
Portfolio Turnover Rate........................... 30.1% 60.7% 72.4% 65.3% 36.6% 20.6 %
Net Assets, End of Period (in millions)........... $388.0 $505.6 $664.2 $298.0 $0.2 $0.7
CLASS B
-----------------------------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 -------------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002
-------------- ------ ------- ------- ------- -------
NET ASSET VALUE, BEGINNING OF PERIOD.............. $ 9.20 $ 8.62 $ 8.31 $ 8.29 $ 6.45 $ 8.57
------ ------ ------- ------- ------- -------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income (Loss)...................... 0.00 +(a) (0.01)(a) 0.01 (a) 0.06 (a) 0.00 (a)+ 0.00 +(a)
Net Realized/Unrealized Gain (Loss) on Investments 0.83 0.67 0.38 0.46 1.84 (2.12)
------ ------ ------- ------- ------- -------
Total from Investment Operations.................. 0.83 0.66 0.39 0.52 1.84 (2.12)
------ ------ ------- ------- ------- -------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.............. -- (0.01) -- (0.05) -- (0.00)+
Distributions from Net Realized Capital Gains..... (0.61) (0.07) (0.08) (0.45) -- --
------ ------ ------- ------- ------- -------
Total Distributions............................... (0.61) (0.08) (0.08) (0.50) -- (0.00)+
------ ------ ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD.................... $ 9.42 $ 9.20 $ 8.62 $ 8.31 $ 8.29 $ 6.45
====== ====== ======= ======= ======= =======
TOTAL RETURN 9.19% 7.62 % 4.71% 6.40% 28.53 % (24.73)%
Ratio of Expenses to Average Net Assets**......... 0.86%* 0.90 % 0.94% 0.95% 0.99 % 1.00 %
Ratio of Expenses to Average Net Assets After
Broker Rebates**................................ N/A N/A N/A N/A 0.99 % N/A
Ratio of Expenses to Average Net Assets Before
Reimbursement and Rebates....................... 0.86%* 0.90 % 0.89%(c) 0.91%(c) 0.98 %(c) 1.22 %
Ratio of Net Investment Income (Loss) to Average
Net Assets...................................... 0.06%* (0.06)% 0.18% 0.67% (0.03)% (0.02)%
Portfolio Turnover Rate........................... 30.1% 60.7 % 72.4% 65.3% 36.6 % 20.6 %
Net Assets, End of Period (in millions)........... $545.6 $535.1 $501.8 $634.6 $551.0 $122.4
* Annualized
** Prior to 05/01/2003, broker rebates were excluded from the calculation of
the expense limitation.
+ Rounds to less than $0.005 per share
N/A Not Applicable
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--01/02/2002.
(c) Excludes effect of Deferred Expense Reimbursement--See Note 3 of financial
statements.
See notes to financial statements
10
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS E
OPPENHEIMER CAPITAL APPRECIATION PORTFOLIO ---------------------------------
FOR THE PERIOD FOR THE YEARS ENDED
ENDED DECEMBER 31,
JUNE 30, 2007 -----------------
(UNAUDITED) 2006 2005(B)
-------------- ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD.................................... $ 9.25 $ 8.68 $ 7.97
------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................... 0.01 (a) 0.00+(a) 0.01 (a)
Net Realized/Unrealized Gain on Investments............................. 0.83 0.67 0.79
------ ------ ------
Total from Investment Operations........................................ 0.84 0.67 0.80
------ ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................... (0.00)+(a) (0.03) (0.01)
Distributions from Net Realized Capital Gains........................... (0.61) (0.07) (0.08)
------ ------ ------
Total Distributions..................................................... (0.61) (0.10) (0.09)
------ ------ ------
NET ASSET VALUE, END OF PERIOD.......................................... $ 9.48 $ 9.25 $ 8.68
====== ====== ======
TOTAL RETURN............................................................ 9.29% 7.68% 10.01%
Ratio of Expenses to Average Net Assets................................. 0.76%* 0.80% 0.83%*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates 0.76%* 0.80% 0.80%(c)*
Ratio of Net Investment Income to Average Net Assets.................... 0.17%* 0.03% 0.15%*
Portfolio Turnover Rate................................................. 30.1% 60.7% 72.4%
Net Assets, End of Period (in millions)................................. $ 3.2 $ 2.5 $ 0.9
* Annualized
+ Rounds to less than $0.005 per share
N/A Not Applicable
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--05/02/2005.
(c) Excludes effect of Deferred Expense Reimbursement--See Note 3 of financial
statements.
See notes to financial statements
11
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is Oppenheimer Capital Appreciation
Portfolio, which is diversified. Shares in the Trust are not offered directly
to the general public and are currently available only to separate accounts
established by certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A, B and E Shares are
offered by the Portfolio. Shares of each Class of the Portfolio represent an
equal pro rata interest in the Portfolio and generally give the shareholder the
same voting, dividend, liquidation, and other rights. Investment income,
realized and unrealized capital gains and losses, the common expenses of the
Portfolio and certain Portfolio-level expense reductions, if any, are allocated
on a pro rata basis to each class based on the relative net assets of each
class to the total net assets of the Portfolio. Each class of shares differs in
its respective distribution expenses and certain other class-specific expense
reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date.
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The value of the security so purchased is subject to market fluctuations during
this period. The Portfolio segregates assets having an aggregate value at least
equal to the amount of the when issued or delayed delivery purchase commitments
until payment is made.
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
The Portfolio utilizes the provisions of the federal income tax laws that
provide for the carryforward of capital losses for eight years, offsetting such
losses against any future net realized capital gains. At December 31, 2006, the
accumulated capital loss carryforwards and expiration dates by the Portfolio
were as follows:
Expiring
Portfolio Total 12/31/2010
--------- -------- ----------
Oppenheimer Capital Appreciation Portfolio $420,575 $420,575
Oppenheimer Capital Appreciation acquired losses of $2,062,652 in the merger
with Met/Putnam Research Portfolio on November 19, 2004 which are subject to a
limitation of $547,359.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. SECURITIES LENDING - The Portfolio may lend its securities to certain
qualified brokers who borrow securities in order to complete certain
transactions. By lending its investment securities, the Portfolio attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term of the loan would
accrue to the account of the Portfolio. Risks of delay in recovery of the
securities or even loss of rights in the collateral may occur should the
borrower of the securities fail financially. Risks may also arise to the extent
that the value of the collateral decreases below the value of the securities
loaned.
Upon entering into a securities lending transaction, the Portfolio receives
cash or other securities as collateral in an amount equal to or exceeding 102%
of the current market value of the loaned securities. Any cash received as
collateral is generally invested by State Street Bank and Trust Company ("State
Street"), acting in its capacity as securities lending agent (the "Agent"), in
the State Street Navigator Securities Lending Prime Portfolio which is a money
market fund registered under the 1940 Act. A portion of the dividends received
on the collateral is rebated to the borrower of the securities and the
remainder is split between the Agent and the Portfolio. On loans collateralized
by cash, the cash collateral is invested in a money market fund or short term
securities. A portion of the income generated upon investment of the collateral
is remitted to the Borrowers and the remainder is allocated between the fund
and the lending agent. On loans collateralized by U.S. Treasuries, a fee is
received from the Borrower and is allocated between the fund and the lending
agent.
G. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
H. FOREIGN CURRENCY TRANSLATION - The books and records of the Portfolio are
maintained in U.S. dollars. Foreign currencies, investments and other assets
and liabilities are translated into U.S. dollars on a daily basis using
prevailing exchange rates. Purchases and sales of securities are translated at
the rates of exchange prevailing when such securities were acquired or sold.
Income is translated at rates of exchange prevailing when interest is accrued
or dividends are recorded.
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The Portfolio does not isolate that portion of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in
forward foreign currency contracts, sales of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities
transactions, and the difference between the amounts of dividends, interest,
and foreign withholding taxes recorded on the Portfolio's books, and the U.S.
dollar equivalent of the amounts actually received or paid. Net unrealized
foreign exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at fiscal year end, from
changes in the exchange rates of foreign currency held, and from changes in the
contract value of forward foreign currency contracts.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with OppenheimerFunds, Inc., (the "Adviser") for investment advisory services
in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- ----------------------------
Oppenheimer Capital Appreciation Portfolio $2,938,231 0.65% First $150 Million
0.625% $150 Million to $300 Million
0.60% $300 Million to $500 Million
0.55% $500 Million to $700 Million
0.525% $700 Million to $900 Million
0.50% Over $900 Million
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Maximum Expense Ratio
under current Expense
Limitation Agreement
----------------------
Portfolio Class A Class B Class E
--------- ------- ------- -------
Oppenheimer Capital Appreciation Portfolio 0.75% 1.00% 0.90%
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to
14
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
reimbursement by the Portfolio to the extent that the charge does not cause the
expenses in such subsequent year to exceed the Maximum Expense Ratio as stated
above. The Portfolio is not obligated to repay any expense paid by the Manager
more than five years after the end of the fiscal year in which such expense was
incurred.
For the period July 1, 2005 through October 31, 2006, if the average monthly
net assets of the Oppenheimer Capital Appreciation Portfolio were in excess of
$1 billion, a discount to the total fees for the Portfolio for that month of
2.5% was applied. Such fee was accrued daily and paid monthly by the tenth
business day following the end of the month in which such fee was accrued. If
OppenheimerFunds, Inc. ("Oppenheimer") shall serve for less than the whole of
any month, the foregoing compensation was prorated. For the purpose of
determining fees payable to Oppenheimer, the value of the Portfolio's net
assets was computed at the times and in the manner specified in the Trust's
Registration Statement.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to
activities primarily intended to result in the sale of Class B and Class E
Shares. However, under Class B and Class E Distribution Agreements, payments to
the Distributor for activities pursuant to the Class B Distribution Plan and
Class E Distribution Plan are currently limited to payments at an annual rate
equal to 0.25% and 0.15% of average daily net assets of the Portfolio
attributable to its Class B and Class E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
During the year ended December 31, 2006 the Portfolio paid brokerage
commissions to affiliated brokers/dealers:
Portfolio Affiliate Commission
--------- --------- ----------
Oppenheimer Capital Appreciation Portfolio Oppenheimer & Co, Inc. $494
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued Net Increase
Through (Decrease)
Beginning Shares Dividend Shares in Shares Ending
Shares Sold Reinvestment Repurchased Outstanding Shares
- - ---------- ---------- ------------- ----------- ------------ ----------
Oppenheimer Capital Appreciation Portfolio
Class A
06/30/2007 54,548,581 7,621,358 3,930,901 (25,231,561) (13,679,302) 40,869,279
12/31/2006 76,444,565 21,089,774 888,831 (43,874,589) (21,895,984) 54,548,581
Class B
06/30/2007 58,165,344 2,012,962 3,698,554 (5,948,607) (237,091) 57,928,253
12/31/2006 58,206,388 6,382,277 474,190 (6,897,511) (41,044) 58,165,344
Class E
06/30/2007 269,008 136,480 21,007 (93,461) 64,026 333,034
12/31/2006 98,712 250,981 2,180 (82,865) 170,296 269,008
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
Oppenheimer Capital Appreciation Portfolio $-- $298,614,232 $-- $488,130,828
15
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
5. INVESTMENT TRANSACTIONS - CONTINUED
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
- --------- ------------ ------------ -------------- --------------
Oppenheimer Capital Appreciation Portfolio $784,018,734 $162,525,651 $(9,937,830) $152,587,821
6. SECURITY LENDING
As of June 30, 2007, the Portfolio had loaned securities which were
collateralized by short-term investments. The value of securities on loan and
the value of the related collateral were as follows:
Value of Value of
Securities Collateral
------------ ------------
Oppenheimer Capital Appreciation Portfolio $102,453,112 $104,798,955
7. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
--------------------- --------------------- -----------------------
2006 2005 2006 2005 2006 2005
---------- ---------- ---------- ---------- ----------- -----------
Oppenheimer Capital Appreciation Portfolio $3,174,051 $5,834,260 $9,152,548 $5,599,872 $12,326,599 $11,434,132
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
------------- ------------- ------------ ------------------ ------------
Oppenheimer Capital Appreciation Portfolio $10,500,594 $59,930,493 $123,048,040 $(420,575) $193,058,552
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
8. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
9. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
16
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
17
MET INVESTORS SERIES TRUST
PIMCO Inflation
Protected Bond Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
PIMCO INFLATION PROTECTED BOND PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY PACIFIC INVESTMENT MANAGEMENT COMPANY LLC
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
MAJOR MARKET TRENDS AFFECTING THE PORTFOLIO'S PERFORMANCE
Most fixed income sectors, including inflation-linked bonds (ILBs), showed
modest gains during the first half of 2006. During the second quarter of 2007
Treasury Inflation-Protection Protected Securities (TIPS) gave back some of
their gains from earlier in the year as worldwide growth and capital flows
drove real yields higher. The Lehman Brothers U.S. TIPS Index, returned a
modest 1.73 percent for the first six months of the year. The benchmark 10-year
TIPS issue yielded 2.67 percent as of the end of June, 46 basis points higher
than at the start of the second quarter. During the first quarter of 2007
economic data pointed toward slower growth, heightening market expectations for
Federal Reserve easing. During the second quarter the data, especially
employment statistics, gave little indication of economic weakness, causing
expectations of Fed easing to unwind and interest rates to move higher. Rates
also climbed in Europe and the U.K. as central banks there tightened to
forestall inflation. Another critical factor moving rates higher was the
market's anticipation of central bank reserve diversification away from
government bonds toward riskier assets. China's investment in a major U.S.
private equity firm raised investor awareness that there could be less demand
for Treasuries at the margin in the future. One consequence of institutional
investors seeking to get out ahead of this trend was the return of the term
premium to the U.S. yield curve late in the second quarter.
OTHER FACTORS ATTRIBUTED TO THE PORTFOLIO'S POSITIVE/NEGATIVE PERFORMANCE VS.
THE BENCHMARK
Below investment grade corporate bonds and locally issued emerging market bonds
held up better than their higher quality counterparts during difficult market
conditions in the first half of 2007. During the first quarter, an emphasis on
shorter maturity nominal bonds added to returns, while exposure to short
maturities via Eurodollar futures lost value during the second quarter as
expectations of Fed easing dimmed. Mortgage-backed bond returns lagged
Treasuries on a like-duration basis for the first six months of the year,
detracting from performance. While volatility in the mortgage market remained
near historic lows, mortgage yield premiums widened mainly due to reduced
demand from banks and other financial institutions. Exposure to short maturity
U.K. rates hurt performance as rates rose amid expectations of more rate hikes
by the Bank of England. Exposure to emerging market currencies helped
performance in the first half, while a position in the yen hurt performance.
MARKET/PORTFOLIO OUTLOOK
Real global growth will continue to advance at an annual rate of around 5
percent over the next several years, led by rapid expansion in developing
economies such as China and India. More mature developed economies will likely
grow at rates closer to 2 percent amid demographic and other challenges. The
U.S. economy will remain weak in 2007 and 2008. The soft domestic housing
market should feed into a broader economic slowdown, exacerbated by the sharp
increase in gasoline prices that should act as a tax on consumer demand. An
anticipated rise in unemployment and tame inflation should prompt Fed easing.
Non-dollar assets should outperform dollar-denominated investments since
relatively sluggish U.S. growth points to a weaker U.S. dollar and lower asset
price appreciation than in the rest of the world.
STRATEGY:
Key strategies will include:
.. REAL AND NOMINAL INTEREST RATE STRATEGIES--PIMCO will likely move total
duration toward neutral reflecting the opposing forces of expected cyclical
domestic weakness and continued secular global strength. Treasury Inflation
Protected Securities (TIPS) duration will likely be maintained near the
index with the potential for tactical overweights should inflation risks
emerge. PIMCO will likely employ select non-US duration strategies given
global relative value opportunities in U.S. dollar-hedged Japanese
government bonds, which provide yield enhancement given interest rate
differentials and short maturity U.K. nominal exposure, which may benefit as
growth potentially slows through 2007.
.. YIELD CURVE--PIMCO will likely maintain a short-to- intermediate nominal
focus in anticipation of a steeper yield curve. Over a cyclical time frame
this steepening is likely to occur as the Fed cuts short-term rates later
this year and early next year to stave off the negative impact of the
housing downturn on the U.S. economy. Over a longer time horizon could also
steepen as countries diversify currency reserves away from longer maturity
Treasury bonds.
.. EMERGING MARKET BONDS--To participate in the rapid growth expected in
developing economies, PIMCO will likely take exposure to locally issued
emerging market bonds. Local Emerging Market (EM) bonds are poised for
continued growth in new issuance, liquidity and investor participation.
Their yields, many of which are in the high single digits, are likely to
compress as economic fundamentals continue to improve. Yield premiums
relative to Treasuries on local EM bonds tend to be more attractive than
those on mostly dollar denominated, external emerging market debt, which
already reflect the strong growth prospects for these economies.
.. CURRENCY--PIMCO will likely take advantage of expected weakness in the U.S.
dollar by building currency positions, comprised largely of EM currencies.
Local EM bonds, which are typically denominated in home country currencies,
can be effective vehicles for taking EM currency exposure.
.. MORTGAGE AND CORPORATE EXPOSURE--While mortgages will remain an important
source of high quality yield in portfolios, PIMCO will target reduced
allocations and look to add value via security selection. Historically tight
credit premiums point toward continued low exposure, as better opportunities
to enhance yield exist elsewhere.
This report contains the current opinions of the manager and such opinions are
subject to change without notice. This report has been distributed for
informational purposes only and should not be considered as investment advice
or a recommendation of any particular security, strategy or investment product.
Information
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
PIMCO INFLATION PROTECTED BOND PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY PACIFIC INVESTMENT MANAGEMENT COMPANY LLC
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
contained herein has been obtained from sources believed to be reliable, but
not guaranteed.
In an environment where interest rates may trend upward, rising rates will
negatively impact fixed income securities. Bonds with a longer duration (a
measure of the expected life of a security) tend to be more sensitive to
changes in interest rates, usually making them more volatile than securities
with shorter durations.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Each sector of the bond
market entails risk. Municipals may realize gains and may incur a tax liability
from time to time. The guarantee on Treasuries, TIPS and Government Bonds is to
the timely repayment of principal and interest; shares of a portfolio that
invest in them are not guaranteed. Mortgage-backed securities are subject
prepayment risk. With corporate bonds there is no assurance that issuers will
meet their obligations. An investment in high-yield securities generally
involves greater risk to principal than an investment in higher-rated bonds.
Investing in non-U.S. securities may entail risk as a result of non-U.S.
economic and political developments, which may be enhanced when investing in
emerging markets.
JOHN B. BRYNJOLFSSON Portfolio Manager PACIFIC INVESTMENT MANAGEMENT COMPANY LLC
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
--------------------------------------------------------------------
U.S. Treasury Inflation Index Note (2.000%, due 01/15/14) 11.56%
--------------------------------------------------------------------
U.S. Treasury Inflation Index Bond (3.875%, due 04/15/29) 8.53%
--------------------------------------------------------------------
U.S. Treasury Inflation Index Note (2.000%, due 07/15/14) 8.08%
--------------------------------------------------------------------
U.S. Treasury Inflation Index Bond (2.375%, due 01/15/25) 6.92%
--------------------------------------------------------------------
U.S. Treasury Inflation Index Note (0.875%, due 04/15/10) 6.68%
--------------------------------------------------------------------
U.S. Treasury Inflation Index Bond (2.000%, due 01/15/26) 6.35%
--------------------------------------------------------------------
U.S. Treasury Inflation Index Bond (3.625%, due 04/15/28) 6.11%
--------------------------------------------------------------------
U.S. Treasury Inflation Index Bond (2.375%, due 01/15/17) 4.88%
--------------------------------------------------------------------
U.S. Treasury Inflation Index Bond (2.375%, due 04/15/11) 4.70%
--------------------------------------------------------------------
U.S. Treasury Inflation Index Note (3.875%, due 01/15/09) 4.63%
--------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
[CHART]
Asset-Backed Securities 5.3%
Corporate Bonds & Debt securities 11.4%
Collateralized Mortgage Obligations 4.5%
Convertible Bonds 0.3%
Foreign Bonds & Debt Securities 1.9%
Options 0.1%
Municipals 0.2%
U.S. Government & Agency Obligations 76.3%
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
PIMCO INFLATION PROTECTED BOND PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY PACIFIC INVESTMENT MANAGEMENT COMPANY LLC
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
PIMCO INFLATION PROTECTED BOND PORTFOLIO MANAGED BY
PACIFIC INVESTMENT MANAGEMENT COMPANY LLC VS. LEHMAN GLOBAL REAL: U.S. TIPS
BOND INDEX/1/
Growth Based on $10,000+
[CHART]
PIMCO Inflation Lehman Global Real:
Protected Bond Portfolio U.S. TIPS Bond Index
------------------------ ----------------------
5/1/2003 $10,000 $10,000
12/31/2003 10,547 10,568
12/31/2004 11,541 11,460
12/31/2005 11,711 11,785
12/31/2006 11,789 11,833
6/30/2007 11,959 12,037
------------------------------------------------------------------
Average Annual Return/2/
(for the period ended 6/30/07)
------------------------------------------------------------------
Since
1 Year 3 Year Inception/3/
------------------------------------------------------------------
PIMCO Inflation
- -- Protected Bond Portfolio--Class A 2.98% 3.28% 4.38%
Class B 2.60% 3.00% 4.10%
Class E 2.72% -- 2.59%
------------------------------------------------------------------
Lehman Global Real: U.S. TIPS Bond
- - - Index/1/ 3.99% 3.80% 4.56%
------------------------------------------------------------------
+The chart reflects the performance of Class A shares of the Portfolio. The
performance of Class A shares will differ from that of the Class B and Class E
shares because of the difference in expenses paid by policyholders investing in
the different share class.
/1/The Lehman Brothers Global Real: U.S. TIPS Index represents an unmanaged
market index made up of U.S. Treasury Inflation Linked Index securities. The
Index does not include fees or expenses and is not available for direct
investment.
/2/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/3/Inception of Class A and Class B shares is 5/1/03. Inception of Class E
shares is 5/1/06. Index returns are based on an inception date of 4/30/03.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
3
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
PIMCO INFLATION PROTECTED BOND PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,014.50 $2.65
Hypothetical (5% return before expenses) 1,000.00 1,022.17 2.66
- ------------------------------------------ ------------- ------------- --------------
Class B
Actual $1,000.00 $1,011.80 $3.89
Hypothetical (5% return before expenses) 1,000.00 1,020.93 3.91
- ------------------------------------------ ------------- ------------- --------------
Class E
Actual $1,000.00 $1,012.90 $3.39
Hypothetical (5% return before expenses) 1,000.00 1,021.42 3.41
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.53%,
0.78%, and 0.68% for the Class A, Class B, and Class E, respectively,
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period).
4
MET INVESTORS SERIES TRUST
PIMCO INFLATION PROTECTED BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-------------------------------------------------------------------
MUNICIPALS - 0.3%
Badger Tobacco Asset Securitization
Corp. 6.375%, due 06/01/32......... $ 1,000,000 $ 1,089,460
California County Tob Securitization
Agency 5.625%, due 06/01/23........ 160,000 160,968
New York City Municipal Water Finance
Authority
4.750%, due 06/15/38............... 300,000 298,545
Tobacco Settlement Financing Corp.
6.000%, due 06/01/23............... 1,000,000 1,058,110
Tobacco Settlement Revenue
Management
6.375%, due 05/15/28............... 200,000 212,342
----------------
Total Municipals
(Cost $2,504,728) 2,819,425
----------------
DOMESTIC BONDS & DEBT SECURITIES - 31.7%
ASSET-BACKED SECURITIES - 7.9%
Aames Mortgage Investment Trust
5.380%, due 04/25/36+.............. 70,788 70,838
Accredited Mortgage Loan Trust
5.480%, due 09/25/35+.............. 288,222 288,434
Ace Securities Corp.
5.430%, due 10/25/35+............... 406,303 406,581
5.370%, due 07/25/36-12/25/36+...... 832,675 833,279
Alternative Loan Trust
5.390%, due 07/25/46+.............. 325,974 326,165
American Home Mortgage Investment
Trust 5.470%, due 09/25/35+........ 111,157 111,230
Argent Securities, Inc.
5.400%, due 03/25/36+............... 370,183 370,183
5.390%, due 04/25/36+............... 365,065 365,008
5.370%, due 10/25/36+............... 957,362 956,913
Arkle Master Issuer Plc
5.300%, due 11/19/07 (144A)+(a).... 1,300,000 1,300,416
Asset Backed Funding Certificates
5.670%, due 06/25/34+............... 1,181,237 1,184,587
5.380%, due 11/25/36+............... 142,316 142,160
Asset Backed Securities Corp.
Home Equity
5.370%, due 11/25/36-12/25/36+..... 3,040,030 3,040,107
Bank One Issuance Trust
5.430%, due 12/15/10+.............. 700,000 701,153
Bear Stearns Asset Backed
Securities, Inc.
5.650%, due 10/25/32-01/25/36+...... 198,975 199,328
5.520%, due 09/25/34+............... 378,518 378,916
5.400%, due 12/25/35+............... 117,983 117,983
5.410%, due 04/25/36+............... 267,505 267,682
5.370%, due 11/25/36+............... 154,004 154,004
----------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
----------------------------------------------------------------------
ASSET-BACKED SECURITIES - CONTINUED
Carrington Mortgage Loan Trust
5.640%, due 10/25/35+.............. $ 2,097,043 $ 2,103,207
Centex Home Equity Loan Trust
5.370%, due 06/25/36+.............. 1,123,145 1,123,876
Chase Credit Card Master Trust
5.440%, due 02/15/10+............... 300,000 300,094
5.430%, due 10/15/10-02/15/11+...... 1,700,000 1,702,806
Chase Issuance Trust
5.330%, due 12/15/10+.............. 400,000 400,343
Citibank Credit Card Issuance Trust
5.456%, due 01/15/10+.............. 500,000 500,656
Citigroup Mortgage Loan Trust, Inc.
4.900%, due 12/25/35+............... 218,749 218,355
5.400%, due 12/25/35+............... 527,060 527,060
5.370%, due 11/25/36+............... 373,322 373,590
5.390%, due 07/25/36-09/25/36+...... 559,877 560,275
Countrywide Asset-Backed Certificates
5.450%, due 07/25/36+............... 215,858 215,858
5.370%, due 01/25/37-05/25/37+...... 2,306,118 2,307,234
5.400%, due 06/25/37+............... 3,003,861 3,003,393
5.350%, due 01/25/46+............... 1,188,386 1,187,829
5.380%, due 09/25/46+............... 425,273 425,140
5.430%, due 10/25/46+............... 1,031,183 1,031,183
Equity One ABS, Inc.
5.620%, due 04/25/34+.............. 121,664 122,087
Fremont Home Loan Trust
5.490%, due 01/25/36+............... 193,868 194,027
5.370%, due 10/25/36+............... 138,598 138,617
5.380%, due 01/25/37+............... 579,412 579,231
GSAMP Mortgage Securities Corp.
5.430%, due 11/25/35+.............. 180,864 180,984
GSAMP Trust
5.610%, due 03/25/34+............... 289,893 290,342
5.390%, due 10/25/36+............... 110,182 110,182
5.360%, due 10/25/46+............... 216,542 216,664
5.420%, due 01/25/47+............... 1,171,081 1,170,899
Home Equity Asset Trust
5.430%, due 02/25/36+............... 158,321 158,442
5.400%, due 05/25/36
(144A)+(a)........................ 412,564 412,435
Honda Auto Receivables Owner Trust
5.342%, due 11/15/07............... 189,535 189,535
HSI Asset Securitization Corp. Trust
5.370%, due 10/25/36+.............. 238,353 238,204
Hyundai Auto Receivables Trust
5.348%, due 11/15/07............... 31,659 31,686
Impac Secured Assets Corp.
5.400%, due 01/25/37+.............. 353,588 353,586
See notes to financial statements
5
MET INVESTORS SERIES TRUST
PIMCO INFLATION PROTECTED BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
------------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------------------
ASSET-BACKED SECURITIES - CONTINUED
Indymac Residential Asset Backed Trust
5.420%, due 03/25/36+................. $ 234,067 $ 234,231
5.370%, due 11/25/36+................. 378,875 378,757
JPMorgan Mortgage Acquisition Corp.
5.530%, due 06/25/35+................. 22,565 22,594
5.370%, due 07/25/36-08/25/36+........ 1,274,246 1,275,076
5.360%, due 08/25/36+................. 176,702 176,820
5.390%, due 11/25/36+................. 259,717 259,938
5.380%, due 04/01/37+................. 2,699,567 2,698,301
Long Beach Mortgage Loan Trust
5.500%, due 08/25/35+................. 210,247 210,439
5.400%, due 02/25/36+................. 148,778 148,778
5.390%, due 03/25/36+................. 84,299 84,358
5.350%, due 06/25/36+................. 68,317 68,367
5.360%, due 11/25/36+................. 154,403 154,506
5.380%, due 05/25/46+................. 98,888 98,959
Master Asset Backed Securities Trust
5.380%, due 10/25/36+................ 34,487 34,487
MBNA Credit Card Master Note Trust
5.420%, due 12/15/11+................ 100,000 100,258
Merrill Lynch Floating Trust
5.390%, due 06/15/22
(144A)+(a)........................... 266,771 266,938
Merrill Lynch Mortgage Investors Trust
5.400%, due 01/25/37+................. 90,788 90,788
5.370%, due 05/25/37+................. 670,247 670,038
5.350%, due 06/25/37+................. 320,688 320,900
5.380%, due 10/25/37+................. 663,880 664,331
Merrill Lynch Mortgage Investors, Inc.
5.390%, due 08/25/36+................ 3,252,847 3,252,847
Morgan Stanley ABS Capital I
5.350%, due 06/25/36+................. 39,046 39,059
5.360%, due 06/25/36-10/25/36+........ 3,299,980 3,298,318
5.370%, due 09/25/36-11/25/36+........ 3,938,203 3,940,531
Morgan Stanley IXIS Real Estate Capital
Trust 5.370%, due 11/25/36+.......... 144,914 144,800
Nelnet Student Loan Trust
5.325%, due 10/27/14+................. 91,371 91,371
5.445%, due 07/25/16-10/25/16+........ 731,958 732,862
Newcastle Mortgage Securities Trust
5.390%, due 03/25/36+................ 227,417 227,498
Nissan Auto Lease Trust
5.347%, due 12/14/07................. 12,034 12,034
Nomura Asset Acceptance Corp.
5.460%, due 01/25/36
(144A)+(a)........................... 289,461 289,664
Nomura Home Equity Loan, Inc.
5.400%, due 02/25/36+................ 64,636 64,666
--------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------------
ASSET-BACKED SECURITIES - CONTINUED
OAO Rosneft Bridge Term
0.508%, due 09/16/07
(144A)(b)(d)........................ $ 2,000,000 $ 2,002,808
Option One Mortgage Loan Trust
5.420%, due 11/25/35+................ 131,842 131,933
5.370%, due 07/25/36-01/25/37+....... 3,285,863 3,287,911
5.360%, due 02/25/37+................ 70,999 70,988
Park Place Securities, Inc.
5.580%, due 09/25/35+............... 51,540 51,654
Phoenix Quake Wind, Ltd.
7.810%, due 07/03/08 (144A)+(b)..... 1,500,000 1,505,385
Residential Asset Mortgage
Products, Inc.
5.400%, due 01/25/36+................ 54,973 54,973
5.390%, due 11/25/36+................ 232,062 232,206
Residential Asset Securities Corp.
5.390%, due 04/25/36-11/25/36+....... 1,992,895 1,994,138
5.360%, due 06/25/36+................ 2,187,992 2,188,777
Securitized Asset Backed Receivables
LLC Trust
5.390%, due 10/25/35+................ 98,767 98,751
5.370%, due 09/25/36+................ 205,576 205,692
SLM Student Loan Trust
5.335%, due 04/25/12-04/25/14+....... 6,420,471 6,420,471
5.325%, due 10/25/12-07/25/13+....... 1,196,571 1,196,571
Small Business Administration
4.504%, due 02/01/14................ 1,907,742 1,822,801
Soundview Home Equity Loan Trust
5.550%, due 06/25/35+................ 71,899 71,955
5.370%, due 10/25/36+................ 831,433 831,433
5.420%, due 10/25/36+................ 265,090 265,090
5.380%, due 11/25/36 (144A)+(a)...... 461,846 461,846
5.400%, due 01/25/37+................ 1,371,220 1,372,073
Soundview Home Loan Trust
5.390%, due 03/25/36+................ 37,089 37,089
4.910%, due 04/25/36+................ 5,665 5,665
5.350%, due 07/25/36+................ 522,135 522,135
Specialty Underwriting & Residential
Finance
5.350%, due 06/25/37+................ 113,904 113,921
5.365%, due 11/25/37+................ 69,650 69,628
Structured Asset Investment Loan Trust
5.370%, due 07/25/36+............... 112,972 112,912
Structured Asset Securities Corp.
4.900%, due 04/25/35+................ 1,301,554 1,297,567
5.329%, due 10/25/35 (144A)+(a)...... 663,186 662,534
5.400%, due 11/25/35+................ 195,399 195,548
5.450%, due 12/25/35 (144A)+(a)...... 633,933 634,378
5.370%, due 05/25/36-10/25/36+....... 1,164,331 1,165,207
See notes to financial statements
6
MET INVESTORS SERIES TRUST
PIMCO INFLATION PROTECTED BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------------
ASSET-BACKED SECURITIES - CONTINUED
Triad Auto Receivables Owner Trust
5.341%, due 11/13/07.............. $ 0 $ 0
Truman Capital Mortgage Loan Trust
5.660%, due 01/25/34 (144A)+(a)... 33,258 33,378
USAA Auto Owner Trust
5.337%, due 07/11/08............... 4,700,000 4,700,733
5.030%, due 11/17/08............... 72,540 72,528
Wachovia Auto Owner Trust
4.820%, due 02/20/09.............. 601,576 601,483
Washington Mutual, Inc.
5.610%, due 08/25/45+.............. 89,354 89,455
5.799%, due 07/25/46+.............. 1,930,563 1,939,464
----------------
88,156,382
----------------
AUTOMOBILES - 0.3%
DaimlerChrysler NA Holding Corp.
5.710%, due 03/13/09+............. 2,900,000 2,904,635
----------------
AUTOMOTIVE LOANS - 0.5%
Ford Motor Credit Co.
7.250%, due 10/25/11............... 5,800,000 5,587,152
7.800%, due 06/01/12............... 400,000 390,600
----------------
5,977,752
----------------
BANKS - 4.7%
Abbey National Treasury Services Plc
5.270%, due 07/02/08+............. 1,500,000 1,500,642
American Express Centurion Bank
5.320%, due 05/07/08+............. 500,000 500,043
Bank of America Corp.
5.366%, due 11/06/09+............. 900,000 900,048
Bank of America NA
5.355%, due 07/25/08+............. 2,800,000 2,801,621
Bank of Ireland
5.370%, due 12/19/08+.............. 12,400,000 12,415,798
5.410%, due 12/18/09+.............. 1,100,000 1,102,168
Charter One Bank NA
5.405%, due 04/24/09+............. 8,000,000 8,010,912
Commonwealth Bank of Australia
5.360%, due 06/08/09 (144A)+(a)... 400,000 400,358
DnB NORBank ASA
5.425%, due 10/13/09 (144A)+(a)... 1,200,000 1,200,659
Export-Import Bank of Korea
5.580%, due 10/04/11 (144A)+(a)... 1,600,000 1,601,787
HBOS Treasury Services Plc
5.460%, due 10/01/07.............. 2,000,000 2,000,446
Royal Bank of Scotland Plc
5.405%, due 07/21/08 (144A)+(a)... 400,000 400,366
Santander US Debt SA Unipersonal
5.370%, due 09/21/07
(144A)+(a)....................... 400,000 400,068
----------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
----------------------------------------------------------------------
BANKS - CONTINUED
5.420%, due 09/19/08
(144A)+(a)........................... $ 500,000 $ 500,512
Skandinaviska Enskilda Banken AB/
New York 5.350%, due 02/13/09+........ 6,600,000 6,605,128
Unicredit Luxembourg Finance SA
5.405%, due 10/24/08 (144A)+(a)....... 1,700,000 1,701,010
Wachovia Bank National Association
5.360%, due 02/23/09+.................. 6,700,000 6,703,598
5.430%, due 12/02/10+.................. 2,300,000 2,301,529
World Savings Bank FSB
5.410%, due 06/20/08+.................. 300,000 300,266
5.485%, due 03/02/09+.................. 300,000 300,907
5.396%, due 05/08/09+.................. 400,000 400,213
----------------
52,048,079
----------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 6.7%
Banc of America Funding Corp.
4.614%, due 02/20/36+................. 2,988,267 2,959,196
Banc of America Mortgage Securities
6.500%, due 09/25/33.................. 236,766 236,951
Bear Stearns ALT-A Trust
5.480%, due 02/25/34+................. 774,558 774,976
Bear Stearns Commercial Mortgage
Securities 6.440%, due 06/16/30....... 700,000 704,014
Bear Stearns Mortgage Funding Trust
5.390%, due 02/25/37+................. 4,883,534 4,881,299
Citigroup Commercial Mortgage Trust
5.390%, due 08/15/21 (144A)+(a)....... 411,494 411,995
Citigroup Mortgage Loan Trust, Inc.
4.700%, due 12/25/35+................. 3,821,744 3,745,004
Commercial Mortgage Pass Through
Certificates 6.455%, due 05/15/32..... 656,220 660,816
Countrywide Alternative Loan Trust
5.600%, due 12/25/35+.................. 104,825 104,988
5.400%, due 09/20/46+.................. 667,511 658,163
5.500%, due 02/20/47-05/25/47+......... 1,898,752 1,898,176
Countrywide Home Loans
3.786%, due 11/19/33+.................. 249,982 240,599
5.610%, due 04/25/35+.................. 2,551,047 2,558,833
5.660%, due 06/25/35 (144A)+(a)........ 624,948 623,906
Credit Suisse First Boston Mortgage
Securities Corp.
4.938%, due 12/15/40.................. 855,876 848,739
Deutsche Alt-A Securities, Inc. Mortgage
Loan Trust 5.420%, due 10/25/36+...... 1,017,646 1,018,620
First Franklin Mortgage Loan Asset
Backed Certificates
5.410%, due 01/25/36+.................. 943,060 943,823
See notes to financial statements
7
MET INVESTORS SERIES TRUST
PIMCO INFLATION PROTECTED BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
----------------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
----------------------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS - CONTINUED
5.370%, due 11/25/36-12/25/36+......... $ 2,414,292 $ 2,416,171
5.360%, due 01/25/38+.................. 1,562,083 1,563,175
First Horizon Pass Trust Mortgage
4.732%, due 06/25/34+................. 834,570 824,301
GE Capital Commercial Mortgage Corp.
4.229%, due 12/10/37.................. 5,798,051 5,669,661
Greenpoint Mortgage Funding Trust
5.540%, due 06/25/45+.................. 1,287,436 1,288,539
5.590%, due 11/25/45+.................. 599,568 600,738
5.400%, due 10/25/46+.................. 694,874 695,479
GS Mortgage Security Corp.
4.538%, due 09/25/35+................. 2,011,398 1,982,612
Harborview Mortgage Loan Trust
5.540%, due 05/19/35+.................. 285,176 285,604
5.410%, due 01/19/38+.................. 407,918 408,480
Indymac Index Mortgage Loan Trust
5.410%, due 11/25/46+................. 1,009,799 1,013,276
JPMorgan Mortgage Trust
5.008%, due 07/25/35+................. 1,415,640 1,394,482
Lehman XS Trust
5.400%, due 04/25/46-11/25/46+......... 3,068,355 3,068,408
5.390%, due 05/25/46+.................. 511,498 511,338
Master Adjustable Rate Mortgages Trust
3.786%, due 11/21/34+................. 600,000 588,210
Mellon Residential Funding Corp.
5.760%, due 12/15/30+.................. 229,232 230,255
5.670%, due 11/15/31+.................. 1,094,169 1,096,029
Merrill Lynch Mortgage Investors Trust
5.390%, due 07/25/37+................. 704,303 703,643
Mystic Re, Ltd.
14.360%, due 12/05/08
(144A)+(b)............................ 700,000 693,035
Residential Accredit Loans, Inc.
5.620%, due 08/25/35+.................. 420,619 421,401
6.389%, due 09/25/45+.................. 435,356 438,711
Securitized Asset Sales, Inc.
7.542%, due 11/26/23.................. 11,566 11,536
Sequoia Mortgage Trust
5.670%, due 10/19/26+................. 466,938 467,281
Small Business Administration
Participation Certificates
4.880%, due 11/01/24.................. 4,371,654 4,182,292
Structured Adjustable Rate Mortgage
Loan Trust
4.580%, due 02/25/34................... 642,158 642,423
6.429%, due 01/25/35+.................. 362,000 363,880
Structured Asset Mortgage Investments II
5.510%, due 06/25/36+................. 342,899 342,839
--------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS - CONTINUED
Structured Asset Mortgage Investments,
Inc. 5.390%, due 08/25/36+.......... $ 784,265 $ 783,908
TBW Mortgage Backed Pass Through
Certificates
5.420%, due 09/25/36+................ 138,369 138,494
5.430%, due 01/25/37+................ 1,132,521 1,133,794
Thornburg Mortgage Securities Trust
5.430%, due 04/25/36+................ 90,285 90,517
5.440%, due 08/25/36+................ 2,225,047 2,222,056
Wachovia Bank Commercial
Mortgage Trust
5.400%, due 06/15/20 (144A)+(a)...... 5,500,000 5,501,720
5.410%, due 09/15/21 (144A)+(a)...... 3,201,525 3,186,078
Washington Mutual
6.229%, due 11/25/42+................ 128,247 128,367
5.610%, due 10/25/45+................ 3,359,769 3,367,669
5.580%, due 11/25/45+................ 496,037 497,968
6.029%, due 02/25/46+................ 527,277 528,288
6.529%, due 11/25/46+................ 379,874 381,438
5.839%, due 12/25/46+................ 252,403 252,588
Wells Fargo Mortgage Backed
Securities Trust
3.539%, due 09/25/34+................ 530,848 517,358
4.110%, due 06/25/35+................ 788,368 784,518
----------------
74,688,658
----------------
ELECTRIC - 0.1%
Nisource Finance Corp.
5.930%, due 11/23/09+............... 800,000 801,687
----------------
FINANCIAL - DIVERSIFIED - 7.3%
American Express Credit Corp.
5.380%, due 03/02/09+............... 1,800,000 1,802,504
Atlas Reinsurance Plc
8.172%, due 01/10/10
(144A)(b)(e)........................ 11,500,000 15,774,739
C10 Capital SPV, Ltd.
6.722%, due 12/01/49 (144A)(a)...... 600,000 590,534
Calabash Re II, Ltd.
13.760%, due 01/08/10 (144A)+(b)..... 400,000 403,480
Citigroup Funding, Inc.
5.320%, due 04/23/09+............... 7,000,000 7,003,262
Citigroup, Inc.
5.405%, due 05/02/08+................ 900,000 900,880
5.400%, due 12/26/08+................ 1,300,000 1,301,099
5.395%, due 01/30/09+................ 900,000 900,570
5.390%, due 12/28/09+................ 6,300,000 6,305,065
East Lane Re Ltd.
12.355%, due 05/06/11 (144A)+(b).... 400,000 401,915
General Electric Capital Corp.
5.400%, due 03/04/08-12/12/08+...... 4,100,000 4,104,040
See notes to financial statements
8
MET INVESTORS SERIES TRUST
PIMCO INFLATION PROTECTED BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
----------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
----------------------------------------------------------------------
FINANCIAL - DIVERSIFIED - CONTINUED
5.355%, due 10/24/08+................. $ 800,000 $ 800,576
5.385%, due 10/26/09+................. 1,000,000 1,000,741
Goldman Sachs Group, Inc.
5.450%, due 12/22/08+................. 3,800,000 3,805,107
5.400%, due 12/23/08+................. 6,200,000 6,202,257
5.660%, due 06/28/10+................. 4,400,000 4,428,297
HSBC Finance Corp.
5.360%, due 05/21/08+................. 1,400,000 1,400,967
5.415%, due 10/21/09+................. 2,100,000 2,101,321
JPMorgan Chase & Co. 5.370%, due
06/26/09+............................. 700,000 700,858
Lehman Brothers Holdings, Inc.
5.370%, due 11/24/08+................. 300,000 300,129
5.410%, due 12/23/08+................. 6,300,000 6,306,716
Longpoint Re Ltd. 10.609%, due 05/08/10
(144A)+(b)............................ 1,400,000 1,400,070
Merrill Lynch & Co., Inc.
5.395%, due 10/23/08+................. 2,500,000 2,503,680
5.390%, due 12/22/08+................. 4,100,000 4,100,910
Morgan Stanley
5.360%, due 11/21/08+................. 1,100,000 1,100,100
5.595%, due 01/22/09.................. 300,000 300,216
5.467%, due 02/09/09+................. 2,100,000 2,103,486
Rabobank Nederland 5.376%, due 01/15/09
(144A)+(a)............................ 800,000 800,546
Redwood Capital IX, Ltd.
11.600%, due 01/09/08 (144A)+(b)...... 1,400,000 1,412,460
13.100%, due 01/09/08 (144A)+(b)...... 500,000 505,100
Vita Capital III, Ltd. 6.480%, due
01/01/12 (144A) +(b).................. 800,000 801,280
Vita Capital Ltd. 6.260%, due 01/01/10
(144A)+(b)............................ 400,000 399,580
----------------
81,962,485
----------------
HEALTH CARE PROVIDERS & SERVICES - 0.6%
HCA, Inc. 1.000%, due 11/14/13 (144A)(a) 6,244,039 6,283,551
----------------
HOTELS, RESTAURANTS & LEISURE - 0.0%
Harrah's Operation Co., Inc. 7.500%,
due 01/15/09.......................... 400,000 406,147
----------------
INSURANCE - 0.9%
American International Group,
Inc. 5.360%, due 06/23/08 (144A)+(a).. 6,200,000 6,202,610
Foundation Re II, Ltd. 12.110%, due
11/26/10 (144A)+(b)................... 1,000,000 1,004,150
Residential Reinsurance 2007
Ltd. 12.610%, due 06/07/10 (144A)+(b). 1,600,000 1,602,560
Shackleton Re, Ltd. 13.355%, due
02/07/08 (144A)+(b)................... 1,000,000 1,014,800
----------------
9,824,120
----------------
--------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------------
MEDIA - 0.5%
EchoStar DBS Corp.
7.000%, due 10/01/13................ $ 6,200,000 $ 6,138,000
----------------
RETAIL - MULTILINE - 0.3%
Wal-Mart Stores, Inc.
5.260%, due 06/16/08+............... 3,600,000 3,599,521
----------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 1.7%
America Movil S.A. de C.V.
5.460%, due 06/27/08 (144A)+(a)..... 6,200,000 6,200,992
AT&T, Inc.
5.456%, due 02/05/10+............... 12,300,000 12,321,648
----------------
18,522,640
----------------
UTILITIES - 0.2%
TXU Electric Delivery Co.
5.735%, due 09/16/08 (144A)+(a)..... 2,000,000 2,001,236
----------------
Total Domestic Bonds & Debt Securities
(Cost $352,859,610) 353,314,893
----------------
FOREIGN BONDS & DEBT SECURITIES - 2.8%
CANADA - 0.1%
Government of Canada
3.000%, due 12/01/36................ 650,046 733,200
----------------
CAYMAN ISLANDS - 0.1%
Atlantic & Western, Ltd.
11.610%, due 01/09/09
(144A)+(b).......................... 1,200,000 1,211,076
----------------
FRANCE - 1.0%
Government of France
3.000%, due 07/25/12(e)............. 7,831,390 10,884,202
----------------
GERMANY - 0.9%
Bundesobligation
4.500%, due 08/17/07(e)............. 8,000,000 10,818,850
----------------
ITALY - 0.1%
Unicredito Italiano S.p.A.
5.358%, due 05/06/08................ 1,400,000 1,399,654
----------------
UNITED KINGDOM - 0.6%
United Kingdom Gilt Inflation Linked
2.500%, due 05/20/09(f)............. 1,300,000 6,706,543
----------------
Total Foreign Bonds & Debt Securities
(Cost $31,907,094) 31,753,525
----------------
U. S. GOVERNMENT & AGENCY OBLIGATIONS - 115.0%
Federal Home Loan Mortgage Corp.
5.500%, due 05/15/16................. 9,267,658 9,267,308
4.500%, due 05/15/17................. 480,379 469,035
5.470%, due 07/15/19-10/15/20........ 14,200,000 14,198,363
5.000%, due 02/15/20-01/15/33........ 27,777,332 27,690,808
4.000%, due 03/15/23-10/15/23........ 899,784 888,437
5.670%, due 12/15/30+................ 436,091 437,353
5.580%, due 08/25/31+................ 176,383 177,249
See notes to financial statements
9
MET INVESTORS SERIES TRUST
PIMCO INFLATION PROTECTED BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-------------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-------------------------------------------------------------------------
U. S. GOVERNMENT & AGENCY OBLIGATIONS - CONTINUED
4.548%, due 01/01/34+................. $ 619,148 $ 612,185
6.227%, due 10/25/44-02/25/45+........ 15,214,274 15,312,558
Federal National Mortgage Assoc.
5.500%, due 06/01/34-07/01/37......... 58,734,516 56,723,902
5.470%, due 08/25/34+................. 586,555 586,953
4.187%, due 11/01/34+................. 5,851,049 5,877,041
4.674%, due 01/01/35+................. 566,747 558,531
4.673%, due 05/25/35+................. 2,700,000 2,665,340
6.000%, due 05/01/36-04/01/37......... 16,520,051 16,353,965
5.380%, due 12/25/36+................. 571,904 570,370
5.670%, due 05/25/42+................. 273,200 273,878
5.950%, due 02/25/44.................. 983,093 980,895
6.227%, due 03/01/44-09/01/44+........ 6,812,114 6,896,225
5.500%, due TBA(c).................... 21,200,000 20,448,057
6.000%, due TBA(c).................... 4,000,000 3,956,876
U.S. Treasury Bond
6.000%, due 02/15/26.................. 1,700,000 1,856,189
6.625%, due 02/15/27.................. 1,500,000 1,757,578
U.S. Treasury Inflation Index Bond
2.375%, due 04/15/11-01/15/27......... 236,395,204 229,603,070
2.000%, due 04/15/12-01/15/26......... 130,256,016 121,397,416
3.625%, due 04/15/28.................. 58,815,902 68,157,573
3.875%, due 04/15/29.................. 78,776,731 95,135,271
3.375%, due 04/15/32.................. 2,808,408 3,233,182
U.S. Treasury Inflation Index Note
3.625%, due 01/15/08.................. 1,413,951 1,415,277
3.875%, due 01/15/09.................. 50,776,224 51,601,388
4.250%, due 01/15/10.................. 32,400,112 33,637,926
0.875%, due 04/15/10.................. 78,485,772 74,561,562
3.500%, due 01/15/11.................. 41,164,020 42,363,581
3.375%, due 01/15/12.................. 818,818 845,430
3.000%, due 07/15/12.................. 45,630,400 46,528,771
1.875%, due 07/15/13.................. 25,331,936 24,306,803
2.000%, due 01/15/14-01/15/16......... 275,602,305 264,291,205
1.625%, due 01/15/15.................. 18,056,982 16,790,176
2.500%, due 07/15/16.................. 10,593,447 10,478,413
U.S. Treasury Note
4.500%, due 02/28/11.................. 1,200,000 1,184,063
4.875%, due 04/30/11.................. 9,200,000 9,189,227
----------------
Total U. S. Government & Agency Obligations (Cost
$1,277,615,068) 1,283,279,430
----------------
CONVERTIBLE BONDS - 0.5%
OIL & GAS EXPLORATION & PRODUCTION - 0.5%
Chesapeake Energy Corp. 2.500%, due
05/15/37 (Cost - $5,195,653).......... 5,100,000 5,215,566
----------------
-------------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-------------------------------------------------------------------------
OPTIONS - 0.1%
Eurodollar Calls, Expire 06/26/08....... $ 5,100,000 $ 129,294
Eurodollar Puts, Expire 06/26/08........ 5,100,000 187,329
Japanese Yen Calls, Expire 06/23/08..... 21,800,000 592,524
Japanese Yen Puts, Expire 06/23/08...... 21,800,000 629,039
Swiss Franc Calls, Expire 09/26/07...... 12,400,000 20,733
Swiss Franc Calls, Expire 09/26/2007.... 7,000,000 18,305
----------------
Total Options (Cost $1,609,761) 1,577,224
----------------
SHORT-TERM INVESTMENTS - 50.7%
COMMERCIAL PAPER - 49.4%
Australia and New Zealand Banking Group
5.245%, due 09/19/07(a)............... 30,100,000 29,749,168
BankAmerica Corp.
5.200%, due 07/18/07-07/24/07......... 5,900,000 5,881,093
5.205%, due 09/04/07.................. 35,600,000 35,265,434
BNP Paribas Finance, Inc. 1.000%, due
07/03/08.............................. 5,000,000 4,998,027
Danske Corp. 5.210%, due 08/20/07
(144A)(a)............................. 63,400,000 62,941,231
Dexia Delaware LLC
5.240%, due 09/17/07.................. 32,800,000 32,427,611
1.000%, due 09/29/08.................. 4,800,000 4,797,672
DNB NORBank ASA 5.175%, due 07/11/07.... 12,600,000 12,581,888
Fortis Bank
5.625%, due 04/28/08.................. 2,700,000 2,699,014
1.000%, due 06/30/08-09/30/08......... 6,200,000 6,197,059
Fortis Funding 5.255%, due 07/18/07
(144A)(a)............................. 23,900,000 23,840,691
General Electric Capital Corp. 5.200%,
due 07/30/07.......................... 12,600,000 12,547,220
HBOS Treasury Services Plc 5.225%, due
08/02/07.............................. 5,800,000 5,773,062
Natixis 5.380%, due 07/02/07 (144A)(a).. 22,600,000 22,596,623
Nordea Bk Finland Plc
1.000%, due 03/31/08-04/09/09......... 7,300,000 7,298,532
0.010%, due 05/28/08.................. 6,300,000 6,298,476
5.298%, due 12/01/08.................. 5,500,000 5,497,794
Os Treasury Services Plc 5.230%, due
08/02/07.............................. 100,000 99,535
Royal Bank of Scotland Plc 5.265%, due
03/26/08.............................. 6,900,000 6,898,495
San Paolo IMI US Financial Co. 5.225%,
due 08/01/07.......................... 43,600,000 43,403,830
Skandinaviska Enskilda Banken AB
1.000%, due 07/06/07.................. 900,000 899,995
5.275%, due 07/06/07.................. 100,000 100,000
See notes to financial statements
10
MET INVESTORS SERIES TRUST
PIMCO INFLATION PROTECTED BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
--------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------------
COMMERCIAL PAPER - CONTINUED
5.230%, due 07/12/07 (144A)(a)....... $ 33,900,000 $ 33,845,826
5.203%, due 08/21/07 (144A)(a)....... 700,000 694,840
5.272%, due 10/03/07................. 600,000 599,954
5.303%, due 02/04/08................. 100,000 99,994
Societe Generale North America
5.245%, due 09/19/07................. 19,800,000 19,569,220
5.250%, due 10/01/07................. 600,000 591,950
5.260%, due 03/26/08................. 6,900,000 6,898,495
0.010%, due 06/30/08................. 6,200,000 6,214,573
Swedbank
5.225%, due 08/03/07................ 600,000 597,126
Swedish National Housing Finance Corp.
5.255%, due 09/13/07 (144A)(a)...... 15,700,000 15,530,409
Total Fina Elf Capital
5.340%, due 07/02/07 (144A)(a)...... 30,500,000 30,495,476
UBS Finance (Delaware) LLC
5.145%, due 08/01/07................. 800,000 796,456
5.230%, due 08/01/07-10/15/07........ 9,400,000 9,327,130
5.235%, due 09/04/07-09/06/07........ 23,000,000 22,782,543
Unicredito Italiano
5.360%, due 05/29/08+............... 4,000,000 4,002,020
Westpac Banking Corp.
5.195%, due 08/02/07(a)............. 66,800,000 66,491,532
----------------
551,329,994
----------------
REPURCHASE AGREEMENT - 0.3%
State Street Bank & Trust Co.,
Repurchase Agreement,
dated 06/29/07 at 2.550% to be
repurchased at $3,455,734
on 07/02/07 collateralized by
$3,445,000 FNMA at
5.750% due 02/15/08 with a value of
$3,525,730.......................... 3,455,000 3,455,000
----------------
---------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
---------------------------------------------------------------
U.S. GOVERNMENT & AGENCY DISCOUNT NOTES - 1.0%
Federal Home Loan Bank
Discount Notes
2.600%, due 07/02/07(d)..... $ 7,000,000 $ 6,998,989
----------------
United States Treasury Bill
4.359%, due 08/30/07(d)...... 60,000 59,533
4.672%, due 08/30/07(d)...... 200,000 198,417
4.588%, due 09/13/07(d)...... 2,555,000 2,530,578
4.593%, due 09/13/07(d)...... 750,000 742,823
----------------
10,530,340
----------------
Total Short-Term Investments
(Cost $565,311,582) 565,315,334
----------------
TOTAL INVESTMENTS - 201.1%
(Cost $2,237,003,496) 2,243,275,397
Other Assets and Liabilities (net) - (101.1)% (1,127,697,914)
----------------
TOTAL NET ASSETS - 100.0% $ 1,115,577,483
================
PORTFOLIO FOOTNOTES:
+ Variable or floating rate security. The stated rate represents the rate at
June 30, 2007.
(a) Securities that may be resold to "qualified institutional buyers" under
Rule 144A or securities offered pursuant to Section 4(2) of the Securities
Act of 1933, as amended. These securities have been determined to be liquid
under the guidelines established by the Board of Trustees. These securities
represent in the aggregate $328,255,313 of net assets
(b) Securities that may be resold to "qualified institutional buyers" under
Rule 144A or securities offered pursuant to Section 4(2) of the Securities
Act of 1933, as amended. These securities have been determined to be
illiquid by the Portfolio's adviser. These securities represent in the
aggregate $30,132,438 of net assets.
(c) This security is traded on a "to-be-announced" basis.
(d) Zero coupon bond - Interest rate represents current yield to maturity.
(e) Par shown in Euro. Value is in USD.
(f) Par shown in Pound Sterling. Value is in USD.
FNMA - Federal National Mortgage Association
See notes to financial statements
11
MET INVESTORS SERIES TRUST
PIMCO INFLATION PROTECTED BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
STRIKE NUMBER OF
CALL OPTIONS EXPIRATION PRICE CONTRACTS VALUE
- ------------------------------------------------------------------------------------------
U. S. Treasury Note Futures 08/24/2007 $ 106.00 (70) $ (42,656)
U. S. Treasury Note Futures 08/24/2007 107.00 (32) (8,500)
U. S. Treasury Note Futures 08/24/2007 109.00 (128) (6,000)
U. S. Treasury Bond Futures 08/24/2007 109.00 (116) (76,126)
-----------
(Written Option Premium $78,032) $ (133,282)
===========
STRIKE
PUT OPTIONS EXPIRATION PRICE CONTRACTS VALUE
- ------------------------------------------------------------------------------------------
U. S. Treasury Note Futures 08/24/2007 $ 103.00 (102) $ (11,156)
Option on Foreign Currency USD to CHF 09/26/2007 7.08 (12,400,000) --
Option on Foreign Currency USD to CHF 09/26/2007 7.20 (7,000,000) --
-----------
(Written Option Premium $24,356) $ (11,156)
===========
CHF - Swiss Franc
USD - United States Dollar
SECURITY SOLD SHORT INTEREST RATE MATURITY PROCEEDS VALUE
- ------------------------------------------------------------------------------------------
U.S. Treasury Note 4.250% 11/15/2013 $ 14,045,477 $14,060,486
U.S. Treasury Inflation Index Note 1.875% 07/15/2015 29,379,319 29,530,149
U.S. Treasury Inflation Index Note 4.625% 11/15/2016 1,918,900 1,938,908
------------ -----------
$ 45,343,696 $45,529,543
============ ===========
The following table summarizes the credit composition of the portfolio holdings
of the PIMCO Inflation Protected Bond Portfolio at June 30, 2007, based upon
credit quality ratings issued by Standard & Poor's. For securities not rated by
Standard & Poor's, the equivalent Moody's rating is used.
PERCENT OF
PORTFOLIO
PORTFOLIO COMPOSITION BY CREDIT QUALITY (UNAUDITED)
---------------------------------------------------
AAA 66.78%
AA 14.07
A 16.05
BBB 0.74
BB 0.90
B 0.27
Other 1.19
------
Total: 100.00%
======
See notes to financial statements
12
MET INVESTORS SERIES TRUST
PIMCO INFLATION PROTECTED BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
ACQUISITION
COST AS A VALUE AS A
ACQUISITION ACQUISITION PERCENTAGE PERCENTAGE OF
ILLIQUID AND RESTRICTED SECURITIES DATES COST OF NET ASSETS VALUE NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------
Atlantic & Western, Ltd. 11.622%, due 01/09/09 12/16/2005 $ 1,200,000 0.11% $ 1,211,076 0.11%
Atlas Reinsurance PLC 7.717%, due 01/10/10 12/15/2006 15,058,683 1.34 15,774,739 1.40
Calabash Re II Ltd. 13.746%, due 01/08/10 12/20/2006 400,000 0.04 403,480 0.04
East Lane Re Ltd. 12.355%, due 05/06/11 4/19/2007 400,000 0.04 401,915 0.04
Foundation Re II Ltd. 12.123%, due 11/26/10 11/10/2006 1,000,000 0.09 1,004,150 0.09
Longpoint Re Ltd. 10.609%, due 05/08/10 4/27/2007 1,400,000 0.13 1,400,070 0.13
Mystic Re Ltd. 14.370%, due 12/05/08 11/20/2006 700,000 0.06 693,035 0.06
OAO Rosneft Bridge Term 1.000%, due 09/16/07 4/23/2007 1,997,800 0.18 2,002,808 0.18
Phoenix Quake Wind, Ltd 7.820%, due 07/03/08 6/18/2003 1,500,000 0.13 1,505,385 0.13
Redwood Capital IX Ltd. 11.614%, due 01/09/08 12/12/2006 1,400,000 0.13 1,412,460 0.13
Redwood Capital IX Ltd. 13.114%, due 01/09/08 12/12/2006 500,000 0.04 505,100 0.05
Residential Reinsurance 2007 Ltd. 12.610%, due 06/07/10 5/16/2007 1,600,000 0.14 1,602,560 0.14
Shackleton Re Ltd. 13.376%, due 02/07/08 7/27/2006 1,000,000 0.09 1,014,800 0.09
Vita Capital III Ltd. 6.486%, due 01/01/12 12/12/2006 800,000 0.07 801,280 0.07
Vita Capital, Ltd. 6.722%, due 01/01/07 4/18/2007 399,280 0.04 399,580 0.04
----------- ---- ----------- ----
$29,355,763 2.63% $30,132,438 2.70%
=========== ==== =========== ====
See notes to financial statements
13
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
PIMCO INFLATION PROTECTED BOND PORTFOLIO
ASSETS
Investments, at value (Note 2)* $2,239,820,397
Repurchase Agreement 3,455,000
Cash 65,883
Cash denominated in foreign currencies** 7,951,077
Receivable for investments sold 52,336,383
Receivable for Trust shares sold 1,662,713
Dividends receivable 51,740
Interest receivable 8,231,341
Premium for swaps purchased 5,195,140
Unrealized appreciation on forward currency contracts
(Note 8) 76,578
--------------
Total assets 2,318,846,252
--------------
LIABILITIES
Payables for:
Investments purchased 1,152,920,757
Trust shares redeemed 546,454
Securities sold short, at value*** (Note 2) 45,529,543
Net variation margin on financial futures contracts
(Note 7) 853,507
Unrealized depreciation on forward currency contracts
(Note 8) 440,505
Outstanding written options**** 144,438
Distribution and services fees - Class B 74,376
Distribution and services fees - Class E 592
Interest payable swap position 2,066,027
Investment advisory fee payable (Note 3) 452,934
Administration fee payable 12,317
Custodian and accounting fees payable 176,638
Accrued expenses 50,681
--------------
Total liabilities 1,203,268,769
--------------
NET ASSETS $1,115,577,483
==============
NET ASSETS REPRESENTED BY:
Paid in surplus $1,161,874,185
Accumulated net realized loss (85,250,610)
Unrealized appreciation on investments, futures
contracts, options contracts, swap contracts and
foreign currency 8,792,975
Undistributed net investment income 30,160,933
--------------
Total $1,115,577,483
==============
NET ASSETS
Class A $ 747,244,710
==============
Class B 363,484,904
==============
Class E 4,847,869
==============
CAPITAL SHARES OUTSTANDING
Class A 74,666,190
==============
Class B 36,365,922
==============
Class E 485,209
==============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 10.01
==============
Class B 10.00
==============
Class E 9.99
==============
- ------------------------------------------------------------------------------
* Investments at cost, excluding Repurchase Agreements $2,233,548,496
** Cost of cash denominated in foreign currencies 7,920,644
***Proceeds of short sales 45,343,697
****Cost of Swaps 1,985,080
*****Cost of written options 102,388
See notes to financial statements
14
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
PIMCO INFLATION PROTECTED BOND PORTFOLIO
INVESTMENT INCOME:
Dividends $ 51,740
Interest 33,520,350
------------
Total investment income 33,572,090
------------
EXPENSES:
Investment advisory fee (Note 3) 3,160,566
Administration fees 46,182
Custody and accounting fees 63,766
Distribution fee - Class B 453,729
Distribution fee - Class E 2,952
Transfer agent fees 11,137
Audit 13,204
Legal 7,460
Trustee fees and expenses 7,227
Shareholder reporting 44,590
Insurance 9,561
Other 2,214
------------
Total expenses 3,822,588
------------
Net investment income 29,749,502
------------
NET REALIZED AND CHANGE IN UNREALIZED GAIN
(LOSS) ON INVESTMENTS, FUTURES CONTRACTS,
OPTIONS CONTRACTS, SWAP CONTRACTS
AND FOREIGN CURRENCY:
Net realized gain (loss) on:
Investments (43,088,023)
Futures contracts (1,450,412)
Options contracts (385,433)
Swap contracts (450,511)
Foreign currency 343,860
------------
Net realized loss on investments, futures
contracts, options contracts, swap
contracts and foreign currency (45,030,519)
------------
Net change in unrealized appreciation
(depreciation) on:
Investments 39,818,888
Futures contracts (4,159,725)
Options contracts 156,855
Swap contracts 6,140,819
Foreign currency 365,428
------------
Net change in unrealized appreciation on
investments, futures contracts,
options contracts, swap contracts,
and foreign currency 42,322,265
------------
Net realized and change in unrealized
loss on investments, futures
contracts, options contracts, swap
contracts and foreign currency (2,708,254)
------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 27,041,248
============
See notes to financial statements
15
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
PIMCO INFLATION PROTECTED BOND PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 29,749,502 $ 46,578,298
Net realized loss on investments, futures contracts, options
contracts, swap contracts and foreign currency (45,030,519) (9,165,893)
Net change in unrealized appreciation (depreciation) on
investments, futures contracts, options contracts, swap
contracts and foreign currency 42,322,265 (33,339,718)
-------------- --------------
Net increase in net assets resulting from operations 27,041,248 4,072,687
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (24,298,686) (27,933,547)
Class B (7,902,994) (13,935,943)
Class E (91,624) --
From net realized gains
Class A -- (19,510,353)
Class B -- (10,635,624)
Class E -- --
-------------- --------------
Net decrease in net assets resulting from distributions (32,293,304) (72,015,467)
-------------- --------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class A 373,961,411 364,484,866
Class B 35,407,158 39,688,328
Class E 3,318,061 3,951,914
Net asset value of shares issued through dividend reinvestment
Class A 24,298,686 47,443,900
Class B 7,902,994 24,571,567
Class E 91,624 --
Cost of shares repurchased
Class A (533,742,564) (68,345,957)
Class B (44,361,848) (58,643,581)
Class E (1,816,144) (649,134)
-------------- --------------
Net increase (decrease) in net assets from capital share
transactions (134,940,622) 352,501,903
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (140,192,678) 284,559,123
Net assets at beginning of period 1,255,770,161 971,211,038
-------------- --------------
Net assets at end of period $1,115,577,483 $1,255,770,161
============== ==============
Net assets at end of period includes undistributed net investment
income $ 30,160,933 $ 32,704,735
============== ==============
See notes to financial statements
16
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
PIMCO INFLATION PROTECTED BOND PORTFOLIO --------------
FOR THE PERIOD
ENDED
JUNE 30, 2007
(UNAUDITED)
--------------
NET ASSET VALUE, BEGINNING OF PERIOD.................................... $10.08
------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................... 0.24 (a)
Net Realized/Unrealized Gain (Loss) on Investments...................... (0.07)
------
Total from Investment Operations........................................ 0.17
------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................... (0.24)
Distributions from Net Realized Capital Gains........................... --
------
Total Distributions..................................................... (0.24)
------
NET ASSET VALUE, END OF PERIOD.......................................... $10.01
======
TOTAL RETURN 1.45%
Ratio of Expenses to Average Net Assets................................. 0.53%*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates 0.53%*
Ratio of Net Investment Income to Average Net Assets.................... 4.78%*
Portfolio Turnover Rate................................................. 470.1%
Net Assets, End of Period (in millions)................................. $747.2
--------------
FOR THE PERIOD
ENDED
JUNE 30, 2007
(UNAUDITED)
--------------
NET ASSET VALUE, BEGINNING OF PERIOD.................................... $10.06
------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................... 0.23 (a)
Net Realized/Unrealized Gain (Loss) on Investments...................... (0.07)
------
Total from Investment Operations........................................ 0.16
------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................... (0.22)
Distributions from Net Realized Capital Gains........................... --
------
Total Distributions..................................................... (0.22)
------
NET ASSET VALUE, END OF PERIOD.......................................... $10.00
======
TOTAL RETURN 1.18%
Ratio of Expenses to Average Net Assets................................. 0.78%*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates 0.78%*
Ratio of Net Investment Income to Average Net Assets.................... 4.51%*
Portfolio Turnover Rate................................................. 470.1%
Net Assets, End of Period (in millions)................................. $363.5
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS A
PIMCO INFLATION PROTECTED BOND PORTFOLIO -------------------------------------------
FOR THE YEARS ENDED DECEMBER 31,
------------------------------------------
2006 2005 2004 2003(B)
------ ------- ------- -------
NET ASSET VALUE, BEGINNING OF PERIOD.................................... $10.78 $ 10.64 $ 10.29 $ 10.00
------ ------- ------- -------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................... 0.43 (a) 0.31 (a) 0.16 (a) 0.07 (a)
Net Realized/Unrealized Gain (Loss) on Investments...................... (0.40) (0.15) 0.81 0.47
------ ------- ------- -------
Total from Investment Operations........................................ 0.03 0.16 0.97 0.54
------ ------- ------- -------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................... (0.43) -- (0.11) (0.04)
Distributions from Net Realized Capital Gains........................... (0.30) (0.02) (0.51) (0.21)
------ ------- ------- -------
Total Distributions..................................................... (0.73) (0.02) (0.62) (0.25)
------ ------- ------- -------
NET ASSET VALUE, END OF PERIOD.......................................... $10.08 $ 10.78 $ 10.64 $ 10.29
====== ======= ======= =======
TOTAL RETURN 0.65% 1.48% 9.41% 5.47%
Ratio of Expenses to Average Net Assets................................. 0.58% 0.55% 0.62% 0.70%*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates 0.58% N/A N/A 0.74%*
Ratio of Net Investment Income to Average Net Assets.................... 4.21% 2.85% 1.39% 0.72%*
Portfolio Turnover Rate................................................. 851.3% 1228.7% 1173.9% 935.0%
Net Assets, End of Period (in millions)................................. $885.5 $585.8 $331.3 $1.1
CLASS B
-------------------------------------------
FOR THE YEARS ENDED DECEMBER 31,
------------------------------------------
2006 2005 2004 2003(B)
------ ------- ------- -------
NET ASSET VALUE, BEGINNING OF PERIOD.................................... $10.76 $ 10.63 $ 10.29 $ 10.00
------ ------- ------- -------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................... 0.40 (a) 0.27 (a) 0.08 (a) 0.07 (a)
Net Realized/Unrealized Gain (Loss) on Investments...................... (0.41) (0.12) 0.84 0.46
------ ------- ------- -------
Total from Investment Operations........................................ (0.01) 0.15 0.92 0.53
------ ------- ------- -------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................... (0.39) -- (0.07) (0.03)
Distributions from Net Realized Capital Gains........................... (0.30) (0.02) (0.51) (0.21)
------ ------- ------- -------
Total Distributions..................................................... (0.69) (0.02) (0.58) (0.24)
------ ------- ------- -------
NET ASSET VALUE, END OF PERIOD.......................................... $10.06 $ 10.76 $ 10.63 $ 10.29
====== ======= ======= =======
TOTAL RETURN 0.39% 1.39% 8.99% 5.35%
Ratio of Expenses to Average Net Assets................................. 0.82% 0.80% 0.81% 0.84%*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates 0.82% N/A N/A 0.84%*
Ratio of Net Investment Income to Average Net Assets.................... 3.93% 2.52% 0.73% 0.64%*
Portfolio Turnover Rate................................................. 851.3% 1228.7% 1173.9% 935.0%
Net Assets, End of Period (in millions)................................. $367.0 $385.4 $502.3 $366.2
* Annualized
N/A Not Applicable
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--05/01/2003.
See notes to financial statements
17
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD
ENDED:
CLASS E
PIMCO INFLATION PROTECTED BOND PORTFOLIO -------------------------------
FOR THE PERIOD
ENDED
JUNE 30, 2007 FOR THE PERIOD ENDED
(UNAUDITED) DECEMBER 31, 2006(B)
-------------- --------------------
NET ASSET VALUE, BEGINNING OF PERIOD.............. $10.06 $ 9.92
------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income............................. 0.23 (a) 0.29 (a)
Net Realized/Unrealized (Loss) on Investments..... (0.07) (0.15)
------ ------
Total from Investment Operations.................. 0.16 0.14
------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.............. (0.23) --
Distributions from Net Realized Capital Gains..... -- --
------ ------
Total Distributions............................... (0.23) --
------ ------
NET ASSET VALUE, END OF PERIOD.................... $ 9.99 $10.06
====== ======
TOTAL RETURN 1.29% 1.41%
Ratio of Expenses to Average Net Assets........... 0.68%* 0.75%*
Ratio of Expenses to Average Net Assets Before
Reimbursement and Rebates....................... 0.68%* 0.75%*
Ratio of Net Investment Income to Average Net
Assets.......................................... 4.61%* 4.23%*
Portfolio Turnover Rate........................... 470.1% 851.3%
Net Assets, End of Period (in millions)........... $ 4.8 $ 3.3
* Annualized
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--05/01/2006.
See notes to financial statements
18
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is PIMCO Inflation Protected Bond Portfolio,
which is non-diversified. Shares in the Trust are not offered directly to the
general public and are currently available only to separate accounts
established by certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A, B and E Shares are
offered by the Portfolio. Shares of each Class of the Portfolio represent an
equal pro rata interest in the Portfolio and generally give the shareholder the
same voting, dividend, liquidation, and other rights. Investment income,
realized and unrealized capital gains and losses, the common expenses of the
Portfolio and certain Portfolio-level expense reductions, if any, are allocated
on a pro rata basis to each class based on the relative net assets of each
class to the total net assets of the Portfolio. Each class of shares differs in
its respective distribution expenses and certain other class-specific expense
reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date. The value of the
security so purchased is subject to market fluctuations during this period. The
Portfolio segregates assets having an aggregate value at least equal to the
amount of the when issued or delayed delivery purchase commitments until
payment is made.
19
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
The Portfolio utilizes the provisions of the federal income tax laws that
provide for the carryforward of capital losses for eight years, offsetting such
losses against any future net realized capital gains. At December 31, 2006, the
accumulated capital loss carryforwards and expiration dates by the Portfolio
were as follows:
Expiring
Portfolio Total 12/31/2014
--------- ----------- -----------
PIMCO Inflation Protected Bond Portfolio $35,536,901 $35,536,901
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. FUTURES CONTRACTS - A futures contract is an agreement involving the
delivery of a particular asset on a specified future date at an agreed upon
price. These contracts are generally used to provide the return of an index
without purchasing all of the securities underlying the index or as a temporary
substitute for purchasing or selling specific securities.
Upon entering into a futures contract, the Portfolio is required to make
initial margin deposits with the broker or segregate liquid investments to
satisfy the broker's margin requirements. Initial margin deposits are recorded
as assets and held in a segregated account at the custodian. During the period
the futures contract is open, changes in the value of the contract are
recognized as unrealized gains or losses by "marking to market" the contract on
a daily basis to reflect the value of the contract's settlement price at the
end of each day's trading. Variation margin payments are made or received and
recognized as assets due from or liabilities to the broker depending upon
whether unrealized gains or losses, respectively, are incurred. When the
contract is closed, the Portfolio records a realized gain or loss equal to the
difference between the proceeds from (or cost of) the closing transaction and
its basis in the contract.
Risks of entering into futures contracts include the possibility that there may
be an illiquid market and that the change in the value of the contract may not
correlate with changes in the value of the underlying securities.
G. OPTIONS CONTRACTS - A purchased option contract gives the buyer the right,
but not the obligation, to buy (call) or sell (put) an underlying item at a
fixed exercise price during a specified period. These contracts are generally
used by the Portfolio to provide the return of an index without purchasing all
of the securities underlying the index or as a substitute for purchasing or
selling specific securities.
Purchases of put and call options are recorded as investments, the value of
which are marked-to-market daily. When a purchased option expires, the
Portfolio will realize a loss equal to the premium paid. When the Portfolio
enters into a closing sale transaction, the Portfolio will realize a gain or
loss depending on whether the sales proceeds from the closing sale transaction
are greater or less than the cost of the option. When the Portfolio exercises a
put option, it will realize a gain or loss from the sale of the underlying
security and the proceeds from such sale will be decreased by the premium
originally paid. When the Portfolio exercises a call option, the cost of the
security which the Portfolio purchases upon exercise will be increased by the
premium originally paid.
The premium received for a written option is recorded as a liability. The
liability is marked-to-market daily based on the option's quoted market price.
When an option expires or the Portfolio enters into a closing purchase
transaction, the Portfolio realizes a gain (or loss if the cost of the closing
purchase transaction exceeds the premium received when the option was sold)
without regard to any unrealized gain or loss on the underlying security and
the liability related to such option is eliminated. When a written call option
is exercised, the Portfolio realizes a gain or loss from the sale of the
underlying security and the proceeds from such sale are increased by the
premium originally received. If a written put option is exercised, the amount
of the premium originally received will reduce the cost of the underlying
security purchased.
20
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The risk associated with purchasing options is limited to the premium
originally paid. The risk in writing a call option is that the Portfolio may
forego the opportunity for profit if the market price of the underlying
security increases and the option is exercised. The risk in writing a put
option is that the Portfolio may incur a loss if the market price of the
underlying security decreases and the option is exercised. This loss can be
greater than premium received. In addition, the Portfolio could be exposed to
risks if the counterparties to the transactions are unable to meet the terms of
the contracts.
H. FORWARD FOREIGN CURRENCY CONTRACTS - The Portfolio may enter into forward
foreign currency contracts to hedge their portfolio holdings against future
movements in certain foreign currency exchange rates. A forward currency
contract is a commitment to purchase or sell a foreign currency at a future
date at a set price. The forward currency contracts are valued at the forward
rate and are marked-to-market daily. The change in market value is recorded by
the Portfolio as an unrealized gain or loss. When the contract is closed, the
Portfolio recognizes a realized gain or loss equal to the difference between
the value of the contract at the time it was opened and the value at the time
it was closed.
The use of forward foreign currency contracts does not eliminate fluctuations
in the underlying prices of the securities of the Portfolio, but it does
establish a rate of exchange that can be achieved in the future. Although
forward foreign currency contracts to sell limit the risk of loss due to a
decline in the value of the currency holdings, they also limit any potential
gain that might result should the value of the currency increase. In addition,
the Portfolio could be exposed to risks if the counterparties to the contracts
are unable to meet the terms of the contracts.
I. FOREIGN CURRENCY TRANSLATION - The books and records of the Portfolio are
maintained in U.S. dollars. Foreign currencies, investments and other assets
and liabilities are translated into U.S. dollars on a daily basis using
prevailing exchange rates. Purchases and sales of securities are translated at
the rates of exchange prevailing when such securities were acquired or sold.
Income is translated at rates of exchange prevailing when interest is accrued
or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in
forward foreign currency contracts, sales of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities
transactions, and the difference between the amounts of dividends, interest,
and foreign withholding taxes recorded on the Portfolio's books, and the U.S.
dollar equivalent of the amounts actually received or paid. Net unrealized
foreign exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at fiscal year end, from
changes in the exchange rates of foreign currency held, and from changes in the
contract value of forward foreign currency contracts.
J. SHORT SALES - The Portfolio may enter into a "short sale" of securities in
circumstances in which, at the time the short position is open, the Portfolio
owns an equal amount of the securities sold short or owns preferred stocks or
debt securities, convertible or exchangeable without payment of further
consideration, into an equal number of securities sold short. This kind of
short sale, which is referred to as one "against the box," may be entered into
by the Portfolio to, for example, lock in a sale price for a security the
Portfolio does not wish to sell immediately.
The Portfolio may also make short sales of a security it does not own, in
anticipation of a decline in the market value of that security. To complete
such a transaction, the Portfolio must borrow the security to make delivery to
the buyer. The Portfolio then is obligated to replace the security borrowed by
purchasing it at market price at the time of replacement. The price at such
time may be more or less than the price at which the security was sold by the
Portfolio. Until the security is replaced, the Portfolio is required to pay to
the lender any dividends or interest which accrue during the period of the
loan. To borrow the security, the Portfolio also may be required to pay a
premium, which would increase the cost of the security sold. The proceeds of
the short sale will be retained by the broker, to the extent necessary to meet
margin requirements, until the short position is closed out. Until the
Portfolio replaces a borrowed security, the Portfolio will segregate with its
custodian, or earmark, cash or other liquid assets at such a level that (i) the
amount segregated, or earmarked, plus the amount deposited with the broker as
collateral will equal the current value of the security sold short and (ii) the
amount segregated plus the amount deposited with the broker as collateral will
not be less than the market value of the security at the time it was sold
short. The Portfolio will incur a loss as a result of the short sale if the
price of the security increases between the date of the short sale and the date
on which the Portfolio replaces the borrowed security. The Portfolio will
realize a gain if the security declines in price between those dates. This
result is the opposite of what one would expect from a cash purchase of a long
position in a security. The amount of any gain will be decreased, and the
amount of any loss increased, by the amount of any premium, dividends or
interest the Portfolio may be required to pay in connection with a short sale.
No more than one third of the Portfolio's net assets will be, when added
together: (i) deposited as collateral for the obligation to replace securities
borrowed to effect short sales; and (ii) segregated in connection with short
sales.
K. SWAP AGREEMENTS - The Portfolio may enter into swap contracts. Swap
contracts are derivatives in the form of a contract or other similar
instrument, which is an agreement to exchange the return generated by one
instrument for the return generated by another instrument. The payment streams
are calculated by reference to a specified index and agreed upon notional
amount. The term "specified index" includes, but is
21
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
not limited to, currencies, fixed interest rates, prices and total return on
interest rate indices, fixed income indices, stock indices and commodity
indices (as well as amounts derived from arithmetic operations on these
indices). For example, the Portfolio may agree to swap the return generated by
a fixed income index for the return generated by a second fixed income index.
The currency swaps in which the Portfolio may enter will generally involve an
agreement to pay interest streams in one currency based on a specified index in
exchange for receiving interest streams denominated in another currency. Such
swaps may involve initial and final exchanges that correspond to the agreed
upon notional amount. A Portfolio will usually enter into swaps on a net basis,
i.e., the two payment streams are netted out in a cash settlement on the
payment date or dates specified in the instrument, with the Portfolio receiving
or paying, as the case may be, only the net amount of the two payments. The
Portfolio's obligations under a swap agreement will be accrued daily (offset
against any amounts owing to the Portfolio) and any accrued by unpaid net
amounts owed to a swap counterparty will be covered by designating the
segregation, either on its records or with the Trust's custodian, of cash or
other liquid assets, to avoid any potential leveraging of the Portfolio. To the
extent that the net amounts owed to a swap counterparty are covered with such
liquid assets, the investment adviser believes such obligations do not
constitute "senior securities" under the 1940 Act and accordingly, the
investment adviser will not treat them as being subject to the Portfolio's
borrowing restrictions. The Portfolio may enter into OTC swap transactions with
counterparties that are approved by the investment adviser in accordance with
guidelines established by the Board. These guidelines provide for a minimum
credit rating for each counterparty and various credit enhancement techniques
(for example, collateralization of amounts due from counterparties) to limit
exposure to counterparties that have lower credit ratings.
The swaps in which the Portfolio may engage may include instruments under which
one party pays a single or periodic fixed amount(s) (or premium), and the other
party pays periodic amounts based on the movement of a specified index. Swaps
do not involve the delivery of securities, other underlying assets, or
principal. Accordingly, the risk of loss with respect to swaps is limited to
the net amount of payments the Portfolio is contractually obligated to make. If
the other party to a swap defaults, the Portfolio's risk of loss consists of
the net amount of payments that the Portfolio contractually is entitled to
receive. Currency swaps usually involve the delivery of the entire principal
value of one designated currency in exchange for the other designated currency.
Therefore, the entire principal value of a currency swap is subject to the risk
that the other party to the swap will default on its contractual delivery
obligations. If there is a default by the counterparty, the Portfolio may have
contractual remedies pursuant to the agreements related to the transaction. The
swap market has grown substantially in recent years with a large number of
banks and investment banking firms acting both as principals and as agents
utilizing standardized swap documentation. As a result, the swap market has
become relatively liquid. Certain swap transactions involve more recent
innovations for which standardized documentation has not yet been fully
developed and, accordingly, they are less liquid than traditional swap
transactions.
The use of swaps is a highly specialized activity that involves investment
techniques and risks different from those associated with ordinary portfolio
securities transactions. If an investment adviser is incorrect in its forecasts
of market values, interest rates, and currency exchange rates, the investment
performance of the Portfolio would be less favorable than it would have been if
this investment technique were not used.
Among the strategic transactions into which the Portfolio may enter are
interest rate swaps and the purchase or sale of related caps and floors. The
Portfolio may enter into these transactions primarily to manage its exposure to
interest rates, to protect against currency fluctuations, or to preserve a
return or spread on a particular investment. Interest rate swaps involve the
exchange by the Portfolio with another party of their respective commitments to
pay or receive interest, e.g., an exchange of floating rate payments for fixed
rate payments with respect to a notional amount of principal. A currency swap
is an agreement to exchange cash flows on a notional amount of two or more
currencies based on the relative value differential among them. An index swap
is an agreement to swap cash flows on a notional amount based on changes in the
values of the reference indices. The purchase of a cap entitles the purchaser,
to the extent that a specific index exceeds a predetermined interest rate, to
receive payments of interest on a notional principal amount from the party
selling such cap. The purchase of a floor entitles the purchaser to receive
payments on a notional principal amount from the party selling such floor to
the extent that a specified index falls below a predetermined interest rate or
amount.
In addition the Portfolio may enter into credit default swap contracts for
investment purposes. As the seller in a credit default swap contract, the
Portfolio would be required to pay the par (or other agreed upon) value of a
referenced debt obligation to the counterparty in the event of a default by a
third party, such as a U.S. or foreign corporate issuer, on the debt
obligation. In return, the Portfolio would receive from the counterparty a
periodic stream of payments over the term of the contract provided that no
event of default has occurred. If no default occurs, the Portfolio would keep
the stream of payments and would have no payment obligations. As the seller,
the Portfolio would be subject to investment exposure on the notional amount of
the swap. The Portfolio may also purchase credit default swap contracts in
order to hedge against the risk of default of debt securities held in its
portfolio, in which case the Portfolio would function as the counterparty
referenced in the preceding sentence. This would involve the risk that the
investment may expire worthless and would only generate income in the event of
an actual default by the issuer of the underlying obligation (as opposed to a
credit downgrade or other indication of financial instability). It would also
involve credit risk--the seller may fail to satisfy its payment obligations to
the Portfolio in the event of a default. Swap agreements are marked daily by
prices that are retrieved from independent pricing platforms (e.g. Bloomberg)
or from brokers. Fair values will be provided if independent prices are
unavailable. The change in value, if any, is recorded as unrealized gain or
loss in the Statement of Operations. A liquidation payment received or made at
the termination of the swap is recorded as realized gain or loss in the
Statement of Operations. Net periodic payments are included as part of realized
gain (loss) on the Statement of Operations.
22
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
L. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
M. REVERSE REPURCHASE AGREEMENTS - The Portfolio may enter into reverse
repurchase agreements with brokers, dealers, domestic and foreign banks or
other financial institutions. In a reverse repurchase agreement, the Portfolio
sells a security and agrees to repurchase it at a mutually agreed upon date and
price, reflecting the interest rate effective for the term of the agreement. It
may also be viewed as the borrowing of money by the Portfolio. The Portfolio's
investment of the proceeds of a reverse repurchase agreement is the speculative
factor known as leverage. Leverage may cause any gains or losses of the
Portfolio to be magnified. The Portfolio may enter into a reverse repurchase
agreement only if the interest income from investment of the proceeds is
greater than the interest expense of the transaction and the proceeds are
invested for a period no longer than the term of the agreement. At the time the
Portfolio enters into a reverse repurchase agreement, it will earmark, or
establish and maintain a segregated account with an approved custodian
containing, cash or other liquid securities having a value not less than the
repurchase price (including accrued interest). If interest rates rise during a
reverse repurchase agreement, it may adversely affect the Portfolio's net asset
value. Reverse repurchase agreements are considered to be borrowings under the
1940 Act.
The assets contained in the segregated account will be marked-to-market daily
and additional assets will be placed in such account on any day in which the
assets fall below the repurchase price (plus accrued interest). The Portfolio's
liquidity and ability to manage its assets might be affected when it sets aside
cash or portfolio securities to cover such commitments. Reverse repurchase
agreements involve the risk that the market value of the securities retained in
lieu of sale may decline below the price of the securities the Portfolio has
sold but is obligated to repurchase. In the event the buyer of securities under
a reverse repurchase agreement files for bankruptcy or becomes insolvent, such
buyer or its trustee or receiver may receive an extension of time to determine
whether to enforce the Portfolio's obligation to repurchase the securities, and
a Portfolio's use of the proceeds of the reverse repurchase agreement may
effectively be restricted pending such decision.
N. FORWARD COMMITMENTS, WHEN-ISSUED AND DELAYED DELIVERY SECURITIES - The
Portfolio may purchase securities on a when-issued or delayed delivery basis
and may purchase or sell securities on a forward commitment basis. Settlement
of such transactions normally occurs within a month or more after the purchase
or sale commitment is made. The Portfolio may purchase securities under such
conditions only with the intention of actually acquiring them, but may enter
into a separate agreement to sell the securities before the settlement date.
Since the value of securities purchased may fluctuate prior to settlement, the
Portfolio may be required to pay more at settlement than the security is worth.
In addition, the purchaser is not entitled to any of the interest earned prior
to settlement. Upon making a commitment to purchase a security on a
when-issued, delayed delivery or forward commitment basis, the Portfolio will
hold liquid assets in a segregated account at the Portfolio's custodian bank
worth at least the equivalent of the amount due. The liquid assets will be
monitored on a daily basis and adjusted as necessary to maintain the necessary
value.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with Pacific Investment Management Company LLC, (the "Adviser") for investment
advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- --------------------
PIMCO Inflation Protected Bond Portfolio $3,160,566 0.50% First $1.2 Billion
0.45% Over $1.2 Billion
23
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
Prior to April 30, 2007, the management fee for the Portfolio was 50 basis
points per all average daily assets . The management fee earned for the period
January 1, 2007 through April 29, 2007 was $2,193,462.
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Maximum Expense Ratio
under current Expense
Limitation Agreement
----------------------
Portfolio Class A Class B Class E
--------- ------- ------- -------
PIMCO Inflation Protected Bond Portfolio 0.65% 0.90% 0.80%
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to Reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratio as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued Net Increase
Through (Decrease)
Beginning Dividend Shares in Shares Ending
Shares Shares Sold Reinvestment Repurchased Outstanding Shares
- - ---------- ----------- ------------- ----------- ------------ ----------
PIMCO Inflation Protected Bond Portfolio
Class A
6/30/2007 87,861,913 36,728,217 2,389,251 (52,313,191) (13,195,723) 74,666,190
12/31/2006 54,327,315 35,479,616 4,798,379 (6,743,397) 33,534,598 87,861,913
Class B
6/30/2007 36,474,733 3,499,381 777,089 (4,385,281) (108,811) 36,365,922
12/31/2006 35,834,547 3,873,479 2,491,777 (5,725,070) 640,186 36,474,733
Class E
6/30/2007 329,047 326,168 9,018 (179,024) 156,162 485,209
05/01/2006-12/31/2006 -- 392,806 -- (63,759) 329,047 329,047
24
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
PIMCO Inflation Protected Bond Portfolio $8,828,150,419 $306,615,120 $10,176,909,338 $7,473,604
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross Net
Income Tax Unrealized Unrealized Unrealized
Portfolio Cost Appreciation (Depreciation) Depreciation
- --------- -------------- ------------ -------------- ------------
PIMCO Inflation Protected Bond Portfolio $2,243,275,397 $9,827,697 $(3,555,796) $6,271,901
6. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
---------------------- ---------------------- ----------------------
2006 2005 2006 2005 2006 2005
----------- ---------- -------- ------- ----------- ----------
PIMCO Inflation Protected Bond Portfolio $71,351,761 $1,500,102 $664,184 $66,877 $72,015,945 $1,566,979
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Depreciation and Deferrals Total
------------- ------------- ------------ ------------------ ------------
PIMCO Inflation Protected Bond Portfolio $32,004,812 -- $(37,510,073) $(35,536,901) $(41,042,162)
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
7. FUTURES CONTRACTS
The futures contracts outstanding as of June 30, 2007 and the description and
unrealized appreciation (depreciation) were as follows:
Unrealized
Number of Appreciation/
Description Expiration date Contracts Notional Value (Depreciation)
- -------------------------------------- --------------------- --------- -------------- --------------
LIBOR Futures March 2008 - Long 1,127 $ 131,985,788 $(2,014,451)
LIBOR Futures June 2008 - Long 1,045 122,356,438 (1,873,450)
Lif UK 90 Day LIBOR Futures March 2008 - Long 1,376 25,800 34,504
LIBOR Futures December 2007 - Long 415 5,188 5,203
Lif UK 90 Day LIBOR Futures June 2008 - Long 381 9,525 14,331
Japan Government Bonds 10 Year Futures September 2007 - Long 19 2,508,190,000 (4,619)
Euro Dollar Futures March 2009 - Long 102 24,158,700 (49,725)
Euro Dollar Futures December 2008 - Long 102 24,168,900 (47,175)
Euro Dollar Futures June 2008 - Long 393 93,165,563 (458,688)
25
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
7. FUTURES CONTRACTS - CONTINUED
Unrealized
Number of Appreciation/
Description Expiration date Contracts Notional Value (Depreciation)
- ---------------------------------- ---------------------- --------- -------------- --------------
Euro Dollar Futures March 2008 - Long 78 $ 18,484,050 $ (40,950)
Euro Dollar Futures September 2008 - Long 102 24,177,825 (48,450)
Euro Dollar Futures June 2009 - Long 102 24,145,950 (49,725)
Euro Dollar Futures December 2007 - Long 452 107,027,950 (477,888)
U.S. Treasury Note 10 Year Futures September 2007 - Long 210 22,197,656 (236,250)
U.S. Treasury Bond Futures September 2007 - Short (933) (100,530,750) 1,399,500
U.S. Treasury Note 5 Year Futures September 2007 - Short (507) (52,767,609) (253,047)
8. FORWARD FOREIGN CURRENCY CONTRACTS
Forward Foreign Currency Contracts to Buy:
Net Unrealized
Value at for In exchange Appreciation/
Settlement Date Contracts to Deliver June 30, 2007 for U.S. $ (Depreciation)
--------------- -------------------- ------------- ----------- --------------
10/2/2007 1,005,568 BRL $ 513,731 $ 512,000 $ 1,731
10/2/2007 956,093 BRL 488,455 495,000 (6,545)
10/2/2007 982,005 BRL 501,693 510,000 (8,307)
10/2/2007 764,622 BRL 390,635 397,000 (6,365)
10/2/2007 998,959 BRL 510,354 514,000 (3,646)
10/2/2007 351,198 BRL 179,422 179,000 422
1/10/2008 89,397,702 CNY 12,031,420 11,982,000 49,420
1/10/2008 18,047,295 CNY 2,428,861 2,415,000 13,861
3/7/2008 15,665,936 CNY 2,122,882 2,132,000 (9,118)
3/7/2008 4,737,118 CNY 641,924 646,000 (4,076)
3/7/2008 9,551,472 CNY 1,294,315 1,302,000 (7,685)
3/7/2008 4,801,150 CNY 650,601 655,000 (4,399)
3/7/2008 4,753,276 CNY 644,114 649,000 (4,886)
3/7/2008 9,140,352 CNY 1,238,604 1,248,000 (9,396)
3/7/2008 9,212,963 CNY 1,248,443 1,258,000 (9,557)
3/2/2009 43,461,700 CNY 6,127,602 6,130,000 (2,398)
3/2/2009 16,098,390 CNY 2,269,689 2,277,000 (7,311)
3/2/2009 17,335,640 CNY 2,444,127 2,452,000 (7,873)
3/2/2009 18,414,165 CNY 2,596,186 2,607,500 (11,314)
7/30/2007 165,798,750 KRW 179,681 179,000 681
9/21/2007 474,931,200 KRW 515,317 512,000 3,317
9/21/2007 458,246,250 KRW 497,213 495,000 2,213
9/21/2007 472,515 KRW 512,695 510,000 2,695
9/21/2007 366,232,500 KRW 397,375 397,000 375
26
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
8. FORWARD FOREIGN CURRENCY CONTRACTS - CONTINUED
Net Unrealized
Value at for In exchange Appreciation/
Settlement Date Contracts to Deliver June 30, 2007 for U.S. $ (Depreciation)
--------------- -------------------- ------------- ----------- --------------
9/21/2007 474,858,900 KRW $ 515,238 $ 514,000 $ 1,238
9/28/2007 5,384,363 MXN 496,440 495,000 1,440
9/28/2007 5,521,260 MXN 509,062 510,000 (938)
9/28/2007 4,286,608 MXN 395,226 397,000 (1,774)
9/28/2007 5,589,236 MXN 515,329 514,000 1,329
9/28/2007 1,946,894 MXN 179,504 179,000 504
3/13/2008 5,686,272 MXN 518,613 512,000 6,613
9/28/2007 298,000 PLN 107,158 103,123 4,035
9/28/2007 1,467,136 PLN 527,567 512,000 15,567
9/28/2007 1,403,276 PLN 504,603 495,000 9,603
9/28/2007 1,443,300 PLN 518,995 510,000 8,995
9/28/2007 1,116,821 PLN 401,597 397,000 4,597
9/28/2007 1,451,115 PLN 521,806 514,000 7,806
9/28/2007 499,350 PLN 179,561 179,000 561
12/10/2007 775,545 RUB 30,215 29,590 625
12/10/2007 869,659 RUB 33,882 33,193 689
12/10/2007 892,796 RUB 34,783 34,083 700
1/11/2008 13,250,560 RUB 516,209 512,000 4,209
1/11/2008 12,815,550 RUB 499,262 495,000 4,262
1/11/2008 13,183,500 RUB 513,596 510,000 3,596
1/11/2008 10,259,473 RUB 399,683 397,000 2,683
1/11/2008 13,289,470 RUB 517,724 514,000 3,724
1/11/2008 4,598,510 RUB 179,146 179,000 146
7/3/2007 787,835 SGD 515,020 512,000 3,020
7/3/2007 761,409 SGD 497,745 495,000 2,745
7/3/2007 782,850 SGD 511,761 510,000 1,761
7/3/2007 609,713 SGD 398,579 397,000 1,579
7/3/2007 788,579 SGD 515,506 514,000 1,506
8/7/2007 274,407 SGD 179,903 179,000 903
10/3/2007 2,238,981 SGD 1,474,110 1,465,000 9,110
10/3/2007 1,475,311 SGD 971,322 967,417 3,905
-------
$76,578
=======
27
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
8. FORWARD FOREIGN CURRENCY CONTRACTS - CONTINUED
Forward Foreign Currency Contracts to Sell:
Net Unrealized
Value at In exchange Appreciation/
Settlement Date Contracts to Deliver June 30, 2007 for U.S. $ (Depreciation)
--------------- -------------------- ------------- ----------- --------------
8/9/2007 1,218,000 CAD $ 1,146,313 $ 1,139,484 $ (6,829)
9/6/2007 1,032,000 CHF 847,375 849,383 2,008
7/26/2007 32,565,000 EUR 44,065,048 43,690,637 (374,411)
8/9/2007 8,282,000 GBP 16,605,305 16,534,640 (70,665)
7/24/2007 163,973,000 JPY 1,332,886 1,355,462 22,576
7/3/2007 2,255,075 SGD 1,474,177 1,465,000 (9,177)
7/3/2007 1,475,311 SGD 964,433 960,426 (4,007)
---------
$(440,505)
=========
CAD - Canadian Dollar
CHF - Swiss Franc
CNY - China Yuan Renminbi
EUR - Euro
GBP - Great Britain Pound
JPY - Japanese Yen
PLN - Polish Zloty
RUB - Russian Ruble
9. OPTIONS
During the year ended June 30, 2007 the following options contracts were
written:
PIMCO INFLATION PROTECTED
BOND PORTFOLIO
------------------------
Number of
Contracts Premium
----------- ---------
Options outstanding at December 31, 2006.......... 24,700,516 $ 256,323
Options written................................... 87,700,448 102,388
Options bought back............................... (71,200,000) --
Options closed and expired........................ (21,800,516) (256,323)
Options exercised................................. -- --
----------- ---------
Options outstanding at June 30, 2007.............. 19,400,448 $ 102,388
=========== =========
28
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
10. SWAP AGREEMENTS
Open swap agreements at June 30, 2007 were as follows:
Notional Expiration
Amount Date Description Value
------ ---------- -------------------------------------------------------------------- ----------
3,400,000 USD 12/20/2008 Agreement with Lehman Brothers dated 12/06/2006 to receive the $4,350
notional amount multiplied by 0.370% and to pay par in the event
of default of underlying sovereign entities of the Republic of Peru.
3,400,000 USD 12/20/2008 Agreement with Morgan Stanley Capital Services, Inc., dated 755
12/06/2006 to receive the notional amount multiplied by 0.300%
and to pay par in event of default of underlying sovereign entities
of the Republic of Panama.
7,500,000 USD 6/20/2009 Agreement with Goldman Sachs Capital Markets, L.P, dated (50,049)
6/01/2007 to receive semi-annually the notional amount
multiplied by 5.00% and to pay semi-annually the notional amount
multiplied by the 3 month USD-LIBOR-BBA.
40,000,000 USD 6/20/2009 Agreement with Morgan Stanley Capital Services, Inc., dated (271,574)
12/18/2006 to receive semi-annually the notional amount
multiplied by 5.00% and to pay semi-annually the notional amount
multiplied by the 3 month USD-LIBOR-BBA.
18,300,000 USD 12/19/2012 Agreement with Lehman Brothers dated 06/19/2007 to pay semi- (401,352)
annually the notional amount multiplied by 5.00% and to receive
semi-annually the notional amount multiplied by the 3 month USD-
LIBOR-BBA.
11,500,000 USD 12/19/2012 Agreement with Morgan Stanley Capital Services, Inc., dated (252,216)
01/21/2007 to receive semi-annually the notional amount
multiplied by 5.00% and to pay semi-annually the notional amount
multiplied by the 3 month USD-LIBOR-BBA.
62,000,000 USD 6/20/2014 Agreement with Lehman Brothers dated 12/14/2006 to pay semi- 203,684
annually the notional amount multiplied by 5.00% and to receive
semi-annually the notional amount multiplied by the 3 USD-
LIBOR-BBA.
27,100,000 USD 6/19/2017 Agreement with Morgan Stanley Capital Services, Inc., dated 1,386,773
1/15/2007 to receive semi-annually the notional amount
multiplied by 5.00% and to pay semi-annually the notional amount
multiplied by the 3 month USD-LIBOR-BBA.
28,000,000 USD 6/20/2017 Agreement with J.P. Morgan Chase Bank dated 12/08/2006 to pay 1,416,311
semi-annually the notional amount multiplied by 5.00% and to
receive semi-annually the notional amount multiplied by the 3
month USD-LIBOR-BBA.
3,200,000 USD 12/19/2017 Agreement with J.P. Morgan Chase Bank dated 01/27/2007 to pay 163,752
semi-annually the notional amount multiplied by 5.00% and to
receive semi-annually the notional amount multiplied by the 3
month USD-LIBOR-BBA.
20,800,000 USD 12/19/2037 Agreement with Morgan Stanley Capital Services, Inc., dated (2,379,654)
01/14/2007 to receive semi-annually the notional amount
multiplied by 5.00% and to pay semi-annually the notional amount
multiplied by the 3 month USD-LIBOR-BBA.
29
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
10. SWAP AGREEMENTS - CONTINUED
Notional Expiration
Amount Date Description Value
------ ---------- ----------------------------------------------------------------- ----------
3,600,000 AUD 1/15/2010 Agreement with J.P. Morgan Chase Bank dated 1/23/2007 to pay $(27,540)
semi-annually the notional amount multiplied by the 6 month
AUD-BBR-BBSW and to receive semi-annually the notional amount
multiplied by 6.5%.
82,600,000 EUR 7/14/2011 Agreement with J.P. Morgan Chase Bank dated 10/26/2006 to pay 1,710,688
July 14, 2011 [(FRCPxtob End Index/FRCPxtob Start Index)-
1}*Notion and to receive July 14, 20011 {[1+2.26125%)^5]-
1}*Notional.
4,700,000 EUR 4/10/2012 Agreement with J.P. Morgan Chase Bank dated 10/02/2006 to pay (47,669)
April 10, 2016 [(FRCPxtob End Index/FRCPxtob Start Index)-
1}*Notional and to receive April 10, 2012 {[1+1.19575%)^5]-
1}*Notional.
9,400,000 EUR 6/17/2015 Agreement with Goldman Sachs Capital Markets, L.P. dated 276,980
08/05/2005 to pay annually the notional amount multiplied by
4.50% and to receive annually the notional amount multiplied by
the 6 month EUR-EURIBOR-Telerate.
2,500,000 EUR 10/15/2016 Agreement with J.P. Morgan Chase Bank dated 10/02/2006 to pay 14,380
October 15, 2016 [(FRCPxtob End Index/FRCPxtob Start Index)-
1}*Notional and to receive October 15,2011 {[1+2.3525%)^5]-
1}*Notional.
10,000,000 GBP 6/15/2008 Agreement with J.P. Morgan Chase Bank dated 10/4/2004 to pay (216,349)
semi-annually the notional amount multiplied by the 6 month GBP-
LIBOR-BBA and to receive semi-annually the notional amount
multiplied by 5%.
28,700,000 GBP 9/15/2015 Agreement with Goldman Sachs Capital Markets L.P. dated 3,719,596
3/28/2007 to receive the notional amount multiplied by the GBP-
LIBOR-BBA and to pay semi-annually the notional amount
multiplied by 5.61875%.
3,200,000,000 JPY 3/18/2009 Agreement with Morgan Stanley Capital Services Inc., dated (73,366)
01/05/2007 to receive semi-annually the notional amount
multiplied by the 6 month JPY-LIBOR-BBA and to pay semi-
annually the notional amount multiplied by 1.00%.
34,700,000 MXN 11/4/2016 Agreement with Citibank, N.A., New York, Inc., dated 05/07/2007 17,640
to receive the notional amount multiplied by 8.17% and to pay the
notional amount multiplied by the 28 days MXN-TIIE-BANXICO.
----------
$5,195,140
==========
USD - United States Dollar
AUD - Australian Dollar
EUR - Euro
GBP - Great Britain Pound
JPY - Japanese Yen
MXN - Mexican Peso
30
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
11. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
12. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
31
MET INVESTORS SERIES TRUST
PIMCO Total
Return Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
PIMCO TOTAL RETURN PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY PACIFIC INVESTMENT MANAGEMENT COMPANY LLC
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
MAJOR MARKET TRENDS AFFECTING THE PORTFOLIO'S PERFORMANCE
During the second quarter of 2007 bonds gave back much of their gains from
earlier in the year as worldwide growth and capital flows drove interest rates
higher. The Lehman Brothers Aggregate Bond Index, a widely used index of
high-grade bonds, managed a modest gain of 0.98 percent for the first six
months of the year. The benchmark 10-year Treasury bond yielded 5.03 percent as
of the end of June, 33 basis points higher than at the start of the year.
During the first quarter of 2007 economic data pointed toward slower growth,
heightening market expectations for Federal Reserve easing. During the second
quarter the data, especially employment statistics, gave little indication of
economic weakness, causing expectations of Fed easing to unwind and interest
rates to move higher. Rates also climbed in Europe and the U.K. as central
banks there tightened to forestall inflation. Another critical factor moving
rates higher was the market's anticipation of central bank reserve
diversification away from government bonds toward riskier assets. China's
investment in a major U.S. private equity firm raised investor awareness that
there could be less demand for Treasuries at the margin in the future. One
consequence of institutional investors seeking to get out ahead of this trend
was the return of the term premium to the U.S. yield curve late in the second
quarter. The Fed has remained on hold thus far in 2007, indicating a reluctance
to ease due to inflation concerns.
OTHER FACTORS ATTRIBUTED TO THE PORTFOLIO'S POSITIVE/NEGATIVE PERFORMANCE VS.
THE BENCHMARK
Below investment grade corporate bonds and locally issued emerging market bonds
held up better than their higher quality counterparts during difficult market
conditions in the first half of 2007. Above-index duration hurt performance
over the six-month period as interest rates rose. An emphasis on shorter
maturities was a positive, as yields on these bonds fell by more than those on
longer maturities. Mortgage-backed bond returns lagged Treasuries on a
like-duration basis for the first six months of the year. Returns from Treasury
Inflation Protected Securities (TIPS) and municipal bonds were mixed. TIPS
outpaced nominal bonds for the first half of 2007, as high gasoline prices
drove higher inflation accruals. Municipal bonds lagged taxable bonds for the
first half of 2007 after a difficult first quarter. Underweighting corporate
bonds was negative, as high grade corporates modestly outpaced Treasuries on a
like-duration basis for the first half of 2007. Holding emerging market bonds
added to performance, as they outperformed Treasuries for the first half of
2007. Government bonds around the world were under pressure amid the rise in
rates. U.S. Treasuries fared better than bonds of most developed economies for
the first six months of the year. Both the Bank of England and European Central
Bank raised rates during the first half of the year to quell inflation while
the Fed remained on hold.
MARKET/PORTFOLIO OUTLOOK
Real global growth should continue to advance at an annual rate of around 5
percent over the next several years, led by rapid expansion in developing
economies such as China and India. More mature developed economies will likely
grow at rates closer to 2 percent amid demographic and other challenges. The
U.S. economy should remain weak in 2007 and 2008. The downturn in the
residential property market has not found a bottom and the corresponding
influence on homeowners and consumers has yet to be fully realized. Non-dollar
assets should outperform dollar-denominated investments since relatively
sluggish U.S. growth points to a weaker U.S. dollar and lower asset price
appreciation than in the rest of the world.
STRATEGY:
Key strategies will include:
. INTEREST RATE STRATEGIES--PIMCO will likely reduce overall duration in
anticipation of higher long-term rates over the next several years.
However, we will likely maintain an overweight to shorter maturities in
anticipation of a steeper yield curve. Over a cyclical time frame this
steepening is likely to occur as the Fed cuts short-term rates later this
year and early next to offset the negative impact of the housing downturn
on the U.S. economy. Over a longer time horizon the yield curve could also
steepen because of continued diversification away from longer maturity
Treasury bonds by developing countries with large currency reserves.
. EMERGING MARKET BONDS--To participate in the rapid growth expected in
developing economies, PIMCO will likely take exposure to locally issued
emerging market bonds. Local EM bonds are poised for continued growth in
new issuance, liquidity and investor participation. Their yields, many of
which are in the high single digits, are likely to compress as economic
fundamentals continue to improve. Yield premiums relative to Treasuries on
local EM bonds tend to be more attractive than those on mostly dollar
denominated, external emerging market debt, which already reflect the
strong growth prospects for these economies.
. CURRENCY--PIMCO will likely take advantage of expected weakness in the
U.S. dollar by building currency positions, comprised largely of EM
currencies. Local EM bonds, which are typically denominated in home
country currencies, can be effective vehicles for taking EM currency
exposure.
. DEVELOPED NON-U.S. MARKETS--PIMCO will likely take exposure to short
maturities in the U.K., where yields reflect more central bank tightening
than we expect.
. MORTGAGE AND ASSET-BACKED BONDS--While mortgages will remain an important
source of high quality yield in portfolios, PIMCO will target neutral
allocations versus the index and look to add value via security selection.
In the case of asset-backed bonds such as those backed by home equity
loans, PIMCO will continue to emphasize the highest quality short-term
issues that offer credit enhancement and payment priority.
. CORPORATES--Historically tight credit premiums point toward a continued
underweight of this sector, as better opportunities to enhance yield exist
elsewhere.
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
PIMCO TOTAL RETURN PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY PACIFIC INVESTMENT MANAGEMENT COMPANY LLC
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
In an environment where interest rates may trend upward, rising rates will
negatively impact fixed income securities. Bonds with a longer duration (a
measure of the expected life of a security) tend to be more sensitive to
changes in interest rates, usually making them more volatile than securities
with shorter durations.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Each sector of the bond
market entails risk. Municipals may realize gains and may incur a tax liability
from time to time. The guarantee on Treasuries, TIPS and Government Bonds is to
the timely repayment of principal and interest, shares of a portfolio that
invest in them are not guaranteed. Mortgage-backed securities are subject
prepayment risk. With corporate bonds there is no assurance that issuers will
meet their obligations. An investment in high-yield securities generally
involves greater risk to principal than an investment in higher-rated bonds.
Investing in non-U.S. securities may entail risk as a result of non-U.S.
economic and political developments, which may be enhanced when investing in
emerging markets.
WILLIAM H. GROSS
PASI HAMALAINEN
Portfolio Managers
PACIFIC INVESTMENT MANAGEMENT COMPANY LLC
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
--------------------------------------------------------------------
Federal National Mortgage Assoc. (5.500%, TBA) 30.50%
--------------------------------------------------------------------
Federal Republic of Germany (4.500%, due 08/17/07) 11.44%
--------------------------------------------------------------------
Federal National Mortgage Assoc. (5.000%, due 03/01/26) 3.73%
--------------------------------------------------------------------
Federal National Mortgage Assoc. (5.000%, due 02/01/35) 2.15%
--------------------------------------------------------------------
Federal National Mortgage Corp. (5.000%, due 02/01/36) 1.66%
--------------------------------------------------------------------
Federal National Mortgage Corp. (6.500%, TBA) 1.64%
--------------------------------------------------------------------
U.S. Treasury Inflation Index Note (0.875%, due 04/15/10) 1.50%
--------------------------------------------------------------------
General Electric Capital Corp. (5.355%, due 10/24/08) 1.41%
--------------------------------------------------------------------
Federal Republic of Brazil (10.000%, due 01/01/12) 1.36%
--------------------------------------------------------------------
Federal National Mortgage Corp. (5.500%, due 09/25/24) 0.94%
--------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
LOGO
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
PIMCO TOTAL RETURN PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY PACIFIC INVESTMENT MANAGEMENT COMPANY LLC
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
PIMCO TOTAL RETURN PORTFOLIO MANAGED BY
PACIFIC INVESTMENT MANAGEMENT COMPANY LLC VS. LEHMAN BROTHERS AGGREGATE BOND
INDEX/1/
Growth Based on $10,000+
[CHART]
PIMCO Total Return Lehman Brothers
Portfolio - Class B Aggregate Bond Index
--------------------- ----------------------
2/12/2001 $10,000 $10,000
12/31/2001 10,669 10,669
12/31/2002 11,661 11,765
12/31/2003 12,186 12,249
12/31/2004 12,771 12,779
12/31/2005 13,058 13,090
12/31/2006 13,647 13,658
6/30/2007 13,654 13,791
-----------------------------------------------------------
Average Annual Return/2/
(for the period ended 6/30/07)
-----------------------------------------------------------
Since
1 Year 3 Year 5 Year Inception/3/
-----------------------------------------------------------
PIMCO Total Return
Portfolio--Class A 5.39% 4.03% 4.62% 5.41%
- -- Class B 5.18% 3.75% 4.34% 5.00%
Class E 5.25% 3.85% 4.44% 4.21%
-----------------------------------------------------------
Lehman Brothers Aggregate
- - - Bond Index/1/ 6.11% 3.98% 4.48% 5.13%
-----------------------------------------------------------
+The chart reflects the performance of Class B shares of the Portfolio. The
performance of Class B shares will differ from that of the other Classes
because of the difference in expenses paid by policyholders investing in the
different share classes.
/1/The Lehman Brothers Aggregate Bond Index represents securities that are U.S.
domestic, taxable, non-convertible and dollar denominated. The Index covers the
investment grade fixed rate bond market, with index components for government
and corporate securities, mortgage pass-through securities, and asset-backed
securities. The Index does not include fees or expenses and is not available
for direct investment.
/2/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/3/Inception of the Class A shares is 5/1/01. Inception of the Class B shares
is 2/12/01. Inception of the Class E shares is 10/31/01. Index returns are
based on an inception date of 1/31/01.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
3
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
PIMCO TOTAL RETURN PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,002.10 $2.63
Hypothetical (5% return before expenses) 1,000.00 1,022.17 2.66
- ------------------------------------------ ------------- ------------- --------------
Class B
Actual $1,000.00 $1,000.50 $3.87
Hypothetical (5% return before expenses) 1,000.00 1,020.93 3.91
- ------------------------------------------ ------------- ------------- --------------
Class E
Actual $1,000.00 $1,000.50 $3.37
Hypothetical (5% return before expenses) 1,000.00 1,021.42 3.41
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.53%,
0.78%, and 0.68% for the Class A, Class B, and Class E, respectively,
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period).
4
MET INVESTORS SERIES TRUST
PIMCO TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
------------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------------------
MUNICIPALS - 0.5%
Badger Tobacco Asset Securitization
Corp.
5.750%, due 06/01/11............... $ 2,000,000 $ 2,103,160
6.125%, due 06/01/27............... 270,000 284,734
6.375%, due 06/01/32............... 360,000 392,205
Georgia State
5.980%, due 05/01/20
(144A)(a)......................... 1,000,000 1,087,700
Illinois Development Finance
Authority (AMBAC)
5.980%, due 02/01/33
(144A)(a)(b)...................... 3,705,000 3,823,486
Texas State
4.750%, due 04/01/35.............. 4,800,000 4,763,088
Tobacco Settlement Funding Corp.
5.875%, due 05/15/39............... 2,000,000 2,129,280
6.250%, due 06/01/42............... 1,300,000 1,410,383
Tobacco Settlement Revenue
Management
6.375%, due 05/15/28.............. 1,800,000 1,911,078
----------------
Total Municipals
(Cost $17,198,860) 17,905,114
----------------
DOMESTIC BONDS & DEBT SECURITIES - 23.5%
ASSET-BACKED SECURITIES - 1.8%
Ameriquest Mortgage Securities, Inc.
5.880%, due 06/25/34
(144A)(a)(b)...................... 65,767 65,830
Asset Backed Funding Certificates
5.670%, due 06/25/34(b)............ 5,856,448 5,873,057
5.380%, due 01/25/37(b)............ 2,788,489 2,790,225
Bear Stearns Asset Backed
Securities, Inc.
5.720%, due 10/27/32(b)........... 71,791 72,051
Carrington Mortgage Loan Trust
5.640%, due 10/25/35(b)........... 5,105,843 5,120,851
Cendant Mortgage Corp.
6.000%, due 07/25/43
(144A)(a)......................... 378,705 378,538
Citigroup Mortgage Loan Trust, Inc.
5.380%, due 01/25/37(b)........... 2,050,937 2,052,651
GMAC LLC
6.000%, due 04/01/11(b)............ 5,000,000 4,823,150
6.625%, due 05/15/12............... 5,100,000 4,929,991
Lehman XS Trust
5.410%, due 05/25/46(b)........... 375,040 375,119
Master Asset Backed Securities Trust
5.430%, due 11/25/35(b)........... 198,506 198,655
--------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------------
ASSET-BACKED SECURITIES - CONTINUED
Merrill Lynch Mortgage Investors,
Inc.
5.430%, due 07/25/36(b)........... $ 370,679 $ 370,892
5.390%, due 08/25/36(b)........... 9,042,914 9,042,914
Morgan Stanley ABS Capital I
5.380%, due 05/25/37(b).......... 5,113,907 5,112,311
Morgan Stanley Equity Index-Linked
1.000%, due 07/07/08............. 12,000,000 11,930,814
Option One Mortgage Loan Trust
5.640%, due 08/25/33(b).......... 39,620 39,716
Renaissance Home Equity Loan Trust
5.760%, due 08/25/33(b).......... 390,489 391,726
Residential Asset Securities Corp.
5.430%, due 04/25/37(b).......... 5,448,311 5,452,594
Structured Asset Securities Corp.
5.334%, due 10/25/35
(144A)(a)........................ 368,437 368,074
Wachovia Asset Securitization, Inc.
5.580%, due 06/25/33(b).......... 113,884 110,382
Wells Fargo Home Equity Trust
5.430%, due 11/25/35
(144A)(a)(b)..................... 5,584,803 5,588,281
----------------
65,087,822
----------------
AUTOMOBILES - 0.5%
Carmax Auto Owner Trust
5.328%, due 06/16/08............. 3,200,000 3,200,000
DaimlerChrysler NA Holdings Corp.
7.200%, due 09/01/09............. 255,000 263,315
Ford Motor Co.
6.530%, due 11/29/13(a).......... 6,965,000 7,008,726
Triad Auto Receivables Owner Trust
5.303%, due 06/12/08............. 1,410,994 1,410,774
Wachovia Auto Loan Owner Trust
2006-1 5.337%, due 06/20/08...... 7,700,000 7,701,201
----------------
19,584,016
----------------
AUTOMOTIVE LOANS - 0.6%
Ford Motor Credit Co.
5.800%, due 01/12/09.............. 3,000,000 2,937,600
7.250%, due 10/25/11.............. 8,800,000 8,477,058
7.800%, due 06/01/12.............. 1,300,000 1,269,451
7.000%, due 10/01/13.............. 400,000 371,053
Ford Motor Credit Co. LLC
6.190%, due 09/28/07(b)........... 600,000 599,998
4.950%, due 01/15/08.............. 800,000 794,111
General Motors Acceptance Corp.
7.250%, due 03/02/11............. 6,600,000 6,583,566
----------------
21,032,837
----------------
See notes to financial statements
5
MET INVESTORS SERIES TRUST
PIMCO TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
---------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
---------------------------------------------------------------------
BANKS - 3.1%
Abbey National Treasury Services Plc
5.270%, due 07/02/08(b)........... $ 12,900,000 $ 12,905,521
ABN AMRO NA Holding Capital
6.523%, due 12/29/49
(144A)(a)......................... 345,000 358,339
American Express Bank FSB/AXP
5.340%, due 06/12/09(b)........... 18,100,000 18,107,674
Bank of America NA
5.360%, due 12/18/08(b)........... 13,800,000 13,807,976
Bank of Ireland
5.370%, due 12/19/08(b)............ 7,700,000 7,709,810
5.410%, due 12/18/09(b)............ 5,400,000 5,410,643
Calyon New York
5.336%, due 01/16/09(b)........... 14,600,000 14,607,826
Credit Agricole SA/London
5.360%, due 05/28/09
(144A)(a)......................... 18,100,000 18,108,073
Fleet Boston Financial Corp.
7.375%, due 12/01/09.............. 70,000 73,135
Glitnir Banki HF
5.618%, due 04/20/10
(144A)(a)(b)...................... 4,700,000 4,695,737
HSBC Capital Funding LP
1.000%, due 12/29/49
(144A)(a)......................... 585,000 548,264
ICICI Bank, Ltd.
5.895%, due 01/12/10
(144A)(a)(b)...................... 3,000,000 3,006,753
Popular NA, Inc.
4.700%, due 06/30/09.............. 50,000 49,270
Rabobank Capital Fund Trust III
5.254%, due 12/29/49
(144A)(a)......................... 370,000 347,058
Unicredit Luxembourg Finance SA
5.405%, due 10/24/08
(144A)(a)(b)...................... 13,100,000 13,107,781
Westpac Capital Trust III
5.819%, due 12/29/49
(144A)(a)......................... 80,000 79,268
Westpac Capital Trust IV
5.256%, due 12/29/49
(144A)(a)......................... 165,000 153,385
----------------
113,076,513
----------------
BUILDING MATERIALS - 0.2%
C10 Capital, Ltd.
6.722%, due 12/18/49.............. 6,800,000 6,618,236
----------------
CHEMICALS - 0.0%
Dow Chemical Co.
7.375%, due 11/01/29.............. 185,000 200,801
-------------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-------------------------------------------------------------------------
CHEMICALS - CONTINUED
ICI Wilmington, Inc.
5.625%, due 12/01/13............... $ 340,000 $ 334,509
----------------
535,310
----------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 9.5%
Adjustable Rate Mortgage Trust
4.589%, due 05/25/35............... 4,915,772 4,844,302
AES Corp. Long Term Rate of Credit
1.000%, due 04/30/10(a)............ 5,600,000 5,607,000
American Home Mortgage
Investment Trust
4.390%, due 02/25/45(b)............ 5,894,099 5,772,674
Banc of America Funding Corp.
4.113%, due 05/25/35(b)............. 8,723,439 8,544,249
4.614%, due 02/20/36(b)............. 18,698,015 18,516,109
Banc of America Mortgage Securities,
Inc.
5.770%, due 01/25/34(b)............. 1,844,071 1,853,554
5.000%, due 05/25/34................ 3,576,081 3,503,641
Bear Stearns Adjustable Rate Mortgage
Trust
5.329%, due 02/25/33(b)............. 138,949 140,857
4.750%, due 10/25/35(b)............. 6,816,416 6,736,218
Bear Stearns ALT-A Trust
5.377%, due 05/25/35................ 4,941,943 4,902,167
5.818%, due 11/25/36................ 6,537,477 6,502,482
5.824%, due 11/25/36................ 10,677,342 10,658,592
Bear Stearns Commercial Mortgage
Securities, Inc.
5.060%, due 11/15/16............... 157,029 156,013
Bear Stearns Mortgage Funding Trust
5.390%, due 02/25/37(b)............ 12,070,622 12,065,097
Chevy Chase Mortgage Funding Corp.
5.450%, due 08/25/35-
05/25/48 (a)(b).................... 6,922,871 6,930,527
Citigroup Mortgage Loan Trust, Inc.
4.700%, due 12/25/35(b)............. 19,788,142 19,390,796
5.380%, due 05/25/37(b)............. 3,000,000 3,002,817
Countrywide Alternative Loan Trust
0.419%, due 05/25/35(b)(c)(d)...... 12,632,256 41,117
5.530%, due 03/20/46(b)............. 486,646 486,449
Countrywide Home Loans
5.640%, due 03/25/35................ 3,089,630 3,099,368
5.610%, due 04/25/35................ 300,123 301,039
5.660%, due 06/25/35
(144A)(a)(b)...................... 11,998,999 11,978,991
5.868%, due 09/20/36(b)............. 13,418,879 13,416,878
Credit Suisse First Boston Mortgage
Securities Corp.
5.954%, due 03/25/32
(144A)(a)(b)....................... 427,719 426,934
See notes to financial statements
6
MET INVESTORS SERIES TRUST
PIMCO TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
----------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
----------------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS - CONTINUED
6.500%, due 04/25/33................ $ 388,942 $ 389,432
6.000%, due 11/25/35................ 8,816,255 8,795,540
Deutsche Alt-A Securities, Inc.
5.410%, due 08/25/37(b)............ 1,400,000 1,400,219
DSLA Mortgage Loan Trust
7.236%, due 07/19/44(b)............ 3,029,749 3,068,879
First Horizon Alternative Mortgage
Securities
0.119%, due 01/25/36(b)(c)(d)...... 125,287,467 126,716
GMAC Mortgage Corp.
5.940%, due 07/01/13............... 59,687 59,241
GMAC Mortgage Corp. Loan Trust
5.500%, due 09/25/34............... 3,534,533 3,497,859
Green Tree Financial Corp.
6.220%, due 03/01/30............... 187,864 186,631
Greenpoint Mortgage Funding Trust
5.540%, due 06/25/45(b)............. 251,207 251,422
5.400%, due 01/25/47(b)............. 482,052 482,318
GS Mortgage Securities Corp. II
5.410%, due 03/06/20
(144A)(a)(b)....................... 18,100,000 18,119,828
GS Mortgage Security Corp.
4.538%, due 09/25/35(b)............ 309,446 305,017
GSR Mortgage Loan Trust
6.000%, due 03/25/32................ 3,209 3,153
4.549%, due 09/25/35(b)............. 770,789 765,125
5.500%, due 11/25/35................ 6,517,620 6,499,829
5.458%, due 04/25/36................ 8,126,510 8,116,773
Harborview Mortgage Loan Trust
5.540%, due 05/19/35(b)............. 3,350,820 3,355,846
5.410%, due 01/19/38(b)............. 339,932 340,400
5.510%, due 01/19/38(b)............. 441,002 441,757
Indymac ARM Trust
6.678%, due 01/25/32(b)............ 2,423 2,419
Indymac Index Mortgage Loan Trust
5.410%, due 11/25/46(b)............ 388,384 388,626
Indymac Residential Asset Backed
Trust
5.400%, due 07/25/37(b)............ 2,500,000 2,503,522
JPMorgan Mortgage Trust
4.768%, due 07/25/35(b)............ 17,444,533 17,152,416
LB-UBS Commercial Mortgage Trust
3.323%, due 03/15/27............... 4,000,000 3,944,807
Lehman XS Trust
5.400%, due 04/25/46(b)............ 285,561 285,739
Master Asset Securitization Trust
4.500%, due 03/25/18............... 2,768,472 2,708,227
Merrill Lynch First Franklin Mortgage
Loan Trust
5.380%, due 07/25/37(b)............ 1,900,000 1,900,297
--------------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS - CONTINUED
MLCC Mortgage Investors, Inc.
5.700%, due 03/15/25(b)............. $ 93,155 $ 93,417
Morgan Stanley Capital I
5.380%, due 10/15/20
(144A)(a)........................... 2,611,772 2,615,287
Morgan Stanley Dean Witter Capital
4.920%, due 03/12/35................ 495,000 476,859
Popular ABS Mortgage Pass-Through
Trust
5.410%, due 06/25/47(b)............. 4,943,805 4,944,020
Residential Accredit Loans, Inc.
5.720%, due 03/25/33(b)............. 2,128,065 2,136,479
Residential Asset Securitization Trust
5.720%, due 05/25/33(b)............. 2,234,393 2,243,734
Residential Funding Mortgage
Securities I
5.670%, due 06/25/18(b)............. 1,232,633 1,234,560
Residential Funding Mortgage
Securities II
5.480%, due 05/25/37(b)............. 5,284,989 5,288,275
Sequoia Mortgage Trust
5.670%, due 07/20/33(b)............. 1,313,505 1,319,912
Structured Asset Mortgage
Investments, Inc.
6.929%, due 03/25/32(b).............. 1,264,169 1,260,862
5.550%, due 05/25/45(b).............. 3,276,934 3,280,912
Structured Asset Securities Corp.
5.000%, due 12/25/34................ 3,494,638 3,464,649
Wachovia Bank Commercial
Mortgage Trust
5.410%, due 09/15/21
(144A)(a)(b)........................ 3,887,566 3,889,658
Washington Mutual, Inc.
5.860%, due 12/25/27(b).............. 5,415,421 5,418,292
5.094%, due 10/25/32(b).............. 125,401 125,087
4.058%, due 10/25/33................. 5,100,000 5,027,121
5.474%, due 02/27/34(b).............. 861,430 846,813
3.799%, due 06/25/34(b).............. 22,700,000 21,997,437
6.429%, due 06/25/42-
08/25/42(b)........................ 1,527,567 1,528,637
Wells Fargo Mortgage Backed
Securities Trust
4.656%, due 09/25/33(b).............. 5,725,910 5,610,733
4.950%, due 03/25/36................. 17,663,078 17,411,031
5.240%, due 04/25/36................. 17,422,190 17,281,478
5.519%, due 08/25/36................. 9,800,000 9,729,566
----------------
351,194,728
----------------
See notes to financial statements
7
MET INVESTORS SERIES TRUST
PIMCO TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
--------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------------
CONTAINERS & PACKAGING - 0.0%
Owens Brockway Glass Container,
Inc.
8.875%, due 02/15/09............. $ 1,000,000 $ 1,022,500
----------------
CREDIT CARD - 0.2%
Citibank Credit Card Issuance Trust
5.526%, due 02/07/10(b).......... 4,000,000 4,006,969
MBNA Credit Card Master Note Trust
3.300%, due 07/15/10(b)........... 1,500,000 1,482,431
5.440%, due 08/16/10.............. 1,200,000 1,201,941
----------------
6,691,341
----------------
DISTRIBUTION/WHOLESALE - 0.0%
Roundys, Inc.
7.720%, due 11/03/11(a)(c)....... 987,525 996,042
----------------
ELECTRIC - 0.1%
Consumers Energy Co.
5.000%, due 02/15/12............. 2,500,000 2,432,220
Progress Energy, Inc.
7.100%, due 03/01/11............. 1,600,000 1,677,915
----------------
4,110,135
----------------
ELECTRIC UTILITIES - 0.6%
Arizona Public Service Co.
4.650%, due 05/15/15............. 165,000 150,705
CMS Energy Corp.
7.500%, due 01/15/09.............. 7,251,000 7,471,865
9.875%, due 10/15/07.............. 500,000 507,148
Dominion Resources, Inc.
8.125%, due 06/15/10.............. 335,000 360,963
6.300%, due 03/15/33.............. 210,000 208,443
DTE Energy Co.
6.375%, due 04/15/33............. 260,000 257,920
Entergy Gulf States
3.600%, due 06/01/08............. 1,400,000 1,375,321
NRG Energy, Inc.
7.250%, due 02/01/14............. 5,500,000 5,527,500
Pacificorp 4.300%, due 09/15/08.... 250,000 246,744
Pepco Holdings, Inc.
6.450%, due 08/15/12.............. 90,000 92,449
7.450%, due 08/15/32.............. 180,000 197,728
Progress Energy, Inc.
6.850%, due 04/15/12............. 650,000 682,050
PSEG Power LLC
5.500%, due 12/01/15.............. 420,000 404,660
8.625%, due 04/15/31.............. 245,000 300,389
TECO Energy, Inc.
6.750%, due 05/01/15............. 4,400,000 4,509,938
----------------
22,293,823
----------------
FINANCIAL - DIVERSIFIED - 3.2%
American General Finance Corp.
4.500%, due 11/15/07............. 280,000 279,252
------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------------
FINANCIAL - DIVERSIFIED - CONTINUED
ANZ Capital Trust II
5.360%, due 12/29/49
(144A)(a)................... $ 525,000 $ 505,612
Bank of America Commercial
Mortgage, Inc.
4.890%, due 04/11/37........ 1,267,643 1,257,321
Citigroup, Inc.
5.625%, due 08/27/12........ 1,000,000 1,001,318
General Electric Capital Corp.
5.355%, due 10/24/08(b)...... 52,000,000 52,037,440
5.450%, due 01/15/13......... 375,000 371,526
6.750%, due 03/15/32......... 165,000 179,578
GMAC LLC
6.610%, due 05/15/09......... 1,600,000 1,600,768
7.000%, due 02/01/12......... 4,800,000 4,712,151
Goldman Sachs Group, Inc.
5.700%, due 09/01/12........ 55,000 55,027
HSBC Capital Funding LP
9.547%, due 12/31/49
(144A)(a)................... 350,000 386,742
HSBC Finance Corp.
5.360%, due 05/21/08(b)...... 1,100,000 1,100,760
5.415%, due 10/21/09(b)...... 11,600,000 11,607,297
ING Capital Funding Trust III
8.439%, due 12/31/49........ 200,000 217,261
JPMorgan Chase Commercial
Mortgage Securities
3.890%, due 01/12/37........ 2,216,591 2,167,267
Lehman Brothers Holdings, Inc.
5.410%, due 12/23/08(b)..... 12,500,000 12,513,325
Mid-State Trust
7.791%, due 03/15/38........ 259,561 274,175
Mizuho JGB Investment
9.870%, due 12/31/49
(144A)(a)................... 410,000 426,304
Mizuho Preferred Capital
8.790%, due 12/29/49
(144A)(a)................... 390,000 401,524
Morgan Stanley
5.809%, due 10/18/16(b)..... 3,900,000 3,902,648
Morgan Stanley Group, Inc.
5.300%, due 03/01/13........ 800,000 785,083
Nisource Finance Corp.
6.150%, due 03/01/13........ 475,000 479,260
Prudential Holding LLC
8.695%, due 12/18/23
(144A)(a)................... 150,000 181,612
RBS Capital Trust II
6.425%, due 12/29/49........ 120,000 116,976
RBS Capital Trust III
5.512%, due 09/29/49........ 815,000 784,452
See notes to financial statements
8
MET INVESTORS SERIES TRUST
PIMCO TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
---------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
---------------------------------------------------------------------
FINANCIAL - DIVERSIFIED - CONTINUED
SLC Student Loan Trust
5.313%, due 02/15/15(b)........... $ 2,100,000 $ 2,099,673
SLM Corp.
6.000%, due 06/30/08(c)(d)........ 13,200,000 13,134,000
SLM Student Loan Trust
5.345%, due 07/25/17(b)........... 6,400,000 6,405,139
Small Business Administration
7.449%, due 08/01/10............... 228,544 231,878
6.353%, due 03/01/11............... 62,647 63,457
5.500%, due 10/01/18............... 133,428 133,692
----------------
119,412,518
----------------
FOOD & DRUG RETAILING - 0.0%
Safeway, Inc.
4.125%, due 11/01/08.............. 480,000 472,708
----------------
HEALTH CARE EQUIPMENT & SUPPLIES - 0.1%
Boston Scientific Corp.
6.000%, due 06/15/11.............. 5,000,000 4,982,150
----------------
HEALTH CARE PROVIDERS & SERVICES - 0.2%
HCA, Inc.
1.000%, due 11/14/13(a)........... 4,987,500 5,019,061
UnitedHealth Group, Inc.
3.300%, due 01/30/08.............. 340,000 335,675
----------------
5,354,736
----------------
HOME EQUITY - 0.2%
Asset Backed Securities Corp. Home
Equity
5.400%, due 05/25/37(b)........... 1,937,703 1,940,288
Bear Stearns Asset Backed Securities
Trust
5.820%, due 06/25/35.............. 319,028 319,620
Morgan Stanley ABS Capital I
5.380%, due 05/25/37.............. 3,499,691 3,501,601
Option One Mortgage Loan Trust
5.380%, due 07/25/37.............. 2,942,058 2,942,058
----------------
8,703,567
----------------
HOMEBUILDERS - 0.1%
C8 Capital SPV, Ltd.
6.640%, due 12/31/49(a)(d)........ 2,100,000 2,083,914
----------------
HOTELS, RESTAURANTS & LEISURE - 0.3%
Hilton Hotels Corp.
7.625%, due 05/15/08.............. 1,000,000 1,018,750
Mandalay Resort Group
10.250%, due 08/01/07.............. 7,000,000 7,026,250
6.500%, due 07/31/09............... 800,000 804,000
----------------
8,849,000
----------------
HOUSEHOLD DURABLES - 0.0%
Centex Corp.
5.700%, due 05/15/14.............. 280,000 262,321
----------------
---------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
---------------------------------------------------------------------
INSURANCE - 0.0%
Nationwide Financial Services, Inc.
6.250%, due 11/15/11............... $ 55,000 $ 56,315
5.900%, due 07/01/12............... 60,000 60,706
----------------
117,021
----------------
MEDIA - 0.0%
Comcast Corp.
7.050%, due 03/15/33.............. 75,000 77,643
Cox Communications, Inc.
4.625%, due 06/01/13.............. 430,000 403,246
News America Holdings, Inc.
8.250%, due 08/10/18............... 110,000 126,203
7.750%, due 01/20/24............... 25,000 27,502
Time Warner Cos, Inc.
9.150%, due 02/01/23............... 155,000 187,819
8.375%, due 03/15/23............... 260,000 299,148
7.625%, due 04/15/31............... 310,000 333,067
----------------
1,454,628
----------------
METALS & MINING - 0.2%
Vale Overseas, Ltd.
6.875%, due 11/21/36.............. 8,200,000 8,263,025
----------------
OIL & GAS - 0.4%
Duke Capital LLC
6.250%, due 02/15/13............... 375,000 380,861
8.000%, due 10/01/19............... 55,000 61,164
El Paso Corp.
6.375%, due 02/01/09............... 1,000,000 1,007,360
7.750%, due 01/15/32............... 2,815,000 2,849,653
Husky Energy, Inc.
6.150%, due 06/15/19.............. 215,000 212,666
Kinder Morgan Energy Partners
7.400%, due 03/15/31............... 225,000 237,867
7.750%, due 03/15/32............... 135,000 148,068
7.300%, due 08/15/33............... 90,000 94,264
Magellan Midstream Partners
5.650%, due 10/15/16.............. 385,000 371,371
Pemex Project Funding Master Trust
7.375%, due 12/15/14............... 1,700,000 1,856,136
8.625%, due 02/01/22............... 2,944,000 3,635,372
Pioneer Natural Resource
5.875%, due 07/15/16.............. 405,000 365,999
Transcontinental Gas Pipe Line Corp.
8.875%, due 07/15/12.............. 35,000 39,375
Valero Energy Corp.
7.500%, due 04/15/32.............. 225,000 246,438
Williams Cos., Inc. (The)
6.750%, due 04/15/09
(144A)(a)........................ 1,000,000 1,015,000
6.375%, due 10/01/10(a)............ 2,900,000 2,921,750
----------------
15,443,344
----------------
See notes to financial statements
9
MET INVESTORS SERIES TRUST
PIMCO TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-------------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-------------------------------------------------------------------------
PAPER & FOREST PRODUCTS - 0.0%
International Paper Co.
5.850%, due 10/30/12............... $ 28,000 $ 27,962
----------------
PHARMACEUTICALS - 0.1%
Wyeth
5.500%, due 03/15/13................ 2,500,000 2,476,848
6.450%, due 02/01/24................ 160,000 165,356
----------------
2,642,204
----------------
REAL ESTATE - 0.2%
Health Care Property Investors, Inc.
(REIT) 5.950%, due 09/15/11........ 4,100,000 4,109,578
Ventas Realty LP/Ventas Capital Corp.
8.750%, due 05/01/09............... 1,500,000 1,576,875
----------------
5,686,453
----------------
RETAIL - MULTILINE - 0.7%
CVS Caremark Corp.
5.660%, due 06/01/10(b)............ 17,200,000 17,233,702
Federated Department Stores, Inc.
6.300%, due 04/01/09............... 60,000 60,602
Wal-Mart Stores, Inc.
5.260%, due 06/16/08(b)............ 8,300,000 8,298,896
----------------
25,593,200
----------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 1.1%
BellSouth Corp. 4.240%,
due 04/26/08 (144A)(a)............. 17,400,000 17,247,593
Deutsche Telekom International
Finance BV
8.250%, due 06/15/30............... 50,000 60,097
France Telecom S.A.
8.500%, due 03/01/31............... 165,000 207,918
Nordic Telephone Term B
3.161%, due 11/30/13(a)............ 1,903,701 2,606,846
Nordic Telephone Term C
3.161%, due 11/30/14(a)............ 2,350,000 3,221,515
Qwest Capital Funding Inc.
7.250%, due 02/15/11............... 8,000,000 8,000,000
Qwest Communications
International, Inc.
7.500%, due 02/15/14............... 511,000 519,943
Qwest Corp.
5.625%, due 11/15/08................ 2,000,000 2,002,500
8.875%, due 03/15/12................ 1,720,000 1,861,900
SBC Communications, Inc.
4.125%, due 09/15/09................ 4,000,000 3,891,660
5.100%, due 09/15/14................ 380,000 362,995
5.625%, due 06/15/16................ 455,000 445,455
Sprint Capital Corp.
6.900%, due 05/01/19............... 220,000 218,221
Verizon Global Funding Corp.
7.375%, due 09/01/12............... 185,000 199,467
-------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-------------------------------------------------------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - CONTINUED
Verizon New York, Inc.
6.875%, due 04/01/12....... $ 325,000 $ 339,189
7.375%, due 04/01/32....... 155,000 163,502
----------------
41,348,801
----------------
TELECOMMUNICATION SERVICES - WIRELESS - 0.0%
AT&T Wireless Services, Inc.
7.875%, due 03/01/11....... 260,000 279,769
8.125%, due 05/01/12....... 5,000 5,503
8.750%, due 03/01/31....... 245,000 306,282
Cingular Wireless LLC
6.500%, due 12/15/11...... 700,000 724,595
----------------
1,316,149
----------------
TOBACCO - 0.1%
Reynolds American, Inc.
7.625%, due 06/01/16...... 2,400,000 2,541,098
----------------
TRANSPORTATION - 0.0%
Norfolk Southern Corp.
5.590%, due 05/17/25....... 60,000 54,716
7.800%, due 05/15/27....... 7,000 7,962
5.640%, due 05/17/29....... 168,000 152,265
7.250%, due 02/15/31....... 65,000 70,412
Union Pacific Corp.
6.625%, due 02/01/29...... 50,000 50,675
----------------
336,030
----------------
Total Domestic Bonds & Debt Securities
(Cost $866,973,823) 867,134,132
----------------
FOREIGN BONDS & DEBT SECURITIES - 16.1%
ARUBA - 0.0%
UFJ Finance Aruba AEC
6.750%, due 07/15/13...... 220,000 232,584
----------------
BRAZIL - 2.1%
Federal Republic of Brazil
10.000%, due 01/01/12(h)... 9,911,000 50,053,039
10.000%, due 01/01/17(h)... 4,900,000 24,622,125
10.250%, due 01/10/28(h)... 7,100,000 4,117,860
----------------
78,793,024
----------------
CAYMAN ISLANDS - 0.1%
Hutchison Whampoa
International, Ltd.
6.250%, due 01/24/14
(144A)(a)................. 245,000 248,798
Mizuho Finance
5.790%, due 04/15/14
(144A)(a)................. 315,000 314,920
Petroleum Export, Ltd.
5.265%, due 06/15/11
(144A)(a)................. 3,980,934 3,868,950
----------------
4,432,668
----------------
See notes to financial statements
10
MET INVESTORS SERIES TRUST
PIMCO TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-----------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-----------------------------------------------------------------
DENMARK - 0.8%
Nykredit Realkredit A/S
5.000%, due 10/01/38(i)....... $ 50,292,277 $ 8,615,595
Realkredit Danmark A/S
5.000%, due 10/01/38(i)........ 98,278,839 16,783,168
5.000%, due 10/01/38(b)(i)..... 24,978,832 4,317,844
----------------
29,716,607
----------------
FRANCE - 0.2%
AXA S.A.
8.600%, due 12/15/30.......... 60,000 73,316
France Telecom S.A.
7.750%, due 03/01/11.......... 400,000 427,690
Sigmakalon Group B.V.
4.588%, due 06/30/12(a)(c)(j). 846,000 1,144,825
1.000%, due 09/19/12-
09/19/13(a)(j)............... 3,473,618 4,728,528
----------------
6,374,359
----------------
GERMANY - 11.8%
Federal Republic of Germany
4.500%, due 08/17/07(j)....... 312,200,000 422,205,599
Kappa Jefferson
5.908%, due 11/29/13-
11/29/14(c)(j)................ 4,500,000 6,151,506
UPC Broadband Term M1
1.000%, due 12/31/14(a)....... 4,049,167 5,481,472
----------------
433,838,577
----------------
ITALY - 0.3%
Telecom Italia Capital
4.000%, due 11/15/08.......... 270,000 264,347
Unicredito Italiano S.p.A.
5.370%, due 05/29/08
(144A)(a)..................... 10,100,000 10,097,231
----------------
10,361,578
----------------
LUXEMBOURG - 0.2%
Telecom Italia Capital S.A.
4.000%, due 01/15/10.......... 510,000 490,565
VTB Capital SA for Vneshtorgbank
5.955%, due 08/01/08
(144A)(a)(b).................. 6,500,000 6,514,625
----------------
7,005,190
----------------
NETHERLANDS - 0.0%
Deutsche Telekom Finance
5.250%, due 07/22/13(j)....... 425,000 411,525
----------------
NORWAY - 0.0%
Den Norske Bank
7.729%, due 06/29/49(a)....... 115,000 122,452
----------------
--------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------
PANAMA - 0.1%
Republic of Panama
9.625%, due 02/08/11........ $ 936,000 $ 1,053,000
9.375%, due 07/23/12........ 410,000 471,500
6.700%, due 01/26/36........ 1,150,000 1,178,750
----------------
2,703,250
----------------
RUSSIA - 0.0%
Morgan Stanley (Gazprom)
9.625%, due 03/01/13
(144A)(a).................. 130,000 150,969
Russian Federation
11.000%, due 07/24/18...... 100,000 139,225
----------------
290,194
----------------
SINGAPORE - 0.0%
United Overseas Bank, Ltd.
5.375%, due 09/03/19
(144A)(a).................. 470,000 453,591
----------------
SOUTH AFRICA - 0.0%
South Africa Government
International Bond
5.875%, due 05/30/22....... 700,000 686,000
----------------
SOUTH KOREA - 0.5%
Export-Import Bank Of Korea
5.450%, due 06/01/09(b).... 16,200,000 16,199,595
Industrial Bank of Korea
4.000%, due 05/19/14
(144A)(a).................. 335,000 325,897
Korea Development Bank
5.500%, due 04/03/10(b).... 1,600,000 1,601,378
Korea First Bank, Ltd.
7.267%, due 03/03/34
(144A)(a).................. 240,000 252,971
Woori Bank Korea
5.750%, due 03/13/14
(144A)(a).................. 305,000 305,141
----------------
18,684,982
----------------
SWEDEN - 0.0%
Skandinaviska Enskilda Banken
4.958%, due 03/29/49
(144A)(a).................. 415,000 386,386
Swedbank
9.000%, due 12/29/49
(144A)(a).................. 180,000 193,911
----------------
580,297
----------------
UKRAINE - 0.0%
Republic of Ukraine
6.875%, due 03/04/11........ 200,000 204,240
7.650%, due 06/11/13........ 500,000 530,450
----------------
734,690
----------------
See notes to financial statements
11
MET INVESTORS SERIES TRUST
PIMCO TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-----------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-----------------------------------------------------------------
UNITED KINGDOM - 0.0%
British Telecom Plc
8.625%, due 12/15/10.......... $ 190,000 $ 207,781
HBOS Capital Funding LP
6.071%, due 06/30/49
(144A)(a)..................... 45,000 44,850
HBOS Plc
3.600%, due 08/15/07
(144A)(a).................... 425,000 424,379
5.375%, due 12/29/49
(144A)(a).................... 285,000 276,337
Standard Chartered Bank
8.000%, due 05/30/31
(144A)(a)..................... 235,000 278,904
----------------
1,232,251
----------------
Total Foreign Bonds & Debt Securities
(Cost $593,985,383) 596,653,819
----------------
U. S. GOVERNMENT & AGENCY OBLIGATIONS - 75.5%
Federal Home Loan Mortgage Corp.
5.500%, due
07/01/07-05/01/35............ 437,232,055 410,219,944
4.500%, due 10/01/07........... 1,587,235 1,580,394
7.000%, due 09/01/10........... 7,434 7,597
6.500%, due
04/01/11-06/01/29............ 207,207 213,974
6.000%, due
05/01/11-04/01/23............ 11,323,811 11,388,090
5.000%, due
09/15/16-09/01/35............ 96,405,994 94,768,512
6.875%, due 11/15/23(b)........ 1,785,916 1,897,878
7.479%, due 01/01/29(b)........ 2,263,172 2,300,862
5.920%, due 05/15/29(b)........ 197,329 197,988
5.910%, due 11/01/31(b)........ 209,415 211,802
3.500%, due 07/15/32........... 384,772 358,903
5.166%, due 08/01/32(b)........ 1,463,629 1,468,465
5.570%, due 07/15/34(b)........ 581,445 584,083
5.332%, due 09/01/35(b)........ 13,808,913 13,760,319
6.427%, due 07/25/44(b)........ 24,465,939 24,672,965
6.227%, due
10/25/44-02/25/45(b)......... 5,063,831 5,105,996
5.500%, due TBA(e)............. 13,500,000 13,019,062
Federal National Mortgage Assoc.
5.500%, due
03/01/08-07/01/37............ 404,872,798 401,916,210
6.000%, due
11/01/08-07/01/37............ 12,189,136 12,232,455
6.500%, due
03/01/09-10/01/17............ 2,090,659 2,124,349
7.000%, due
04/01/11-05/01/11............ 52,039 53,080
-------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-------------------------------------------------------------
U. S. GOVERNMENT & AGENCY OBLIGATIONS - CONTINUED
8.000%, due
11/01/13-10/01/25........ $ 30,612 $ 31,466
5.000%, due
02/01/18-06/01/37........ 390,737,177 373,276,208
7.067%, due 10/01/28(b).... 313,789 316,843
7.500%, due 09/01/30....... 2,952 3,085
6.771%, due 02/01/31(b).... 1,206,559 1,225,944
7.248%, due 09/01/31(b).... 198,414 200,020
5.720%, due 09/18/31(b).... 1,636,911 1,651,864
6.220%, due 04/25/32(b).... 699,022 717,003
5.482%, due 07/01/32(b).... 209,371 210,899
5.474%, due 09/01/32(b).... 828,937 835,222
4.816%, due 11/01/32(b).... 1,244,055 1,253,355
4.984%, due 09/01/34(b).... 8,299,419 8,176,318
6.129%, due 09/01/34(b).... 504,830 511,673
4.187%, due 11/01/34(b).... 19,893,567 19,981,941
4.704%, due 12/01/34(b).... 4,455,282 4,395,010
4.766%, due 12/01/34(b).... 12,326,311 12,213,480
4.673%, due 05/25/35(b).... 8,600,000 8,489,602
4.734%, due 09/01/35(b).... 10,764,064 10,688,788
4.847%, due 11/01/35(b).... 4,214,468 4,178,210
6.968%, due 11/01/35(b).... 2,071,136 2,141,072
6.272%, due 12/01/36(b).... 1,564,558 1,580,506
6.227%, due
08/01/41-10/01/44(b)..... 9,475,797 9,610,535
6.277%, due 09/01/41(b).... 3,703,648 3,734,275
6.226%, due 08/01/42(b).... 1,071,207 1,089,605
5.500%, due TBA(e)......... 1,167,500,000 1,125,994,943
6.000%, due TBA(e)......... 30,500,000 30,140,702
6.500%, due TBA(e)......... 60,000,000 60,571,860
Government National Mortgage
Assoc.
8.250%, due 02/15/09....... 4,066 4,075
6.000%, due 04/15/14....... 71,505 71,951
6.375%, due
02/20/22-02/20/27(b)..... 210,295 212,547
5.375%, due
04/20/22-05/20/32(b)..... 671,127 679,433
7.000%, due 10/15/23....... 52,572 54,802
7.500%, due
01/15/26-04/15/31........ 6,195,388 6,545,860
6.125%, due
01/20/26-11/20/30(b)..... 401,782 406,755
5.750%, due
08/20/27-03/20/32(b)..... 191,120 192,817
5.500%, due
09/20/27-09/20/33(b)..... 14,262,659 13,788,069
6.250%, due
02/20/28-01/20/30(b)..... 269,558 271,598
See notes to financial statements
12
MET INVESTORS SERIES TRUST
PIMCO TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-------------------------------------------------------------------
SECURITY SHARES/PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-------------------------------------------------------------------
U. S. GOVERNMENT & AGENCY OBLIGATIONS - CONTINUED
5.875%, due 04/20/29(b).......... $ 70,989 $ 71,982
5.820%, due 02/16/30(b).......... 55,624 56,275
1.000%, due 05/20/30(b).......... 160,476 162,893
5.620%, due 01/16/31(b).......... 163,497 164,314
6.500%, due 10/20/31(b).......... 7,997 8,143
6.000%, due
07/20/32-03/20/33(b)........... 76,276 76,971
U.S. Treasury Inflation Index Note
3.875%, due 01/15/09............. 504,004 512,195
0.875%, due 04/15/10............. 58,247,119 55,334,821
2.000%, due 07/15/14............. 15,238,014 14,632,074
U.S. Treasury Note
4.750%, due 05/15/14............. 10,800,000 10,668,380
4.500%, due 05/15/17............. 800,000 767,250
----------------
Total U. S. Government & Agency Obligations
(Cost $2,809,317,013) 2,785,986,562
----------------
PREFERRED STOCK - 0.0%
Home Ownership Funding 13.331%/
1.000%*(c)(f)
(Cost - $1,011,000)............. 2,500 344,340
----------------
RIGHT - 0.0%
United Mexican States(c)
(Cost - $0)..................... 1,500,000 11,100
----------------
OPTIONS - 0.4%
Eurodollar Futures Calls,
Expire 03/17/08................. 2,885,000 209,163
Eurodollar Puts, Expire 05/20/10.. 6,000,000 466,975
Eurodollar Puts, Expire 05/21/08.. 5,000,000 151,060
Option On FNMA Puts,
Expire 07/05/07................. 414,000,000 4
OTC British Pound Calls,
Expire 09/26/08................. 190,100,000 373,990
OTC Eurodollar Calls,
Expire 05/21/08................. 10,400,000 260,664
OTC Eurodollar Calls,
Expire 05/21/08................. 9,000,000 225,392
OTC Eurodollar Calls,
Expire 05/21/08................. 5,000,000 141,049
OTC Eurodollar Calls,
Expire 05/21/08................. 4,000,000 112,542
OTC Eurodollar Calls,
Expire 05/21/08................. 3,200,000 80,282
OTC Eurodollar Calls,
Expire 05/21/10................. 4,500,000 205,741
OTC Eurodollar Calls,
Expire 05/21/10................. 4,000,000 182,746
OTC Eurodollar Calls,
Expire 05/21/10................. 4,000,000 182,714
-----------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
-----------------------------------------------------------------
OPTIONS - CONTINUED
OTC Eurodollar Calls,
Expire 06/03/10............... $ 9,300,000 $ 425,324
OTC Eurodollar Calls,
Expire 06/04/08............... 11,200,000 313,739
OTC Eurodollar Puts,
Expire 05/20/10............... 6,000,000 312,187
OTC Eurodollar Puts,
Expire 05/21/08............... 10,400,000 349,595
OTC Eurodollar Puts,
Expire 05/21/08............... 9,000,000 302,984
OTC Eurodollar Puts,
Expire 05/21/08............... 4,000,000 120,302
OTC Eurodollar Puts,
Expire 05/21/08............... 3,200,000 107,568
OTC Eurodollar Puts,
Expire 05/21/10............... 4,500,000 225,611
OTC Eurodollar Puts,
Expire 05/21/10............... 4,000,000 200,651
OTC Eurodollar Puts,
Expire 05/21/10............... 4,000,000 200,532
OTC Eurodollar Puts,
Expire 06/03/10............... 9,300,000 468,601
OTC Japanese Calls,
Expire 06/03/10............... 23,600,000 1,399,338
OTC Japanese Yen Calls,
Expire 01/18/08............... 12,400,000 213,801
OTC Japanese Yen Calls,
Expire 03/17/10............... 30,000,000 2,804,340
OTC Japanese Yen Calls,
Expire 06/03/10............... 5,400,000 279,099
OTC Japanese Yen Puts,
Expire 06/03/10............... 23,600,000 1,002,150
OTC Japanese Yen Puts,
Expire 06/03/10............... 5,400,000 415,612
OTC Japanese Yen Puts,
Expire 06/04/08............... 11,200,000 590,441
OTC Japanese Yen Puts,
Expire 3/17/10................ 30,000,000 887,190
Swaption Calls, Expire 08/08/07. 64,400,000 681
Swaption Calls, Expire 09/26/08. 169,700,000 333,856
Swaption Calls, Expire 12/20/07. 139,300,000 171,197
Swaption Puts, Expire 07/09/07.. 32,800,000 181,630
Swaption Puts, Expire 08/24/07.. 440,900,000 12,627
U.S. Treasury Bond Future Calls,
Expires 08/24/07.............. 901,000 28,156
----------------
Total Options
(Cost $15,292,786) 13,939,534
----------------
See notes to financial statements
13
MET INVESTORS SERIES TRUST
PIMCO TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 16.7%
COMMERICAL PAPER - 14.4%
Bank of Ireland
5.165%, due 11/08/07
(144A)(a).................... $ 72,000,000 $ 70,657,100
BNP Paribas Finance, Inc.
1.000%, due 07/03/08......... 14,100,000 14,094,437
Danske Corp.
5.205%, due 09/11/07(144A)... 17,800,000 17,614,702
Dexia Delaware LLC
5.420%, due 07/02/07......... 77,994,000 77,982,258
Fortis Bank
5.320%, due 06/30/08......... 14,000,000 14,004,627
General Electric Capital Corp.
5.170%, due 11/06/07......... 36,000,000 35,338,240
Nordea Bank Finland Plc
5.283%, due 12/01/08......... 38,100,000 38,085,553
Rabobank USA Financial Corp.
5.330%, due 07/02/07......... 46,100,000 46,093,175
Royal Bank Canada
5.267%, due 06/30/08......... 14,000,000 14,007,195
Royal Bank of Scotland Plc
1.000%, due 07/03/08......... 13,100,000 13,094,832
Royal Bank Scotland Plc
5.260%, due 03/26/08......... 29,200,000 29,193,632
Societe Generale North America
5.210%, due 09/10/07.......... 1,100,000 1,088,697
5.270%, due 03/26/08.......... 30,200,000 30,193,414
Swedbank
5.225%, due 08/08/07......... 23,300,000 23,171,494
UBS Finance (Delaware) LLC
5.245%, due 09/14/07.......... 91,300,000 90,302,357
5.215%, due 09/17/07.......... 16,200,000 16,016,954
Westpac Banking Corp.
5.200%, due 08/02/07......... 1,000,000 995,378
----------------
531,934,045
----------------
REPURCHASE AGREEMENT - 0.3%
State Street Bank & Trust Co.,
Repurchase Agreement dated
06/29/07 at 3.400% to be
repurchased at $12,295,483 on
07/02/07 collateralized by
$12,255,000 FNMA at 5.750%
due 02/15/08 with a value of
$12,542,184.................. 12,292,000 12,292,000
----------------
U.S. GOVERNMENT & AGENCY DISCOUNT NOTES - 2.0%
Federal Home Loan Bank
Discount Notes
2.600%, due 07/02/07(g)...... 44,000,000 43,993,644
----------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
----------------------------------------------------------------
U.S. GOVERNMENT & AGENCY DISCOUNT NOTES - CONTINUED
United States Treasury Bill
4.485%, due 08/30/07(g).... $ 1,200,000 $ 1,190,950
4.550%, due 08/30/07(g).... 2,350,000 2,332,022
4.591%, due 08/30/07(g).... 310,000 307,607
4.709%, due 08/30/07(g).... 1,750,000 1,736,146
4.426%, due 09/13/07(g).... 160,000 158,538
4.451%, due 09/13/07(g).... 900,000 891,731
4.481%, due 09/13/07(g).... 2,250,000 2,229,188
4.632%, due 09/13/07(g).... 15,235,000 15,089,379
4.638%, due 09/13/07(g).... 5,220,000 5,170,046
----------------
73,099,251
----------------
Total Short-Term Investments
(Cost $617,325,296) 617,325,296
----------------
TOTAL INVESTMENTS - 132.7%
(Cost $4,921,104,161) 4,899,299,897
----------------
Other Assets and Liabilities (net) - (32.7)% (1,207,435,830)
----------------
TOTAL NET ASSETS - 100.0% $ 3,691,864,067
================
PORTFOLIO FOOTNOTES:
* Non-income producing security.
(a) Securities that may be resold to "qualified institutional buyers" under
Rule 144A or securities offered pursuant to Section 4(2) of the Securities
Act of 1933, as amended. These securities have been determined to be liquid
under the guidelines established by the Board of Trustees. These securities
represent in the aggregate $160,536,663 of net assets.
(b) Variable or floating rate security. The stated rate represents the rate at
June 30, 2007.
(c) Illiquid securities representing in the aggregate 0.43% of net assets.
(d) Securities that may be resold to "qualified institutional buyers" under
Rule 144A or securities offered pursuant to Section 4(2) of the Securities
Act of 1933, as amended. These securities have been determined to be
illiquid by the Portfolio's adviser. These securities represent in the
aggregate $15,787 of net assets.
(e) This security is traded on a "to-be-announced" basis.
(f) Security is a "step-down" bond where the coupon decreases or steps down at
a predetermined date. Rates shown are current coupon and next coupon rate
when a security steps down.
(g) Zero coupon bond - Interest rate represents current yield to maturity.
(h) Par shown in Brazilian Real. Value is in USD.
See notes to financial statements
14
MET INVESTORS SERIES TRUST
PIMCO TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
(i) Par shown in Danish Krone. Value is in USD.
(j) Par shown in Euro. Value is in USD.
AMBAC - Ambac Indemnity Corporation
FNMA - Federal National Mortgage Association
MTN - Medium-Term Note
REIT - Real Estate Investment Trust
TBA - To Be Announced
Term - Term Loan
The following table summarizes the credit composition of the Portfolio holdings
of the PIMCO Total Return Portfolio at June 30, 2007 based upon credit quality
ratings issued by Standard & Poor's. For securities not rated by Standard &
Poor's, the equivalent Moody's rating is used.
PERCENT OF
PORTFOLIO COMPOSITION BY CREDIT QUALITY PORTFOLIO
--------------------------------------------------
AAA/Government/Government Agency 70.05%
AA 12.82
A 6.68
BBB 3.26
BB 5.91
B 1.28
------
Total: 100.00%
======
STRIKE NUMBER OF
CALL OPTIONS EXPIRATION PRICE CONTRACTS VALUE
- --------------------------------------------------------------------------------
Swaption 9/26/2008 $ 4.95 (60,600,000) $ (416,549)
Swaption 9/26/2008 4.95 (73,800,000) (371,720)
Swaption 8/24/2007 5.70 (49,200,000) (466,982)
Swaption 7/19/2007 98.98 (83,000,000) (1,131,871)
Swaption 8/23/2007 99.18 (120,000,000) (1,948,200)
Swaption 8/8/2007 4.90 (28,000,000) (1,632)
OTC USD ECAL Swaps Option 12/20/2007 5.15 (60,600,000) (197,626)
-----------
(Written Option Premium $3,586,349) $(4,534,580)
===========
STRIKE NUMBER OF
PUT OPTIONS EXPIRATION PRICE CONTRACTS VALUE
-----------------------------------------------------------------------------
Swaption 7/9/2007 $ 4.80 (115,900,000) $(271,223)
U.S. Treasury Note Futures 8/24/2007 100.00 (4,409) (68,890)
---------
(Written Option Premium $760,037) $(340,113)
=========
See notes to financial statements
15
MET INVESTORS SERIES TRUST
PIMCO TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
SECURITIES SOLD SHORT INTEREST RATE MATURITY PROCEEDS VALUE
--------------------------------------------------------------------------
U.S. Treasury Bonds 4.75% 2/15/1937 $2,518,265,034 $255,891,245
U.S. Treasury Notes 3.25% 8/15/2007 28,694,601 28,952,440
U.S. Treasury Notes 3.00% 11/15/2007 29,213,638 29,798,460
U.S. Treasury Notes 4.88% 2/15/2012 73,413,486 74,030,568
U.S. Treasury Notes 4.75% 5/15/2014 23,316,216 22,522,136
U.S. Treasury Notes 4.25% 11/15/2014 163,367,863 159,680,154
U.S. Treasury Notes 4.63% 2/15/2017 127,540,905 128,456,383
U.S. Treasury Notes 4.50% 5/15/2017 128,561,138 128,034,911
-------------- ------------
$3,092,372,881 $827,366,297
============== ============
ACQUISITION
COST AS A
ACQUISITION ACQUISITION PERCENTAGE
ILLIQUID AND RESTRICTED SECURITIES DATES COST OF NET ASSETS VALUE
- ---------------------------------------------------------------------------------------------------------------------
Countrywide Alternative Loan Trust 0.419%, due 05/25/35 3/6/2006 $ 126,417 0.00% $ 41,117
First Horizon Alternative Mortgage Securities 0.119%, due 01/25/36 3/2/2006 178,068 0.00 126,716
Home Ownership Funding 13.331%/1.000% 11/10/2004 1,011,000 0.03 344,340
Roundys, Inc. 7.72%, due 11/03/11 2/3/2006 994,754 0.03 996,042
Sigmakalon Group B.V. 4.588%, due 06/30/12 11/10/2005 983,189 0.03 1,144,825
SLM Corp. 6.000%, due 06/30/08 6/28/2007 13,134,000 0.36 13,134,000
----------- ---- -----------
$16,427,428 0.45% $15,787,040
=========== ==== ===========
VALUE AS A
PERCENTAGE OF
ILLIQUID AND RESTRICTED SECURITIES NET ASSETS
- --------------------------------------------------------------------------------
Countrywide Alternative Loan Trust 0.419%, due 05/25/35 0.00%
First Horizon Alternative Mortgage Securities 0.119%, due 01/25/36 0.00
Home Ownership Funding 13.331%/1.000% 0.01
Roundys, Inc. 7.72%, due 11/03/11 0.03
Sigmakalon Group B.V. 4.588%, due 06/30/12 0.03
SLM Corp. 6.000%, due 06/30/08 0.36
----
0.43%
====
See notes to financial statements
16
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
PIMCO TOTAL RETURN PORTFOLIO
ASSETS
Investments, at value (Note 2)* $4,887,007,897
Repurchase Agreement 12,292,000
Cash 941
Cash denominated in foreign currencies** 78,621,415
Receivable for investments sold 1,817,491,202
Receivable for Trust shares sold 6,749,628
Interest receivable 34,786,044
Net variation margin on financial futures contracts (Note 7) 4,681,284
Unrealized appreciation on forward currency contracts (Note 8) 1,858,129
--------------
Total assets 6,843,488,540
--------------
LIABILITIES
Payables for:
Investments purchased 2,259,164,822
Trust shares redeemed 1,319,038
Securities sold short, at value*** (Note 2) 827,366,297
Open swap contracts at fair value (Note 10) 37,159,531
Unrealized depreciation on forward currency contracts (Note 8) 4,628,341
Outstanding written options**** 4,874,693
Distribution and services fees--Class B 240,901
Distribution and services fees--Class E 15,693
Interest payable swap position 14,668,040
Investment advisory fee payable (Note 3) 1,494,501
Administration fee payable 36,284
Custodian and accounting fees payable 414,468
Accrued expenses 241,864
--------------
Total liabilities 3,151,624,473
--------------
NET ASSETS $3,691,864,067
==============
NET ASSETS REPRESENTED BY:
Paid in surplus $3,703,983,851
Accumulated net realized loss (47,005,262)
Unrealized depreciation on investments, futures contracts, options
contracts, swap contracts and foreign currency (41,355,081)
Undistributed net investment income 76,240,559
--------------
Total $3,691,864,067
==============
NET ASSETS
Class A $2,387,544,481
==============
Class B 1,177,787,715
==============
Class E 126,531,871
==============
CAPITAL SHARES OUTSTANDING
Class A 209,031,320
==============
Class B 104,015,638
==============
Class E 11,142,225
==============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 11.42
==============
Class B 11.32
==============
Class E 11.36
==============
- ----------------------------------------------------------------------------------------
* Investments at cost, excluding Repurchase Agreements $4,908,812,161
** Cost of cash denominated in foreign currencies 78,310,154
***Proceeds of short sales 3,092,372,881
****Cost of Swaps 45,495,117
*****Cost of written options 4,346,386
See notes to financial statements
17
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
PIMCO TOTAL RETURN PORTFOLIO
INVESTMENT INCOME:
Dividends $ 100,819
Interest 84,741,276
------------
Total investment income 84,842,095
------------
EXPENSES:
Investment advisory fee (Note 3) 7,833,146
Administration fees 110,071
Custody and accounting fees 136,228
Distribution fee--Class B 1,478,584
Distribution fee--Class E 96,814
Transfer agent fees 16,596
Audit 13,675
Legal 7,448
Trustee fees and expenses 3,505
Shareholder reporting 134,658
Insurance 20,535
Other 2,254
------------
Total expenses 9,853,514
------------
Net investment income 74,988,581
------------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS,
FUTURES CONTRACTS, OPTIONS CONTRACTS, SWAP CONTRACTS AND
FOREIGN CURRENCY:
Net realized gain (loss) on:
Investments (17,511,834)
Futures contracts (21,013,353)
Options contracts 2,175,742
Swap contracts (15,912)
Foreign currency (258,088)
------------
Net realized loss on investments, futures contracts, options
contracts, swap contracts and foreign currency (36,623,445)
------------
Net change in unrealized appreciation (depreciation) on:
Investments (25,540,378)
Futures contracts (11,296,131)
Options contracts (2,059,846)
Swap contracts (1,979,322)
Foreign currency (1,257,753)
------------
Net change in unrealized depreciation on investments, futures
contracts, options contracts, swap contracts, and foreign
currency (42,133,430)
------------
Net realized and change in unrealized loss on investments, futures
contracts, options contracts, swap contracts and foreign
currency (78,756,875)
------------
NET DECREASE IN NET ASSETS FROM OPERATIONS $ (3,768,294)
============
See notes to financial statements
18
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
PIMCO TOTAL RETURN PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 74,988,581 $ 102,357,550
Net realized gain (loss) on investments, futures contracts,
options contracts, swap contracts and foreign currency (36,623,445) 5,102,371
Net change in unrealized appreciation (depreciation) on
investments, futures contracts, options contracts, swap
contracts and foreign currency (42,133,430) 8,694,063
-------------- --------------
Net increase (decrease) in net assets resulting from operations (3,768,294) 116,153,984
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (62,028,481) (29,094,951)
Class B (39,544,590) (30,169,751)
Class E (4,411,449) (3,863,607)
From net realized gains
Class A -- (429,561)
Class B -- (483,466)
Class E -- (60,274)
-------------- --------------
Net decrease in net assets resulting from distributions (105,984,520) (64,101,610)
-------------- --------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class A 1,000,134,506 612,875,519
Class B 82,979,005 174,431,330
Class E 4,445,928 7,736,408
Net asset value of shares issued through dividend reinvestment
Class A 62,028,481 29,524,512
Class B 39,544,590 30,653,217
Class E 4,411,449 3,923,881
Cost of shares repurchased
Class A (51,788,706) (137,417,970)
Class B (126,118,237) (116,201,961)
Class E (10,660,490) (27,861,563)
-------------- --------------
Net increase in net assets from capital share transactions 1,004,976,526 577,663,373
-------------- --------------
Total increase in net assets 895,223,712 629,715,747
Net assets at beginning of period 2,796,640,355 2,166,924,608
-------------- --------------
Net assets at end of period $3,691,864,067 $2,796,640,355
============== ==============
Net assets at end of period includes undistributed net investment
income $ 76,240,559 $ 107,236,497
============== ==============
See notes to financial statements
19
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS A
PIMCO TOTAL RETURN PORTFOLIO ----------------------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 ------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003
-------------- -------- ------- ------- -------
NET ASSET VALUE, BEGINNING OF PERIOD........................ $ 11.80 $ 11.60 $ 11.40 $ 11.61 $ 11.34
-------- -------- ------- ------- -------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income....................................... 0.28 (a) 0.49 (a) 0.40 (a) 0.20 (a) 0.28 (a)
Net Realized/Unrealized Gain (Loss) on Investments.......... (0.24) 0.04 (0.12) 0.40 0.23
-------- -------- ------- ------- -------
Total from Investment Operations............................ 0.04 0.53 0.28 0.60 0.51
-------- -------- ------- ------- -------
LESS DISTRIBUTIONS
Dividends from Net Investment Income........................ (0.42) (0.32) (0.01) (0.81) (0.13)
Distributions from Net Realized Capital Gains............... -- (0.01) (0.07) -- (0.11)
-------- -------- ------- ------- -------
Total Distributions......................................... (0.42) (0.33) (0.08) (0.81) (0.24)
-------- -------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD.............................. $ 11.42 $ 11.80 $ 11.60 $ 11.40 $ 11.61
======== ======== ======= ======= =======
TOTAL RETURN 0.21% 4.80% 2.46% 5.25% 4.53%
Ratio of Expenses to Average Net Assets**................... 0.53%* 0.58% 0.57% 0.57% 0.59%
Ratio of Expenses to Average Net Assets Before Reimbursement
and Rebates............................................... 0.53%* 0.58% 0.57% N/A 0.57%(b)
Ratio of Net Investment Income to Average Net Assets........ 4.86%* 4.28% 3.42% 1.69% 2.43%
Portfolio Turnover Rate..................................... 347.9% 161.2% 344.2% 416.0% 547.1%
Net Assets, End of Period (in millions)..................... $2,387.5 $1,445.1 $912.6 $578.0 $194.5
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
PIMCO TOTAL RETURN PORTFOLIO --------
--------
2002
-------
NET ASSET VALUE, BEGINNING OF PERIOD........................ $ 10.35
-------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income....................................... 0.33(a)
Net Realized/Unrealized Gain (Loss) on Investments.......... 0.66
-------
Total from Investment Operations............................ 0.99
-------
LESS DISTRIBUTIONS
Dividends from Net Investment Income........................ --
Distributions from Net Realized Capital Gains............... --
-------
Total Distributions......................................... --
-------
NET ASSET VALUE, END OF PERIOD.............................. $ 11.34
=======
TOTAL RETURN 9.57%
Ratio of Expenses to Average Net Assets**................... 0.65%
Ratio of Expenses to Average Net Assets Before Reimbursement
and Rebates............................................... 0.64%(b)
Ratio of Net Investment Income to Average Net Assets........ 3.06%
Portfolio Turnover Rate..................................... 474.4%
Net Assets, End of Period (in millions)..................... $155.0
CLASS B
--------------------------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 ----------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003
-------------- -------- --------- --------- -------
NET ASSET VALUE, BEGINNING OF PERIOD........................ $ 11.69 $ 11.50 $ 11.32 $ 11.54 $ 11.29
-------- -------- --------- --------- -------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income....................................... 0.27 (a) 0.46 (a) 0.37 (a) 0.19 (a) 0.24 (a)
Net Realized/Unrealized Gain (Loss) on Investments.......... (0.25) 0.04 (0.12) 0.38 0.25
-------- -------- --------- --------- -------
Total from Investment Operations............................ 0.02 0.50 0.25 0.57 0.49
-------- -------- --------- --------- -------
LESS DISTRIBUTIONS
Dividends from Net Investment Income........................ (0.39) (0.30) -- (0.79) (0.13)
Distributions from Net Realized Capital Gains............... -- (0.01) (0.07) -- (0.11)
-------- -------- --------- --------- -------
Total Distributions......................................... (0.39) (0.31) (0.07) (0.79) (0.24)
-------- -------- --------- --------- -------
NET ASSET VALUE, END OF PERIOD.............................. $ 11.32 $ 11.69 $ 11.50 $ 11.32 $ 11.54
======== ======== ========= ========= =======
TOTAL RETURN 0.05% 4.52% 2.25% 4.98% 4.53%
Ratio of Expenses to Average Net Assets**................... 0.78%* 0.83% 0.82% 0.81% 0.83%
Ratio of Expenses to Average Net Assets Before Reimbursement
and Rebates............................................... 0.78%* 0.83% 0.82% N/A 0.82%(b)
Ratio of Net Investment Income to Average Net Assets........ 4.67%* 4.01% 3.13% 1.66% 2.07%
Portfolio Turnover Rate..................................... 347.9% 161.2% 344.2% 416.0% 547.1%
Net Assets, End of Period (in millions)..................... $1,177.8 $1,219.1 $1,107.7 $1,028.5 $893.8
--------
--------
2002
-------
NET ASSET VALUE, BEGINNING OF PERIOD........................ $ 10.33
-------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income....................................... 0.31(a)
Net Realized/Unrealized Gain (Loss) on Investments.......... 0.65
-------
Total from Investment Operations............................ 0.96
-------
LESS DISTRIBUTIONS
Dividends from Net Investment Income........................ --
Distributions from Net Realized Capital Gains............... --
-------
Total Distributions......................................... --
-------
NET ASSET VALUE, END OF PERIOD.............................. $ 11.29
=======
TOTAL RETURN 9.29%
Ratio of Expenses to Average Net Assets**................... 0.90%
Ratio of Expenses to Average Net Assets Before Reimbursement
and Rebates............................................... 0.90%(b)
Ratio of Net Investment Income to Average Net Assets........ 2.85%
Portfolio Turnover Rate..................................... 474.4%
Net Assets, End of Period (in millions)..................... $427.7
* Annualized
** Prior to 05/01/2003, broker rebates were excluded from the calculation of
the expense limitation.
N/A Not Applicable
(a) Per share amounts based on average shares outstanding during the period.
(b) Excludes effect of Deferred Expense Reimbursement--See Note 3 of financial
statements.
See notes to financial statements
20
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS E
PIMCO TOTAL RETURN PORTFOLIO --------------------------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 -----------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002
-------------- ------ ------- ------- ------- ------
NET ASSET VALUE, BEGINNING OF PERIOD................... $11.73 $11.53 $ 11.34 $ 11.56 $ 11.30 $10.33
------ ------ ------- ------- ------- ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income.................................. 0.28 (a) 0.47 (a) 0.39 (a) 0.21 (a) 0.23 (a) 0.33(a)
Net Realized/Unrealized Gain (Loss) on Investments..... (0.25) 0.05 (0.13) 0.37 0.27 0.64
------ ------ ------- ------- ------- ------
Total from Investment Operations....................... 0.03 0.52 0.26 0.58 0.50 0.97
------ ------ ------- ------- ------- ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income................... (0.40) (0.31) -- (0.80) (0.13) --
Distributions from Net Realized Capital Gains.......... -- (0.01) (0.07) -- (0.11) --
------ ------ ------- ------- ------- ------
Total Distributions.................................... (0.40) (0.32) (0.07) (0.80) (0.24) --
------ ------ ------- ------- ------- ------
NET ASSET VALUE, END OF PERIOD......................... $11.36 $11.73 $ 11.53 $ 11.34 $ 11.56 $11.30
====== ====== ======= ======= ======= ======
TOTAL RETURN 0.05% 4.67% 2.33% 5.06% 4.44% 9.39%
Ratio of Expenses to Average Net Assets**.............. 0.68%* 0.72% 0.72% 0.71% 0.73% 0.80%
Ratio of Expenses to Average Net Assets Before
Reimbursement and Rebates............................ 0.68%* 0.72% 0.72% N/A 0.71%(b) 0.80%(b)
Ratio of Net Investment Income to Average Net Assets... 4.77%* 4.10% 3.24% 1.76% 2.02% 3.00%
Portfolio Turnover Rate................................ 347.9% 161.2% 344.2% 416.0% 547.1% 474.4%
Net Assets, End of Period (in millions)................ $126.5 $132.5 $146.6 $146.6 $119.3 $29.2
* Annualized
** Prior to 05/01/2003, broker rebates were excluded from the calculation of
the expense limitation.
N/A Not Applicable
(a) Per share amounts based on average shares outstanding during the period.
(b) Excludes effect of Deferred Expense Reimbursement--See Note 3 of financial
statements.
See notes to financial statements
21
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is PIMCO Total Return Portfolio, which is
diversified. Shares in the Trust are not offered directly to the general public
and are currently available only to separate accounts established by certain
affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A, B and E Shares are
offered by the Portfolio. Shares of each Class of the Portfolio represent an
equal pro rata interest in the Portfolio and generally give the shareholder the
same voting, dividend, liquidation, and other rights. Investment income,
realized and unrealized capital gains and losses, the common expenses of the
Portfolio and certain Portfolio-level expense reductions, if any, are allocated
on a pro rata basis to each class based on the relative net assets of each
class to the total net assets of the Portfolio. Each class of shares differs in
its respective distribution expenses and certain other class-specific expense
reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date. The value of the
security so purchased is subject to market fluctuations during this period. The
Portfolio segregates assets having an aggregate value at least equal to the
amount of the when issued or delayed delivery purchase commitments until
payment is made.
22
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
The Portfolio utilizes the provisions of the federal income tax laws that
provide for the carryforward of capital losses for eight years, offsetting such
losses against any future net realized capital gains. At December 31, 2006, the
accumulated capital loss carryforwards and expiration dates by the Portfolio
were as follows:
Expiring
Portfolio Total 12/31/2014
--------- ----------- -----------
PIMCO Total Return Portfolio $11,799,340 $11,799,340
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. FUTURES CONTRACTS - A futures contract is an agreement involving the
delivery of a particular asset on a specified future date at an agreed upon
price. These contracts are generally used to provide the return of an index
without purchasing all of the securities underlying the index or as a temporary
substitute for purchasing or selling specific securities.
Upon entering into a futures contract, the Portfolio is required to make
initial margin deposits with the broker or segregate liquid investments to
satisfy the broker's margin requirements. Initial margin deposits are recorded
as assets and held in a segregated account at the custodian. During the period
the futures contract is open, changes in the value of the contract are
recognized as unrealized gains or losses by "marking to market" the contract on
a daily basis to reflect the value of the contract's settlement price at the
end of each day's trading. Variation margin payments are made or received and
recognized as assets due from or liabilities to the broker depending upon
whether unrealized gains or losses, respectively, are incurred. When the
contract is closed, the Portfolio records a realized gain or loss equal to the
difference between the proceeds from (or cost of) the closing transaction and
its basis in the contract.
Risks of entering into futures contracts include the possibility that there may
be an illiquid market and that the change in the value of the contract may not
correlate with changes in the value of the underlying securities.
G. OPTIONS CONTRACTS - A purchased option contract gives the buyer the right,
but not the obligation, to buy (call) or sell (put) an underlying item at a
fixed exercise price during a specified period. These contracts are generally
used by the Portfolio to provide the return of an index without purchasing all
of the securities underlying the index or as a substitute for purchasing or
selling specific securities.
Purchases of put and call options are recorded as investments, the value of
which are marked-to-market daily. When a purchased option expires, the
Portfolio will realize a loss equal to the premium paid. When the Portfolio
enters into a closing sale transaction, the Portfolio will realize a gain or
loss depending on whether the sales proceeds from the closing sale transaction
are greater or less than the cost of the option. When the Portfolio exercises a
put option, it will realize a gain or loss from the sale of the underlying
security and the proceeds from such sale will be decreased by the premium
originally paid. When the Portfolio exercises a call option, the cost of the
security which the Portfolio purchases upon exercise will be increased by the
premium originally paid.
The premium received for a written option is recorded as a liability. The
liability is marked-to-market daily based on the option's quoted market price.
When an option expires or the Portfolio enters into a closing purchase
transaction, the Portfolio realizes a gain (or loss if the cost of the closing
purchase transaction exceeds the premium received when the option was sold)
without regard to any unrealized gain or loss on the underlying security and
the liability related to such option is eliminated. When a written call option
is exercised, the Portfolio realizes a gain or loss from the sale of the
underlying security and the proceeds from such sale are increased by the
premium originally received. If a written put option is exercised, the amount
of the premium originally received will reduce the cost of the underlying
security purchased.
23
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The risk associated with purchasing options is limited to the premium
originally paid. The risk in writing a call option is that the Portfolio may
forego the opportunity for profit if the market price of the underlying
security increases and the option is exercised. The risk in writing a put
option is that the Portfolio may incur a loss if the market price of the
underlying security decreases and the option is exercised. This loss can be
greater than premium received. In addition, the Portfolio could be exposed to
risks if the counterparties to the transactions are unable to meet the terms of
the contracts.
H. FORWARD FOREIGN CURRENCY CONTRACTS - The Portfolio may enter into forward
foreign currency contracts to hedge their portfolio holdings against future
movements in certain foreign currency exchange rates. A forward currency
contract is a commitment to purchase or sell a foreign currency at a future
date at a set price. The forward currency contracts are valued at the forward
rate and are marked-to-market daily. The change in market value is recorded by
the Portfolio as an unrealized gain or loss. When the contract is closed, the
Portfolio recognizes a realized gain or loss equal to the difference between
the value of the contract at the time it was opened and the value at the time
it was closed.
The use of forward foreign currency contracts does not eliminate fluctuations
in the underlying prices of the securities of the Portfolio, but it does
establish a rate of exchange that can be achieved in the future. Although
forward foreign currency contracts to sell limit the risk of loss due to a
decline in the value of the currency holdings, they also limit any potential
gain that might result should the value of the currency increase. In addition,
the Portfolio could be exposed to risks if the counterparties to the contracts
are unable to meet the terms of the contracts.
I. FOREIGN CURRENCY TRANSLATION - The books and records of the Portfolio are
maintained in U.S. dollars. Foreign currencies, investments and other assets
and liabilities are translated into U.S. dollars on a daily basis using
prevailing exchange rates. Purchases and sales of securities are translated at
the rates of exchange prevailing when such securities were acquired or sold.
Income is translated at rates of exchange prevailing when interest is accrued
or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in
forward foreign currency contracts, sales of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities
transactions, and the difference between the amounts of dividends, interest,
and foreign withholding taxes recorded on the Portfolio's books, and the U.S.
dollar equivalent of the amounts actually received or paid. Net unrealized
foreign exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at fiscal year end, from
changes in the exchange rates of foreign currency held, and from changes in the
contract value of forward foreign currency contracts.
J. SHORT SALES - The Portfolio may enter into a "short sale" of securities in
circumstances in which, at the time the short position is open, the Portfolio
owns an equal amount of the securities sold short or owns preferred stocks or
debt securities, convertible or exchangeable without payment of further
consideration, into an equal number of securities sold short. This kind of
short sale, which is referred to as one "against the box," may be entered into
by the Portfolio to, for example, lock in a sale price for a security the
Portfolio does not wish to sell immediately.
The Portfolio may also make short sales of a security it does not own, in
anticipation of a decline in the market value of that security. To complete
such a transaction, the Portfolio must borrow the security to make delivery to
the buyer. The Portfolio then is obligated to replace the security borrowed by
purchasing it at market price at the time of replacement. The price at such
time may be more or less than the price at which the security was sold by the
Portfolio. Until the security is replaced, the Portfolio is required to pay to
the lender any dividends or interest which accrue during the period of the
loan. To borrow the security, the Portfolio also may be required to pay a
premium, which would increase the cost of the security sold. The proceeds of
the short sale will be retained by the broker, to the extent necessary to meet
margin requirements, until the short position is closed out. Until the
Portfolio replaces a borrowed security, the Portfolio will segregate with its
custodian, or earmark, cash or other liquid assets at such a level that (i) the
amount segregated, or earmarked, plus the amount deposited with the broker as
collateral will equal the current value of the security sold short and (ii) the
amount segregated plus the amount deposited with the broker as collateral will
not be less than the market value of the security at the time it was sold
short. The Portfolio will incur a loss as a result of the short sale if the
price of the security increases between the date of the short sale and the date
on which the Portfolio replaces the borrowed security. The Portfolio will
realize a gain if the security declines in price between those dates. This
result is the opposite of what one would expect from a cash purchase of a long
position in a security. The amount of any gain will be decreased, and the
amount of any loss increased, by the amount of any premium, dividends or
interest the Portfolio may be required to pay in connection with a short sale.
No more than one third of the Portfolio's net assets will be, when added
together: (i) deposited as collateral for the obligation to replace securities
borrowed to effect short sales; and (ii) segregated in connection with short
sales.
24
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
K. SWAP AGREEMENTS - The Portfolio may enter into swap contracts. Swap
contracts are derivatives in the form of a contract or other similar
instrument, which is an agreement to exchange the return generated by one
instrument for the return generated by another instrument. The payment streams
are calculated by reference to a specified index and agreed upon notional
amount. The term "specified index" includes, but is not limited to, currencies,
fixed interest rates, prices and total return on interest rate indices, fixed
income indices, stock indices and commodity indices (as well as amounts derived
from arithmetic operations on these indices). For example, the Portfolio may
agree to swap the return generated by a fixed income index for the return
generated by a second fixed income index. The currency swaps in which the
Portfolio may enter will generally involve an agreement to pay interest streams
in one currency based on a specified index in exchange for receiving interest
streams denominated in another currency. Such swaps may involve initial and
final exchanges that correspond to the agreed upon notional amount. A Portfolio
will usually enter into swaps on a net basis, i.e., the two payment streams are
netted out in a cash settlement on the payment date or dates specified in the
instrument, with the Portfolio receiving or paying, as the case may be, only
the net amount of the two payments. The Portfolio's obligations under a swap
agreement will be accrued daily (offset against any amounts owing to the
Portfolio) and any accrued but unpaid net amounts owed to a swap counterparty
will be covered by designating the segregation, either on its records or with
the Trust's custodian, of cash or other liquid assets, to avoid any potential
leveraging of the Portfolio. To the extent that the net amounts owed to a swap
counterparty are covered with such liquid assets, the investment adviser
believes such obligations do not constitute "senior securities" under the 1940
Act and accordingly, the investment adviser will not treat them as being
subject to the Portfolio's borrowing restrictions. The Portfolio may enter into
OTC swap transactions with counterparties that are approved by the investment
adviser in accordance with guidelines established by the Board. These
guidelines provide for a minimum credit rating for each counterparty and
various credit enhancement techniques (for example, collateralization of
amounts due from counterparties) to limit exposure to counterparties that have
lower credit ratings.
The swaps in which the Portfolio may engage may include instruments under which
one party pays a single or periodic fixed amount(s) (or premium), and the other
party pays periodic amounts based on the movement of a specified index. Swaps
do not involve the delivery of securities, other underlying assets, or
principal. Accordingly, the risk of loss with respect to swaps is limited to
the net amount of payments the Portfolio is contractually obligated to make. If
the other party to a swap defaults, the Portfolio's risk of loss consists of
the net amount of payments that the Portfolio contractually is entitled to
receive. Currency swaps usually involve the delivery of the entire principal
value of one designated currency in exchange for the other designated currency.
Therefore, the entire principal value of a currency swap is subject to the risk
that the other party to the swap will default on its contractual delivery
obligations. If there is a default by the counterparty, the Portfolio may have
contractual remedies pursuant to the agreements related to the transaction. The
swap market has grown substantially in recent years with a large number of
banks and investment banking firms acting both as principals and as agents
utilizing standardized swap documentation. As a result, the swap market has
become relatively liquid. Certain swap transactions involve more recent
innovations for which standardized documentation has not yet been fully
developed and, accordingly, they are less liquid than traditional swap
transactions.
The use of swaps is a highly specialized activity that involves investment
techniques and risks different from those associated with ordinary portfolio
securities transactions. If an investment adviser is incorrect in its forecasts
of market values, interest rates, and currency exchange rates, the investment
performance of the Portfolio would be less favorable than it would have been if
this investment technique were not used.
Among the strategic transactions into which the Portfolio may enter are
interest rate swaps and the purchase or sale of related caps and floors. The
Portfolio may enter into these transactions primarily to manage its exposure to
interest rates, to protect against currency fluctuations, or to preserve a
return or spread on a particular investment. Interest rate swaps involve the
exchange by the Portfolio with another party of their respective commitments to
pay or receive interest, e.g., an exchange of floating rate payments for fixed
rate payments with respect to a notional amount of principal. A currency swap
is an agreement to exchange cash flows on a notional amount of two or more
currencies based on the relative value differential among them. An index swap
is an agreement to swap cash flows on a notional amount based on changes in the
values of the reference indices. The purchase of a cap entitles the purchaser,
to the extent that a specific index exceeds a predetermined interest rate, to
receive payments of interest on a notional principal amount from the party
selling such cap. The purchase of a floor entitles the purchaser to receive
payments on a notional principal amount from the party selling such floor to
the extent that a specified index falls below a predetermined interest rate or
amount.
In addition the Portfolio may enter into credit default swap contracts for
investment purposes. As the seller in a credit default swap contract, the
Portfolio would be required to pay the par (or other agreed upon) value of a
referenced debt obligation to the counterparty in the event of a default by a
third party, such as a U.S. or foreign corporate issuer, on the debt
obligation. In return, the Portfolio would receive from the counterparty a
periodic stream of payments over the term of the contract provided that no
event of default has occurred. If no default occurs, the Portfolio would keep
the stream of payments and would have no payment obligations. As the seller,
the Portfolio would be subject to investment exposure on the notional amount of
the swap. The Portfolio may also purchase credit default swap contracts in
order to hedge against the risk of default of debt securities held in its
portfolio, in which case the Portfolio would function as the counterparty
referenced in the preceding paragraph. This would involve the risk that the
investment may expire worthless and would only generate income in the event of
an actual default by the issuer of the underlying obligation (as opposed to a
credit downgrade or other indication of financial instability). It would also
involve credit risk--the seller may fail to satisfy its payment obligations to
the Portfolio in the event of a default. Swap agreements are marked daily by
prices that are retrieved from independent pricing platforms (e.g. Bloomberg)
or from brokers. Fair values will be provided if independent prices
25
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
are unavailable. The change in value, if any, is recorded as unrealized gain or
loss in the Statement of Operations. A liquidation payment received or made at
the termination of the swap is recorded as realized gain or loss in the
Statement of Operations. Net periodic payments are included as part of realized
gain (loss) on the Statement of Operations.
L. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
M. REVERSE REPURCHASE AGREEMENTS - The Portfolio may enter into reverse
repurchase agreements with brokers, dealers, domestic and foreign banks or
other financial institutions. In a reverse repurchase agreement, the Portfolio
sells a security and agrees to repurchase it at a mutually agreed upon date and
price, reflecting the interest rate effective for the term of the agreement. It
may also be viewed as the borrowing of money by the Portfolio. The Portfolio's
investment of the proceeds of a reverse repurchase agreement is the speculative
factor known as leverage. Leverage may cause any gains or losses of the
Portfolio to be magnified. The Portfolio may enter into a reverse repurchase
agreement only if the interest income from investment of the proceeds is
greater than the interest expense of the transaction and the proceeds are
invested for a period no longer than the term of the agreement. At the time the
Portfolio enters into a reverse repurchase agreement, it will earmark, or
establish and maintain a segregated account with an approved custodian
containing, cash or other liquid securities having a value not less than the
repurchase price (including accrued interest). If interest rates rise during a
reverse repurchase agreement, it may adversely affect the Portfolio's net asset
value. Reverse repurchase agreements are considered to be borrowings under the
1940 Act.
The assets contained in the segregated account will be marked-to-market daily
and additional assets will be placed in such account on any day in which the
assets fall below the repurchase price (plus accrued interest). The Portfolio's
liquidity and ability to manage its assets might be affected when it sets aside
cash or portfolio securities to cover such commitments. Reverse repurchase
agreements involve the risk that the market value of the securities retained in
lieu of sale may decline below the price of the securities the Portfolio has
sold but is obligated to repurchase. In the event the buyer of securities under
a reverse repurchase agreement files for bankruptcy or becomes insolvent, such
buyer or its trustee or receiver may receive an extension of time to determine
whether to enforce the Portfolio's obligation to repurchase the securities, and
a Portfolio's use of the proceeds of the reverse repurchase agreement may
effectively be restricted pending such decision.
N. FORWARD COMMITMENTS, WHEN-ISSUED AND DELAYED DELIVERY SECURITIES - The
Portfolio may purchase securities on a when-issued or delayed delivery basis
and may purchase or sell securities on a forward commitment basis. Settlement
of such transactions normally occurs within a month or more after the purchase
or sale commitment is made. The Portfolio may purchase securities under such
conditions only with the intention of actually acquiring them, but may enter
into a separate agreement to sell the securities before the settlement date.
Since the value of securities purchased may fluctuate prior to settlement, the
Portfolio may be required to pay more at settlement than the security is worth.
In addition, the purchaser is not entitled to any of the interest earned prior
to settlement. Upon making a commitment to purchase a security on a
when-issued, delayed delivery or forward commitment basis, the Portfolio will
hold liquid assets in a segregated account at the Portfolio's custodian bank
worth at least the equivalent of the amount due. The liquid assets will be
monitored on a daily basis and adjusted as necessary to maintain the necessary
value.
O. MORTGAGE DOLLAR ROLLS - PIMCO Total Return Portfolio may enter into dollar
rolls in which the Portfolio sells mortgage-backed securities for delivery in
the current month and simultaneously contracts to repurchase substantially
similar (same type, coupon and maturity) securities to settle on a specified
future date. During the roll period, the Portfolio forgoes principal and
interest paid on the securities. The Portfolio is compensated by a fee paid by
the counterparty, often in the form of a drop in the repurchase price of the
securities. Dollar rolls are accounted for as financing arrangements; the fee
is accrued into interest income ratably over the term of the dollar roll and
any gain or loss on the roll is deferred and realized upon disposition of the
rolled security. The average monthly balance of dollar rolls outstanding during
the period ended June 30, 2007 was approximately $1,163,887,870.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with Pacific Investment Management Company LLC, (the "Adviser") for investment
advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
26
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- --------------------
PIMCO Total Return Portfolio $7,833,146 0.50% All
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Net Increase
Shares Issued (Decrease)
Beginning Shares Through Dividend Shares in Shares Ending
Shares Sold Reinvestment Repurchased Outstanding Shares
- - ----------- ---------- ---------------- ----------- ------------ -----------
PIMCO Total Return Portfolio
Class A
06/30/2007 122,425,419 85,716,949 5,324,333 (4,435,381) 86,605,901 209,031,320
12/31/2006 78,649,719 53,129,683 2,633,766 (11,987,749) 43,775,700 122,425,419
Class B
06/30/2007 104,268,472 7,188,342 3,420,812 (10,861,988) (252,834) 104,015,638
12/31/2006 96,335,613 15,269,408 2,754,108 (10,090,657) 7,932,859 104,268,472
Class E
06/30/2007 11,293,528 384,591 380,625 (916,519) (151,303) 11,142,225
12/31/2006 12,709,648 669,480 351,918 (2,437,518) (1,416,120) 11,293,528
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
- - ------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
- - --------------- -------------- --------------- --------------
PIMCO Total Return Portfolio $12,217,613,670 $1,218,444,985 $11,270,770,433 $138,611,553
27
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
5. INVESTMENT TRANSACTIONS - CONTINUED
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation Depreciation Depreciation
- --------- -------------- ------------ ------------ --------------
PIMCO Total Return Portfolio $4,921,104,161 $11,959,129 $(33,763,393) $(21,804,264)
6. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
- - -------------------- ---------------------- -----------------------
2006 2005 2006 2005 2006 2005
- - ----------- -------- -------- ----------- ----------- -----------
PIMCO Total Return Portfolio $63,128,395 $488,706 $973,395 $13,857,166 $64,101,790 $14,345,872
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
- - ------------- ------------- ------------ ------------------ -----------
PIMCO Total Return Portfolio $105,978,367 $-- $3,454,001 $(11,799,340) $97,633,028
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
7. FUTURES CONTRACTS
The futures contracts outstanding as of June 30, 2007 and the description and
unrealized appreciation or depreciation were as follows:
Unrealized
Appreciation/
Description Expiration Date Number of Contracts Notional Value (Depreciation)
- ---------------------------------------------- ---------------------- ------------------- -------------- --------------
Euribor Future September 2007 - Long 390 $ 93,249,000 $ (689,317)
Euribor Future September 2008 - Long 1,856 442,145,600 (62,731)
LIBOR Futures March 2008 - Long 3,030 354,850,875 (4,657,021)
LIBOR Futures June 2008 - Long 925 108,305,938 (1,770,314)
LIBOR Futures December 2007 - Long 1,094 128,189,450 (1,645,588)
LIBOR Futures December 2008 - Long 1,231 144,150,100 (2,589,184)
LIBOR Futures September 2008 - Long 494 57,841,225 (1,028,151)
Libor Option Put March 2008 - Long 1,200 45,000 75,227
Option on Future December 2007 - Long 2,400 0 (30,091)
LIBOR Futures March 2008 - Long 2,110 39,563 52,910
EuroDollar Futures March 2009 - Long 2,559 606,099,150 (799,688)
EuroDollar Futures December 2008 - Long 3,117 738,573,150 799,025
EuroDollar Futures June 2008 - Long 11,810 2,799,708,125 (12,552,938)
EuroDollar Futures March 2008 - Long 296 70,144,600 74,000
EuroDollar Futures September 2008 - Long 6,250 1,481,484,375 491,875
EuroDollar Futures December 2007 - Long 1,891 447,765,163 141,825
U.S. Treasury Note 10 Year Futures September 2007 - Long 2,748 290,472,188 2,376,406
Germany Federal Republic Bonds 5 Year Futures September 2007 - Short (272) (28,851,040) 7,355
Germany Federal Republic Bonds 10 Year Futures September 2007 - Short (392) (43,414,000) (272,634)
U.S. Treasury Bond Futures September 2007 - Short (1,610) (173,477,500) (2,941,000)
28
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
8. FORWARD FOREIGN CURRENCY CONTRACTS
Forward Foreign Currency Contracts to Buy:
Net Unrealized
Value at In exchange Appreciation/
Settlement Date Contracts to Deliver 06/30/2007 for U.S. $ (Depreciation)
--------------- -------------------- ----------- ----------- --------------
07/19/2007 1,293,000 AUD $ 1,097,287 $ 1,088,724 $ 8,563
07/26/2007 1,180,000 AUD 1,001,211 998,280 2,931
07/03/2007 47,727,397 BRL 24,665,321 24,812,787 (147,466)
07/03/2007 48,295,236 BRL 24,958,778 25,107,999 (149,221)
07/05/2007 48,958,243 BRL 25,573,674 25,426,249 147,425
10/02/2007 6,171,600 BRL 3,152,986 2,960,000 192,986
10/02/2007 6,706,610 BRL 3,426,315 3,236,000 190,315
10/02/2007 6,463,906 BRL 3,302,322 3,095,000 207,322
10/02/2007 6,470,313 BRL 3,305,594 3,125,000 180,594
10/02/2007 10,474,884 BRL 5,351,475 5,064,000 287,475
10/02/2007 5,204,264 BRL 2,658,787 2,608,000 50,787
10/02/2007 14,379,598 BRL 7,346,340 7,316,000 30,340
10/02/2007 30,090,998 BRL 15,373,078 15,463,000 (89,922)
10/02/2007 31,416,053 BRL 16,050,031 16,173,000 (122,969)
10/02/2007 13,863,100 BRL 7,082,468 7,064,000 18,468
10/02/2007 14,368,080 BRL 7,340,455 7,312,000 28,455
10/02/2007 11,166,918 BRL 5,705,025 5,657,000 48,025
10/02/2007 12,148,383 BRL 6,206,442 6,162,000 44,442
10/04/2008 265,827 BRL 133,819 122,727 11,092
10/04/2008 8,500,000 BRL 4,278,937 4,027,482 251,455
10/04/2008 33,057,102 BRL 16,641,089 16,368,954 272,135
10/04/2008 21,827,600 BRL 10,988,108 11,080,000 (91,892)
03/13/2008 486,000,000 CLP 920,017 922,464 (2,447)
03/13/2008 52,600,000 CLP 99,574 99,621 (47)
11/21/2007 60,868,550 CNY 8,137,833 8,105,000 32,833
11/21/2007 58,112,151 CNY 7,769,316 7,739,000 30,316
11/26/2007 74,910,000 CNY 10,021,807 10,000,000 21,807
11/26/2007 71,636,433 CNY 9,583,854 9,563,000 20,854
01/10/2008 12,328,300 CNY 1,659,181 1,670,615 (11,434)
01/10/2008 50,985,200 CNY 6,861,746 6,922,164 (60,418)
01/10/2008 20,203,315 CNY 2,719,025 2,735,353 (16,328)
01/10/2008 27,698,910 CNY 3,727,805 3,753,240 (25,435)
01/10/2008 20,629,260 CNY 2,776,350 2,793,022 (16,672)
01/10/2008 20,629,260 CNY 2,776,350 2,794,611 (18,261)
01/10/2008 33,453,140 CNY 4,502,227 4,521,000 (18,773)
01/10/2008 25,805,968 CNY 3,473,047 3,488,000 (14,953)
29
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
8. FORWARD FOREIGN CURRENCY CONTRACTS - CONTINUED
Net Unrealized
Value at In exchange Appreciation/
Settlement Date Contracts to Deliver 06/30/2007 for U.S. $ (Depreciation)
--------------- -------------------- ----------- ----------- --------------
01/10/2008 25,595,136 CNY $ 3,444,673 $ 3,456,000 $ (11,327)
01/10/2008 26,667,926 CNY 3,589,052 3,601,000 (11,948)
01/10/2008 13,840,539 CNY 1,862,703 1,869,459 (6,756)
01/10/2008 71,430,000 CNY 9,613,271 9,624,739 (11,468)
09/06/2007 401,000 DKK 72,994 72,374 620
09/06/2007 2,124,000 GBP 4,256,762 4,240,350 16,412
09/06/2007 2,124,000 GBP 4,256,762 4,240,350 16,412
10/03/2007 9,823,200 INR 240,446 240,000 446
10/03/2007 16,213,400 INR 396,861 393,052 3,809
07/24/2007 2,893,754,000 JPY 23,522,439 23,920,858 (398,419)
07/18/2007 6,500,241,000 KRW 7,041,124 6,986,502 54,622
07/30/2007 5,383,201,050 KRW 5,833,949 5,807,747 26,202
08/27/2007 318,571,000 KRW 345,472 345,597 (125)
09/21/2007 454,926,000 KRW 493,610 483,804 9,806
09/21/2007 1,800,000,000 KRW 1,953,062 1,947,736 5,326
09/27/2007 2,103,175,300 KRW 2,282,314 2,277,643 4,671
03/13/2008 116,747,437 MXN 10,647,874 10,363,732 284,142
03/13/2008 15,600,000 MXN 1,422,788 1,402,046 20,742
03/13/2008 19,298,888 MXN 1,760,143 1,757,000 3,143
07/10/2007 8,440,432 MYR 2,445,722 2,464,000 (18,278)
10/17/2007 8,440,432 MYR 2,445,722 2,457,185 (11,463)
09/06/2007 49,884,000 NOK 8,471,039 8,325,517 145,522
07/21/2007 192,000 NZD 148,258 144,192 4,066
09/28/2007 2,373,693 PLN 853,555 854,000 (445)
03/13/2008 25,304,095 PLN 9,110,255 8,757,560 352,695
03/13/2008 3,200,000 PLN 1,152,099 1,163,865 (11,766)
09/19/2007 2,707,147 RUB 105,472 103,415 2,057
09/19/2007 2,707,147 RUB 105,472 103,504 1,968
11/02/2007 22,863,707 RUB 890,845 861,157 29,688
12/07/2007 213,483,240 RUB 8,317,390 8,142,000 175,390
12/10/2007 3,578,874 RUB 139,433 136,546 2,887
12/10/2007 4,013,180 RUB 156,354 153,175 3,179
12/10/2007 4,119,946 RUB 160,514 157,280 3,234
01/11/2008 37,911,100 RUB 1,476,921 1,468,000 8,921
01/11/2008 42,600,000 RUB 1,659,589 1,656,621 2,968
01/11/2008 38,959,470 RUB 1,517,763 1,518,000 (237)
07/03/2007 1,750,807 SGD 1,144,529 1,155,000 (10,471)
07/18/2007 12,111,550 SGD 7,927,411 8,018,239 (90,828)
30
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
8. FORWARD FOREIGN CURRENCY CONTRACTS - CONTINUED
Net Unrealized
Contracts to Value at In exchange Appreciation/
Settlement Date Deliver 06/30/2007 for U.S. $ (Depreciation)
--------------- -------------- ---------- ----------- --------------
08/07/2007 1,625,621 SGD $1,065,769 $1,079,000 $ (13,231)
08/07/2007 1,679,000 SGD 1,100,765 1,119,520 (18,755)
09/21/2007 659,000 SGD 433,507 434,754 (1,247)
09/21/2007 2,080,000 SGD 1,368,277 1,379,856 (11,579)
10/03/2007 1,051,481 SGD 692,279 688,000 4,279
10/03/2007 691,768 SGD 455,450 453,619 1,831
07/02/2007 21,808,952 TWD 666,244 657,887 8,357
08/02/2007 21,808,952 TWD 668,084 667,389 695
----------
$1,858,129
==========
Forward Foreign Currency Contracts to Sell:
Net Unrealized
Value at In exchange Appreciation/
Settlement Date Contracts to Deliver 06/30/2007 for U.S. $ (Depreciation)
--------------- -------------------- ------------ ------------ --------------
07/12/2007 3,125,999 AUD $ 2,653,312 $ 2,628,965 $ (24,347)
07/12/2007 202,000 AUD 171,455 169,481 (1,974)
10/02/2007 101,140,000 BRL 51,671,040 52,000,000 328,960
10/02/2007 48,700,000 BRL 24,880,162 25,000,000 119,838
08/09/2007 39,319,000 CAD 37,004,826 36,784,373 (220,453)
09/06/2007 169,594,000 DKK 30,871,145 30,803,349 (67,796)
07/26/2007 380,028,000 EUR 514,231,605 509,862,286 (4,369,319)
08/09/2007 29,941,000 GBP 60,031,323 59,775,859 (255,464)
07/24/2007 25,063,000 JPY 203,729 206,976 3,247
07/10/2007 8,440,432 MYR 2,445,722 2,441,548 (4,174)
09/06/2007 25,096,523 GBP 4,261,760 4,240,350 (21,410)
09/06/2007 25,087,849 NOK 4,260,287 4,240,350 (19,937)
07/05/2007 4,936,000 NZD 3,813,544 3,725,051 (88,493)
07/03/2007 1,059,038 SGD 692,310 688,000 (4,310)
07/03/2007 691,768 SGD 452,220 450,341 (1,879)
07/02/2007 21,808,952 TWD 666,244 665,414 (830)
-----------
$(4,628,341)
===========
AUD - Australian Dollar KRW - South Korean Won
BRL - Brazilian Real MXN - Mexican Peso
CAD - Canadian Dollar MYR - Malaysian Ringgit
CLP - Chilean Peso NOK - Norwegian Krone
CNY - China Yuan Renminbi NZD - New Zealand Dollar
DKK - Danish Krone PLN - Polish Zloty
EUR - Euro Dollar RUB - Russian Ruble
GBP - British Pound SGD - Singapore Dollar
INR - Indian Rupee TWD - Taiwan Dollar
JPY - Japenese Yen
31
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
9. OPTIONS
During the year ended June 30, 2007 the following options contracts were
written:
PIMCO Total Return Portfolio
---------------------------
Number of
Contracts Premium
------------ -----------
Options outstanding at December 31, 2006.......... 280,401,977 $ 3,795,179
Options written................................... 524,606,182 3,727,299
Options bought back............................... (87,600,000) (704,306)
Options closed and expired........................ (104,203,750) (2,471,786)
Options exercised................................. -- --
------------ -----------
Options outstanding at June 30, 2007.............. 613,204,409 $ 4,346,386
============ ===========
10. SWAP AGREEMENTS
Open swap agreements at June 30, 2007 were as follows:
Expiration
Notional Amount Date Description
- --------------- - ---------- -------------------------------------------------------------------------------------------------
8,700,000 USD 12/20/2007 Agreement with Morgan Stanley Capital Services, Inc., dated 12/15/2006 to receive the notional
amount multiplied by 0.26% and to pay semi-annually the notional amount of underlying
soveraign entities of the Russian Federation.
27,000,000 USD 3/20/2008 Agreement with Lehman Brothers Specials Financing , Inc. dated 12/22/2006 to receive the
notional amount multiplied by 0.055% and to pay quarterly the notional amount of underlying
entities of American International Group, Inc.
300,000 USD 12/20/2008 Agreement with J.P. Morgan Chase Bank dated 02/12/2004 to pay quarterly the notional
amount multiplied by 1.35% and to receive par in the event of default of underlying entities of
Capital One Financing Corporation 8.750% due 2/1/2007.
1,200,000 USD 12/20/2008 Agreement with Lehman Brothers dated 10/14/2003 to pay quarterly the notional amount
multiplied by 0.97% and to receive par in the event of default of underlying entities of Goodrich
Corporation 7.625% due 12/15/2012.
1,200,000 USD 12/20/2008 Agreement with Lehman Brothers dated 10/14/2003 to pay quarterly the notional amount
multiplied by 0.53% and to receive par in the event of default of underlying entities of
Lockheed Martin Corporation 8.20% due 12/1/2009.
1,200,000 USD 12/20/2008 Agreement with Lehman Brothers dated 10/14/2003 to pay quarterly the notional amount
multiplied by 0.48% and to receive par in the event of default of underlying entities of Northrop
Grumman Corporation 7.125% due 02/15/2011.
5,000,000 USD 12/20/2008 Agreement with Lehman Brothers dated 12/14/2006 to receive the notional amount multiplied
by 0.31% and to pay the semi-annually notional amount in underlying soveraign entities of
Russian Federation.
5,000,000 USD 12/20/2008 Agreement with Lehman Brothers dated 12/06/2006 to pay the sem-notional amount multiplied
by 0.29% and to received par in the event of default entity of Petroleos Mexicanos 9.500% due
9/15/2027.
7,000,000 USD 12/20/2008 Agreement with Lehman Brothers dated 12/18/2006 to receive the notional amount multiplied
by 0.40% and to pay the quarterly notional amount in underlying soveraign entities of Republic
of Indonesia.
5,300,000 USD 12/20/2008 Agreement with Lehman Brothers dated 12/14/2006 to receive the notional amount multiplied
by 0.32% and to pay the semi-annually notional amount in underlying soveraign entities of
Republic of Peru.
Description Value
- ------------------------------------------------------------------------------------------------- --------
Agreement with Morgan Stanley Capital Services, Inc., dated 12/15/2006 to receive the notional $ 1,105
amount multiplied by 0.26% and to pay semi-annually the notional amount of underlying
soveraign entities of the Russian Federation.
Agreement with Lehman Brothers Specials Financing , Inc. dated 12/22/2006 to receive the 950
notional amount multiplied by 0.055% and to pay quarterly the notional amount of underlying
entities of American International Group, Inc.
Agreement with J.P. Morgan Chase Bank dated 02/12/2004 to pay quarterly the notional (5,284)
amount multiplied by 1.35% and to receive par in the event of default of underlying entities of
Capital One Financing Corporation 8.750% due 2/1/2007.
Agreement with Lehman Brothers dated 10/14/2003 to pay quarterly the notional amount (15,896)
multiplied by 0.97% and to receive par in the event of default of underlying entities of Goodrich
Corporation 7.625% due 12/15/2012.
Agreement with Lehman Brothers dated 10/14/2003 to pay quarterly the notional amount (8,587)
multiplied by 0.53% and to receive par in the event of default of underlying entities of
Lockheed Martin Corporation 8.20% due 12/1/2009.
Agreement with Lehman Brothers dated 10/14/2003 to pay quarterly the notional amount (7,375)
multiplied by 0.48% and to receive par in the event of default of underlying entities of Northrop
Grumman Corporation 7.125% due 02/15/2011.
Agreement with Lehman Brothers dated 12/14/2006 to receive the notional amount multiplied 1,041
by 0.31% and to pay the semi-annually notional amount in underlying soveraign entities of
Russian Federation.
Agreement with Lehman Brothers dated 12/06/2006 to pay the sem-notional amount multiplied 1,932
by 0.29% and to received par in the event of default entity of Petroleos Mexicanos 9.500% due
9/15/2027.
Agreement with Lehman Brothers dated 12/18/2006 to receive the notional amount multiplied 103
by 0.40% and to pay the quarterly notional amount in underlying soveraign entities of Republic
of Indonesia.
Agreement with Lehman Brothers dated 12/14/2006 to receive the notional amount multiplied 2,992
by 0.32% and to pay the semi-annually notional amount in underlying soveraign entities of
Republic of Peru.
32
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
10. SWAP AGREEMENTS - CONTINUED
Expiration
Notional Amount Date Description
- --------------- - ---------- -------------------------------------------------------------------------------------------
4,700,000 USD 6/20/2010 Agreement with Morgan Stanley Capital Services, Inc., dated 04/13/07 to receive 3 months
the notional amount multiplied by 0.17% and to pay par in event of default of underlying
sovereign entities of the Glitnir Banki HF.
4,800,000 USD 6/20/2010 Agreement with Morgan Stanley Capital Services, Inc., dated 04/14/2005 to receive semi-
annually the notional amount multiplied by 2.10% and to pay par in event of default of
underlying sovereign entities of the Dow Jones CDX Emerging Markets Index.
500,000 USD 9/20/2010 Agreement with Merrill Lynch International dated 07/27/2005 to receive quarterly the
notional amount multiplied by 3.80% and to pay par in the event of default of Ford Motor
Credit Co. 7.00% due 10/1/2013.
300,000 USD 9/20/2010 Agreement with Lehman Brothers dated 10/7/2005 to pay semi-annually the notional
amount multiplied by 2.26% and to receive par in the event of default of Republic of Turkey
11.875% due 01/15/2030.
700,000 USD 10/20/2010 Agreement with Morgan Stanley Capital Services, Inc. dated 10/11/2005 to pay semi-
annually the notional amount multiplied by 2.20% and to receive par in the event of default
of Republic of Turkey 11.875% due 01/15/2030.
1,000,000 USD 10/20/2010 Agreement with Lehman Brothers dated 09/29/2005 to pay semi-annually the notional
amount multiplied by 2.11% and to receive par in the event of default of Republic of Turkey
11.875% due 01/15/2030.
5,000,000 USD 6/20/2011 Agreement with Merrill Lynch Capital Services, Inc., dated 11/30/2006 to pay the notional
amount multiplied by 0.51% and to receive quarterly notional amount in underlying entity
of Boston Scientific Corp.
5,000,000 USD 6/20/2011 Agreement with Merrill Lynch Capital Services, Inc., dated 12/01/2006 to pay the notional
amount multiplied by 1.29% and to receive quarterly notional amount in underlying entity
of GMAC LLC.
4,200,000 USD 9/20/2011 Agreement with J.P. Morgan Chase Bank, dated 11/09/2006 to pay the notional amount
multiplied by 0.46% and to receive quarterly notional amount in underlying entity of Health
Care Property Investors, Inc.
16,025,000 USD 12/20/2011 Agreement with Lehman Brothers Specials Financing , Inc. dated 09/28/2007 to pay the
notional amount multiplied by 3.25% and to receive the notional amount in the underlying
entity of Dow Jones CDX.NA.HY.7.
2,000,000 USD 1/20/2012 Agreement with Lehman Brothers Specials Financing , Inc. dated 11/19/2007 to pay the
notional amount multiplied by 0.39% and to receive semi-annually the notional amount in
the underlying entity of United Mexican States.
2,500,000 USD 3/20/2012 Agreement with Bank of America, N.A. dated 06/13/2007 to pay the notional amount
multiplied by 0.09% and to receive notional amount in the underlying entity of Consumers
Energy Company.
67,500,000 USD 12/19/2012 Agreement with Morgan Stanley Capital Services, Inc., dated 06/21/2007 to receive semi-
annually the notional amount multiplied by 5.00% and to pay the notional amount
multiplied by 3 month USD-LIBOR-BBA.
5,000,000 USD 6/20/2012 Agreement with Citibank, N.A., New York dated 06/18/2007 to pay the notional amount
multiplied by 1.03% and to receive notional amount in the underlying entity of Chesapeake
Energy Corporation.
10,000,000 USD 6/20/2012 Agreement with Citibank, N.A., New York, dated 06/12/07 to receive 3 months the notional
amount multiplied by 2.30% and to pay par in event of default of underlying sovereign
entities of the Nortel Networks Corporation.
Description Value
- ------------------------------------------------------------------------------------------- -----------
Agreement with Morgan Stanley Capital Services, Inc., dated 04/13/07 to receive 3 months $ 4,941
the notional amount multiplied by 0.17% and to pay par in event of default of underlying
sovereign entities of the Glitnir Banki HF.
Agreement with Morgan Stanley Capital Services, Inc., dated 04/14/2005 to receive semi- 211,369
annually the notional amount multiplied by 2.10% and to pay par in event of default of
underlying sovereign entities of the Dow Jones CDX Emerging Markets Index.
Agreement with Merrill Lynch International dated 07/27/2005 to receive quarterly the 16,645
notional amount multiplied by 3.80% and to pay par in the event of default of Ford Motor
Credit Co. 7.00% due 10/1/2013.
Agreement with Lehman Brothers dated 10/7/2005 to pay semi-annually the notional (11,533)
amount multiplied by 2.26% and to receive par in the event of default of Republic of Turkey
11.875% due 01/15/2030.
Agreement with Morgan Stanley Capital Services, Inc. dated 10/11/2005 to pay semi- (25,834)
annually the notional amount multiplied by 2.20% and to receive par in the event of default
of Republic of Turkey 11.875% due 01/15/2030.
Agreement with Lehman Brothers dated 09/29/2005 to pay semi-annually the notional (34,207)
amount multiplied by 2.11% and to receive par in the event of default of Republic of Turkey
11.875% due 01/15/2030.
Agreement with Merrill Lynch Capital Services, Inc., dated 11/30/2006 to pay the notional 12,501
amount multiplied by 0.51% and to receive quarterly notional amount in underlying entity
of Boston Scientific Corp.
Agreement with Merrill Lynch Capital Services, Inc., dated 12/01/2006 to pay the notional 71,139
amount multiplied by 1.29% and to receive quarterly notional amount in underlying entity
of GMAC LLC.
Agreement with J.P. Morgan Chase Bank, dated 11/09/2006 to pay the notional amount (20,720)
multiplied by 0.46% and to receive quarterly notional amount in underlying entity of Health
Care Property Investors, Inc.
Agreement with Lehman Brothers Specials Financing , Inc. dated 09/28/2007 to pay the (192,489)
notional amount multiplied by 3.25% and to receive the notional amount in the underlying
entity of Dow Jones CDX.NA.HY.7.
Agreement with Lehman Brothers Specials Financing , Inc. dated 11/19/2007 to pay the 4,656
notional amount multiplied by 0.39% and to receive semi-annually the notional amount in
the underlying entity of United Mexican States.
Agreement with Bank of America, N.A. dated 06/13/2007 to pay the notional amount 19,228
multiplied by 0.09% and to receive notional amount in the underlying entity of Consumers
Energy Company.
Agreement with Morgan Stanley Capital Services, Inc., dated 06/21/2007 to receive semi- (1,480,399)
annually the notional amount multiplied by 5.00% and to pay the notional amount
multiplied by 3 month USD-LIBOR-BBA.
Agreement with Citibank, N.A., New York dated 06/18/2007 to pay the notional amount (49,639)
multiplied by 1.03% and to receive notional amount in the underlying entity of Chesapeake
Energy Corporation.
Agreement with Citibank, N.A., New York, dated 06/12/07 to receive 3 months the notional (225,931)
amount multiplied by 2.30% and to pay par in event of default of underlying sovereign
entities of the Nortel Networks Corporation.
33
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
10. SWAP AGREEMENTS - CONTINUED
Expiration
Notional Amount Date Description
- --------------- - ---------- ---------------------------------------------------------------------------------------------
8,300,000 USD 6/20/2012 Agreement with Bank of America, N.A. dated 04/27/2007 to pay the notional amount
multiplied by 0.53% and to receive notional amount in the underlying entity of
Globalsantafe Corporation.
9,400,000 USD 6/20/2012 Agreement with Citibank, N.A., New York dated 04/19/2007 to pay the notional amount
multiplied by 2.75% and to receive notional amount in the underlying entity of
CDX.NA.HY.8.
4,500,000 USD 6/20/2012 Agreement with Citibank, N.A., New York,, Inc. dated 05/21/2007 to pay the notional
amount multiplied by 1.00% and to receive the notional amount in the underlying entity of
Reynolds American Inc.
1,300,000 USD 6/20/2012 Agreement with Bank of America, N.A. dated 05/22/2007 to pay the notional amount
multiplied by 1.00% and to receive notional amount in the underlying entity of Chesapeake
Energy Corporation.
1,300,000 USD 6/20/2012 Agreement with Morgan Stanley Capital Services Inc. dated 05/22/2007 to pay the notional
amount multiplied by 1.00% and to receive notional amount in the underlying entity of
Chesapeake Energy Corporation.
2,000,000 USD 6/20/2012 Agreement with J.P. Morgan Chase Bank dated 3/21/2007 to receive quarterly the notional
amount multiplied by 0.43% and to pay par in the event of default of underlying soveraign
entities of the International Paper Company 5.850% due 10/30/2012.
4,000,000 USD 6/20/2012 Agreement with Morgan Stanley Capital Services, Inc. dated 03/21/2007 to pay the notional
amount multiplied by 0.475% and to receive quarterly the notional amount in the
underlying entity of International Paper Company.
5,000,000 USD 9/20/2012 Agreement with Lehman Brothers Specials Financing , Inc. dated 06/25/2007 to receive the
notional amount multiplied by 2.850% and to pay quarterly the notional amount of
underlying entities of Nortel Networks Corporation.
10,000,000 USD 12/19/2012 Agreement with Citibank, N.A., New York, dated 06/16/2007 to receive semi-annually the
notional amount multiplied by 4.283% and to pay the notional amount multiplied by
6 month LIBOR (EURO).
109,700,000 USD 12/19/2012 Agreement with Lehman Brothers Specials Financing , Inc. dated 01/19/2007 to receive
semi-annually the notional amount multiplied by 5.00% and to pay the semi-annually
notional amount multiplied by the 3 month USD-LOBOR-BBA.
2,500,000 USD 3/20/2013 Agreement with Morgan Stanley Capital Services, Inc. dated 11/01/2006 to pay the notional
amount multiplied by 0.15% and to receive quarterly the notional amount in the underlying
entity of Wyeth.
60,000,000 USD 6/20/2014 Agreement with Morgan Stanley Capital Services, Inc. dated 01/25/2007 to receive semi-
annually the notional amount multiplied by 2.50% and to pay semi-annually the notional
amount multiplied by 3 month JPY-LIBOR-BBA.
207,900 USD 6/20/2014 Agreement with Bank Of America, N.A. dated 02/01/2007 to receive semi-annually the
notional amount multiplied by 5.00% and to pay the semi-annually notional amount
multiplied by the 3 month USD-LOBOR-BBA.
397,000,000 USD 12/19/2014 Agreement with Morgan Stanley Capital Services, Inc. dated 06/08/2007 to receive semi-
annually the notional amount multiplied by 5.00% and to pay the semi-annually notional
amount multiplied by the 3 month USD-LOBOR-BBA.
17,400,000 USD 12/20/2016 Agreement with Morgan Stanley Capital Services, Inc. dated 11/09/2006 to pay the notional
amount multiplied by 0.65% and to receive par in the event of default of underlying entity of
the Dow Jones CDA.Na IG.7.
3,900,000 USD 12/20/2016 Agreement with Lehman Brothers Specials Financing , Inc. dated 11/01/2006 to pay the
notional amount multiplied by 0.34% and to receive quarterly notional amount in the
underlying entity of Morgan Stanley.
Description Value
- --------------------------------------------------------------------------------------------- -----------
Agreement with Bank of America, N.A. dated 04/27/2007 to pay the notional amount $ (54,160)
multiplied by 0.53% and to receive notional amount in the underlying entity of
Globalsantafe Corporation.
Agreement with Citibank, N.A., New York dated 04/19/2007 to pay the notional amount 167,182
multiplied by 2.75% and to receive notional amount in the underlying entity of
CDX.NA.HY.8.
Agreement with Citibank, N.A., New York,, Inc. dated 05/21/2007 to pay the notional (50,444)
amount multiplied by 1.00% and to receive the notional amount in the underlying entity of
Reynolds American Inc.
Agreement with Bank of America, N.A. dated 05/22/2007 to pay the notional amount (14,573)
multiplied by 1.00% and to receive notional amount in the underlying entity of Chesapeake
Energy Corporation.
Agreement with Morgan Stanley Capital Services Inc. dated 05/22/2007 to pay the notional (14,573)
amount multiplied by 1.00% and to receive notional amount in the underlying entity of
Chesapeake Energy Corporation.
Agreement with J.P. Morgan Chase Bank dated 3/21/2007 to receive quarterly the notional (6,738)
amount multiplied by 0.43% and to pay par in the event of default of underlying soveraign
entities of the International Paper Company 5.850% due 10/30/2012.
Agreement with Morgan Stanley Capital Services, Inc. dated 03/21/2007 to pay the notional (21,328)
amount multiplied by 0.475% and to receive quarterly the notional amount in the
underlying entity of International Paper Company.
Agreement with Lehman Brothers Specials Financing , Inc. dated 06/25/2007 to receive the (20,761)
notional amount multiplied by 2.850% and to pay quarterly the notional amount of
underlying entities of Nortel Networks Corporation.
Agreement with Citibank, N.A., New York, dated 06/16/2007 to receive semi-annually the (226,033)
notional amount multiplied by 4.283% and to pay the notional amount multiplied by
6 month LIBOR (EURO).
Agreement with Lehman Brothers Specials Financing , Inc. dated 01/19/2007 to receive (2,405,922)
semi-annually the notional amount multiplied by 5.00% and to pay the semi-annually
notional amount multiplied by the 3 month USD-LOBOR-BBA.
Agreement with Morgan Stanley Capital Services, Inc. dated 11/01/2006 to pay the notional (1,712)
amount multiplied by 0.15% and to receive quarterly the notional amount in the underlying
entity of Wyeth.
Agreement with Morgan Stanley Capital Services, Inc. dated 01/25/2007 to receive semi- (1,971,136)
annually the notional amount multiplied by 2.50% and to pay semi-annually the notional
amount multiplied by 3 month JPY-LIBOR-BBA.
Agreement with Bank Of America, N.A. dated 02/01/2007 to receive semi-annually the (6,829,985)
notional amount multiplied by 5.00% and to pay the semi-annually notional amount
multiplied by the 3 month USD-LOBOR-BBA.
Agreement with Morgan Stanley Capital Services, Inc. dated 06/08/2007 to receive semi- 13,382,934
annually the notional amount multiplied by 5.00% and to pay the semi-annually notional
amount multiplied by the 3 month USD-LOBOR-BBA.
Agreement with Morgan Stanley Capital Services, Inc. dated 11/09/2006 to pay the notional 47,405
amount multiplied by 0.65% and to receive par in the event of default of underlying entity of
the Dow Jones CDA.Na IG.7.
Agreement with Lehman Brothers Specials Financing , Inc. dated 11/01/2006 to pay the 36,169
notional amount multiplied by 0.34% and to receive quarterly notional amount in the
underlying entity of Morgan Stanley.
34
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
10. SWAP AGREEMENTS - CONTINUED
Expiration
Notional Amount Date Description
- --------------- - ---------- -------------------------------------------------------------------------------------------
31,400,000 USD 12/20/2016 Agreement with Bank of America, N.A. dated 09/21/2006 to pay the notional amount
multiplied by 0.65% and to receive notional amount in the underlying entity of Dow Jones
CDX.N.A.
72,000,000 USD 6/20/2017 Agreement with Bank of America N.A., dated 12/07/2006 to pay semi-annually the notional
amount multiplied by 5.00% and to receive the notional amount multiplied by 3 month
USD-LIBOR-BBA.
20,000,000 USD 6/20/2017 Agreement with Morgan Stanley Capital Services Inc dated 06/08/07 to pay the notional
amount multiplied by 0.97% and to receive notional amount in the underlying entity of
Weyerhaeuser Company.
13,000,000 USD 6/20/2017 Agreement with Morgan Stanley Capital Services Inc dated 06/08/07 to pay the notional
amount multiplied by 0.99% and to receive notional amount in the underlying entity of
Weyerhaeuser Company.
4,800,000 USD 6/20/2017 Agreement with Lehman Brothers Specials Financing , Inc. dated 04/13/2007 to pay the
notional amount multiplied by 1.25% and to receive the notional amount in the underlying
entity of Reynolds American, Inc.
9,700,000 USD 6/20/2017 Agreement with J.P. Morgan Chase Bank, Inc. dated 04/12/2007 to pay the notional
amount multiplied by 0.95% and to receive the notional amount in the underlying entity of
Liz Claiborne, Inc.
8,000,000 USD 6/20/2017 Agreement with Bank of America, N.A. dated 06/08/2007 to pay the notional amount
multiplied by 0.95% and to receive notional amount in the underlying entity of Federated
Department Stores, Inc.
5,400,000 USD 6/20/2017 Agreement with Citibank, N.A., New York, dated 05/01/07 to receive 3 months the notional
amount multiplied by 0.47% and to pay par in event of default of underlying sovereign
entities of the Diamond Offshore Drilling, INC.
5,800,000 USD 6/20/2017 Agreement with J.P. Morgan Chase Bank, dated 06/18/2007 to pay semi-annually the
notional amount multiplied by 5.00% and to pay semi-annually the notional amount
multiplied by 3 month USD-LIBOR-BBA.
107,700,000 USD 12/19/2017 Agreement with J.P. Morgan Chase Bank, dated 01/27/2007 to pay semi-annually the
notional amount multiplied by 5.00% and to pay semi-annually the notional amount
multiplied by 3 month USD-LIBOR-BBA.
22,500,000 USD 6/20/2037 Agreement with Morgan Stanley Capital Services, Inc., dated 11/29/2006 to receive the
notional amount and to pay semi-annually the notional amount multiplied by 3 month
USD-LIBOR-BBA.
176,300,000 USD 12/19/2037 Agreement with Morgan Stanley Capital Services, Inc., dated 06/14/2007 to receive semi-
annually the notional amount multiplied by 5.00% and to pay the notional amount
multiplied by 3 month USD-LIBOR-BBA.
307,300,000 USD 12/19/2037 Agreement with Bank of America, N.A., dated 06/08/2007 to receive semi-annually the
notional amount multiplied by 5.00% and to pay the notional amount multiplied by 3
month USD-LIBOR-BBA.
4,300,000 USD 7/25/2045 Agreement with Lehman Brothers dated 01/24/06 to pay quarterly the notional amount
multiplied by 0.54% and to receive par in event of default of underlying sovereign entities
of the ABX.HE.A.06-01.
5,000,000 USD 5/6/2046 Agreement with Bank of America N.A., dated 12/21/2006 to receive annually the notional
amount multiplied by 1.75% and to pay the notional amount multiplied by 3 month USD-
LIBOR plus 1.35%.
Description Value
- ------------------------------------------------------------------------------------------- ------------
Agreement with Bank of America, N.A. dated 09/21/2006 to pay the notional amount $ 85,546
multiplied by 0.65% and to receive notional amount in the underlying entity of Dow Jones
CDX.N.A.
Agreement with Bank of America N.A., dated 12/07/2006 to pay semi-annually the notional 3,641,941
amount multiplied by 5.00% and to receive the notional amount multiplied by 3 month
USD-LIBOR-BBA.
Agreement with Morgan Stanley Capital Services Inc dated 06/08/07 to pay the notional 47,176
amount multiplied by 0.97% and to receive notional amount in the underlying entity of
Weyerhaeuser Company.
Agreement with Morgan Stanley Capital Services Inc dated 06/08/07 to pay the notional 11,071
amount multiplied by 0.99% and to receive notional amount in the underlying entity of
Weyerhaeuser Company.
Agreement with Lehman Brothers Specials Financing , Inc. dated 04/13/2007 to pay the 12,258
notional amount multiplied by 1.25% and to receive the notional amount in the underlying
entity of Reynolds American, Inc.
Agreement with J.P. Morgan Chase Bank, Inc. dated 04/12/2007 to pay the notional 279,244
amount multiplied by 0.95% and to receive the notional amount in the underlying entity of
Liz Claiborne, Inc.
Agreement with Bank of America, N.A. dated 06/08/2007 to pay the notional amount 214,616
multiplied by 0.95% and to receive notional amount in the underlying entity of Federated
Department Stores, Inc.
Agreement with Citibank, N.A., New York, dated 05/01/07 to receive 3 months the notional 8,753
amount multiplied by 0.47% and to pay par in event of default of underlying sovereign
entities of the Diamond Offshore Drilling, INC.
Agreement with J.P. Morgan Chase Bank, dated 06/18/2007 to pay semi-annually the 296,800
notional amount multiplied by 5.00% and to pay semi-annually the notional amount
multiplied by 3 month USD-LIBOR-BBA.
Agreement with J.P. Morgan Chase Bank, dated 01/27/2007 to pay semi-annually the 5,511,271
notional amount multiplied by 5.00% and to pay semi-annually the notional amount
multiplied by 3 month USD-LIBOR-BBA.
Agreement with Morgan Stanley Capital Services, Inc., dated 11/29/2006 to receive the (767,250)
notional amount and to pay semi-annually the notional amount multiplied by 3 month
USD-LIBOR-BBA.
Agreement with Morgan Stanley Capital Services, Inc., dated 06/14/2007 to receive semi- (20,169,855)
annually the notional amount multiplied by 5.00% and to pay the notional amount
multiplied by 3 month USD-LIBOR-BBA.
Agreement with Bank of America, N.A., dated 06/08/2007 to receive semi-annually the (35,157,099)
notional amount multiplied by 5.00% and to pay the notional amount multiplied by 3
month USD-LIBOR-BBA.
Agreement with Lehman Brothers dated 01/24/06 to pay quarterly the notional amount 155,875
multiplied by 0.54% and to receive par in event of default of underlying sovereign entities
of the ABX.HE.A.06-01.
Agreement with Bank of America N.A., dated 12/21/2006 to receive annually the notional 1,154,315
amount multiplied by 1.75% and to pay the notional amount multiplied by 3 month USD-
LIBOR plus 1.35%.
35
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
10. SWAP AGREEMENTS - CONTINUED
Expiration
Notional Amount Date Description
- --------------- - ---------- -------------------------------------------------------------------------------------------
1,600,000 USD 12/10/2046 Agreement with Merrill Lynch Capital Services, Inc., dated 12/07/2006 to pay monthly the
notional amount multiplied by 2.0299% and to received par in the event of default of
Topanga 2006-2A B 1ML+145 144A 6.77%, due 12/10/2046.
190,100,000 BRL 1/2/2012 Agreement with Morgan Stanley Capital Services, Inc. dated 05/16/07 to receive annually the
notional amount multiplied by 10.115% and pay semi-annually multiplied by the BRL PTAX
(BRL09).
16,200,000 CAD 6/20/2017 Agreement with Merrill Lynch Capital Services, Inc., dated 06/08/2007 to receive semi-
annually the notional amount multiplied by 5.50% and to pay semi-annually the notional
amount multiplied by the 3 month CAD-BA-CDOR.
1,600,000 EUR 3/20/2011 Agreement with Morgan Stanley Capital Services, Inc., dated 06/12/2007 to receive semi-
annually the notional amount multiplied by 2.30% and to pay the notional amount
multiplied by 3 month BRL-BRR-CDI.
21,700,000 EUR 4/10/2012 Agreement with J.P. Morgan Chase Bank dated 03/13/2007 to receive annually the notional
amount multiplied by ([1+1.9475%)^5] - 1)* Notional and pay annually notional amount
multiplied [(Index Final/Index Initial) - 1].
2,400,000 EUR 3/15/2012 Agreement with Lehman Brothers dated 03/13/2007 to receive annually the notional
amount multiplied by ([1+1.9475%)^5] - 1)* Notional and pay annually notional amount
multiplied [(Index Final/Index Initial) - 1].
10,400,000 EUR 3/15/2012 Agreement with J.P. Morgan Chase Bank dated 03/21/2007 to receive annually the notional
amount multiplied by ([1+1.9475%)^5] - 1)* Notional and pay annually notional amount
multiplied [(FRCPxtob End Index/FRCPxtob Start Index) - 1]*Notional .
91,100,000 EUR 6/16/2014 Agreement with Morgan Stanley Capital Services, Inc. dated 03/16/2005 to receive annually
the notional amount multiplied by 5.00% and pay semi-annually notional amount multiplied
by EUR-EURIBOR-Telerate.
2,600,000 EUR 6/17/2015 Agreement with J.P. Morgan Chase Bank dated 6/21/2005 to receive annually the notional
amount multiplied by the 6 month EUR-EURIBOR-Telerate and to pay annually the notional
amount multiplied by 4.50%.
25,000,000 EUR 12/15/2014 Agreement with Morgan Stanley Capital Services, Inc. dated 07/18/2006 to pay annually the
notional amount multiplied by 4.00% and receive Annually the notional amount multiplied
by 3 month EUR-EURIBOR-Telerate.
26,700,000 EUR 6/18/2034 Agreement with Morgan Stanley Capital Services, Inc. dated 02/07/2006 to receive annually
the notional amount multiplied by .00% and pay Annually the notional amount multiplied by
6 month EUR-EURIBOR-Telerate.
16,200,000 GBP 6/15/2016 Agreement with Merrill Lynch Capital Services, Inc., dated 11/15/2005 to receive semi-
annually the notional amount multiplied by 5.00% and to pay semi-annually the notional
amount multiplied by the 6 month GBP-LIBOR-BBA.
4,700,000 GBP 9/15/2015 Agreement with Morgan Stanley Capital Services, Inc. dated 06/16/206 to receive semi-
annually the notional amount multiplied by 5.00% and pay semi-annually multiplied by the
6 month GBP-LIBOR-BBA.
700,000 GBP 6/18/2034 Agreement with Morgan Stanley Capital Services, Inc. dated 11/23/2005 to receive semi-
annually the notional amount multiplied by 5.00% and pay semi-annually multiplied by the
6 month GBP-LIBOR-BBA.
14,100,000 GBP 6/18/2034 Agreement with Merrill Lynch Capital Services, Inc., dated 11/15/2005 to receive semi-
annually the notional amount multiplied by the 6 month GBP-LIBOR-BBA and pay semi-
annually the notional amount multiplied by 5.00%
25,000,000 GBP 12/15/2035 Agreement with Morgan Stanley Capital Services, Inc. dated 11/3/2005 to receive semi-
annually the notional amount multiplied by 6 month GBP-LIBOR-BBA and to pay semi-
annually notional amount multiplied by 4.00%.
Description Value
- ------------------------------------------------------------------------------------------- -----------
Agreement with Merrill Lynch Capital Services, Inc., dated 12/07/2006 to pay monthly the $ 328,741
notional amount multiplied by 2.0299% and to received par in the event of default of
Topanga 2006-2A B 1ML+145 144A 6.77%, due 12/10/2046.
Agreement with Morgan Stanley Capital Services, Inc. dated 05/16/07 to receive annually the (1,664,977)
notional amount multiplied by 10.115% and pay semi-annually multiplied by the BRL PTAX
(BRL09).
Agreement with Merrill Lynch Capital Services, Inc., dated 06/08/2007 to receive semi- (89,109)
annually the notional amount multiplied by 5.50% and to pay semi-annually the notional
amount multiplied by the 3 month CAD-BA-CDOR.
Agreement with Morgan Stanley Capital Services, Inc., dated 06/12/2007 to receive semi- 647
annually the notional amount multiplied by 2.30% and to pay the notional amount
multiplied by 3 month BRL-BRR-CDI.
Agreement with J.P. Morgan Chase Bank dated 03/13/2007 to receive annually the notional (220,089)
amount multiplied by ([1+1.9475%)^5] - 1)* Notional and pay annually notional amount
multiplied [(Index Final/Index Initial) - 1].
Agreement with Lehman Brothers dated 03/13/2007 to receive annually the notional (11,144)
amount multiplied by ([1+1.9475%)^5] - 1)* Notional and pay annually notional amount
multiplied [(Index Final/Index Initial) - 1].
Agreement with J.P. Morgan Chase Bank dated 03/21/2007 to receive annually the notional (91,740)
amount multiplied by ([1+1.9475%)^5] - 1)* Notional and pay annually notional amount
multiplied [(FRCPxtob End Index/FRCPxtob Start Index) - 1]*Notional .
Agreement with Morgan Stanley Capital Services, Inc. dated 03/16/2005 to receive annually 5,855,833
the notional amount multiplied by 5.00% and pay semi-annually notional amount multiplied
by EUR-EURIBOR-Telerate.
Agreement with J.P. Morgan Chase Bank dated 6/21/2005 to receive annually the notional 76,612
amount multiplied by the 6 month EUR-EURIBOR-Telerate and to pay annually the notional
amount multiplied by 4.50%.
Agreement with Morgan Stanley Capital Services, Inc. dated 07/18/2006 to pay annually the 1,728,062
notional amount multiplied by 4.00% and receive Annually the notional amount multiplied
by 3 month EUR-EURIBOR-Telerate.
Agreement with Morgan Stanley Capital Services, Inc. dated 02/07/2006 to receive annually 1,706,120
the notional amount multiplied by .00% and pay Annually the notional amount multiplied by
6 month EUR-EURIBOR-Telerate.
Agreement with Merrill Lynch Capital Services, Inc., dated 11/15/2005 to receive semi- (2,165,869)
annually the notional amount multiplied by 5.00% and to pay semi-annually the notional
amount multiplied by the 6 month GBP-LIBOR-BBA.
Agreement with Morgan Stanley Capital Services, Inc. dated 06/16/206 to receive semi- (609,132)
annually the notional amount multiplied by 5.00% and pay semi-annually multiplied by the
6 month GBP-LIBOR-BBA.
Agreement with Morgan Stanley Capital Services, Inc. dated 11/23/2005 to receive semi- (29,059)
annually the notional amount multiplied by 5.00% and pay semi-annually multiplied by the
6 month GBP-LIBOR-BBA.
Agreement with Merrill Lynch Capital Services, Inc., dated 11/15/2005 to receive semi- (595,501)
annually the notional amount multiplied by the 6 month GBP-LIBOR-BBA and pay semi-
annually the notional amount multiplied by 5.00%
Agreement with Morgan Stanley Capital Services, Inc. dated 11/3/2005 to receive semi- 2,387,866
annually the notional amount multiplied by 6 month GBP-LIBOR-BBA and to pay semi-
annually notional amount multiplied by 4.00%.
36
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
10. SWAP AGREEMENTS - CONTINUED
Expiration
Notional Amount Date Description
- --------------- - ---------- ----------------------------------------------------------------------------------------
560,000,000 MXN 5/14/2009 Agreement with Citibank, N.A., New York, dated 05/16/2007 to receive the notional amount
multiplied by 7.91% and to pay the notional amount multiplied by the 28 days MXN-TIIE-
BANXICO.
831,000,000 MXN 5/14/2009 Agreement with Morgan Stanley Capital Service, dated 05/16/2007 to receive the notional
amount multiplied by 7.91% and to pay the notional amount multiplied by the 28 days
MXN-TIIE-BANXICO.
78,900,000 MXN 9/5/2016 Agreement with Merrill Lynch Capital Services, Inc., dated 11/15/2006 to receive the
notional amount multiplied by 8.72% and to pay the notional amount multiplied by the 28
days MXN-TIIE-BANXICO.
352,400 MXN 11/4/2016 Agreement with Merrill Lynch Capital Services, Inc., dated 12/01/2006 to receive the
notional amount multiplied by 8.17% and to pay the notional amount multiplied by the 28
days MXN-TIIE-BANXICO.
72,700,000 MXN 11/4/2016 Agreement with Merrill Lynch Capital Services, Inc., dated 03/09/2007 to receive the
notional amount multiplied by 8.17% and to pay the notional amount multiplied by the 28
days MXN-TIIE-BANXICO.
272,000,000 MXN 11/4/2016 Agreement with Citibank, N.A., New York, dated 01/27/2007 to receive the notional amount
multiplied by 8.17% and to pay the notional amount multiplied by the 28 days MXN-TIIE-
BANXICO.
Description Value
- ---------------------------------------------------------------------------------------- ------------
Agreement with Citibank, N.A., New York, dated 05/16/2007 to receive the notional amount $ (16,019)
multiplied by 7.91% and to pay the notional amount multiplied by the 28 days MXN-TIIE-
BANXICO.
Agreement with Morgan Stanley Capital Service, dated 05/16/2007 to receive the notional (20,811)
amount multiplied by 7.91% and to pay the notional amount multiplied by the 28 days
MXN-TIIE-BANXICO.
Agreement with Merrill Lynch Capital Services, Inc., dated 11/15/2006 to receive the 303,970
notional amount multiplied by 8.72% and to pay the notional amount multiplied by the 28
days MXN-TIIE-BANXICO.
Agreement with Merrill Lynch Capital Services, Inc., dated 12/01/2006 to receive the 179,144
notional amount multiplied by 8.17% and to pay the notional amount multiplied by the 28
days MXN-TIIE-BANXICO.
Agreement with Merrill Lynch Capital Services, Inc., dated 03/09/2007 to receive the 36,957
notional amount multiplied by 8.17% and to pay the notional amount multiplied by the 28
days MXN-TIIE-BANXICO.
Agreement with Citibank, N.A., New York, dated 01/27/2007 to receive the notional amount 138,272
multiplied by 8.17% and to pay the notional amount multiplied by the 28 days MXN-TIIE-
BANXICO.
------------
$(37,159,531)
============
EUR - Euro Dollar
GBP - British Pounds
MXN - Mexican Peso
USD - United States Dollar
11. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
12. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
37
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
12. RECENT ACCOUNTING PRONOUNCEMENTS - CONTINUED
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
38
MET INVESTORS SERIES TRUST
Pioneer
Fund Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
PIONEER FUND PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY PIONEER INVESTMENT MANAGEMENT, INC.
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
FIRST HALF MARKET REVIEW
After having eked out a marginally positive return in the first quarter, the
S&P 500(R) Index posted a solid gain in the second quarter despite slower GDP
growth and rising bond yields. The S&P 500(R) Index returned 7% in the first
half, with its energy (up 17%), materials (16%), and telecom services
(15%) leading while the financials (-1%) and consumer discretionary
(3%) sectors were its worst performers.
SECOND QUARTER PERFORMANCE REVIEW
Pioneer Fund Portfolio shares returned 7.90% at net asset value in the first
half of 2007, compared to 6.96% for the benchmark S&P 500(R) Index.
Returns benefited most from good stock selection in the industrials, materials,
and consumer discretionary sectors and an underweight in financials.
In the consumer discretionary sector, efficiency and building parts supplier
Johnson Controls returned 36% primarily driven by profits in its Building
Controls business, which has benefited from the strength of U.S. construction
spending.
In industrials, heavy truck maker PACCAR, farm equipment maker Deere, and
Caterpillar truckmaker PACCAR each returned over 25% on continued strong
business conditions and operating results. All three are benefiting from strong
demand--PACCAR due to a strong overall economy, Deere from an increase in farm
equipment demand linked to rising corn prices and ethanol demand, and
Caterpillar from strength in a number of its end markets.
In the materials sector, diversified mining company Rio Tinto and aluminum
producer Alcoa each returned over 35%. Merger and acquisition activity in the
mining industry continues, stimulating investor interest in the group, and
metal prices remain firm.
The largest drag on performance was the energy sector, as rising oil prices
penalized both our underweight of the energy sector and selection strategy
within the sector. We have been surprised by the continuing strength in oil
prices, and have not been positioned for rising prices.
CURRENT OUTLOOK AND POSITIONING
The U.S. economy continues to behave in line with our expectations, slowing
without falling into recession. While there are sources of concern, equity
valuations remain quite reasonable, and we continue to expect single-digit
profit growth and interest rates near current levels for the remainder of the
year. We have rather moderate expectations for this year but are looking ahead
to positioning the portfolio for next year as we move through this year.
Over the last couple of years, it's been very much an old economy-focused
market with cyclicals, materials and industrials doing very well, but we expect
a shift in investor preferences toward consumer staples and less cyclically
sensitive stocks, and consumer staples now represents one of our most
overweighted sectors. While we continue to have significant positions in
industrials and materials companies, and while these positions have been key
contributors to performance, we're increasingly cautious on some of the
cyclicals that have done so well. We're avoiding companies with overly
leveraged balance sheets, and we're very conscious of earnings and the
sensitivity of the market to earnings announcements.
The financials sector represents our largest underweight relative to the S&P
500(R) index. Later in the year, the sector may present some opportunities, but
we remain cautious for the time being, because of credit quality concerns and
tight lending margins. It may still be six to twelve months before the coast is
clear there, but the companies that make their way through this difficult time
should be in pretty good shape for the upturn. Keep in mind, you always want to
be looking ahead six to nine to twelve months, rather than focusing on the
immediate environment.
At June 30, we are also underweighted energy and utilities relative to the S&P
500(R) Index. As noted above, oil company stocks appear richly valued barring a
forecast of rising oil prices, but we believe oil prices are higher than is
justified by underlying supply, demand, and inventory conditions and that
prices would be lower than they are if it weren't for the tension in the Middle
East. Utilities, particularly electric utilities appear very richly valued
given their modest earnings and dividend growth prospects.
SINCERELY,
JOHN A. CAREY
Executive Vice President & Portfolio Manager
PIONEER INVESTMENT MANAGEMENT, INC.
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
PIONEER FUND PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY PIONEER INVESTMENT MANAGEMENT, INC.
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
---------------------------------
AT&T, Inc. 3.48%
---------------------------------
Chevron Corp. 2.62%
---------------------------------
McGraw-Hill Cos., Inc. 2.59%
---------------------------------
PACCAR, Inc. 2.11%
---------------------------------
Norfolk Southern Corp. 1.94%
---------------------------------
Reed Elsevier NV 1.84%
---------------------------------
Johnson Controls, Inc. 1.82%
---------------------------------
Target Corp. 1.75%
---------------------------------
Chubb Corp. (The) 1.75%
---------------------------------
Deere & Co. 1.71%
---------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
[CHART]
Basic Materials 5.4%
Communications 13.3%
Cyclical 13.3%
Non-Cyclical 22.8%
Energy 7.0%
Financials 14.8%
Industrials 11.4%
Technology 11.1%
Utilities 0.9%
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
PIONEER FUND PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY PIONEER INVESTMENT MANAGEMENT, INC.
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
PIONEER FUND PORTFOLIO MANAGED BY
PIONEER INVESTMENT MANAGEMENT, INC. VS. S&P 500(R) INDEX/1/
Growth Based on $10,000+
[CHART]
Pioneer Fund S&P 500(R)
Portfolio - Class A Index
--------------------- ------------
12/31/1996 $10,000 $10,000
12/31/1997 12,529 13,336
12/31/1998 14,811 16,747
12/31/1999 14,799 20,271
12/30/2000 18,389 18,424
12/31/2001 14,161 16,234
12/31/2002 9,883 12,646
12/31/2003 12,234 16,273
12/30/2004 13,595 18,044
12/31/2005 14,409 18,931
12/31/2006 16,702 21,922
6/30/2007 18,022 23,448
-------------------------------------------------------------
Average Annual Return/2/
(for the period ended 6/30/07)
-------------------------------------------------------------
Since
1 Year 3 Year 5 Year 10 Year Inception/3/
-------------------------------------------------------------
Pioneer Fund
- -- Portfolio--Class A 19.77% 13.10% 9.27% 5.63% 7.51%
-------------------------------------------------------------
- - - S&P 500(R) Index/1/ 20.59% 11.68% 10.71% 7.13% 11.05%
-------------------------------------------------------------
+The chart reflects the performance of Class A shares of the Portfolio. This is
currently the only active Class in the Portfolio.
/1/The S&P 500(R) Index is an unmanaged index consisting of 500 chosen for
market size, liquidity, and industry group representation. It is a market-value
weighted index (stock price times number of shares outstanding), with each
stock's weight in the Index proportionate to its market value. The Index does
not include fees and expenses and is not available for direct investment.
/2/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gains distributions.
/3/Inception of Class A shares is 12/31/1994. Index returns are based on an
inception date of 12/31/1994.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
3
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
PIONEER FUND PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,079.00 $4.69
Hypothetical (5% return before expenses) 1,000.00 1,020.28 4.56
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.91%
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period).
4
MET INVESTORS SERIES TRUST
PIONEER FUND PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
---------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
---------------------------------------------------------
COMMON STOCKS - 97.8%
AEROSPACE & DEFENSE - 2.6%
General Dynamics Corp................ 7,532 $ 589,153
United Technologies Corp............. 9,727 689,936
------------
1,279,089
------------
AIRLINES - 1.1%
Delta Air Lines, Inc.*............... 10,166 200,270
Southwest Airlines Co................ 22,100 329,511
------------
529,781
------------
AUTO COMPONENTS - 1.8%
Johnson Controls, Inc................ 7,612 881,241
------------
AUTOMOBILES - 0.8%
Ford Motor Co........................ 41,761 393,389
------------
BANKS - 6.7%
Bank of America Corp................. 7,420 362,764
Compass Bancshares, Inc.............. 2,221 153,205
First Horizon National Corp.......... 4,586 178,854
National City Corp................... 15,592 519,525
SunTrust Banks, Inc.................. 6,955 596,322
U.S. Bancorp......................... 14,796 487,528
Wachovia Corp........................ 4,501 230,676
Wells Fargo & Co..................... 14,708 517,280
Zions Bancorporation................. 2,681 206,196
------------
3,252,350
------------
BEVERAGES - 1.8%
Coca-Cola Co......................... 5,500 287,705
PepsiCo, Inc......................... 9,302 603,235
------------
890,940
------------
CHEMICALS - 2.2%
Air Products & Chemicals, Inc........ 2,992 240,467
Dow Chemical Co. (The)............... 5,990 264,878
E.I. du Pont de Nemours & Co......... 4,825 245,303
Ecolab, Inc.......................... 3,969 169,476
Praxair, Inc......................... 1,786 128,574
------------
1,048,698
------------
COMMERCIAL SERVICES & SUPPLIES - 0.6%
Automatic Data Processing, Inc....... 6,140 297,606
------------
COMMUNICATIONS EQUIPMENT & SERVICES - 2.9%
Cisco Systems, Inc.*................. 10,789 300,474
Motorola, Inc........................ 26,806 474,466
Nokia Oyj (ADR)...................... 21,982 617,914
------------
1,392,854
------------
COMPUTERS & PERIPHERALS - 3.2%
Dell, Inc.*.......................... 13,233 377,802
EMC Corp.*........................... 8,210 148,601
Hewlett-Packard Co................... 15,243 680,143
Sun Microsystems, Inc.*.............. 64,925 341,505
------------
1,548,051
------------
-----------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
-----------------------------------------------------------------
ELECTRIC SERVICES - 0.5%
Southern Co.................................. 7,226 $ 247,780
------------
ELECTRIC UTILITIES - 0.4%
Consolidated Edison, Inc..................... 4,521 203,988
------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.6%
Emerson Electric Co.......................... 6,646 311,033
------------
FINANCIAL - DIVERSIFIED - 4.8%
American Express Co.......................... 5,584 341,629
Federated Investors, Inc. - Class B.......... 5,626 215,645
Merrill Lynch & Co., Inc..................... 5,663 473,313
State Street Corp............................ 9,876 675,518
T. Rowe Price Group, Inc..................... 3,071 159,354
Washington Mutual, Inc....................... 10,465 446,228
------------
2,311,687
------------
FOOD & DRUG RETAILING - 4.2%
H.J. Heinz Co................................ 9,085 431,265
Kraft Foods, Inc. - Class A.................. 14,727 519,127
Sysco Corp................................... 10,512 346,791
Walgreen Co.................................. 16,479 717,495
------------
2,014,678
------------
FOOD PRODUCTS - 3.4%
Campbell Soup Co............................. 10,663 413,831
General Mills, Inc........................... 5,781 337,726
Hershey Co. (The)............................ 9,106 460,946
Kellogg Co................................... 3,777 195,611
Sara Lee Corp................................ 13,768 239,563
------------
1,647,677
------------
HEALTH CARE EQUIPMENT & SUPPLIES - 5.6%
Becton, Dickinson & Co....................... 9,325 694,712
Biomet, Inc.................................. 12,262 560,619
C.R. Bard, Inc............................... 5,474 452,317
Medtronic, Inc............................... 6,489 336,519
St. Jude Medical, Inc.*...................... 9,111 378,015
Zimmer Holdings, Inc.*....................... 3,404 288,966
------------
2,711,148
------------
HOUSEHOLD PRODUCTS - 1.3%
Clorox Co.................................... 1,779 110,476
Colgate-Palmolive Co......................... 8,241 534,429
------------
644,905
------------
INDUSTRIAL - DIVERSIFIED - 1.8%
3M Co........................................ 3,798 329,628
General Electric Co.......................... 9,008 344,826
Rockwell Automation, Inc..................... 3,158 219,292
------------
893,746
------------
INSURANCE - 3.0%
Chubb Corp. (The)............................ 15,674 848,590
Hartford Financial Services Group, Inc. (The) 3,499 344,687
SAFECO Corp.................................. 3,992 248,542
------------
1,441,819
------------
See notes to financial statements
5
MET INVESTORS SERIES TRUST
PIONEER FUND PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
--------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
--------------------------------------------------------------
IT CONSULTING & SERVICES - 1.0%
DST Systems, Inc.*........................ 3,426 $ 271,374
Fiserv, Inc.*............................. 3,328 189,030
------------
460,404
------------
MACHINERY - 5.4%
Caterpillar, Inc.......................... 7,968 623,895
Deere & Co................................ 6,873 829,846
PACCAR, Inc............................... 11,773 1,024,722
Parker Hannifin Corp...................... 1,485 145,396
------------
2,623,859
------------
MEDIA - 5.5%
Gannett Co., Inc.......................... 5,584 306,842
McGraw-Hill Cos., Inc. (The).............. 18,428 1,254,578
Reed Elsevier NV (ADR).................... 23,538 892,561
Walt Disney Co. (The)..................... 6,435 219,691
------------
2,673,672
------------
METALS & MINING - 3.1%
Alcoa, Inc................................ 16,540 670,366
Rio Tinto Plc (ADR)....................... 2,690 823,463
------------
1,493,829
------------
OFFICE FURNISHING & SUPPLIES - 1.4%
Canon, Inc. (ADR) 11,317 663,629
------------
OIL & GAS - 6.8%
Apache Corp............................... 6,740 549,917
Chevron Corp.............................. 15,082 1,270,508
Exxon Mobil Corp.......................... 9,600 805,248
Pioneer Natural Resources Co.............. 7,575 368,978
Weatherford International, Ltd.*.......... 5,644 311,774
------------
3,306,425
------------
PERSONAL PRODUCTS - 0.3%
Estee Lauder Companies, Inc. - Class A.... 2,737 124,561
------------
PHARMACEUTICALS - 7.2%
Abbott Laboratories....................... 8,959 479,754
Barr Pharmaceuticals, Inc.*............... 6,852 344,176
Eli Lilly & Co............................ 5,817 325,054
Merck & Co., Inc.......................... 5,269 262,396
Novartis AG (ADR)......................... 6,413 359,577
Pfizer, Inc............................... 17,431 445,711
Roche Holding AG (ADR).................... 4,650 412,920
Schering-Plough Corp...................... 23,068 702,190
Teva Pharmaceutical Industries, Ltd. (ADR) 4,396 181,335
------------
3,513,113
------------
RETAIL - MULTILINE - 3.2%
CVS Caremark Corp......................... 6,997 255,041
J.C. Penney Co., Inc...................... 6,000 434,280
Target Corp............................... 13,354 849,314
------------
1,538,635
------------
-----------------------------------------------------------------
SECURITY SHARES/PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-----------------------------------------------------------------
RETAIL - SPECIALTY - 2.5%
Barnes & Noble, Inc...................... 3,672 $ 141,262
Liz Claiborne, Inc....................... 2,984 111,303
Lowe's Cos., Inc......................... 12,167 373,405
Nordstrom, Inc........................... 9,065 463,403
Staples, Inc............................. 5,897 139,936
------------
1,229,309
------------
ROAD & RAIL - 2.7%
Burlington Northern Santa Fe Corp........ 4,489 382,193
Norfolk Southern Corp.................... 17,900 941,003
------------
1,323,196
------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS - 3.2%
Applied Materials, Inc................... 12,658 251,514
Intel Corp............................... 23,022 547,003
Texas Instruments, Inc................... 19,348 728,065
------------
1,526,582
------------
SOFTWARE - 1.6%
Adobe Systems, Inc.*..................... 7,347 294,982
Microsoft Corp........................... 16,091 474,202
------------
769,184
------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 4.6%
ALLTEL Corp.............................. 3,069 207,311
AT&T, Inc................................ 40,619 1,685,689
Verizon Communications, Inc.............. 6,002 247,102
Windstream Corp.......................... 5,136 75,807
------------
2,215,909
------------
Total Common Stocks
(Cost $32,408,041) 47,404,767
------------
SHORT-TERM INVESTMENT - 1.9%
State Street Bank & Trust Co.,
Repurchase Agreement
dated 06/29/07 at 1.500% to be
repurchased at $937,117
on 07/02/07 collateralized by
$790,000 FNMA at 7.125% due 01/15/30
with a value of $961,825.
(Cost - $937,000)...................... $937,000 937,000
------------
TOTAL INVESTMENTS - 99.7%
(Cost $33,345,041) 48,341,767
Other Assets and Liabilities (net) - 0.3% 161,198
------------
TOTAL NET ASSETS - 100.0% $ 48,502,965
============
PORTFOLIO FOOTNOTES:
* Non-income producing security.
ADR - American Depositary Receipt
FNMA - Federal National Mortgage Association
See notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
PIONEER FUND PORTFOLIO
ASSETS
Investments, at value (Note 2)* $ 47,404,767
Repurchase Agreement 937,000
Cash 810
Receivable for investments sold 202,926
Receivable for Trust shares sold 93,764
Dividends receivable 53,470
Interest receivable 78
------------
Total assets 48,692,815
------------
LIABILITIES
Payables for:
Investments purchased 70,536
Trust shares redeemed 8,659
Investment advisory fee payable (Note 3) 29,899
Administration fee payable 1,130
Custodian and accounting fees payable 23,293
Accrued expenses 56,333
------------
Total liabilities 189,850
------------
NET ASSETS $ 48,502,965
============
NET ASSETS REPRESENTED BY:
Paid in surplus $ 43,842,879
Accumulated net realized loss (10,584,506)
Unrealized appreciation on investments 14,996,726
Undistributed net investment income 247,866
------------
Total $ 48,502,965
============
NET ASSETS
Class A $ 48,502,965
============
CAPITAL SHARES OUTSTANDING
Class A 3,098,976
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 15.65
============
- --------------------------------------------------------------------------------------
* Investments at cost, excluding Repurchase Agreements $ 32,408,041
See notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
PIONEER FUND PORTFOLIO
INVESTMENT INCOME:
Dividends (1) $ 425,605
Interest 17,493
----------
Total investment income 443,098
----------
EXPENSES:
Investment advisory fee (Note 3) 171,887
Administration fees 3,417
Custody and accounting fees 11,368
Transfer agent fees 3,509
Audit 12,043
Legal 7,144
Trustee fees and expenses 3,263
Shareholder reporting 593
Insurance 981
Other 1,105
----------
Total expenses 215,310
Less fees waived and expenses reimbursed by the Manager (3,149)
Less broker commission recapture (3,797)
----------
Net expenses 208,364
----------
Net investment income 234,734
----------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on:
Investments 826,372
----------
Net realized gain on investments 826,372
----------
Net change in unrealized appreciation on:
Investments 2,431,309
----------
Net change in unrealized appreciation on investments 2,431,309
----------
Net realized and change in unrealized gain on investments 3,257,681
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $3,492,415
==========
- -------------------------------------------------------------------------------------
(1)Dividend income is net withholding taxes of: $ 6,557
See notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
PIONEER FUND PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 234,734 $ 419,908
Net realized gain on investments 826,372 1,829,514
Net change in unrealized appreciation on investments 2,431,309 4,336,388
----------- ------------
Net increase in net assets resulting from operations 3,492,415 6,585,810
----------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (406,776) (389,928)
----------- ------------
Net decrease in net assets resulting from distributions (406,776) (389,928)
----------- ------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class A 5,008,730 12,170,312
Net asset value of shares issued through dividend reinvestment
Class A 406,776 389,928
Cost of shares repurchased
Class A (3,726,939) (21,473,225)
----------- ------------
Net increase (decrease) in net assets from capital share
transactions 1,688,567 (8,912,985)
----------- ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 4,774,206 (2,717,103)
----------- ------------
Net assets at beginning of period 43,728,759 46,445,862
----------- ------------
Net assets at end of period $48,502,965 $ 43,728,759
=========== ============
Net assets at end of period includes undistributed net investment
income $ 247,866 $ 419,908
=========== ============
See notes to financial statements
9
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS A
PIONEER FUND PORTFOLIO -----------------------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 --------------------------------------------------
(UNAUDITED) 2006 2005 2004++ 2003++ 2002++
-------------- ------ ------ ------ ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD................... $14.63 $12.75 $12.03 $10.92 $ 8.94 $ 13.87
------ ------ ------ ------ ------ -------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income.................................. 0.08 (a) 0.13 (a) 0.13(a) 0.11 (a) 0.15 (a) 0.32 (a)
Net Realized/Unrealized Gain (Loss) on Investments..... 1.07 1.89 0.59 1.11 (a) 1.98 (a) (4.47)(a)
------ ------ ------ ------ ------ -------
Total from Investment Operations....................... 1.15 2.02 0.72 1.22 2.13 (4.15)
------ ------ ------ ------ ------ -------
LESS DISTRIBUTIONS
Dividends from Net Investment Income................... (0.13) (0.14) -- (0.11) (0.15) (0.78)
Distributions from Net Realized Capital Gains.......... -- -- -- -- -- --
------ ------ ------ ------ ------ -------
Total Distributions.................................... (0.13) (0.14) -- (0.11) (0.15) (0.78)
------ ------ ------ ------ ------ -------
NET ASSET VALUE, END OF PERIOD......................... $15.65 $14.63 $12.75 $12.03 $10.92 $ 8.94
====== ====== ====== ====== ====== =======
TOTAL RETURN 7.90% 15.92% 5.99% 11.13% 23.78% (30.21)%
Ratio of Expenses to Average Net Assets................ 0.91%* 1.09% 1.01% 0.99%(b) 1.12% 0.90 %
Ratio of Expenses to Average Net Assets Before
Reimbursement and Rebates............................ 0.94%* 1.22% 1.01% 1.12% 1.12% 0.90 %
Ratio of Net Investment Income to Average Net Assets... 1.02%* 0.98% 1.03% 0.98% 1.56% 2.88 %
Portfolio Turnover Rate................................ 8.5% 28.5% 16.0% 19.0% 98.0% 25.0 %
Net Assets, End of Period (in millions)................ $48.5 $43.7 $46.0 $33.0 $27.0 $22.0
* Annualized
(a) Per share amounts based on average shares outstanding during the period.
(b) The investment manager waived a portion of its management fee for the
period.
++ Audited by other Independent Registered Public Accounting Firm.
See notes to financial statements
10
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is Pioneer Fund Portfolio, which is
diversified. Shares in the Trust are not offered directly to the general public
and are currently available only to separate accounts established by certain
affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A Shares are offered
by the Portfolio. Class B and E Shares are not currently offered by the
Portfolio included in this report. Shares of each Class of the Portfolio
represent an equal pro rata interest in the Portfolio and generally give the
shareholder the same voting, dividend, liquidation, and other rights.
Investment income, realized and unrealized capital gains and losses, the common
expenses of the Portfolio and certain Portfolio-level expense reductions, if
any, are allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the Portfolio. Each class of
shares differs in its respective distribution expenses and certain other
class-specific expense reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
11
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date. The value of the
security so purchased is subject to market fluctuations during this period. The
Portfolio segregates assets having an aggregate value at least equal to the
amount of the when issued or delayed delivery purchase commitments until
payment is made.
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
The Portfolio utilizes the provisions of the federal income tax laws that
provide for the carryforward of capital losses for eight years, offsetting such
losses against any future net realized capital gains. At December 31, 2006, the
accumulated capital loss carryforwards and expiration dates by the Portfolio
were as follows:
Expiring Expiring
Portfolio Total 12/31/2010 12/31/2011
--------- ----------- ---------- ----------
Pioneer Fund Portfolio $11,243,971 $9,959,689 $1,284,282
On May 1, 2006, the Pioneer Fund Portfolio, a series of The Travelers Series
Trust, was reorganized into the Pioneer Fund Portfolio a series of Met
Investors Series Trust. The Portfolio acquired capital losses of $13,217,771.
The losses incurred by the Portfolio are subject to an annual limitation of
$1,630,787.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with Pioneer Investment Management, Inc., (the "Adviser") for investment
advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- ----------------------------
Pioneer Fund Portfolio $171,887 0.75% First $250 Million
0.70% $250 Million to $500 Million
0.675% $500 Million to $1 Billion
0.65% $1 Billion to $2 Billion
0.60% Over $2 Billion
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Maximum Expense Ratio
under current Expense
Limitation Agreement Expenses Deferred in
--------------------- --------------------
2006 2007
------- ------
Subject to repayment
until December 31,
- --------------------
Portfolio Class A Class B Class E 2011 2012
--------- ------- ------- ------- ------- ------
Pioneer Fund Portfolio 1.00% 1.25%* 1.15%* $56,750 $3,149
* Classes not offered during the period.
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratio as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
The amount waived and expenses reimbursed for the period ended June 30, 2007 is
shown as investment advisory fee waiver in the Statement of Operations of the
Portfolio.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued Net Increase
Through (Decrease)
Beginning Shares Dividend Shares in Shares Ending
Shares Sold Reinvestment Repurchased Outstanding Shares
- - --------- ------- ------------- ----------- ------------ ---------
Pioneer Fund Portfolio
Class A
06/30/2007 2,988,347 328,444 26,380 (244,195) 110,629 3,098,976
12/31/2006 3,643,620 901,144 29,186 (1,585,603) (655,273) 2,988,347
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
Pioneer Fund Portfolio $-- $5,908,263 $-- $3,877,885
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
--------- ----------- ------------ -------------- --------------
Pioneer Fund Portfolio $33,345,041 $15,169,399 $(172,673) $14,996,726
6. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
--------------- ---------------------- -------------
2006 2005 2006 2005 2006 2005
-------- ---- ---- ---- -------- ----
Pioneer Fund Portfolio $389,928 $-- $-- $-- $389,928 $--
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
------------- ------------- ------------ ------------------ ----------
Pioneer Fund Portfolio $419,908 $-- $12,398,510 $(11,243,971) $1,574,447
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
7. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
14
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
8. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
15
MET INVESTORS SERIES TRUST
Pioneer Strategic
Income Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
PIONEER STRATEGIC INCOME PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY PIONEER INVESTMENT MANAGEMENT, INC.
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
MARKET REVIEW
The first half of 2007 in the U.S. fixed income market was dominated by two
issues: the anticipated easing of rates by the Federal Reserve and worries
about the U.S. housing and sub-prime market. Contrary to our view, investors
expected the Fed to cut rates at the beginning of 2007, due to weak economic
growth and controlled inflation. Indeed, these expectations seemed to be
confirmed by anemic first quarter GDP growth (ultimately determined to be
0.7%), which resulted from a large inventory correction and a slowdown in
housing and in government spending. As it became evident that second quarter
growth would more than compensate for the weakness of the first quarter
(current expectations are around 3.3%), the market unwound its expectations of
easing in May and June, with the 10 year Treasury rising from 4.70% at the
beginning of the year to 5.03% by the end of June. The yield curve inversion
lessened as the Fed remained on hold with the emergence of stronger growth.
Part of the fears regarding U.S. GDP growth centered on the weak U.S. housing
market, which gave rise to the second major concern of the first half: the
sub-prime market. Poor U.S. housing demand, reflected in lower housing permits
and new construction, and lower prices, has accelerated defaults among
sub-prime borrowers, highlighting the weak underwriting standards used to
extend these mortgage loans. Rising sub-prime defaults raised concerns about
CDO, hedge fund and financial institutions' exposure to these assets, and along
with increasing yields, brought about a flight to quality and aversion to risky
credit sectors in June.
The Lehman U.S. Universal Index returned 1.10% for the six month period.
Treasuries returned 1.0%, with dramatic differences along the yield curve, as
longer yields rose, reflecting changed interest rate expectations, and short
Treasuries benefited from the duration shortening trade and the flight to
quality in June. Investment grade corporates marginally outpaced Treasuries,
returning 3 basis points of excess return for the period. Particularly hard hit
in June were mortgages, which widened 4 basis points vs. swaps for a -53 basis
points excess return versus Treasuries for the month, their worst performance
since July 2003, resulting in a -57 excess return for the first half. U.S. high
yield, at a 3.0% return, was the best performing U.S. fixed income asset class
for the first half of 2007. The high yield markets benefited from improving
economic growth outlook and a 10 year low in default rates. High yield
performance for the period reflected its lower interest rate sensitivity, in an
environment of rising yields and stronger economic growth.
With respect to currencies and international fixed income, the U.S. dollar
declined against most major currencies except the Yen during the period,
reflecting continuing concerns about relative U.S. growth, trade and capital
flows, and the sub-prime impact on the credit and mortgage markets. The Euro
rose 3% and the Norwegian Krone rose 6.6%. The Japanese Yen declined 3.5% due
to continued uncertainty surrounding Japanese growth. International high yield
had strong performance, primarily due to strong currency returns, and emerging
markets debt, underperformed high yield, reflecting tight relative spreads and
increased risk aversion later in May and June.
PERFORMANCE REVIEW
Pioneer Strategic Income Portfolio returned 1.96% for the six months, compared
to the Lehman Brothers U.S. Universal Index return of 1.11%.
The primary contributors to our outperformance were our U.S. high yield
allocation and our short duration position. While we have reduced our global
high yield allocation over the past year to the current level of 27.5% in light
of tighter spreads, we continue to find value through bottom-up security
selection. We positioned our duration 0.3 years short, consistent with our view
that economic growth was strong and the Fed would not cut rates. Finally, our
currency positions generally helped performance, as the dollar weakened over
the period against most currencies except the Japanese Yen. Our TIPS overweight
vs. nominal Treasuries, focused in longer maturities, also helped performance.
Security positions that helped performance included our Norwegian Krone
position, which we pared down over the period as well as high yield issues True
Move and Intelsat. True Move, a Thai telecom provider, benefited from favorable
tax rulings affecting tariffs, and Intelsat was acquired by another private
equity firm. Securities that hurt performance included our Japanese Yen
position, in the face of a dollar rally against the Yen. In addition, our
Sallie Mae position declined on news of a leveraged buyout (which recent
reports indicate may fall through).
TRADING ACTIVITY
In response to the increase in Treasury yields, we extended the duration of the
portfolio to a near-neutral position to the index, primarily by adding lower
coupon mortgages. We also increased our inflation-linked position in the longer
end, as a hedge against increased inflation. At the sector level, we continued
to improve the quality of the portfolio and positioned it more defensively. We
have reduced our non-investment grade exposure with a corresponding increase in
our mortgage exposure. We have also increased our loan exposure within our high
yield allocation, gaining seniority in the capital structure. Significant
security level additions included Community Health Systems, and Algoma Steel;
security sales included Celanese (bond tender), Gazprom, Kabel Deutschland and
Noble Group.
CURRENT OUTLOOK AND POSITIONING
We believe the U.S. economy will experience good growth for the year. We
therefore continue to believe the Fed will not cut rates in 2007, and that
long-term U.S. interest rates will remain in a trading range.
Given solid economic growth prospects and sufficient market liquidity, we
believe high yield can continue to deliver above-market performance and
continue to hold high yield and, to a lesser extent, emerging markets
positions, but we have been reducing exposure as narrower relative yields
reduce relative their attractiveness.
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
PIONEER STRATEGIC INCOME PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY PIONEER INVESTMENT MANAGEMENT, INC.
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
We continue to favor mortgages over investment grade corporate bonds, because
they offer comparable yield without incurring the credit risk associated with
LBO and share buyback corporate actions. Finally, we favor inflation-protected
securities (TIPS) as a hedge against an overheating economy and rising
inflation.
SINCERELY,
KENNETH J. TAUBES ANDREW FELTUS
Director of Fixed Income Vice President and Portfolio
Investments Manager
PIONEER INVESTMENT MANAGEMENT, PIONEER INVESTMENT
INC. MANAGEMENT, INC.
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
------------------------------------------------------------------
U.S. Treasury Bond (5.375%, due 02/15/31) 4.14%
------------------------------------------------------------------
U.S. Treasury Note (4.500%, due 11/15/15) 2.99%
------------------------------------------------------------------
U.S. Treasury Note (1.875%, due 07/15/15) 1.78%
------------------------------------------------------------------
Federal Home Loan Mortgage Corp. (4.500%, due 04/01/22) 1.78%
------------------------------------------------------------------
U.S. Treasury Note (3.625%, due 01/15/10) 1.72%
------------------------------------------------------------------
Federal National Mortgage Association
(5.000%, due 06/01/37) 1.69%
------------------------------------------------------------------
U.S. Treasury Note (2.375%, due 01/15/17) 1.65%
------------------------------------------------------------------
Federal National Mortgage Association
(5.000%, due 03/01/37) 1.54%
------------------------------------------------------------------
U.S. Treasury Note (5.000%, due 02/15/11) 1.47%
------------------------------------------------------------------
Federal Home Loan Mortgage Corp. (5.000%, due 05/01/37) 1.39%
------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
LOGO
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
PIONEER STRATEGIC INCOME PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY PIONEER INVESTMENT MANAGEMENT, INC.
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
PIONEER STRATEGIC INCOME PORTFOLIO MANAGED BY
PIONEER INVESTMENT MANAGEMENT, INC. VS. LEHMAN BROTHERS U.S. UNIVERSAL INDEX/1/
Growth Based on $10,000+
[CHART]
Pioneer Strategic Income Lehman Brothers
Portfolio - Class A U.S. Universal Index/1/
------------------------- ------------------------
10/30/1996 $10,000 $10,000
10/31/1997 10,844 10,906
10/31/1998 10,774 11,748
10/31/1999 10,967 11,916
10/31/2000 10,993 12,781
10/31/2001 11,498 14,526
10/31/2002 11,728 15,314
10/31/2003 14,140 16,344
10/31/2004 15,788 17,347
10/31/2005 16,605 17,626
10/31/2006 17,759 18,629
12/31/2006 17,955 18,769
6/30/2007 18,307 18,977
------------------------------------------------------------------
Average Annual Return/2/
(for the period ended 6/30/07)
------------------------------------------------------------------
Since
1 Year 3 Year 5 Year 10 Year Inception/3/
------------------------------------------------------------------
Pioneer Strategic Income
- -- Portfolio--Class A 7.13% 7.39% 9.23% 5.77% 6.65%
------------------------------------------------------------------
Lehman Brothers
- - - U.S. Universal Index/1/ 6.63% 4.54% 5.18% 6.16% 6.73%
------------------------------------------------------------------
+The chart reflects the performance of Class A shares of the Portfolio. This is
currently the only active Class in the Portfolio.
/1/The Lehman Brothers U.S. Universal Index is the union of the U.S. Aggregate
Index, the U.S. High Yield Corporate index, the 144A index, the Eurodollar
Index, the Emerging markets index, the Non-ERISA portion of the CMBS Index, and
the CMSB High Yield Index. The Index does not include fees and expenses and is
not available for direct investment.
/2/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gains distributions.
/3/Inception of Class A shares is 6/16/94. Index returns are based on an
inception date 12/31/94.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administrative charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
3
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
PIONEER STRATEGIC INCOME PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,000.00 $3.87
Hypothetical (5% return before expenses) 1,000.00 1,020.93 3.91
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.78%
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period).
4
MET INVESTORS SERIES TRUST
PIONEER STRATEGIC INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
------------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------------------
DOMESTIC BONDS & DEBT SECURITIES - 31.1%
AEROSPACE & DEFENSE - 0.1%
L-3 Communications Corp.
6.125%, due 01/15/14..................... $ 400,000 $ 379,000
-------------
AIRLINES - 0.2%
Calair LLC/Calair Capital Corp.
8.125%, due 04/01/08..................... 180,000 181,575
Continental Airlines, Inc.
8.499%, due 05/01/11..................... 365,864 371,581
-------------
553,156
-------------
ASSET-BACKED SECURITIES - 2.2%
Aegis Asset Backed Securities Trust
6.970%, due 01/25/34(a).................. 150,000 150,941
Alfa Diversified Payment Rights Finance Co.
S.A. 7.260%, due 12/15/11
(144A)(a)(b)............................. 1,035,000 1,036,294
Ameriquest Mortgage Securities, Inc.
8.417%, due 10/25/33(a).................. 25,000 25,043
Conseco Finance Securitizations Corp.
6.910%, due 05/01/33...................... 4,869 4,984
7.360%, due 09/01/33...................... 3,661 3,663
6.681%, due 12/01/33...................... 212,309 214,310
DB Master Finance LLC
8.285%, due 06/20/31..................... 585,000 591,334
Dominos Pizza Master Issuer LLC
7.629%, due 04/25/37..................... 1,365,000 1,338,838
Green Tree Financial Corp.
7.860%, due 03/01/30..................... 183,057 170,217
Greenpoint Manufactured Housing
8.450%, due 06/20/31..................... 232,140 199,296
LNR CDO, Ltd.
8.070%, due 07/24/37 (144A)(a)(b)........ 215,000 215,000
Madison Avenue Manufactured Housing
Contract Trust
8.570%, due 03/25/32(a).................. 250,000 160,766
Master Asset Backed Securities Trust
8.820%, due 12/25/32(a).................. 50,000 49,602
Mid-State Trust 7.540%, due 02/15/36....... 68,066 60,245
PF Export Receivables Master Trust
6.436%, due 06/01/15 (144A)(b)........... 645,545 667,736
Power Receivables Finance LLC
6.290%, due 01/01/12 (144A)(b)........... 735,887 744,308
Taganka Car Loan Finance Plc
6.320%, due 11/14/13 (144A)(a)(b)........ 564,436 567,522
TIAA Commercial Real Estate Securitization
6.840%, due 05/22/37 (144A)(c)........... 100,000 98,660
-------------
6,298,759
-------------
AUTO COMPONENTS - 0.2%
Commercial Vehicle Group, Inc.
8.000%, due 07/01/13(d).................. 345,000 345,862
---------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
---------------------------------------------------------------
AUTO COMPONENTS - CONTINUED
Titan International, Inc.
8.000%, due 01/15/12 (144A)(b)..... $ 235,000 $ 242,638
-------------
588,500
-------------
AUTOMOTIVE LOANS - 0.3%
Ford Motor Credit Co.
5.700%, due 01/15/10............... 830,000 793,396
-------------
BANKS - 1.3%
ALB Finance B.V. 9.250%, due 09/25/13 400,000 400,480
ATF Bank
9.250%, due 04/12/12 (144A)(b)..... 455,000 486,850
ATF Capital B.V. 9.250%, due 02/21/14
(144A)(b).......................... 525,000 560,437
Kazkommerts International B.V.
8.000%, due 11/03/15 (144A)(b)..... 505,000 493,031
Russian Standard Finance S.A.
7.500%, due 10/07/10 (144A)(b)..... 415,000 401,513
Sibacademfinance Plc
9.000%, due 05/12/09 (144A)(b)..... 700,000 715,275
Turanalem Finance B.V.
8.500%, due 02/10/15 (144A)(b)(d).. 600,000 587,280
Western Financial Bank
9.625%, due 05/15/12............... 90,000 96,442
-------------
3,741,308
-------------
BEVERAGES - 0.4%
Argentine Beverages Financial
7.375%, due 03/22/12 (144A)(b)..... 205,000 207,050
Cerveceria Nacional Dominicana
8.000%, due 03/27/14 (144A)(b)..... 350,000 361,375
CIA Brasileira de Bebidas
8.750%, due 09/15/13............... 600,000 685,500
-------------
1,253,925
-------------
BUILDING MATERIALS - 1.0%
Ainsworth Lumber Co., Ltd.
6.750%, due 03/15/14(d)............ 825,000 617,719
Builders FirstSource, Inc.
9.610%, due 02/15/12(a)............ 500,000 508,750
C10 Capital SPV, Ltd. 6.722%,
due 12/01/49 (144A)(b)............. 353,000 347,430
NSG Holdings, LLC 7.750%,
due 12/15/25 (144A)(b)............. 685,000 695,275
U.S. Concrete, Inc.
8.375%, due 04/01/14(d)............ 840,000 842,100
-------------
3,011,274
-------------
CHEMICALS - 1.1%
Basell Finance Co. B.V.
8.100%, due 03/15/27 (144A)(b)..... 295,000 269,925
Georgia Gulf Corp.
9.500%, due 10/15/14(d)............ 975,000 970,125
See notes to financial statements
5
MET INVESTORS SERIES TRUST
PIONEER STRATEGIC INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-------------------------------------------------------------------
CHEMICALS - CONTINUED
Ineos Group Holdings Plc
7.875%, due 02/15/16 (144A)(b)(m)...... $ 340,000 $ 432,083
Kronos International, Inc.
6.500%, due 04/15/13(n)................ 455,000 590,532
LPG International, Inc.
7.250%, due 12/20/15(d)................ 400,000 403,000
Nell AF SARL 8.375%, due 08/15/15
(144A)(b)(n)........................... 430,000 585,699
-------------
3,251,364
-------------
COAL - 0.3%
Massey Energy Co.
6.875%, due 12/15/13(d)................ 890,000 819,912
-------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 0.9%
CS First Boston Mortgage Securities Corp.
6.122%, due 04/15/37 (144A)(c)......... 70,000 68,314
Global Signal Trust
6.376%, due 12/15/14.................... 560,000 550,705
7.036%, due 02/15/36.................... 275,000 274,509
Rural Housing Trust
6.330%, due 04/01/26................... 5,370 5,357
Sasco Net Interest Margin Trust
0.000%, due 05/27/33................... 47,105 5
SBA CMBS Trust 6.904%, due 11/15/36
(144A)(b).............................. 420,000 415,664
Timberstar Trust 7.530%, due 10/15/36.... 1,305,000 1,289,146
-------------
2,603,700
-------------
COMMERCIAL SERVICES & SUPPLIES - 1.3%
FTI Consulting, Inc.
7.750%, due 10/01/16................... 450,000 461,250
HydroChem Industrial Services, Inc.
9.250%, due 02/15/13 (144A) (b)........ 660,000 683,100
Lamar Media Corp.
7.250%, due 01/01/13................... 80,000 80,200
NCO Group, Inc. 10.230%, due 11/15/13
(144A)(a)(b)........................... 1,800,000 1,813,500
Rural/Metro Corp.
9.875%, due 03/15/15(d)................ 555,000 586,912
-------------
3,624,962
-------------
COMMUNICATIONS EQUIPMENT - 0.4%
Anixter, Inc. 5.950%, due 03/01/15....... 1,164,000 1,094,160
-------------
CONSTRUCTION & ENGINEERING - 0.5%
Dycom Industries, Inc.
8.125%, due 10/15/15................... 930,000 971,850
Esco Corp. 9.235%, due 12/15/13
(144A)(a)(b)........................... 325,000 333,125
-------------
1,304,975
-------------
--------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------------
CONTAINERS & PACKAGING - 0.2%
AEP Industries, Inc.
7.875%, due 03/15/13.................... $ 452,000 $ 454,260
-------------
ELECTRIC UTILITIES - 1.5%
AES Corp. 8.750%, due 06/15/08............ 7,000 7,166
FPL Energy American Wind LLC
6.639%, due 06/20/23 (144A)(b).......... 604,640 615,816
FPL Energy Wind Funding LLC
6.876%, due 06/27/17 (144A)(b).......... 576,720 575,999
Kiowa Power Partners LLC
5.737%, due 03/30/21 (144A)(b).......... 650,000 625,514
Ormat Funding Corp.
8.250%, due 12/30/20.................... 914,672 937,539
Power Contract Financing III LLC
2.186%, due 02/05/10 (144A)(b).......... 1,000,000 830,000
Tenaska Alabama Partners LP
7.000%, due 06/30/21 (144A)(b).......... 618,764 636,231
Westar Energy, Inc.
7.125%, due 08/01/09.................... 110,000 113,054
-------------
4,341,319
-------------
ELECTRONICS - 0.1%
Legrand S.A. 8.500%, due 02/15/25......... 20,000 23,450
NXP BV / NXP Funding LLC
7.875%, due 10/15/14.................... 240,000 237,600
-------------
261,050
-------------
ENERGY - 0.9%
Caithness Coso Funding Corp.
6.263%, due 06/15/14 (144A)(b).......... 821,221 810,181
Copano Energy LLC
8.125%, due 03/01/16.................... 250,000 255,000
SemGroup LP 8.750%, due 11/15/15
(144A)(b)............................... 465,000 469,650
Southern Star Central Corp.
6.750%, due 03/01/16 (144A)(b).......... 160,000 158,400
Targa Resources, Inc. 8.500%, due 11/01/13
(144A)(b)............................... 265,000 270,300
Tiverton Power Associates LP/Rumford
Power Associates LP
9.000%, due 07/15/18 (144A)(b).......... 99,337 149,503
VeraSun Energy Corp.
9.875%, due 12/15/12.................... 500,000 527,500
Williams Cos., Inc. 6.500%, due 12/01/08.. 50,000 50,375
-------------
2,690,909
-------------
ENTERTAINMENT & LEISURE - 0.3%
Capitol Records, Inc. 8.375%, due 08/15/09
(144A)(c)............................... 65,000 67,275
EMI Group Plc 9.750%, due 05/20/08(o)..... 20,000 41,124
See notes to financial statements
6
MET INVESTORS SERIES TRUST
PIONEER STRATEGIC INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-------------------------------------------------------------------
ENTERTAINMENT & LEISURE - CONTINUED
Lottomatica SpA 8.250%, due 03/31/66
(144A)(b)(n)........................... $ 695,000 $ 1,015,902
-------------
1,124,301
-------------
ENVIRONMENTAL SERVICES - 0.1%
Clean Harbors, Inc.
11.250%, due 07/15/12.................. 309,000 342,770
-------------
FINANCIAL - DIVERSIFIED - 1.8%
Algoma Acquisition Corp.
9.875%, due 06/15/15 (144A)(b)......... 1,415,000 1,415,000
AmeriCredit Corp. 8.500%, due 07/01/15
(144A)(b).............................. 750,000 759,375
Arch Western Financial LLC
6.750%, due 07/01/13................... 20,000 19,300
Glencore Funding LLC
6.000%, due 04/15/14 (144A)(b)......... 1,010,000 992,597
SLM Corp.
5.330%, due 04/18/08 (144A)(a)(b)....... 1,250,000 1,242,789
4.128%, due 07/25/14(a)................. 775,000 617,094
-------------
5,046,155
-------------
FOOD PRODUCTS - 0.3%
Cosan Finance, Ltd. 7.000%, due 02/01/17
(144A)(b).............................. 460,000 447,948
Nutro Products, Inc. 9.370%, due 10/15/13
(144A)(a)(b)........................... 320,000 339,392
-------------
787,340
-------------
HEALTH CARE PROVIDERS & SERVICES - 0.2%
HCA, Inc.
7.190%, due 11/15/15.................... 10,000 9,063
9.625%, due 11/15/16 (144A)(b)(d)....... 455,000 490,262
8.360%, due 04/15/24.................... 50,000 46,352
7.690%, due 06/15/25(d)................. 50,000 43,740
Multicare Cos., Inc. 9.000%, due 08/01/07
(144A)(c)(e)........................... 330,000 2,310
-------------
591,727
-------------
HOMEBUILDERS - 0.8%
Beazer Homes USA, Inc.
8.625%, due 05/15/11(d)................ 85,000 82,025
C8 Capital SPV, Ltd. 6.640%, due 12/31/49
(144A)(b).............................. 610,000 605,327
K. Hovnanian Enterprises, Inc.
7.750%, due 05/15/13(d)................ 30,000 26,400
Meritage Homes Corp.
6.250%, due 03/15/15(d)................ 765,000 684,675
Urbi Desarrollos Urbanos S.A. de C.V.
8.500%, due 04/19/16 (144A)(b)......... 485,000 510,463
WCI Communities, Inc.
7.875%, due 10/01/13(d)................ 460,000 425,500
-------------
2,334,390
-------------
-----------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-----------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE - 0.9%
Shingle Springs Tribal Gaming Authority
9.375%, due 06/15/15 (144A)(b)....... $ 1,000,000 $ 1,013,750
Station Casinos, Inc.
6.625%, due 03/15/18................. 845,000 730,925
Wimar Opco LLC 9.625%, due 12/15/14
(144A)(b)............................ 1,000,000 967,500
-------------
2,712,175
-------------
INDUSTRIAL - DIVERSIFIED - 0.2%
Park - Ohio Industries, Inc.
8.375%, due 11/15/14................. 565,000 546,638
-------------
INSURANCE - 2.0%
Conseco, Inc.
9.500%, due 10/15/06(e)............... 40,000 0
7.620%, due 08/09/07(e)............... 80,000 0
Foundation Re Ltd. 9.460%, due 11/24/08
(144A)(a)(b)......................... 250,000 237,973
Hanover Insurance Group, Inc.
7.625%, due 10/15/25................. 1,085,000 1,132,999
Kingsway America, Inc.
7.500%, due 02/01/14................. 1,030,000 1,046,726
Liberty Mutual Group, Inc.
7.000%, due 03/15/37 (144A)(b)....... 510,000 490,577
Ohio Casualty Corp.
7.300%, due 06/15/14................. 340,000 361,956
Platinum Underwriters Finance, Inc.
7.500%, due 06/01/17(d).............. 1,305,000 1,345,766
Presidential Life Corp.
7.875%, due 02/15/09................. 1,155,000 1,160,775
-------------
5,776,772
-------------
MACHINERY - 0.5%
Baldor Electric Co.
8.625%, due 02/15/17................. 970,000 1,030,625
Gardner Denver, Inc.
8.000%, due 05/01/13................. 400,000 420,000
-------------
1,450,625
-------------
MEDIA - 0.9%
C&M Finance, Ltd.
8.100%, due 02/01/16 (144A)(b)....... 1,340,000 1,363,450
CanWest Media, Inc.
8.000%, due 09/15/12................. 879 877
Corp. Interamericana de Entretenimiento
S.A. 8.875%, due 06/14/15 (144A)(b).. 1,050,000 1,102,500
CSC Holdings, Inc. 7.875%, due 12/15/07 47,000 47,411
Pegasus Communications Corp.
9.750%, due 12/01/06(f).............. 10,816 14
-------------
2,514,252
-------------
See notes to financial statements
7
MET INVESTORS SERIES TRUST
PIONEER STRATEGIC INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
--------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------
METALS & MINING - 1.5%
Aleris International, Inc.
9.000%, due 12/15/14 (144A)(b)..... $ 355,000 $ 358,550
10.000%, due 12/15/16 (144A)(b).... 200,000 199,500
American Rock Salt Co. LLC
9.500%, due 03/15/14.............. 280,000 284,550
Asia Aluminum Holdings, Ltd.
8.000%, due 12/23/11 (144A)(b).... 855,000 846,450
Compass Minerals International, Inc.
0.000%/12.750%, due 12/15/12(g).... 60,000 61,950
Series B 0.000%/12.000,%
due 06/01/13(d)(g)............... 90,000 89,775
FMG Finance Property, Ltd.
10.625%, due 09/01/16 (144A)(b)... 370,000 442,150
Novelis, Inc. 7.250%, due 02/15/15.. 400,000 412,500
Vale Overseas, Ltd.
6.250%, due 01/11/16............... 270,000 269,154
8.250%, due 01/17/34(d)............ 1,100,000 1,292,171
Wheeling-Pittsburgh Corp.
6.000%, due 08/01/10............... 4,782 3,748
5.000%, due 08/01/11............... 7,510 5,886
-------------
4,266,384
-------------
OFFICE FURNISHING & SUPPLIES - 0.1%
Xerox Corp.
9.750%, due 01/15/09............... 100,000 105,820
7.125%, due 06/15/10............... 245,000 254,263
-------------
360,083
-------------
OIL & GAS - 3.2%
Baytex Energy, Ltd.
9.625%, due 07/15/10.............. 1,000,000 1,040,000
Complete Production Services, Inc.
8.000%, due 12/15/16 (144A)(b).... 835,000 847,525
Compton Petroleum Finance Corp.
7.625%, due 12/01/13(d)........... 1,065,000 1,057,012
DDI Holdings A.S.
9.300%, due 01/19/12 (144A)(b)..... 1,300,000 1,374,750
9.300%, due 04/26/12 (144A)(b)..... 285,000 301,744
Harvest Operations Corp.
7.875%, due 10/15/11.............. 490,000 483,262
Inergy LP/Inergy Finance Corp.
8.250%, due 03/01/16.............. 250,000 258,125
Nakilat, Inc.
6.067%, due 12/31/33 (144A)(b)..... 410,000 385,414
6.267%, due 12/31/33 (144A)(b)..... 500,000 476,358
Pemex Project Funding Master Trust
7.375%, due 12/15/14............... 200,000 218,369
8.625%, due 02/01/22(d)............ 90,000 111,136
PetroMena AS 9.750%, due 05/24/12
(144A)(c)(q)...................... 3,000,000 539,367
-----------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-----------------------------------------------------------------
OIL & GAS - CONTINUED
Quicksilver Resources, Inc.
7.125%, due 04/01/16................. $ 675,000 $ 654,750
Sevan Marine ASA 8.370%, due 05/14/13
(144A)(b)............................ 200,000 206,010
Seven Seas Petroleum, Inc.
12.500%, due 05/15/05(e)(f).......... 60,000 0
Stone Energy Corp.
8.250%, due 12/15/11(d).............. 80,000 80,400
TNK-BP Finance S.A.
7.500%, due 07/18/16 (144A)(b)........ 850,000 878,475
6.625%, due 03/20/17 (144A)(b)........ 275,000 267,108
XCL, Ltd. 13.500%, due 05/01/04 (e)(f). 80,000 0
XTO Energy, Inc. 6.250%, due 04/15/13.. 30,000 30,697
-------------
9,210,502
-------------
PAPER & FOREST PRODUCTS - 0.4%
Abitibi Consolidated, Inc.
7.875%, due 08/01/09(d).............. 1,000 970
Louis No 1 Plc 8.500%, due 12/01/14 (m) 790,000 1,036,000
Louisiana-Pacific Corp.
8.875%, due 08/15/10................. 10,000 10,757
-------------
1,047,727
-------------
PHARMACEUTICALS - 0.7%
Angiotech Pharmaceuticals, Inc.
7.750%, due 04/01/14(d).............. 1,120,000 1,061,200
Phibro Animal Health Corp.
10.000%, due 08/01/13 (144A)(b)...... 580,000 609,000
Warner Chilcott Corp.
8.750%, due 02/01/15................. 465,000 480,112
-------------
2,150,312
-------------
REAL ESTATE - 1.0%
B.F. Saul (REIT) 7.500%, due 03/01/14.. 470,000 474,113
Crescent Real Estate Equities LP (REIT)
9.250%, due 04/15/09................. 210,000 215,120
Forest City Enterprises, Inc.
7.625%, due 06/01/15................. 560,000 567,000
Trustreet Properties, Inc. (REIT)
7.500%, due 04/01/15................. 1,075,000 1,157,566
Ventas Realty LP/Ventas Capital Corp.
7.125%, due 06/01/15................. 330,000 334,125
-------------
2,747,924
-------------
RETAIL - MULTILINE - 0.2%
Autonation, Inc. 7.000%, due 04/15/14.. 210,000 208,425
Brown Shoe Co., Inc.
8.750%, due 05/01/12................. 82,000 86,100
Sally Holdings LLC 9.250%, due 11/15/14
(144A)(b)............................ 415,000 418,112
-------------
712,637
-------------
See notes to financial statements
8
MET INVESTORS SERIES TRUST
PIONEER STRATEGIC INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------------
ROAD & RAIL - 0.3%
Greenbrier Cos., Inc.
8.375%, due 05/15/15(d)............... $ 860,000 $ 870,750
-------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 1.8%
COLO.COM, Inc. 13.875%, due 03/15/10
(144A)(c)(e)(f)....................... 181,448 0
Colt Telecom Group Plc
7.625%, due 12/15/09 (m).............. 15,000 20,710
Digicel, Ltd.
9.250%, due 09/01/12 (144A)(b)........ 960,000 1,016,400
GC Impsat Holdings I Plc
9.875%, due 02/15/17 (144A)(b)........ 780,000 793,650
Insight Midwest LP/Insight Capital, Inc.
9.750%, due 10/01/09(d)............... 8,000 8,080
Intelsat Intermediate
0.000%/ 9.250%, due 02/01/15(d)(g).... 1,210,000 1,001,275
Mastec, Inc.
7.625%, due 02/01/17.................. 410,000 413,075
Stratos Global Corp.
9.875%, due 02/15/13.................. 525,000 560,438
Tele Norte Celular Participacoes S.A.
8.000%, due 12/18/13.................. 126,000 132,930
True Move Co., Ltd.
10.750%, due 12/16/13 (144A)(b)....... 1,085,000 1,155,525
-------------
5,102,083
-------------
TELECOMMUNICATION SERVICES - WIRELESS - 0.0%
Alamosa Delaware, Inc.
11.000%, due 07/31/10................. 90,000 95,354
-------------
TEXTILES, APPAREL & LUXURY GOODS - 0.1%
INVISTA, Inc.
9.250%, due 05/01/12 (144A)(b)........ 145,000 154,063
-------------
TRANSPORTATION - 0.5%
CMA CGM S.A.
7.250%, due 02/01/13 (144A)(b)........ 310,000 316,559
Groupo Transportacion Ferroviaria
Mexicana, S.A. de C.V.
9.375%, due 05/01/12.................. 110,000 118,250
Stena AB 7.000%, due 12/01/16........... 1,000,000 1,005,000
Trailer Bridge, Inc.
9.250%, due 11/15/11.................. 100,000 102,750
-------------
1,542,559
-------------
UTILITIES - 0.3%
ISA Capital do Brasil S.A.
8.800%, due 01/30/17 (144A)(b)(d)..... 230,000 246,675
Southern Union Co.
7.200%, due 11/01/66.................. 690,000 694,361
-------------
941,036
-------------
Total Domestic Bonds & Debt Securities
(Cost $88,388,868) 89,494,488
-------------
------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------------
U. S. GOVERNMENT & AGENCY OBLIGATIONS - 54.8%
Federal Home Loan Mortgage Corp.
2.330%, due 01/15/17(a)................ $ 196,470 $ 9,407
4.500%, due 07/01/20-04/01/35.......... 8,376,105 7,901,552
5.000%, due 12/01/21-05/01/37.......... 9,071,453 8,546,869
0.000%, due 06/15/30(h)................ 31,105 24,106
6.000%, due 12/01/31-06/01/35.......... 763,268 545,436
2.680%, due 03/15/32(a)................ 161,070 14,879
5.500%, due 03/15/32-01/01/35.......... 2,176,691 1,920,895
STRIPS 0.000%, due 06/01/31(h)......... 32,366 25,130
Federal National Mortgage Association
6.375%, due 08/15/07................... 1,350,000 1,145,781
6.000%, due 12/25/15-04/25/33.......... 345,218 87,417
5.000%, due 03/25/17-07/01/37.......... 25,200,734 23,481,945
2.380%, due 03/25/18(a)................ 378,747 27,909
4.000%, due 07/01/18................... 1,142,907 1,060,002
4.500%, due 11/01/18-07/01/35.......... 3,947,803 3,683,057
5.500%, due 12/01/18-06/01/36.......... 5,551,218 5,373,669
3.862%, due 09/17/29(h)................ 15,075 11,925
7.500%, due 01/01/30-01/25/42.......... 429,403 442,438
7.000%, due 11/25/31-12/25/41.......... 4,402 4,499
1.780%, due 01/25/32(a)................ 612,654 29,230
2.780%, due 03/25/32(a)................ 153,172 15,215
2.680%, due 09/25/32-10/25/32(a)....... 136,191 13,169
1.680%, due 02/25/33(a)................ 878,015 49,467
5.421%, due 12/01/36(a)................ 1,287,189 1,287,588
5.575%, due 01/01/37(a)................ 1,602,855 1,595,305
STRIPS 5.500%, due 01/01/33(h)......... 453,143 118,256
Government National Mortgage Association
5.000%, due 10/15/18-05/15/37.......... 5,917,941 5,607,667
5.500%, due 08/15/19-03/15/37.......... 17,732,573 17,236,138
6.000%, due 02/15/24-05/20/32.......... 127,054 126,771
6.500%, due 11/15/32-01/15/36.......... 13,439 13,710
4.500%, due 09/15/33-03/15/36.......... 11,551,583 10,603,179
U.S. Treasury Bond
4.500%, due 11/30/11(d)................ 1,135,000 1,116,025
7.250%, due 05/15/16(d)................ 1,710,000 1,976,787
6.250%, due 08/15/23(d)................ 3,060,000 3,398,754
5.500%, due 08/15/28(d)................ 2,380,000 2,469,809
5.250%, due 11/15/28(d)................ 1,020,000 1,027,332
5.375%, due 02/15/31(d)................ 11,600,000 11,915,381
U.S. Treasury Inflation Index Bond
2.375%, due 01/15/17(d)............... 4,872,353 4,758,540
U.S. Treasury Inflation Index Note
1.875%, due 07/15/15(d)................ 5,428,711 5,131,831
2.000%, due 01/15/16(d)................ 2,691,321 2,556,125
2.500%, due 07/15/16(d)................ 3,581,270 3,542,381
U.S. Treasury Note
4.000%, due 08/31/07-02/15/15(d)....... 2,440,000 2,394,908
3.625%, due 01/15/10(d)................ 5,100,000 4,948,596
See notes to financial statements
9
MET INVESTORS SERIES TRUST
PIONEER STRATEGIC INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
--------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
--------------------------------------------------------------------
U. S. GOVERNMENT & AGENCY OBLIGATIONS - CONTINUED
4.375%, due 12/15/10(d)................. $ 2,200,000 $ 2,164,767
5.000%, due 02/15/11(d)................. 4,200,000 4,220,345
4.875%, due 02/15/12(d)................. 745,000 744,302
4.125%, due 05/15/15(d)................. 900,000 848,461
4.250%, due 08/15/15(d)................. 580,000 550,502
4.500%, due 11/15/15(d)................. 8,925,000 8,611,233
5.125%, due 05/15/16(d)................. 245,000 246,455
4.625%, due 11/15/16-02/15/17(d)........ 710,000 687,891
U.S. Treasury STRIPS
4.256%, due 08/15/10(d)(h).............. 1,000,000 860,363
3.808%, due 05/15/13(h)................. 1,500,000 1,127,058
3.846%, due 11/15/13(d)(h).............. 2,080,000 1,521,468
-------------
Total U. S. Government & Agency
Obligations (Cost $161,363,717) 157,821,925
-------------
CONVERTIBLE BONDS - 0.0%
SOFTWARE - 0.0%
Cybernet Internet Services International,
Inc. 13.000%, due 08/15/09
(144A)(c)(e)(f)
(Cost - $440,042)...................... 440,000 0
-------------
MUNICIPALS - 0.3%
NEW JERSEY - 0.2%
New Jersey Economic Development
Authority, Special Facilities Revenue,
Continental Airlines, Inc., Project
6.250%, due 09/15/29................... 430,000 442,960
-------------
TEXAS - 0.1%
City of San Antonio TX Electric & Gas
1.000%, due 08/01/07 (144A)(b)......... 210,000 263,231
-------------
Total Municipals
(Cost $599,173) 706,191
-------------
FOREIGN BONDS & DEBT SECURITIES - 5.0%
BRAZIL - 0.2%
Banco Nacional de Desenvolvimento
Economico e Social
11.000%/8.000%, due 04/28/10(i)(j)..... 780,000,000 584,648
-------------
CANADA - 0.9%
Government of Canada
5.500%, due 06/01/10(l)................ 330,000 317,884
Province of Ontario
5.500%, due 04/23/13................... 3,000,000 2,380,077
-------------
2,697,961
-------------
COLOMBIA - 0.4%
Republic of Colombia
9.750%, due 04/23/09(d)................. 50,000 53,700
----------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
----------------------------------------------------------------------
COLOMBIA - CONTINUED
9.750%, due 04/09/11................ $ 853,566 $ 926,119
-------------
979,819
-------------
JAPAN - 0.8%
Japanese Government CPI Linked Bond
1.100%, due 12/10/16(p)............ 298,200,000 2,386,811
-------------
MEXICO - 0.0%
United Mexican States
7.500%, due 01/14/12(d)............ 84,000 90,216
-------------
NETHERLANDS - 0.1%
Kingdom of the Netherlands
5.000%, due 07/15/12(n)............ 130,000 179,153
-------------
NORWAY - 0.7%
Government of Norway
5.500%, due 05/15/09(q)............. 2,200,000 374,220
6.000%, due 05/16/11(q)............. 9,460,000 1,644,356
-------------
2,018,576
-------------
RUSSIA - 0.5%
Russian Federation
8.250%, due 03/31/10 (144A)(b)...... 40,001 41,609
7.500%, due 03/31/30 (144A)(b)...... 1,191,513 1,310,664
-------------
1,352,273
-------------
SWEDEN - 1.4%
Kingdom of Sweden
5.250%, due 03/15/11(r)............. 14,240,000 2,133,790
5.500%, due 10/08/12(r)............. 12,740,000 1,947,349
-------------
4,081,139
-------------
Total Foreign Bonds & Debt Securities
(Cost $12,490,690) 14,370,596
-------------
ESCROWED SHARES - 0.0%
Vlasic Foods International, Inc.
0.000%, due 01/01/49(e)
(Cost - $0)........................ 190,660 6,902
-------------
LOAN PARTICIPATION - 2.7%
UNITED STATES - 2.7%
Algoma Steel, Inc.
2.500%, due 06/20/14............... 1,360,000 1,360,000
AmWINS Group, Inc.
7.820%, due 06/11/13............... 500,000 500,000
Community Health Systems
4.000%, due 04/19/08............... 1,500,000 1,502,970
Freeport McMoRan Copper & Gold, Inc.
1.750%, due 03/19/14............... 215,467 215,725
Inverness Medical Innovations
2.250%, due 06/26/15............... 1,000,000 1,010,000
J.G. Wentworth LLC
10.350%, due 03/01/14.............. 650,000 647,160
Knology, Inc. 5.260%, due 04/30/12... 500,000 504,690
See notes to financial statements
10
MET INVESTORS SERIES TRUST
PIONEER STRATEGIC INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
---------------------------------------------------------------------
SECURITY SHARES/PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
---------------------------------------------------------------------
UNITED STATES - CONTINUED
Olympus Cable Holdings LLC (First Union
Securities, Inc./The Bank of Nova Scotia)
4.798%, due 09/30/10..................... $ 36,164 $ 35,339
RMK Acquisition Corp.
2.125%, due 04/26/13..................... 8,108 8,138
Sally Holdings LLC
7.870%, due 11/18/13..................... 250,000 251,495
Sandridge Energy
5.250%, due 04/01/15..................... 980,000 1,004,500
Sun Healthcare Bank
2.000%, due 01/15/08-04/12/14............. 459,770 460,920
7.360%, due 01/15/08...................... 40,230 40,330
USI Holdings Corp.
8.110%, due 04/30/14..................... 350,000 352,079
-------------
Total Loan Participation
(Cost $7,847,839) 7,893,346
-------------
COMMON STOCKS - 0.2%
AIRLINES - 0.0%
UAL Corp.*(d).............................. 527 21,391
US Airways Group, Inc. - Class A
(144A)(c)(e)............................. 25 0
-------------
21,391
-------------
BUILDING PRODUCTS - 0.0%
Owens Corning, Inc.*(b)(d)................. 2,967 99,780
-------------
COMMERCIAL SERVICES & SUPPLIES - 0.0%
Loewen Group, Inc.(e)...................... 20,000 2
-------------
FINANCE - DIVERSIFIED - 0.0%
Outsourcing Solutions, Inc.
(144A)(b)(e)............................. 270 1,146
Leucadia National Corp.(d)................. 26 917
-------------
2,063
-------------
FOOD PRODUCTS - 0.0%
Archibald Candy Corp. (144A)(c)(e)......... 308 878
Aurora Foods, Inc. (144A)(c)(e)............ 2,833 0
Smithfield Foods, Inc.*.................... 2,166 66,677
-------------
67,555
-------------
INSURANCE - 0.1%
Conseco, Inc.*(d).......................... 5,666 118,363
-------------
IT CONSULTING & SERVICES - 0.0%
Comdisco Holding Co., Inc.................. 83 1,029
-------------
MEDIA - 0.0%
KNOLOGY, Inc.*(d).......................... 49 851
-------------
OIL & GAS - 0.0%
Polymer Group, Inc. - Class A*(d).......... 136 4,013
Sterling Chemicals, Inc.*.................. 35 736
York Research (144A)(c)(e)................. 337 0
-------------
4,749
-------------
-----------------------------------------------------------------------
SECURITY SHARES/PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-----------------------------------------------------------------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 0.0%
Cincinnati Bell, Inc.*(d).................. 35 $ 202
Covad Communications Group, Inc.*(d)....... 10 9
Ionex Communications, Inc.
(144A)(c)(e)............................. 175 0
-------------
211
-------------
TELECOMMUNICATION SERVICES - WIRELESS - 0.1%
Dobson Communications Corp. - Class A*..... 15,125 168,039
iPCS, Inc.................................. 5,531 187,335
USA Mobility, Inc.*(d)..................... 4 107
-------------
355,481
-------------
Total Common Stocks
(Cost $726,286) 671,475
-------------
PREFERRED STOCKS - 0.0%
AIRLINES - 0.0%
US Airways Group, Inc. - Class A
0.000%, (144A)(c)(e)..................... 16 0
-------------
MEDIA - 0.0%
PTV, Inc., Series A
10.000%, due 01/10/23.................... 1 4
-------------
Total Preferred Stocks
(Cost - $0) 4
-------------
CONVERTIBLE PREFERRED STOCKS - 0.0%
METALS & MINING - 0.0%
LTV Corp. 8.250%, (144A)(c)(e)............. 7,000 0
-------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 0.0%
Dobson Communications Corp.
6.000%, due 08/19/16 (144A)(b)........... 259 59,181
-------------
Total Convertible Preferred Stocks
(Cost $400,049) 59,181
-------------
RIGHTS - 0.0%
FOREIGN GOVERNMENT - 0.0%
United Mexican States 0.000%, due 06/30/07*
(Cost - $0)................................ 250,000 1,850
-------------
WARRANTS - 0.1%
AIRLINES - 0.0%
US Airways Group, Inc. - Class A1, Expire
4/01/10* (144A)(c)(e).................... 16 0
-------------
COMMERCIAL SERVICES & SUPPLIES - 0.0%
MDP Acquisitions Plc Corp.
Expire 10/01/13*......................... 42 5,499
-------------
COMMUNICATIONS EQUIPMENT & SERVICES - 0.1%
American Tower Corp., Expire 8/1/08*
(144A)(b)................................ 140 82,967
COLO.COM, Inc., Expire 3/15/10*
(144A)(c)(e)............................. 220 0
See notes to financial statements
11
MET INVESTORS SERIES TRUST
PIONEER STRATEGIC INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-------------------------------------------------------------------------
SECURITY SHARES/PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT & SERVICES - CONTINUED
KMC Telecom Holdings, Inc., Expire
1/31/08* (144A)(c)(e)...................... 250 $ 0
Startec Global Communications Corp.,
Expire 5/15/08 (144A)(c)(e)................ 170 0
-------------
82,967
-------------
FINANCIAL - DIVERSIFIED - 0.0%
ContiFinancial Corp., Liquidating Trust,
Units of Interest (Represents interest in a
trust in the liquidation of ContiFinancial
Corp. and its affiliates)*(e).............. 861,384 1,077
Mediq Inc., Expire 6/1/09 (144A)(c)(e)....... 110 0
-------------
1,077
-------------
FOREIGN GOVERNMENT - 0.0%
Republic of Venezuela, Expire 4/15/20*....... 1,700 63,750
-------------
HOTELS, RESTAURANTS & LEISURE - 0.0%
Mikohn Gaming Corp., Expire 8/15/08*
(144A)(c)(e)............................... 70 1
-------------
INDUSTRIAL - DIVERSIFIED - 0.0%
Dayton Superior Corp., Expire 6/15/09*
(144A)(c)(e)............................... 210 0
Solutia, Inc., Expire 7/15/09
(144A)(c)(e)............................... 18 0
-------------
0
-------------
MEDIA - 0.0%
KNOLOGY Holdings, Inc., Expire 10/15/07*
(144A)(c)(e)............................... 215 0
XM Satellite Radio Holdings, Inc., Expire
3/15/10 *(144A)(c)(e)...................... 100 6,451
-------------
6,451
-------------
TRANSPORTATION INFRASTRUCTURE - 0.0%
Atlantic Express Transportation Corp. Expire
4/15/08* (144A)(c)......................... 525 789
-------------
Total Warrants
(Cost $54,115) 160,534
-------------
TOTAL INVESTMENTS - 94.2%
(Cost $272,310,779) 271,186,492
Other Assets and Liabilities (net) - 5.8% 16,602,385
-------------
TOTAL NET ASSETS - 100.0% $ 287,788,877
=============
PORTFOLIO FOOTNOTES:
* Non-income producing security.
(a) Variable or floating rate security. The stated rate represents the rate at
June 30, 2007.
(b) Securities that may be resold to "qualified institutional buyers" under
Rule 144A or securities offered pursuant to Section 4(2) of the Securities
Act of 1933, as amended. These securities have been determined to be liquid
under the guidelines established by the Board of Trustees.
(c) Securities that may be resold to "qualified institutional buyers" under
Rule 144A or securities offered pursuant to Section 4(2) of the Securities
Act of 1933, as amended. These securities have been determined to be
illiquid by the Portfolio's adviser.
(d) A portion or all of the security was held on loan. As of June 30, 2007, the
market value of the securities loaned was $72,027,615 and the collateral
received consisted of cash in the amount of $73,366,647 and securities in
the amount of $137,900.
(e) Security valued in good faith at fair value as determined by or under the
direction of the Board of Trustees.
(f) Security is in default and/or issuer is in bankruptcy.
(g) Security is a "step-up" bond where coupon increases or steps up at a
predetermined date. Rates shown are current coupon and next coupon rate
when security steps up.
(h) Zero coupon bond - Interest rate represents current yield to maturity.
(i) Security is a "step-down" bond where the coupon decreases or steps down at
a predetermined date. Rates shown are current coupon and next coupon rate
when a security steps down.
(j) Par shown in Italian Lira, Issue has not redenominated into Euro dollars.
(k) Par shown in Australian Dollar. Value is shown in USD.
(l) Par shown in Canadian Dollar. Value is shown in USD.
(m) Par shown in Euro. Value is shown in USD.
(n) Par shown in Netherlands Dollar. Value is shown in USD.
(o) Par shown in Pound Sterling. Value is shown in USD.
(p) Par shown in Japanese Yen. Value is shown in USD.
(q) Par shown in Norwegian Krone. Value is shown in USD.
(r) Par shown in Swedish Krona. Value is shown in USD.
REIT - Real Estate Investment Trust
See notes to financial statements
12
MET INVESTORS SERIES TRUST
PIONEER STRATEGIC INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
The following table summarizes the credit composition of the portfolio holdings
of the Pioneer Strategic Income Portfolio at June 30, 2007, based upon quality
ratings issued by Standard & Poor's. For securities not rated by Standard &
Poor's, the equivalent Moody's rating is used.
PERCENT OF
PORTFOLIO
PORTFOLIO COMPOSITION BY CREDIT QUALITY (UNAUDITED)
---------------------------------------------------
AAA/Government/Government Agency 61.16%
AA 1.79
A 0.58
BBB 5.59
BB 9.27
B 15.00
Below B 1.84
Equities/Other 4.77
------
Total: 100.00%
======
See notes to financial statements
13
MET INVESTORS SERIES TRUST
PIONEER STRATEGIC INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
ACQUISITION
COST AS A VALUE AS A
ACQUISITION ACQUISITION PERCENTAGE OF PERCENTAGE OF
ILLIQUID AND RESTRICTED SECURITIES DATES COST NET ASSETS VALUE NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------------------
Archibald Candy Corp. 11/1/2002 $ 514 0.00% $ 878 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
Atlantic Express Transportation Corp., Expire 04/15/08 5/21/2004 -- 0.00 788 0.00
- ---------------------------------------------------------------------------------------------------------------------------------
Aurora Foods Inc 9/21/2000
10/17/2000 7,570 0.00 -- 0.00
- ---------------------------------------------------------------------------------------------------------------------------------
Capitol Records, Inc. 8.375%, due 08/15/09 4/15/2003 62,820 0.02 67,275 0.02
- ---------------------------------------------------------------------------------------------------------------------------------
COLO COM, Inc Expire 3/15/10 3/3/2000
4/7/2000
6/15/2000 13,705 0.00 -- 0.00
- ---------------------------------------------------------------------------------------------------------------------------------
COLO COM, Inc. 13.875%, due 03/15/10 3/3/2000
4/7/2000
6/15/2000 178,714 0.06 -- 0.00
- ---------------------------------------------------------------------------------------------------------------------------------
CS First Boston Mortgage Securities Corp. 6.122%, due 04/15/37 6/4/2002 55,773 0.02 68,314 0.02
- ---------------------------------------------------------------------------------------------------------------------------------
Cybernet Internet Services International, Inc. 13.000%, due 08/15/09 8/19/1999 440,042 0.15 -- 0.00
- ---------------------------------------------------------------------------------------------------------------------------------
Dayton Superior Corp., Expire 6/15/09 6/9/2000
7/18/2000
12/15/2000 4,026 0.00 -- 0.00
- ---------------------------------------------------------------------------------------------------------------------------------
Ionex Communications, Inc. 1/26/2005 1,948 0.00 -- 0.00
- ---------------------------------------------------------------------------------------------------------------------------------
KMC Telecom Holdings, Inc., Expire 1/31/08 1/26/1998
2/5/1998 4,392 0.00 -- 0.00
- ---------------------------------------------------------------------------------------------------------------------------------
KNOLOGY Holdings, Inc., Expire 10/15/07 10/16/1997 405 0.00 -- 0.00
- ---------------------------------------------------------------------------------------------------------------------------------
LTV Corp. 8.250% 11/12/1999 355,250 0.12 -- 0.00
- ---------------------------------------------------------------------------------------------------------------------------------
Mediq Inc. Expire 6/1/09 11/9/1998 9,369 0.00 -- 0.00
- ---------------------------------------------------------------------------------------------------------------------------------
Mikohn Gaming Corp., Expire 8/15/08 2/8/2002 -- 0.00 1 0.00
- ---------------------------------------------------------------------------------------------------------------------------------
Multicare Cos., Inc. 8/04/1997
3/8/1998
5/22/1998
8/4/1998
8/03/1998
8/05/1998 34 0.00 2,310 0.00
- ---------------------------------------------------------------------------------------------------------------------------------
PetroMena AS 8/10/1996
8/11/1998 491,406 0.17 539,367 0.19
- ---------------------------------------------------------------------------------------------------------------------------------
Solutia, Inc., Expire 7/15/09 1/13/2003 -- 0.00 -- 0.00
- ---------------------------------------------------------------------------------------------------------------------------------
Startec Global Communication Corp., Expire 5/15/08 5/18/1998
5/21/1998 198 0.00 -- 0.00
- ---------------------------------------------------------------------------------------------------------------------------------
TIAA Commercial Real Estate Securitization 6.840%, due 05/22/37 5/7/2002 77,415 0.03 98,660 0.03
- ---------------------------------------------------------------------------------------------------------------------------------
US Airways Group, Inc. (Common Stock) 7/27/2000 34,240 0.01 -- 0.00
- ---------------------------------------------------------------------------------------------------------------------------------
US Airways Group, Inc. (Preferred Stock) 7/27/2000 -- 0.00 -- 0.00
- ---------------------------------------------------------------------------------------------------------------------------------
US Airways Group, Inc., Expire 4/01/10 7/27/2000 -- 0.00 -- 0.00
- ---------------------------------------------------------------------------------------------------------------------------------
XM Satellite Radio, Inc., Expire 3/15/10 3/10/2000 14,255 0.00 6,451 0.00
- ---------------------------------------------------------------------------------------------------------------------------------
York Research 1/22/2003 -- 0.00 -- 0.00
- ---------------------------------------------------------------------------------------------------------------------------------
$1,752,076 0.58% $784,044 0.26%
------------------------------------------------
See notes to financial statements
14
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
PIONEER STRATEGIC INCOME PORTFOLIO
ASSETS
Investments, at value (Note 2)* $271,186,492
Cash 4,274,068
Cash denominated in foreign currencies** 13,210,108
Collateral for securities on loan 73,504,547
Receivable for investments sold 1,502,726
Receivable for Trust shares sold 80,118
Interest receivable 3,136,713
Unrealized appreciation on forward currency contracts
(Note 8) 28,007
------------
Total assets 366,922,779
------------
LIABILITIES
Payables for:
Investments purchased 4,883,081
Trust shares redeemed 293,341
Unrealized depreciation on forward currency contracts
(Note 8) 83,019
Collateral for securities on loan 73,504,547
Investment advisory fee payable (Note 3) 159,964
Administration fee payable 3,552
Custodian and accounting fees payable 40,906
Accrued expenses 165,492
------------
Total liabilities 79,133,902
------------
NET ASSETS $287,788,877
============
NET ASSETS REPRESENTED BY:
Paid in surplus $309,183,105
Accumulated net realized loss (27,364,953)
Unrealized depreciation on investments and foreign
currency (1,130,533)
Undistributed net investment income 7,101,258
------------
Total $287,788,877
============
NET ASSETS
Class A $287,788,877
============
CAPITAL SHARES OUTSTANDING
Class A 30,035,088
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 9.58
============
- ----------------------------------------------------------------------------
* Investments at cost $272,310,779
**Cost of cash denominated in foreign currencies 13,166,066
See notes to financial statements
15
MET INVESTORS SERIES TRUST
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
PIONEER STRATEGIC INCOME PORTFOLIO
INVESTMENT INCOME:
Dividends (1) $ 75,602
Interest (2) 8,073,855
-----------
Total investment income 8,149,457
-----------
EXPENSES:
Investment advisory fee (Note 3) 931,133
Administration fees 13,063
Custody and accounting fees 59,727
Transfer agent fees 3,531
Audit 12,672
Legal 12,871
Trustee fees and expenses 3,264
Shareholder reporting 8,129
Insurance 5,453
Other 1,110
-----------
Total expenses 1,050,953
-----------
Net investment income 7,098,504
-----------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY:
Net realized gain on:
Investments 925,953
Foreign currency 27,205
-----------
Net realized gain on investments and foreign currency 953,158
-----------
Net change in unrealized appreciation (depreciation) on:
Investments (3,032,762)
Foreign currency 35,387
-----------
Net change in unrealized depreciation on investments and foreign
currency (2,997,375)
-----------
Net realized and change in unrealized loss on investments and
foreign currency (2,044,217)
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 5,054,287
===========
- --------------------------------------------------------------------------------------
(1)Dividend income is net withholding taxes of: $ 5
(2)Interest income includes securities lending income of: 25,546
See notes to financial statements
16
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
PIONEER STRATEGIC INCOME PORTFOLIO
Period Ended Period Ended Year Ended
June 30, 2007 December 31, October 31,
(Unaudited) 2006* 2006
------------- ------------ ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 7,098,504 $ 1,894,134 $ 11,108,175
Net realized gain on investments and foreign currency 953,158 851,762 882,958
Net change in unrealized appreciation (depreciation) on
investments and foreign currency (2,997,375) 31,325 2,565,148
------------ ------------ ------------
Net increase in net assets resulting from operations 5,054,287 2,777,221 14,556,281
------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (1,894,886) (11,694,618) (8,052,523)
------------ ------------ ------------
Net decrease in net assets resulting from distributions (1,894,886) (11,694,618) (8,052,523)
------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class A 42,605,324 11,403,672 69,977,588
Net asset value of shares issued through dividend reinvestment
Class A 1,894,886 11,694,618 8,052,523
Cost of shares repurchased
Class A (13,685,158) (3,301,462) (28,047,489)
------------ ------------ ------------
Net increase in net assets from capital share transactions 30,815,052 19,796,828 49,982,622
------------ ------------ ------------
TOTAL INCREASE IN NET ASSETS 33,974,453 10,879,431 56,486,380
Net assets at beginning of period 253,814,424 242,934,993 186,448,613
------------ ------------ ------------
Net assets at end of period $287,788,877 $253,814,424 $242,934,993
============ ============ ============
Net assets at end of period includes undistributed net investment
income $ 7,101,258 $ 1,897,640 $ 11,566,759
============ ============ ============
* For the period November 1, 2006 through December 31, 2006.
See notes to financial statements
17
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS A
PIONEER STRATEGIC INCOME PORTFOLIO -------------------------------------------------------------------------------
FOR THE PERIOD
ENDED PERIOD ENDED FOR THE YEARS ENDED OCTOBER 31,(D)
JUNE 30, 2007 DECEMBER 31, --------------------------------------------------
(UNAUDITED) 2006(D) 2006 2005 2004++ 2003++ 2002++
-------------- ------------ ------ ------ ------ ------ ------
NET ASSET VALUE, BEGINNING OF PERIOD..... $ 9.46 $ 9.81 $ 9.56 $ 9.73 $ 9.53 $ 8.94 $ 9.94
------ ------ ------ ------ ------ ------ ------
INCOME (LOSS) FROM INVESTMENT
OPERATIONS
Net Investment Income.................... 0.25 (a) 0.07 (a) 0.49 (a) 0.53 (a) 0.57 (a) 0.63 (a) 1.14 (c)
Net Realized/Unrealized Gain (Loss) on
Investments............................ (0.06) 0.04 0.15 (0.04) 0.48 (a) 1.04 (a) (0.94)(c)
------ ------ ------ ------ ------ ------ ------
Total from Investment Operations......... 0.19 0.11 0.64 0.49 1.05 1.67 0.20
------ ------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income..... (0.07) (0.46) (0.39) (0.66) (0.85) (1.08) (1.20)
Distributions from Net Realized Capital
Gains.................................. -- -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------
Total Distributions...................... (0.07) (0.46) (0.39) (0.66) (0.85) (1.08) (1.20)
------ ------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD........... $ 9.58 $ 9.46 $ 9.81 $ 9.56 $ 9.73 $ 9.53 $ 8.94
====== ====== ====== ====== ====== ====== ======
TOTAL RETURN............................. 1.96% 1.10% 6.95% 5.17% 11.66% 20.56% 2.00%
Ratio of Expenses to Average Net Assets.. 0.78%* 0.85%* 0.88% 0.86% 0.90%(b) 1.00% 0.93%
Ratio of Expenses to Average Net Assets
Before Reimbursement and Rebates....... 0.78%* 0.85%* 0.88% N/A N/A N/A N/A
Ratio of Net Investment Income to Average
Net Assets............................. 5.27%* 4.56%* 5.13% 5.58% 6.19% 7.05% 8.24%(c)
Portfolio Turnover Rate.................. 23.2% 6.4% 33.0% 37.0% 56.0% 141.0% 208.0%
Net Assets, End of Period (in millions).. $287.8 $253.8 $243 $186 $107 $100 $97
* Annualized
N/A Not Applicable
(a) Per share amount based on average shares outstanding during the period.
(b) The investment manager waived a portion of its management fee for the
period.
(c) Effective November 1, 2001, the Fund adopted a change in the accounting
method that requires the Portfolio to amortize premiums and accrete all
discounts. Without the adoption of this change, for the year ended
October 31, 2002, these amount would have been $1.16, $(0.96) and 8.42% for
net investment income, net realized and unrealized loss and the ratio net
investment income to average net assets respectively.
(d) Fiscal Year End changed on November 1, 2006 from October 31 to December 31.
++ Audited by other Independent Registered Public Accounting Firm.
See notes to financial statements
18
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is Pioneer Strategic Income Portfolio, which
is non-diversified. Shares in the Trust are not offered directly to the general
public and are currently available only to separate accounts established by
certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A Shares are offered
by the Portfolio. Class B and E Shares are not currently offered by the
Portfolio included in this report. Shares of each Class of the Portfolio
represent an equal pro rata interest in the Portfolio and generally give the
shareholder the same voting, dividend, liquidation, and other rights.
Investment income, realized and unrealized capital gains and losses, the common
expenses of the Portfolio and certain Portfolio-level expense reductions, if
any, are allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the Portfolio. Each class of
shares differs in its respective distribution expenses and certain other
class-specific expense reductions.
On May 24, 2006, the Board of Trustees of the Trust approved the change of the
fiscal year end from October 31 to December 31. The Portfolio's change of the
fiscal year end became effective on November 1, 2006.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
19
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED - CONTINUED
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date. The value of the
security so purchased is subject to market fluctuations during this period. The
Portfolio segregates assets having an aggregate value at least equal to the
amount of the when issued or delayed delivery purchase commitments until
payment is made.
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
The Portfolio utilizes the provisions of the federal income tax laws that
provide for the carryforward of capital losses for eight years, offsetting such
losses against any future net realized capital gains. At December 31, 2006, the
accumulated capital loss carryforwards and expiration dates by the Portfolio
were as follows:
Expiring Expiring Expiring Expiring
Portfolio Total 12/31/2007 12/31/2008 12/31/2009 12/31/2010
- --------- ----------- ---------- ---------- ---------- -----------
Pioneer Strategic Income Portfolio $27,677,097 $3,523,658 $3,076,895 $7,414,445 $13,662,099
On May 1, 2006, the Portfolio, a series of The Travelers Series Trust, was
reorganized into the Portfolio, a series of Met Investors Series Trust. The
Portfolio acquired capital losses of $28,401,723. The losses incurred by the
Portfolio are subject to an annual limitation of $6,843,272.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. SECURITIES LENDING - The Portfolio may lend its securities to certain
qualified brokers who borrow securities in order to complete certain
transactions. By lending its investment securities, the Portfolio attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term of the loan would
accrue to the account of the Portfolio. Risks of delay in recovery of the
securities or even loss of rights in the collateral may occur should the
borrower of the securities fail financially. Risks may also arise to the extent
that the value of the collateral decreases below the value of the securities
loaned.
Upon entering into a securities lending transaction, the Portfolio receives
cash or other securities as collateral in an amount equal to or exceeding 102%
of the current market value of the loaned securities. Any cash received as
collateral is generally invested by State Street Bank and Trust Company ("State
Street"), acting in its capacity as securities lending agent (the "Agent"), in
the State Street Navigator Securities Lending Prime Portfolio which is a money
market fund registered under the 1940 Act. A portion of the dividends received
on the collateral is rebated to the borrower of the securities and the
remainder is split between the Agent and the Portfolio. On loans collateralized
by cash, the cash collateral is invested in a money market fund or short term
securities. A portion of the income generated upon investment of the collateral
is remitted to the Borrowers and the remainder is allocated between the fund
and the lending agent. On loans collateralized by U.S. Treasuries, a fee is
received from the Borrower and is allocated between the fund and the lending
agent.
G. FORWARD FOREIGN CURRENCY CONTRACTS - The Portfolio may enter into forward
foreign currency contracts to hedge their portfolio holdings against future
movements in certain foreign currency exchange rates. A forward currency
contract is a commitment to purchase or sell a foreign currency at a future
date at a set price. The forward currency contracts are valued at the forward
rate and are marked-to-market daily. The change in market value is recorded by
the Portfolio as an unrealized gain or loss. When the contract is closed, the
Portfolio recognizes a realized gain or loss equal to the difference between
the value of the contract at the time it was opened and the value at the time
it was closed.
20
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The use of forward foreign currency contracts does not eliminate fluctuations
in the underlying prices of the securities of the Portfolio, but it does
establish a rate of exchange that can be achieved in the future. Although
forward foreign currency contracts to sell limit the risk of loss due to a
decline in the value of the currency holdings, they also limit any potential
gain that might result should the value of the currency increase. In addition,
the Portfolio could be exposed to risks if the counterparties to the contracts
are unable to meet the terms of the contracts.
H. FOREIGN CURRENCY TRANSLATION - The books and records of the Portfolio are
maintained in U.S. dollars. Foreign currencies, investments and other assets
and liabilities are translated into U.S. dollars on a daily basis using
prevailing exchange rates. Purchases and sales of securities are translated at
the rates of exchange prevailing when such securities were acquired or sold.
Income is translated at rates of exchange prevailing when interest is accrued
or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in
forward foreign currency contracts, sales of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities
transactions, and the difference between the amounts of dividends, interest,
and foreign withholding taxes recorded on the Portfolio's books, and the U.S.
dollar equivalent of the amounts actually received or paid. Net unrealized
foreign exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at fiscal year end, from
changes in the exchange rates of foreign currency held, and from changes in the
contract value of forward foreign currency contracts.
I. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
J. FORWARD COMMITMENTS, WHEN-ISSUED AND DELAYED DELIVERY SECURITIES - The
Portfolio may purchase securities on a when-issued or delayed delivery basis
and may purchase or sell securities on a forward commitment basis. Settlement
of such transactions normally occurs within a month or more after the purchase
or sale commitment is made. The Portfolio may purchase securities under such
conditions only with the intention of actually acquiring them, but may enter
into a separate agreement to sell the securities before the settlement date.
Since the value of securities purchased may fluctuate prior to settlement, the
Portfolio may be required to pay more at settlement than the security is worth.
In addition, the purchaser is not entitled to any of the interest earned prior
to settlement. Upon making a commitment to purchase a security on a
when-issued, delayed delivery or forward commitment basis, the Portfolio will
hold liquid assets in a segregated account at the Portfolio's custodian bank
worth at least the equivalent of the amount due. The liquid assets will be
monitored on a daily basis and adjusted as necessary to maintain the necessary
value.
K. STRIPPED SECURITIES - The Portfolio may invest in "Stripped Securities," a
term used collectively for certain structured fixed income securities. Stripped
securities can be principal only securities ("PO"), which are debt obligations
that have been stripped of unmatured interest coupons or interest only
securities ("IO"), which are unmatured interest coupons that have been stripped
from debt obligations. Stripped Securities do not make periodic payments of
interest prior to maturity. As is the case with all securities, the market
value of Stripped Securities will fluctuate in response to changes in economic
conditions, interest rates and the market's perception of the securities.
However, fluctuations in response to interest rates may be greater in Stripped
Securities than for debt obligations of comparable maturities that currently
pay interest. The amount of fluctuation increases with a longer period of
maturity.
The yield to maturity on IOs' is sensitive to the rate of principal repayments
(including prepayments) on the related underlying debt obligation and principal
payments may have a material effect on yield to maturity. If the underlying
debt obligation experiences greater than anticipated prepayments of principal,
the Portfolio may not fully recoup the initial investment in IOs'.
L. CREDIT AND MARKET RISK - The Portfolio may invest in high yield instruments
that are subject to certain credit and market risks. The yields of high yield
instruments reflect, among other things, perceived credit risk. The Portfolio's
investments in securities rated below investment grade typically involve risks
not associated with higher rated securities including, among others, greater
risk related to timely and ultimate payment of interest and principal, greater
market price volatility and less liquid secondary market trading.
M. LOAN PARTICIPATIONS - The Portfolio may invest in loans arranged through
private negotiation between one or more financial institutions. The Portfolios'
investment in any such loan may be in the form of a participation in or an
assignment of the loan. In connection with purchasing participations, the
Portfolio generally will have no right to enforce compliance by the borrower
with the terms of the loan agreement relating to the loan, nor any rights of
set-off against the borrower and the Portfolio may not benefit directly from
any collateral supporting the loan in which they have purchased the
participation.
21
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The Portfolio will assume the credit risk of both the borrower and the lender
that is selling the participation. In the event of the insolvency of the lender
selling the participation, the Portfolio may be treated as a general creditor
of the lender and may not benefit from any set-off between the lender and the
borrower.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with Pioneer Investment Management, Inc., (the "Adviser") for investment
advisory services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- ---------------------------
Pioneer Strategic Income Portfolio $931,133 0.75% First $75 Million
0.70% $75 Million to $150 Million
0.65% Over $150 Million
Prior to May 1, 2006, Travelers Asset Management International Company LLC
managed the investment operations of the Portfolio pursuant to a management
agreement entered into by The Travelers Series Trust on behalf of the
Portfolio. In addition, The Travelers Insurance Company acted as administrator
to the Portfolio.
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Maximum Expense Ratio
under current Expense
Limitation Agreement
---------------------
Portfolio Class A Class B Class E
--------- ------- ------- -------
Pioneer Strategic Income Portfolio** 1.25% 1.50%* 1.40%*
* Classes not offered during the period.
** Prior to May 1, 2006, the maximum expense ratios for the Pioneer Strategic
Income Portfolio were 1.50%, 1.75%, and 1.65% for Class A, B and E,
respectively.
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratio as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
22
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued
Through Net Increase
Beginning Dividend Shares in Shares Ending
Shares Shares Sold Reinvestment Repurchased Outstanding Shares
- - ---------- ----------- ------------- ----------- ------------ ----------
Pioneer Strategic Income Portfolio
Class A
06/30/2007 26,825,628 4,438,067 196,158 (1,424,765) 3,209,460 30,035,088
11/01/2006-12/31/2006 24,768,301 1,154,973 1,236,218 (333,864) 2,057,327 26,825,628
11/01/2005-10/31/2006 19,495,007 7,350,719 866,796 (2,944,221) 5,273,294 24,768,301
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
Pioneer Strategic Income Portfolio $91,272,343 $25,264,307 $35,182,940 $23,084,827
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Depreciation
- --------- ------------ ------------ -------------- --------------
Pioneer Strategic Income Portfolio $272,310,779 $5,602,456 $(6,726,743) $(1,124,287)
6. SECURITY LENDING
As of June 30, 2007, the Portfolio had loaned securities which were
collateralized by short-term investments. The value of securities on loan and
the value of the related collateral were as follows:
Value of Value of
Securities Collateral
----------- -----------
Pioneer Strategic Income Portfolio $72,027,615 $73,504,547
23
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
7. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31,
2006, October 31, 2006 and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
--------------------------------- ---------------------- ---------------------------------
2006* 2006** 2005 2006* 2006** 2005 2006 2006** 2005
----------- ---------- ---------- ----- ------ ---- ----------- ---------- ----------
Pioneer Strategic Income Portfolio $11,694,618 $8,052,523 $7,620,245 $-- $-- $-- $11,694,618 $8,052,523 $7,620,245
* For the period November 1, 2006 through December 31, 2006
** For the year October 31, 2006
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
------------- ------------- ------------ ------------------ ------------
Pioneer Strategic Income Portfolio $1,894,886 $-- $1,228,582 $(27,677,097) $(24,553,629)
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
8. FORWARD FOREIGN CURRENCY CONTRACTS
Open forward foreign currency contracts at June 30, 2007, were as follows:
Forward Foreign Currency Contracts to Buy:
In Exchange Value at Net Unrealized
Settlement Date Contracts to Deliver for U.S. $ 06/30/07 Appreciation
--------------- -------------------- ----------- --------- --------------
08/14/07 1,190,000 GBP 2,357,747 2,385,754 $28,007
-------
$28,007
=======
Forward Foreign Currency Contracts to Sell:
In Exchange Value at Net Unrealized
Settlement Date Contracts to Deliver for US $ 06/30/07 Depreciation
--------------- -------------------- ----------- --------- --------------
09/06/07 3,565,000 AUD 2,967,506 3,021,209 $(53,703)
08/14/07 1,190,000 GBP 2,356,438 2,385,754 (29,316)
--------
$(83,019)
========
AUD - Australian Dollar
GBP - Great Britain Pound
9. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
10. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
24
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
25
MET INVESTORS SERIES TRUST
RCM Technology Portfolio
(formerly RCM Global Technology Portfolio)
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
RCM TECHNOLOGY PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY RCM CAPITAL MANAGEMENT LLC
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
MANAGEMENT'S PERFORMANCE REVIEW
The RCM Technology Portfolio, Class A increased by +10.82% for the first six
months of 2007. The Portfolio outperformed its primary style benchmark, the
Goldman Sachs Technology Index ('GSTI')/1/ which returned 10.40%, as well as
its broad-market index, the S&P 500(R) Index, which returned 6.96%.
MARKET ENVIRONMENT
The first half of 2007 started off with investors concerned about the economy.
As the second quarter progressed, investors became enthusiastic about many
large cap technology stocks, such as IBM, Oracle, and Dell, which were not
holdings of the portfolio. Our focus for the RCM Technology Portfolio is on
mid-cap, higher-growth companies, and the portfolio's stock holdings generally
lagged those larger companies which appreciated more than those in the GSTI
Index.
North American markets continued to march higher despite a major move upward in
long term bond yields, continued weakness in housing, and high energy prices.
The first half ended with some volatility, given late quarter press citing the
near collapse of two mortgage-debt funds at Bear Stearns. Nonetheless, strong
global economies, favorable earnings, and record corporate buyout activity
supported strength during the first half of 2007. Finally, the market broadened
its interest into the higher growth companies in June, and the Portfolio passed
the indices for the year.
PORTFOLIO REVIEW
Positive stock selection was the major contributor to the portfolio's
performance during the first half of 2007. Most notably, strong stock-picking
in the consumer services, media and telecommunication services industries
proved to benefit the portfolio. Specific stocks that added the most value on
an absolute basis were Japanese-based Nintendo Co., Apple, Inc. and NII
Holdings. RCM's decision to overweight energy and materials and to underweight
software also proved to be successful strategies during this period.
The largest detractors to portfolio performance were some of the component
companies that are struggling with competition. On an absolute basis, Qlogic
Corp, Seagate Technology and Marvell Technology proved to be the biggest
negative contributors to performance.
From a geographical perspective, the portfolio benefited from positions in
European & Asian technology stocks. Strong stock selection within these areas
also helped performance. Our focus in Asia has been on components companies,
Chinese internet companies and gaming companies, and many of these have done
well despite some concerns about the regional currencies and economies. In
Europe, we have been focusing on the third generation cellular components and
alternative energy companies who are being driven by rapid adoption of these
two technologies in that region.
- --------
/1/ The Goldman Sachs Technology Index is a capitalization-weighted index
considered representative of the technology Industry. The Index does not
include fees or expenses and is not available for direct investment.
OUTLOOK
Earlier this year, we believed that the economy was weakening and that interest
rates would be cut, but now it appears that the economy has again resumed its
steady growth and interest rates have begun to rise. This steady growth should
help most technology companies at least meet expectations, and we are hopeful
that investors will continue to show interest in the higher growth companies.
We remain focused on growth sectors within technology, and we have seen a
compression in the difference between valuations of high and low growth
companies. We believe the large amount of cash available for buyouts has caused
investors to set a 'valuation floor' of multiples for most stocks. The higher
growth companies have seen their multiples continue to compress toward this
floor, despite their much higher growth rates than the economy. As investors
gain confidence about the economy, we think they will continue the recent trend
and buy these high growth companies.
Another factor is the multinational nature of our Portfolio's companies, most
of which have significant business outside the North America. That piece is
doing better than expected, helping many of these companies to ride through any
softness in the U.S. That performance is also helping bolster confidence in
these companies.
We remain enthusiastic about the fundamentals driving our companies,
historically low valuations for growth, and a number of strong product cycles
that are underway in the technology sector.
WALTER C. PRICE
HUACHEN CHEN
Portfolio Managers
RCM CAPITAL MANAGEMENT LLC
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
RCM TECHNOLOGY PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY RCM CAPITAL MANAGEMENT LLC
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
------------------------------------------------------------
Google, Inc.--Class A 5.09%
------------------------------------------------------------
Intel Corp. 4.72%
------------------------------------------------------------
Nintendo Co., Ltd. 4.25%
------------------------------------------------------------
NVIDIA Corp. 4.05%
------------------------------------------------------------
NII Holdings, Inc. 4.01%
------------------------------------------------------------
Apple, Inc. 3.36%
------------------------------------------------------------
Merrill Lynch International Co., Expires 11/17/10 3.03%
------------------------------------------------------------
Focus Media Holding, Ltd. 2.68%
------------------------------------------------------------
SanDisk Corp. 2.64%
------------------------------------------------------------
EMC Corp. 2.56%
------------------------------------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
[CHART]
Technology 44.6%
Communications 34.8%
Energy 7.3%
Cyclical 5.2%
Industrials 3.5%
Basic Materials 3.4%
Non-cyclical 1.2%
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
RCM TECHNOLOGY PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY RCM CAPITAL MANAGEMENT LLC
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
RCM TECHNOLOGY PORTFOLIO MANAGED BY
RCM CAPITAL MANAGEMENT LLC VS. NASDAQ COMPOSITE INDEX/1/ AND S&P 500(R) INDEX/2/
Growth Based on $10,000+
[CHART]
RCM Technology NASDAQ S&P 500(R)
Portfolio Composite Index Index
-------------- --------------- ----------
2/12/2001 $10,000 $10,000 $10,000
12/31/2001 6,160 7,120 8,509
12/31/2002 3,040 4,903 6,628
12/31/2003 4,790 7,401 8,531
12/31/2004 4,584 8,078 9,458
12/31/2005 5,089 8,249 9,923
12/31/2006 5,362 9,107 11,491
6/30/2007 5,929 9,855 12,291
-----------------------------------------------------------------
Average Annual Return/3/
(for the period ended 6/30/07)
-----------------------------------------------------------------
Since
1 Year 3 Year 5 Year Inception/4/
-----------------------------------------------------------------
RCM Technology
Portfolio--Class A 24.18% 8.05% 9.23% -4.63%
- -- Class B 23.85% 7.74% 9.01% -7.87%
Class E 23.96% 7.84% 9.12% 2.29%
-----------------------------------------------------------------
- - - NASDAQ Composite Index/1/ 20.76% 9.14% 12.97% -0.24%
-----------------------------------------------------------------
- -- S&P 500(R) Index/2/ 20.59% 11.68% 10.71% 3.27%
-----------------------------------------------------------------
+The chart reflects the performance of Class B shares of the Portfolio. The
performance of Class B shares will differ from that of the other Classes
because of the difference in expenses paid by policyholders investing in the
different share classes.
/1/The NASDAQ Composite Index is a market-value weighted index of all common
stocks listed on NASDAQ. The Index does not include fees or expenses and is not
available for direct investment.
/2/The S&P 500(R) Index is an unmanaged index consisting of 500 stocks chosen
for market size, liquidity, and industry group representation. It is a
market-value weighted index (stock price times number of shares outstanding),
with each stock's weight in the Index proportionate to its market value. The
Index does not include fees or expenses and is not available for direct
investment.
/3/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/4/Inception of the Class A shares is 5/1/01. Inception of the Class B shares
is 2/12/01. Inception of the Class E shares is 10/31/01. Index returns are
based on an inception date of 1/31/01.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
3
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
RCM TECHNOLOGY PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,108.20 $4.76
Hypothetical (5% return before expenses) 1,000.00 1,020.28 4.56
- ------------------------------------------ ------------- ------------- --------------
Class B
Actual $1,000.00 $1,105.80 $6.06
Hypothetical (5% return before expenses) 1,000.00 1,019.04 5.81
- ------------------------------------------ ------------- ------------- --------------
Class E
Actual $1,000.00 $1,107.30 $5.54
Hypothetical (5% return before expenses) 1,000.00 1,019.54 5.31
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.91% ,
1.16% , and 1.06% for the Class A, Class B, and Class E, respectively,
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period).
4
MET INVESTORS SERIES TRUST
RCM TECHNOLOGY PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
------------------------------------------------------------
COMMON STOCKS - 91.1%
CHEMICALS - 3.2%
Monsanto Co......................... 89,505 $ 6,045,168
Wacker Chemie AG.................... 17,361 4,095,259
-----------
10,140,427
-----------
COMMUNICATIONS EQUIPMENT & SERVICES - 8.9%
Alcatel S.A......................... 311,300 4,338,385
Cisco Systems, Inc.*................ 160,630 4,473,545
Comverse Technology, Inc.*(a)....... 153,365 3,197,660
Foundry Networks, Inc.*............. 408,560 6,806,610
Nokia Oyj (ADR)..................... 98,505 2,768,429
QUALCOMM, Inc....................... 75,645 3,282,237
Research In Motion, Ltd.*........... 15,915 3,161,663
-----------
28,028,529
-----------
COMPUTERS & PERIPHERALS - 13.5%
Apple Computer, Inc.*............... 86,450 10,550,358
EMC Corp.*.......................... 443,560 8,028,436
Network Appliance, Inc.*............ 95,716 2,794,907
NVIDIA Corp.*....................... 308,285 12,735,254
SanDisk Corp.*...................... 169,450 8,292,883
-----------
42,401,838
-----------
ELECTRICAL EQUIPMENT & SERVICES - 1.7%
Energy Conversion Devices, Inc.*(a). 11,815 364,138
Sunpower Corp. - Class A*(a)........ 77,700 4,898,985
-----------
5,263,123
-----------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 4.7%
ABB, Ltd............................ 314,580 7,063,844
Riverbed Technology, Inc.*.......... 110,640 4,848,245
Suntech Power Holdings Co., Ltd.
(ADR)*(a)......................... 77,186 2,814,973
-----------
14,727,062
-----------
ENERGY EQUIPMENT & SERVICES - 2.3%
Cameron International Corp.*........ 34,900 2,494,303
Renewable Energy Corp AS*........... 121,612 4,686,685
-----------
7,180,988
-----------
HOUSEHOLD DURABLES - 0.9%
Dolby Laboratories, Inc.*........... 84,200 2,981,522
-----------
INDUSTRIAL-DIVERSIFIED - 1.2%
Orkla ASA........................... 199,180 3,744,383
-----------
INTERNET SOFTWARE & SERVICES - 12.5%
Baidu.com (ADR)*(a)................. 28,870 4,849,583
Google, Inc. - Class A*............. 30,565 15,997,110
Juniper Networks, Inc.*(a).......... 159,535 4,015,496
--------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
--------------------------------------------------------------
INTERNET SOFTWARE & SERVICES - CONTINUED
McAfee, Inc.*......................... 152,175 $ 5,356,560
SINA Corp.*........................... 39,218 1,641,665
Tencent Holdings, Ltd................. 1,826,890 7,334,161
------------
39,194,575
------------
MEDIA - 2.7%
Focus Media Holding, Ltd.*(a)......... 166,645 8,415,573
------------
RETAIL - SPECIALTY - 0.8%
GameStop Corp., - Class A*(a)......... 61,020 2,385,882
------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS - 14.6%
Analog Devices, Inc.(a)............... 42,725 1,608,169
Chartered Semiconductor Manufacturing,
Ltd.*............................... 6,477,140 5,718,716
First Solar, Inc.*(a)................. 55,740 4,977,024
Infineon Technologies AG*............. 378,005 6,281,233
Intel Corp............................ 624,405 14,835,863
MEMC Electronic Materials, Inc.*...... 43,040 2,630,605
National Semiconductor Corp........... 74,815 2,115,020
ON Semiconductor Corp.*(a)............ 398,755 4,274,654
Q-Cells AG*........................... 24,020 2,075,521
Texas Instruments, Inc................ 37,400 1,407,362
------------
45,924,167
------------
SOFTWARE - 15.1%
Activision, Inc.*..................... 271,200 5,063,304
Autodesk, Inc.*(a).................... 148,420 6,987,614
Cerner Corp.*......................... 110,520 6,130,544
Nintendo Co., Ltd..................... 36,620 13,344,053
Red Hat, Inc.*(a)..................... 213,992 4,767,742
Salesforce.com, Inc.*(a).............. 166,500 7,136,190
THQ, Inc.*(a)......................... 131,550 4,014,906
------------
47,444,353
------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 4.6%
Corning, Inc.*........................ 257,200 6,571,460
Level 3 Communications, Inc.*(a)...... 992,325 5,805,101
Telefonaktiebolaget LM Ericsson (ADR). 54,800 2,185,972
------------
14,562,533
------------
TELECOMMUNICATION SERVICES - WIRELESS - 4.4%
NII Holdings, Inc.*................... 155,845 12,582,925
PT Telekomunikasi Indonesia........... 1,052,835 1,136,709
------------
13,719,634
------------
Total Common Stocks
(Cost $249,425,616) 286,114,589
------------
See notes to financial statements
5
MET INVESTORS SERIES TRUST
RCM TECHNOLOGY PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
------------------------------------------------------------------
SECURITY SHARES/PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------------
WARRANTS - 4.6%
Macquarie Bank Ltd.,
Expires 04/09/12(b).................. 83,065 $ 1,295,814
Macquarie Bank Ltd.,
Expires 11/15/11(b).................. 179,192 3,675,228
Merrill Lynch International Co.,
Expires 11/17/10(b).................. 1,095,905 9,505,880
------------
Total Warrants (Cost $11,984,329)...... 14,476,922
------------
SHORT-TERM INVESTMENT - 7.1%
State Street Bank & Trust Co.,
Repurchase Agreement
dated 06/29/07 at 3.400% to be
repurchased at $22,315,321
on 07/02/07 collateralized by
$23,050,000 FHLB at 4.375% due
09/17/10 with a value of $22,755,882.
(Cost - $22,309,000)................. $22,309,000 22,309,000
------------
TOTAL INVESTMENTS - 102.8%
(Cost $283,718,945) 322,900,511
------------
Other Assets and Liabilities (net) - (2.8)% (8,826,574)
------------
TOTAL NET ASSETS - 100.0% $314,073,937
============
PORTFOLIO FOOTNOTES:
* Non-income producing security.
(a) A portion or all of the security was held on loan. As of June 30, 2007, the
market value of the securities loaned was $50,509,942 and the collateral
received consisted of cash in the amount of $51,685,797.
(b) Securities that may be resold to "qualified institutional buyers" under
Rule 144A or securities offered pursuant to Section 4(2) of the Securities
Act of 1933, as amended. These securities have been determined to be liquid
under the guidelines established by the Board of Trustees. These securities
represent in the aggregate $14,476,922 of net assets.
ADR - American Depositary Receipt
FHLB - Federal Home Loan Bank
See notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
RCM TECHNOLOGY PORTFOLIO
ASSETS
Investments, at value (Note 2)* $300,591,511
Repurchase Agreement 22,309,000
Cash 294
Cash denominated in foreign currencies** 473,792
Collateral for securities on loan 51,685,797
Receivable for investments sold 4,712,304
Receivable for Trust shares sold 324,207
Dividends receivable 20,426
Interest receivable 2,107
------------
Total assets 380,119,438
------------
LIABILITIES
Payables for:
Investments purchased 13,501,124
Trust shares redeemed 459,793
Distribution and services fees - Class B 18,979
Distribution and services fees - Class E 1,940
Collateral for securities on loan 51,685,797
Investment advisory fee payable (Note 3) 221,068
Administration fee payable 3,713
Custodian and accounting fees payable 102,177
Accrued expenses 50,910
------------
Total liabilities 66,045,501
------------
NET ASSETS $314,073,937
============
NET ASSETS REPRESENTED BY:
Paid in surplus $254,439,023
Accumulated net realized gain 20,679,321
Unrealized appreciation on investments and foreign currency 39,180,863
Accumulated net investment loss (225,270)
------------
Total $314,073,937
============
NET ASSETS
Class A $204,568,654
============
Class B 93,509,929
============
Class E 15,995,354
============
CAPITAL SHARES OUTSTANDING
Class A 35,669,366
============
Class B 16,553,130
============
Class E 2,815,693
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 5.74
============
Class B 5.65
============
Class E 5.68
============
- --------------------------------------------------------------------------------------
* Investments at cost, excluding Repurchase Agreements $261,409,945
**Cost of cash denominated in foreign currencies 473,026
See notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
RCM TECHNOLOGY PORTFOLIO
INVESTMENT INCOME:
Dividends (1) $ 882,602
Interest (2) 357,824
-----------
Total investment income 1,240,426
-----------
EXPENSES:
Investment advisory fee (Note 3) 1,294,359
Administration fees 12,066
Custody and accounting fees 22,503
Distribution fee - Class B 113,103
Distribution fee - Class E 11,806
Transfer agent fees 10,730
Audit 12,181
Legal 7,161
Trustee fees and expenses 7,194
Shareholder reporting 13,882
Insurance 2,067
Other 1,714
-----------
Total expenses 1,508,766
Less broker commission recapture (43,070)
-----------
Net expenses 1,465,696
-----------
Net investment loss (225,270)
-----------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS, OPTIONS CONTRACTS AND FOREIGN CURRENCY:
Net realized gain (loss) on:
Investments 24,864,376
Options contracts 461,421
Foreign currency (41,247)
-----------
Net realized gain on investments, options contracts and foreign currency 25,284,550
-----------
Net change in unrealized appreciation (depreciation) on:
Investments 5,636,500
Foreign currency (703)
-----------
Net change in unrealized appreciation on investments and foreign currency 5,635,797
-----------
Net realized and change in unrealized gain on investments, options contracts and foreign currency 30,920,347
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $30,695,077
===========
- ----------------------------------------------------------------------------------------------------------------------
(1)Dividend income is net withholding taxes of: $ 64,508
(2)Interest income includes securities lending income of: 88,492
See notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
RCM TECHNOLOGY PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment loss $ (225,270) $ (1,738,506)
Net realized gain on investments, options contracts and foreign currency 25,284,550 19,050,137
Net change in unrealized appreciation (depreciation) on investments and foreign currency 5,635,797 (983,136)
------------ ------------
Net increase in net assets resulting from operations 30,695,077 16,328,495
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net realized gains
Class A (7,555,464) --
Class B (3,580,530) --
Class E (606,662) --
------------ ------------
Net decrease in net assets resulting from distributions (11,742,656) --
------------ ------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class A 29,075,814 63,546,281
Class B 6,883,957 19,096,597
Class E 793,092 2,163,845
Net asset value of shares issued through dividend reinvestment
Class A 7,555,464 --
Class B 3,580,530 --
Class E 606,662 --
Cost of shares repurchased
Class A (29,180,460) (19,286,994)
Class B (14,494,451) (18,099,160)
Class E (3,045,775) (4,833,335)
------------ ------------
Net increase in net assets from capital share transactions 1,774,833 42,587,234
------------ ------------
TOTAL INCREASE IN NET ASSETS 20,727,254 58,915,729
Net assets at beginning of period 293,346,683 234,430,954
------------ ------------
Net assets at end of period $314,073,937 $293,346,683
============ ============
Net assets at end of period includes distributions in excess of net investment income $ (225,270) $ --
============ ============
See notes to financial statements
9
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR
PERIOD ENDED:
CLASS A
RCM TECHNOLOGY PORTFOLIO ----------------------------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 -----------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002
-------------- ------ ------- ------ ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD.... $ 5.39 $ 5.11 $ 4.62 $ 4.83 $ 3.06 $ 6.18
------ ------ ------- ------ ------ -------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Loss..................... (0.00)+ (a) (0.03)(a) (0.03)(a) (0.02)(a) (0.04)(a) (0.04)(a)
Net Realized/Unrealized Gain (Loss) on
Investments........................... 0.57 0.31 0.56 (0.19) 1.81 (3.08)
------ ------ ------- ------ ------ -------
Total from Investment Operations........ 0.57 0.28 0.53 (0.21) 1.77 (3.12)
------ ------ ------- ------ ------ -------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.... -- -- -- -- -- --
Distributions from Net Realized Capital
Gains................................. (0.22) -- (0.04) (0.00) + -- --
------ ------ ------- ------ ------ -------
Total Distributions..................... (0.22) -- (0.04) (0.00) + -- --
------ ------ ------- ------ ------ -------
NET ASSET VALUE, END OF PERIOD.......... $ 5.74 $ 5.39 $ 5.11 $ 4.62 $ 4.83 $ 3.06
====== ====== ======= ====== ====== =======
TOTAL RETURN 10.82 % 5.48 % 11.35 % (4.28)% 57.84 % (50.49)%
Ratio of Expenses to Average Net
Assets**.............................. 0.91 %* 1.02 % 1.10 % 0.96 % 1.10 % 1.10 %
Ratio of Expenses to Average Net Assets
After Broker Rebates**................ N/A N/A N/A N/A 1.04 % 1.04 %
Ratio of Expenses to Average Net Assets
Before Reimbursement and Rebates...... 0.94 %* 1.06 %(b) 1.19 % N/A 1.26 % 1.73 %
Ratio of Net Investment Loss to Average
Net Assets............................ (0.07)%* (0.57)% (0.69)% (0.45)% (0.89)% (0.90)%
Portfolio Turnover Rate................. 112.4 % 265.0 % 290.7 % 173.0 % 313.0 % 227.2 %
Net Assets, End of Period (in millions). $204.6 $184.8 $129.3 $81.8 $47.2 $13.0
CLASS B
--------------------------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 -----------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002
-------------- ------ ------ ------- ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD.... $ 5.32 $ 5.05 $ 4.58 $ 4.79 $ 3.04 $ 6.16
------ ------ ------ ------- ------ -------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Loss..................... (0.01)(a) (0.04)(a) (0.04)(a) (0.02)(a) (0.05)(a) (0.04)(a)
Net Realized/Unrealized Gain (Loss) on
Investments........................... 0.56 0.31 0.55 (0.19) 1.80 (3.08)
------ ------ ------ ------- ------ -------
Total from Investment Operations........ 0.55 0.27 0.51 (0.21) 1.75 (3.12)
------ ------ ------ ------- ------ -------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.... -- -- -- -- -- --
Distributions from Net Realized Capital
Gains................................. (0.22) -- (0.04) (0.00) + -- --
------ ------ ------ ------- ------ -------
Total Distributions..................... (0.22) -- (0.04) (0.00) + -- --
------ ------ ------ ------- ------ -------
NET ASSET VALUE, END OF PERIOD.......... $ 5.65 $ 5.32 $ 5.05 $ 4.58 $ 4.79 $ 3.04
====== ====== ====== ======= ====== =======
TOTAL RETURN 10.58 % 5.35 % 11.01 % (4.31)% 57.57 % (50.65)%
Ratio of Expenses to Average Net
Assets**.............................. 1.16 %* 1.28 % 1.35 % 1.21 % 1.35 % 1.35 %
Ratio of Expenses to Average Net Assets
After Broker Rebates**................ N/A N/A N/A N/A 1.29 % 1.27 %
Ratio of Expenses to Average Net Assets
Before Reimbursement and Rebates...... 1.19 %* 1.31 %(b) 1.44 % N/A 1.52 % 1.96 %
Ratio of Net Investment Income Loss to
Average Net Assets.................... (0.32)%* (0.83)% (0.95)% (0.57)% (1.14)% (1.13)%
Portfolio Turnover Rate................. 112.4 % 265.0 % 290.7 % 173.0 % 313.0 % 227.2 %
Net Assets, End of Period (in millions). $ 93.5 $91.9 $86.5 $100.2 $64.8 $15.2
* Annualized
** Prior to 05/01/2003, broker rebates were excluded from the calculation of
the expense limitation.
+ Rounds to less than $0.005 per share
N/A Not Applicable
(a) Per share amounts based on average shares outstanding during the period.
(b) Excludes effect of Deferred Expense Reimbursement--See Note 3 of financial
statements.
See notes to financial statements
10
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR
PERIOD ENDED:
CLASS E
RCM TECHNOLOGY PORTFOLIO -------------------------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 ----------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002
-------------- ------ ------ ------ ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD.... $ 5.34 $ 5.07 $ 4.59 $ 4.80 $ 3.05 $ 6.17
------ ------ ------ ------ ------ -------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Loss..................... (0.01)(a) (0.04)(a) (0.04)(a) (0.02)(a) (0.05)(a) (0.03)(a)
Net Realized/Unrealized Gain (Loss) on
Investments........................... 0.57 0.31 0.56 (0.19) 1.80 (3.09)
------ ------ ------ ------ ------ -------
Total from Investment Operations........ 0.56 0.27 0.52 (0.21) 1.75 (3.12)
------ ------ ------ ------ ------ -------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.... -- -- -- -- -- --
Distributions from Net Realized Capital
Gains................................. (0.22) -- (0.04) (0.00) + -- --
------ ------ ------ ------ ------ -------
Total Distributions..................... (0.22) -- (0.04) (0.00) + -- --
------ ------ ------ ------ ------ -------
NET ASSET VALUE, END OF PERIOD.......... $ 5.68 $ 5.34 $ 5.07 $ 4.59 $ 4.80 $ 3.05
====== ====== ====== ====== ====== =======
TOTAL RETURN 10.73 % 5.33 % 11.21 % (4.30)% 57.88 % (50.57)%
Ratio of Expenses to Average Net
Assets**.............................. 1.06 %* 1.18 % 1.25 % 1.10 % 1.25 % 1.25 %
Ratio of Expenses to Average Net Assets
After Broker Rebates**................ N/A N/A N/A N/A 1.22 % 1.12 %
Ratio of Expenses to Average Net Assets
Before Reimbursement and Rebates...... 1.09 %* 1.21 %(b) 1.34 % N/A 1.37 % 1.83 %
Ratio of Net Investment Loss to Average
Net Assets............................ (0.23)%* (0.74)% (0.85)% (0.55)% (1.07)% (0.97)%
Portfolio Turnover Rate................. 112.4 % 265.0 % 290.7 % 173.0 % 313.0 % 227.2 %
Net Assets, End of Period (in millions). $ 16.0 $16.7 $18.6 $20.3 $15.5 $1.2
* Annualized
** Prior to 05/01/2003, broker rebates were excluded from the calculation of
the expense limitation.
+ Rounds to less than $0.005 per share
N/A Not Applicable
(a) Per share amounts based on average shares outstanding during the period.
(b) Excludes effect of Deferred Expense Reimbursement--See Note 3 of financial
statements.
See notes to financial statements
11
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is RCM Technology Portfolio, which is
diversified. Shares in the Trust are not offered directly to the general public
and are currently available only to separate accounts established by certain
affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A, B and E Shares are
offered by the Portfolio. Shares of each Class of the Portfolio represent an
equal pro rata interest in the Portfolio and generally give the shareholder the
same voting, dividend, liquidation, and other rights. Investment income,
realized and unrealized capital gains and losses, the common expenses of the
Portfolio and certain Portfolio-level expense reductions, if any, are allocated
on a pro rata basis to each class based on the relative net assets of each
class to the total net assets of the Portfolio. Each class of shares differs in
its respective distribution expenses and certain other class-specific expense
reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date. The value of the
security so purchased is subject to market fluctuations during this period. The
Portfolio segregates assets having an aggregate value at least equal to the
amount of the when issued or delayed delivery purchase commitments until
payment is made.
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. OPTIONS CONTRACTS - A purchased option contract gives the buyer the right,
but not the obligation, to buy (call) or sell (put) an underlying item at a
fixed exercise price during a specified period. These contracts are generally
used by the Portfolio to provide the return of an index without purchasing all
of the securities underlying the index or as a substitute for purchasing or
selling specific securities.
Purchases of put and call options are recorded as investments, the value of
which are marked-to-market daily. When a purchased option expires, the
Portfolio will realize a loss equal to the premium paid. When the Portfolio
enters into a closing sale transaction, the Portfolio will realize a gain or
loss depending on whether the sales proceeds from the closing sale transaction
are greater or less than the cost of the option. When the Portfolio exercises a
put option, it will realize a gain or loss from the sale of the underlying
security and the proceeds from such sale will be decreased by the premium
originally paid. When the Portfolio exercises a call option, the cost of the
security which the Portfolio purchases upon exercise will be increased by the
premium originally paid.
The premium received for a written option is recorded as a liability. The
liability is marked-to-market daily based on the option's quoted market price.
When an option expires or the Portfolio enters into a closing purchase
transaction, the Portfolio realizes a gain (or loss if the cost of the closing
purchase transaction exceeds the premium received when the option was sold)
without regard to any unrealized gain or loss on the underlying security and
the liability related to such option is eliminated. When a written call option
is exercised, the Portfolio realizes a gain or loss from the sale of the
underlying security and the proceeds from such sale are increased by the
premium originally received. If a written put option is exercised, the amount
of the premium originally received will reduce the cost of the underlying
security purchased.
The risk associated with purchasing options is limited to the premium
originally paid. The risk in writing a call option is that the Portfolio may
forego the opportunity for profit if the market price of the underlying
security increases and the option is exercised. The risk in writing a put
option is that the Portfolio may incur a loss if the market price of the
underlying security decreases and the option is exercised. This loss can be
greater than premium received. In addition, the Portfolio could be exposed to
risks if the counterparties to the transactions are unable to meet the terms of
the contracts.
G. FORWARD FOREIGN CURRENCY CONTRACTS - The Portfolio may enter into forward
foreign currency contracts to hedge their portfolio holdings against future
movements in certain foreign currency exchange rates. A forward currency
contract is a commitment to purchase or sell a foreign currency at a future
date at a set price. The forward currency contracts are valued at the forward
rate and are marked-to-market daily. The change in market value is recorded by
the Portfolio as an unrealized gain or loss. When the contract is closed, the
Portfolio recognizes a realized gain or loss equal to the difference between
the value of the contract at the time it was opened and the value at the time
it was closed.
The use of forward foreign currency contracts does not eliminate fluctuations
in the underlying prices of the securities of the Portfolio, but it does
establish a rate of exchange that can be achieved in the future. Although
forward foreign currency contracts to sell limit the risk of loss due to a
decline in the value of the currency holdings, they also limit any potential
gain that might result should the value of the currency increase. In addition,
the Portfolio could be exposed to risks if the counterparties to the contracts
are unable to meet the terms of the contracts.
H. SECURITIES LENDING - The Portfolio may lend its securities to certain
qualified brokers who borrow securities in order to complete certain
transactions. By lending its investment securities, the Portfolio attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term of the loan would
accrue to the account of the Portfolio. Risks of delay in recovery of the
securities or even loss of rights in the collateral may occur should the
borrower of the securities fail financially. Risks may also arise to the extent
that the value of the collateral decreases below the value of the securities
loaned.
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Upon entering into a securities lending transaction, the Portfolio receives
cash or other securities as collateral in an amount equal to or exceeding 102%
of the current market value of the loaned securities. Any cash received as
collateral is generally invested by State Street Bank and Trust Company ("State
Street"), acting in its capacity as securities lending agent (the "Agent"), in
the State Street Navigator Securities Lending Prime Portfolio which is a money
market fund registered under the 1940 Act. A portion of the dividends received
on the collateral is rebated to the borrower of the securities and the
remainder is split between the Agent and the Portfolio. On loans collateralized
by cash, the cash collateral is invested in a money market fund or short term
securities. A portion of the income generated upon investment of the collateral
is remitted to the Borrowers and the remainder is allocated between the fund
and the lending agent. On loans collateralized by U.S. Treasuries, a fee is
received from the Borrower and is allocated between the fund and the lending
agent.
I. FOREIGN CURRENCY TRANSLATION - The books and records of the Portfolio are
maintained in U.S. dollars. Foreign currencies, investments and other assets
and liabilities are translated into U.S. dollars on a daily basis using
prevailing exchange rates. Purchases and sales of securities are translated at
the rates of exchange prevailing when such securities were acquired or sold.
Income is translated at rates of exchange prevailing when interest is accrued
or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in
forward foreign currency contracts, sales of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities
transactions, and the difference between the amounts of dividends, interest,
and foreign withholding taxes recorded on the Portfolio's books, and the U.S.
dollar equivalent of the amounts actually received or paid. Net unrealized
foreign exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at fiscal year end, from
changes in the exchange rates of foreign currency held, and from changes in the
contract value of forward foreign currency contracts.
J. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
K. DIRECTED BROKERAGE AGREEMENT - The Trust has entered into a directed
brokerage arrangement with State Street Global Markets ("SSGM"). Under this
arrangement, the Portfolio directs certain trades to SSGM in return for a
recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to
each Portfolio are shown separately as an expense reduction on the Statement of
Operations of the Portfolio.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with RCM Capital Management LLC (the "Adviser") for investment advisory
services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
--------- -------------------- ----------- --------------------
RCM Technology Portfolio $1,294,359 0.88% First $500 Million
0.85% Over $500 Million
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
14
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Maximum Expense Ratio
under current Expense
Limitation Agreement
----------------------
Portfolio Class A Class B Class E
--------- ------- ------- -------
RCM Technology Portfolio 1.10% 1.35% 1.25%
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratio as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
The amount waived and expenses reimbursed for the period ended June 30, 2007 is
shown as investment advisory fee waiver in the Statement of Operations of the
Portfolio.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued Net Increase
Through (Decrease)
Beginning Shares Dividend Shares in Shares Ending
Shares Sold Reinvestment Repurchased Outstanding Shares
- - ---------- ---------- ------------- ----------- ------------ ----------
RCM Technology Portfolio
Class A
06/30/2007 34,305,469 5,318,979 1,425,559 (5,380,641) 1,363,897 35,669,366
12/31/2006 25,295,337 12,779,536 -- (3,769,404) 9,010,132 34,305,469
Class B
06/30/2007 17,282,279 1,275,630 685,925 (2,690,704) (729,149) 16,553,130
12/31/2006 17,112,023 3,759,488 -- (3,589,232) 170,256 17,282,279
Class E
06/30/2007 3,120,605 144,231 115,555 (564,698) (304,912) 2,815,693
12/31/2006 3,667,912 421,844 -- (969,151) (547,307) 3,120,605
15
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
RCM Technology Portfolio $-- $319,396,400 $-- $327,177,169
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
- --------- ------------ ------------ -------------- --------------
RCM Technology Portfolio $283,718,945 $41,010,777 $(1,829,211) $39,181,566
6. SECURITY LENDING
As of June 30, 2007, the Portfolio had loaned securities which were
collateralized by short term investments. The value of securities on loan and
the value of the related collateral were as follows:
Value of Value of
Securities Collateral
----------- -----------
RCM Technology Portfolio $50,509,942 $51,685,797
7. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
--------------- ---------------------- ---------------
2006 2005 2006 2005 2006 2005
---- ---------- ---- -------- ---- ----------
RCM Technology Portfolio $-- $1,349,811 $-- $250,251 $-- $1,600,062
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
------------- ------------- ------------ ------------------ -----------
RCM Technology Portfolio $5,147,258 $6,601,215 $28,934,020 $-- $40,682,493
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
8. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
9. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
16
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
17
MET INVESTORS SERIES TRUST
Strategic Conservative
Growth Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
STRATEGIC CONSERVATIVE GROWTH PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY GALLATIN ASSET MANAGEMENT, INC.
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
MARKET OVERVIEW
Continuing the general trend of the past four years, financial markets
progressed markedly during the first half of 2007. Volatility returned to the
markets with episodic appearances over the past six months. Global markets
dropped sharply in February on fears of a slowdown in U.S. economic growth from
a subprime lending meltdown. Despite significant declines, markets recovered
sharply and ended the first quarter on a positive note. The advancement
continued during the second quarter as markets remained resilient and the Dow
and S&P 500 reached all-time highs. Year-to-date through June 30, the S&P
500(R) Index returned 6.9%, the S&P MidCap 400(R) Index returned 11.9%, and the
S&P SmallCap 600(R) Index returned 8.6%. Energy was the best performing sector
across large-cap and mid-cap stocks, while materials dominated in small-caps.
Financials were the biggest laggard across all market capitalizations. Foreign
stocks, as measured by the MSCI EAFE(R) Index, returned 10.7% in light of
continued strong economic growth abroad. Bonds underperformed equities with the
Lehman Brothers Aggregate Bond Index returning 0.98%.
PORTFOLIO OVERVIEW
For the six-month period ended June 30, 2007, the Portfolio (Class B) returned
6.78%, underperforming its blended benchmark which returned 7.19%. Most of the
underperformance was attributed to the Portfolio's mid-cap holdings as the
mid-cap value portion of the model, Neuberger Berman Mid Cap Value Portfolio*,
lagged the broad S&P MidCap 400(R) Index. The Portfolio's large-cap segment
also detracted, with Jennison Growth Portfolio and Van Kampen Comstock
Portfolio holding back returns as both lagged the broad S&P 500(R) Index.
Sources of strength for the period included the Portfolio's small-cap and
foreign holdings. Within small-cap, Franklin Templeton Small Cap Growth
Portfolio gained 10.18% during the period, outperforming the S&P SmallCap
600(R) Index by 1.62%. Within the foreign sleeve of the Portfolio, exposure to
emerging market equities had the greatest impact, with MFS(R) Emerging Markets
Equity Portfolio returning 14.58% during the period. With regard to the bond
portion of the Portfolio, Lord Abbett Bond Debenture Portfolio displayed strong
performance during the period, aiding overall returns.
We made one change to the underlying portfolios in the Strategic Conservative
Growth Portfolio during the period, replacing Pioneer Mid-Cap Value Portfolio
with Neuberger Berman Partners Mid Cap Value Portfolio.
OUTLOOK
The rate of economic growth in the U.S. has slowed in recent quarters. We
believe we are moving through the low point of the cycle and expect growth to
gradually improve in coming quarters. This positive growth is expected to fuel
corporate profits, capital spending, and employment, thus supporting further
economic expansion. Within domestic equities, we favor large-cap stocks based
on relative valuations. As a group, large-caps have shown improved fundamentals
over the past several years which have not been reflected in valuations.
Continued exposure to domestic mid-cap and small-cap stocks, as well as foreign
equities provides additional growth opportunities and portfolio
diversification. The relatively small bond allocation tempers the overall risk
of an otherwise all-equity portfolio. Within fixed-income, relatively
attractive yields are available in investment-grade, short- and
intermediate-maturity bonds. We continue to limit exposure to speculative-grade
bonds.
- --------
* Neuberger Berman Partners Mid Cap Value Portfolio was added to the Portfolio
during February 2007. Therefore, it was not held in the Portfolio for the full
six-month period.
MARK A. KELLER
Chief Investment Officer
GREGORY W. ELLSTON
MATTHEW R. EMBLETON
DANIEL T. WINTER
Portfolio Managers
GALLATIN ASSET MANAGEMENT, INC.
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
- --------------------------------------------------------------------------------
HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
----------------------------------------------------------------------
PIMCO Total Return Portfolio (Class A) 14.72%
----------------------------------------------------------------------
Davis Venture Value Portfolio (Class A) 11.06%
----------------------------------------------------------------------
T. Rowe Price Large Cap Growth Portfolio (Class A) 11.06%
----------------------------------------------------------------------
Jennison Growth Portfolio (Class A) 11.01%
----------------------------------------------------------------------
MFS(R) Research International Portfolio (Class A) 10.20%
----------------------------------------------------------------------
Van Kampen Comstock Portfolio (Class A) 9.91%
----------------------------------------------------------------------
Neuberger Berman Partners Mid Cap Value Portfolio (Class A) 9.84%
----------------------------------------------------------------------
Franklin Templeton Small Cap Growth Portfolio (Class A) 7.06%
----------------------------------------------------------------------
MFS(R) Emerging Markets Equity Portfolio (Class A) 5.21%
----------------------------------------------------------------------
FI Mid Cap Opportunities Portfolio (Class A) 5.03%
----------------------------------------------------------------------
Lord Abbett Bond Debenture Portfolio (Class A) 4.95%
----------------------------------------------------------------------
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
STRATEGIC CONSERVATIVE GROWTH PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY GALLATIN ASSET MANAGEMENT, INC.
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
STRATEGIC CONSERVATIVE GROWTH PORTFOLIO MANAGED BY
GALLATIN ASSET MANAGEMENT, INC. VS. WILSHIRE 5000 EQUITY INDEX/1/ AND BLENDED
BENCHMARK/2/
Growth Based on $10,000+
[CHART]
Strategic Conservative MSCI Global Blended
Growth Portfolio Capital Markets Benchmark/2/
---------------------- --------------- ------------
11/1/2006 $10,000 $10,000 $10,000
12/31/2006 10,348 10,345 10,309
6/30/2007 11,050 11,127 11,053
------------------------------------------------------------
Cumulative Return/3/
(for the period ended 6/30/07)
------------------------------------------------------------
Since Inception/4/
------------------------------------------------------------
Strategic Conservative Growth
- -- Portfolio--Class B 10.50%
------------------------------------------------------------
- - - Wilshire 5000 Equity Index/1/ 11.27%
------------------------------------------------------------
- -- Blended Benchmark/2/ 10.53%
------------------------------------------------------------
+The chart reflects the performance of Class B shares of the Portfolio. This is
currently the only active Class in the Portfolio.
/1/The Wilshire 5000 Equity Index measures the performance of all U.S.
headquartered equity securities with readily available price data. The market
capitalized weighted index is compromised of approximately 82% New York Stock
Exchange, 2% American Stock Exchange and 16% OTC (1995). The Index was created
in 1974 and backdated to 1971, with a base index of December 1980 (base index
equals 1,044.596). Dividends are reinvested on the "ex" dividend date and the
rebalancing of share weights is done on a monthly basis. No attempt has been
made to adjust the market capitalization of the index to take into account
cross holding between corporations. The Index does not include fees or expenses
and is not available for direct investment.
/2/ The blended benchmark is comprised of 20% Lehman Brothers Aggregate Bond
Index, 43% S&P 500(R) Index, 15% S&P 400(R) MidCap Index, 7% S&P 600(R)
SmallCap Index, and 15% MSCI EAFE(R) Index.
The Lehman Brother Aggregate Bond Index represents securities that are U.S.
domestic, taxable, non-convertible and dollar denominated. The Index covers the
investment grade fixed rate bond market with index components for government
and corporate securities, mortgage pass-through securities, and asset-backed
securities. The Index does not include fees or expenses and is not available
for direct investment.
The S&P 500(R) Index is an unmanaged index consisting of 500 stocks chosen for
market size, liquidity, and industry group representation. It is a market-value
weighted index (stock price times number of shares outstanding), with each
stock's weight in the Index proportionate to its market value. The Index does
not include fees or expenses and is not available for direct investment.
The S&P MidCap 400(R) Index is a capitalization-weighted index which measures
the performance of the mid-range sector of the U.S. Stock market. The Index
does not include fees or expenses and is not available for direct investment.
The S&P SmallCap 600(R) Index is a capitalization-weighted index which measures
the performance of the small-cap range of the U.S. stock market. The Index does
not include fees or expenses and is not available for direct investment.
The Morgan Stanley Capital International Europe, Australasia and Far East Index
("MSCI EAFE(R) Index") is an unmanaged free float-adjusted market
capitalization index that is designed to measure developed market equity
performance excluding the US & Canada. The Index does not include fees or
expenses and is not available for direct investment.
/3/"Cumulative Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/4/Inception of Class B shares is 11/1/06. Index returns are based on an
inception date of 10/31/06.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
2
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
STRATEGIC CONSERVATIVE GROWTH PORTFOLIO ------------- ------------- --------------
Class B
Actual $1,000.00 $1,067.80 $2.05
Hypothetical (5% return before expenses) 1,000.00 1,022.81 2.01
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.40%
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period)
3
MET INVESTORS SERIES TRUST
STRATEGIC CONSERVATIVE GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
------------------------------------------------------------------
INVESTMENT COMPANY SECURITIES - 100.0%
Davis Venture Value Portfolio
(Class A)*............................. 848,374 $ 31,686,766
FI Mid Cap Opportunities Portfolio
(Class A)*............................. 664,486 14,419,344
Franklin Templeton Small Cap Growth
Portfolio (Class A)*................... 1,794,812 20,209,578
Jennison Growth Portfolio (Class A)*..... 2,465,572 31,534,672
Lord Abbett Bond Debenture Portfolio
(Class A).............................. 1,152,514 14,175,923
MFS(R) Emerging Markets Equity Portfolio
(Class A).............................. 1,237,879 14,916,448
MFS(R) Research International Portfolio
(Class A).............................. 2,081,022 29,217,552
Neuberger Berman Partners Mid Cap Value
Portfolio (Class A)*................... 1,253,132 28,182,932
PIMCO Total Return Portfolio
(Class A).............................. 3,691,366 42,155,396
T. Rowe Price Large Cap Growth Portfolio
(Class A)*............................. 1,937,334 31,675,415
Van Kampen Comstock Portfolio
(Class A).............................. 2,321,680 28,394,147
-------------
Total Investment Company Securities
(Cost $281,979,147) 286,568,173
-------------
TOTAL INVESTMENTS - 100.0%
(Cost $281,979,147) 286,568,173
-------------
Other Assets and Liabilities (net) - 0.0% (114,706)
-------------
TOTAL NET ASSETS - 100.0% $ 286,453,467
=============
PORTFOLIO FOOTNOTES:
* A Portfolio of Metropolitan Series Fund, Inc.
See notes to financial statements
4
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
STRATEGIC CONSERVATIVE GROWTH PORTFOLIO
ASSETS
Investments, at value (Note 2)* $286,568,173
Receivable for Trust shares sold 795,829
Receivable from investment manager (Note 3) 9,485
------------
Total assets 287,373,487
------------
LIABILITIES
Payables for:
Investments purchased 618,996
Trust shares redeemed 176,834
Distribution and services fees - Class B 58,317
Investment advisory fee payable (Note 3) 34,296
Administration fee payable 1,901
Custodian and accounting fees payable 7,402
Accrued expenses 22,274
------------
Total liabilities 920,020
------------
NET ASSETS $286,453,467
============
NET ASSETS REPRESENTED BY:
Paid in surplus $270,383,874
Accumulated net realized gain 8,358,864
Unrealized appreciation on investments 4,589,026
Undistributed net investment income 3,121,703
------------
Total $286,453,467
============
NET ASSETS
Class B $286,453,467
============
CAPITAL SHARES OUTSTANDING
Class B 25,970,338
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class B $ 11.03
============
- -------------------------------------------------------------------------------------
* Investments at cost $281,979,147
See notes to financial statements
5
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
STRATEGIC CONSERVATIVE GROWTH PORTFOLIO
INVESTMENT INCOME:
Dividends from underlying Portfolios $ 3,593,456
-----------
Total investment income 3,593,456
-----------
EXPENSES:
Investment advisory fee (Note 3) 175,264
Administration fees 11,901
Custody and accounting fees 12,350
Distribution fee - Class B 294,860
Transfer agent fees 2,008
Audit 7,404
Legal 12,976
Trustee fees and expenses 6,134
Insurance 7,578
Other 1,238
-----------
Total expenses 531,713
Less fees waived and expenses reimbursed by the Manager (59,960)
-----------
Net expenses 471,753
-----------
Net investment income 3,121,703
-----------
NET REALIZED AND CHANGE IN UNREALIZED GAIN ON INVESTMENTS AND CAPITAL
GAINS DISTRIBUTIONS FROM UNDERLYING PORTFOLIOS:
Net realized gain on:
Investments 595,553
Capital gain distributions from underlying Portfolios 7,763,350
-----------
Net realized gain on investments and capital gains distributions
from underlying Portfolios 8,358,903
-----------
Net change in unrealized appreciation on:
Investments 3,925,058
-----------
Net change in unrealized appreciation on investments 3,925,058
-----------
Net realized and change in unrealized gain on investments 12,283,961
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $15,405,664
===========
See notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
STRATEGIC CONSERVATIVE GROWTH PORTFOLIO
Period Ended Period Ended
June 30, 2007 December 31,
(Unaudited) 2006*
------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 3,121,703 $ 178,800
Net realized gain on investments and capital gain distributions from underlying Portfolios 8,358,903 20,566
Net change in unrealized appreciation on investments 3,925,058 663,968
------------ ------------
Net increase in net assets resulting from operations 15,405,664 863,334
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class B -- (198,525)
From net realized gains
Class B (20,578) --
------------ ------------
Net decrease in net assets resulting from distributions (20,578) (198,525)
------------ ------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class B 162,698,460 115,319,605
Net asset value of shares issued through dividend reinvestment
Class B 20,578 198,525
Cost of shares repurchased
Class B (7,742,587) (91,009)
------------ ------------
Net increase in net assets from capital share transactions 154,976,451 115,427,121
------------ ------------
TOTAL INCREASE IN NET ASSETS 170,361,537 116,091,930
Net assets at beginning of period 116,091,930 --
------------ ------------
Net assets at end of period $286,453,467 $116,091,930
============ ============
Net assets at end of period includes undistributed net investment income $ 3,121,703 $ --
============ ============
* For the period November 1, 2006 (Commencement of Operations) through
December 31, 2006.
See notes to financial statements
7
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE PERIOD ENDED:
CLASS B
STRATEGIC CONSERVATIVE GROWTH PORTFOLIO -------------------------------
FOR THE PERIOD
ENDED FOR THE PERIOD
JUNE 30, 2007 ENDED
(UNAUDITED) DECEMBER 31, 2006(B)
-------------- --------------------
NET ASSET VALUE, BEGINNING OF PERIOD............................. $10.33 $10.00
------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income............................................ 0.14 (a) 0.03 (a)
Net Realized/Unrealized Gain on Investments...................... 0.56 0.32
------ ------
Total from Investment Operations................................. 0.70 0.35
------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income............................. -- (0.02)
Distributions from Net Realized Capital Gains.................... (0.00)+ --
------ ------
Total Distributions.............................................. (0.00)+ (0.02)
------ ------
NET ASSET VALUE, END OF PERIOD................................... $11.03 $10.33
====== ======
TOTAL RETURN 6.78% 3.48%
Ratio of Expenses to Average Net Assets.......................... 0.40%* 0.40%*
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates........................................................ 0.45%* 0.87%*
Ratio of Net Investment Income to Average Net Assets............. 2.65%* 2.27%*
Portfolio Turnover Rate.......................................... 10.6% 0.1%
Net Assets, End of Period (in millions).......................... $286.5 $116.1
* Annualized
+ Rounds to less than $0.005 per share
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--11/01/2006.
See notes to financial statements
8
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is Strategic Conservative Growth Portfolio,
which is non-diversified. Shares in the Trust are not offered directly to the
general public and are currently available only to separate accounts
established by certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class B Shares are offered
by the Portfolio. Class A and E Shares are not currently offered by the
Portfolio included in this report. Shares of each Class of the Portfolio
represent an equal pro rata interest in the Portfolio and generally give the
shareholder the same voting, dividend, liquidation, and other rights.
Investment income, realized and unrealized capital gains and losses, the common
expenses of the Portfolio and certain Portfolio-level expense reductions, if
any, are allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the Portfolio. Each class of
shares differs in its respective distribution expenses and certain other
class-specific expense reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
9
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date. The value of the
security so purchased is subject to market fluctuations during this period. The
Portfolio segregates assets having an aggregate value at least equal to the
amount of the when issued or delayed delivery purchase commitments until
payment is made.
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with Gallatin Asset Management, Inc., (the "Adviser") for investment advisory
services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- ----------------------------
Strategic Conservative Growth Portfolio $175,264 0.15% First $250 Million
0.125% $250 Million to $500 Million
0.10% Over $500 Million
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
10
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Maximum Expense Ratio Expenses Deferred in
- - under current Expense --------------------
Limitation Agreement 2006 2007
- - --------------------- ------- -------
Subject to repayment
until December 31,
- - ------- ------- ------- --------------------
Portfolio Class A Class B Class E 2011 2012
- --------- ------- ------- ------- ------- -------
Strategic Conservative Growth Portfolio 0.15%* 0.40% 0.30%* $36,665 $59,960
* Classes not offered during the period.
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratio as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
The amount waived and expenses reimbursed for the period ended June 30, 2007 is
shown as investment advisory fee waiver in the Statement of Operations of the
Portfolio.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued
Through Net Increase
Beginning Shares Dividend Shares in Shares Ending
Shares Sold Reinvestment Repurchased Outstanding Shares
---------- ---------- ------------- ----------- ------------ ----------
Strategic Conservative Growth Portfolio
Class B
06/30/2007 11,233,486 15,442,409 1,890 (707,447) 14,736,852 25,970,338
11/01/2006-12/31/2006 -- 11,223,123 19,163 (8,800) 11,233,486 11,233,486
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
Strategic Conservative Growth Portfolio $-- $190,902,885 $-- $24,982,771
11
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
5. INVESTMENT TRANSACTIONS - CONTINUED
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
- --------- ------------ ------------ -------------- --------------
Strategic Conservative Growth Portfolio $281,979,147 $7,897,306 $(3,308,280) $4,589,026
6. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the period ended December 31, 2006
were as follows:
Ordinary Income Long-Term Capital Gain Total
--------------- ---------------------- --------
2006 2006 2006
--------------- ---------------------- --------
Strategic Conservative Growth Portfolio $198,525 $-- $198,525
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
------------- ------------- ------------ ------------------ --------
Strategic Conservative Growth Portfolio $2,700 $17,839 $663,968 $-- $684,507
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
7. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
8. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
9. OTHER MATTERS
The Portfolio does not invest in the Underlying Portfolios for the purpose of
exercising management or control; however, investments by the Portfolio within
its principal investment strategies may represent a significant portion of the
Underlying Portfolio's net assets. Transactions in the Underlying Portfolios
during the period ended June 30, 2007 in which the Portfolio had ownership of
at least 5% of the outstanding voting securities at the end of the period are
as follows:
Number of shares
held at December 31, Shares purchased Shares sold during the
Security Description 2006 during the period period
- -------------------- -------------------- ----------------- ----------------------
Franklin Templeton Small Cap Growth Portfolio - Class A 734,267 1,079,406 (18,861)
Number of
shares held at
Security Description June 30, 2007
- -------------------- --------------
Franklin Templeton Small Cap Growth Portfolio - Class A 1,794,812
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
9. OTHER MATTERS - CONTINUED
Net Realized Gain
(Loss) on Capital
Net Realized Gain Gain Distributions Income earned from
(Loss) on Investments from Affiliates affiliates during the
Security Description during the period during the period period
- -------------------- --------------------- ------------------ ---------------------
Franklin Templeton Small Cap Growth Portfolio - Class A $9,431 $1,261,583 $ --
Security Description Ending Value
- -------------------- ------------
Franklin Templeton Small Cap Growth Portfolio - Class A $20,209,578
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
13
MET INVESTORS SERIES TRUST
Strategic Growth
and Income Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
STRATEGIC GROWTH AND INCOME PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY GALLATIN ASSET MANAGEMENT, INC.
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
MARKET OVERVIEW
Continuing the general trend of the past four years, financial markets
progressed markedly during the first half of 2007. Volatility returned to the
markets with episodic appearances over the past six months. Global markets
dropped sharply in February on fears of a slowdown in U.S. economic growth from
a subprime lending meltdown. Despite significant declines, markets recovered
sharply and ended the first quarter on a positive note. The advancement
continued during the second quarter as markets remained resilient and the Dow
and S&P 500 reached all-time highs. Year-to-date through June 30, the S&P
500(R) Index returned 6.9%, the S&P MidCap 400(R) Index returned 11.9%, and the
S&P SmallCap 600(R) Index returned 8.6%. Energy was the best performing sector
across large-cap and mid-cap stocks, while materials dominated in small-caps.
Financials were the biggest laggard across all market capitalizations. Foreign
stocks, as measured by the MSCI EAFE(R) Index, returned 10.7% in light of
continued strong economic growth abroad. Bonds underperformed equities with the
Lehman Brothers Aggregate Bond Index returning 0.98%.
PORTFOLIO OVERVIEW
For the six-month period ended June 30, 2007, the Portfolio (Class B) returned
4.97%, underperforming its blended benchmark which returned 5.41%. Much of the
underperformance was attributed to the Portfolio's mid-cap exposure. Despite
strong absolute returns, Neuberger Berman Mid Cap Value Portfolio* and FI Mid
Cap Opportunities Portfolio lagged the broad S&P MidCap 400(R) Index during the
period. Another area of underperformance was the Portfolio's real estate
holding, Neuberger Berman Real Estate Portfolio, as REIT's sold off sharply
during the latter portion of the six-month period. The Portfolio's fixed-income
portion also detracted, with PIMCO Total Return Portfolio and BlackRock Bond
Income Portfolio lagging the Lehman Aggregate Bond Index during the period.
Sources of strength for the period included the Portfolio's large-cap and
small-cap holdings. Within large-cap, the two growth-oriented portfolios, T.
Rowe Price Large Cap Growth Portfolio and Oppenheimer Capital Appreciation
Portfolio, outperformed the broader S&P 500 Index. Within small-cap, Franklin
Templeton Small Cap Growth Portfolio gained 10.18% during the period,
outperforming the S&P SmallCap 600(R) Index by 1.62%.
We made one change to the underlying portfolios in the Strategic Growth and
Income Portfolio during the period, replacing Pioneer Mid-Cap Value Portfolio
with Neuberger Berman Partners Mid Cap Value Portfolio.
OUTLOOK
The rate of economic growth in the U.S. has slowed in recent quarters. We
believe we are moving through the low point of the cycle and expect growth to
gradually improve in coming quarters. This positive growth is expected to fuel
corporate profits, capital spending, and employment, thus supporting further
economic expansion. Within domestic equities, we favor large-cap stocks based
on relative valuations. As a group, large-caps have shown improved fundamentals
over the past several years which have not been reflected in valuations.
Continued exposure to domestic mid-cap and small-cap stocks, as well as foreign
equities provides additional growth opportunities and portfolio
diversification. Within fixed-income, relatively attractive yields are
available in investment-grade, short- and intermediate-maturity bonds. We
continue to limit exposure to speculative-grade bonds.
- --------
*Neuberger Berman Partners Mid Cap Value Portfolio was added to the Portfolio
during February 2007. Therefore, it was not held in the Portfolio for the full
six-month period.
MARK A. KELLER
Chief Investment Officer
GREGORY W. ELLSTON
MATTHEW R. EMBLETON
DANIEL T. WINTER
Portfolio Managers
GALLATIN ASSET MANAGEMENT, INC.
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the portfolio's holdings asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
- --------------------------------------------------------------------------------
HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
----------------------------------------------------------------------
BlackRock Bond Income Portfolio (Class A) 14.88%
----------------------------------------------------------------------
PIMCO Total Return Portfolio (Class A) 14.83%
----------------------------------------------------------------------
MFS(R) Research International Portfolio (Class A) 10.28%
----------------------------------------------------------------------
Oppenheimer Capital Appreciation Portfolio (Class A) 8.19%
----------------------------------------------------------------------
Davis Venture Value Portfolio (Class A) 8.10%
----------------------------------------------------------------------
Neuberger Berman Partners Mid Cap Value Portfolio (Class A) 7.93%
----------------------------------------------------------------------
FI Mid Cap Opportunities Portfolio (Class A) 7.10%
----------------------------------------------------------------------
T. Rowe Price Large Cap Growth Portfolio (Class A) 7.09%
----------------------------------------------------------------------
Lord Abbett Growth and Income Portfolio (Class A) 7.07%
----------------------------------------------------------------------
Franklin Templeton Small Cap Growth Portfolio (Class A) 5.08%
----------------------------------------------------------------------
Lord Abbett Bond Debenture Portfolio (Class A) 4.99%
----------------------------------------------------------------------
Neuberger Berman Real Estate Portfolio (Class A) 4.51%
----------------------------------------------------------------------
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
STRATEGIC GROWTH AND INCOME PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY GALLATIN ASSET MANAGEMENT, INC.
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
STRATEGIC GROWTH AND INCOME PORTFOLIO MANAGED BY
GALLATIN ASSET MANAGEMENT, INC. VS. MSCI GLOBAL CAPITAL MARKETS INDEX/1/ AND
BLENDED BENCHMARK/2/
Growth Based on $10,000+
[CHART]
Strategic Growth MSCI Global Capital Blended
and Income Portfolio Markets Index/1/ Benchmark/2/
-------------------- ------------------- -------------
11/1/2006 $10,000 $10,000 $10,000
12/31/2006 10,281 10,350 10,249
6/30/2007 10,792 11,026 10,808
------------------------------------------------------------------
Cumulative Return/3/
(for the period ended 6/30/07)
------------------------------------------------------------------
Since Inception/4/
------------------------------------------------------------------
Strategic Growth and Income
- -- Portfolio--Class B 7.92%
------------------------------------------------------------------
- - - MSCI Global Capital Market Index/1/ 9.86%
------------------------------------------------------------------
- -- Blended Benchmark/2/ 8.07%
------------------------------------------------------------------
+The chart reflects the performance of Class B shares of the Portfolio. This is
currently the only active Class in the Portfolio.
/1/The MSCI Global Capital Markets Index/SM/ is an unmanaged index which
measure the performance of the core capital markets asset classes comprising
global equities and fixed income. It is a market capitalization weighted
composite of the MSCI All Country World Index/SM/ and the MSCI Global Total
Bond Index/SM/. The MSCI All Country World Index/SM/ is an unmanaged free
float-adjusted market capitalization index that is designed to measure equity
market performance in the global developed and emerging markets. The MSCI All
Country World Index includes 49 country indices. The MSCI Global Total Bond
Index is an unmanaged index which measures the capitalization weighted
performance of sovereign, investment grade credit and high yield bond markets
with appropriate adjustments for investability and to eliminate double
counting. The MSCI Global Total Bond Index/SM/ includes the World Sovereign
Debt Index, USD Total Bond Index, Euro Dollar Credit Index, Euro Sterling
Credit Index, Euro Credit Index, Emerging Market Local Sovereign Index and High
Yield Sovereign and Corporate Indices.
/2/The blended benchmark is comprised of 35% Lehman Brothers Aggregate Bond
Index, 30% S&P 500(R) Index, 15% S&P MidCap 400(R) Index, 5% S&P SmallCap
600(R) Index, 10% MSCI EAFE(R) Index, and 5% Dow Jones Wilshire REIT Index.
The Lehman Brothers Aggregate Bond Index represents securities that are U.S.
domestic, taxable, non-convertible and dollar denominated. The Index covers the
investment grade fixed rate bond market, with index components for government
and corporate securities, mortgage pass-through securities, and asset-backed
securities. The Index does not include fees or expenses and is not available
for direct investment.
The S&P 500(R) Index is an unmanaged index consisting of 500 stocks chosen for
market size, liquidity, and industry group representation. It is a market-
value weighted index (stock price times number of shares outstanding), with
each stock's weight in the Index proportionate to its market value.
The S&P MidCap 400(R) Index is a capitalization-weighted index which measures
the mid-range sector of the U.S. stock market. The Index does not include fees
or expenses and is not available for direct investment.
The S&P SmallCap 600(R) Index is a capitalization-weighted index which measures
the small-cap range of the U.S. stock market. The Index does not include fees
or expenses and is not available for direct investment.
The Morgan Stanley Capital International Europe, Australasia and Far East Index
("MSCI EAFE(R) Index") is an unmanaged free float-adjusted market
capitalization index that is designed to measure developed market equity
performance, excluding the US & Canada. The Index does not include fees or
expenses and is not available for direct investment.
The Dow Jones Wilshire REIT Index measures U.S. publicly traded real estate
investment trusts. The Index does not include fees or expenses and is not
available for direct investment.
/3/"Cumulative Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/4/Inception of Class B shares is 11/1/06. Index returns are based on an
inception date of 10/31/06.
Effective July 1, 2007, Morgan Stanley Capital International, Inc. (MSCI)
discontinued the MSCI Global Capital Markets Index and the Portfolio will use
the Dow Jones Moderate Portfolio Index in future reports to policyholders as
the Portfolio's primary benchmark.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would
be lower.
- --------------------------------------------------------------------------------
2
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
STRATEGIC GROWTH AND INCOME PORTFOLIO ------------- ------------- --------------
Class B
Actual $1,000.00 $1,049.70 $2.03
Hypothetical (5% return before expenses) 1,000.00 1,022.81 2.01
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.40%
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period).
3
MET INVESTORS SERIES TRUST
STRATEGIC GROWTH AND INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
-------------------------------------------------------------------
INVESTMENT COMPANY SECURITIES - 100.0%
BlackRock Bond Income Portfolio
(Class A)*.............................. 394,680 $ 41,650,640
Davis Venture Value Portfolio
(Class A)*.............................. 607,194 22,678,692
FI Mid Cap Opportunities Portfolio
(Class A)*.............................. 915,531 19,867,015
Franklin Templeton Small Cap Growth
Portfolio (Class A)*.................... 1,261,717 14,206,939
Lord Abbett Bond Debenture Portfolio
(Class A)............................... 1,134,472 13,954,000
Lord Abbett Growth and Income Portfolio
(Class A)............................... 674,309 19,790,966
MFS(R) Research International Portfolio
(Class A)............................... 2,048,226 28,757,087
Neuberger Berman Partners Mid Cap Value
Portfolio (Class A)*.................... 986,230 22,180,324
Neuberger Berman Real Estate Portfolio
(Class A)............................... 827,261 12,632,271
Oppenheimer Capital Appreciation Portfolio
(Class A)............................... 2,414,986 22,918,221
PIMCO Total Return Portfolio
(Class A)............................... 3,634,682 41,508,066
T. Rowe Price Large Cap Growth Portfolio
(Class A)*.............................. 1,213,360 19,838,430
-------------
Total Investment Company Securities
(Cost $282,275,372) 279,982,651
-------------
TOTAL INVESTMENTS - 100.0%
(Cost $282,275,372) 279,982,651
-------------
Other Assets and Liabilities (net) - 0.0% (112,957)
-------------
TOTAL NET ASSETS - 100.0% $ 279,869,694
=============
PORTFOLIO FOOTNOTES:
* A Portfolio of Metropolitan Series Fund, Inc.
See notes to financial statements
4
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
STRATEGIC GROWTH AND INCOME PORTFOLIO
ASSETS
Investments, at value (Note 2)* $279,982,651
Receivable for Trust shares sold 177,709
Receivable from investment manager (Note 3) 9,584
------------
Total assets 280,169,944
------------
LIABILITIES
Payables for:
Investments purchased 157,256
Trust shares redeemed 20,453
Distribution and services fees - Class B 57,269
Investment advisory fee payable (Note 3) 33,772
Administration fee payable 1,901
Custodian and accounting fees payable 7,446
Accrued expenses 22,153
------------
Total liabilities 300,250
------------
NET ASSETS $279,869,694
============
NET ASSETS REPRESENTED BY:
Paid in surplus $269,136,119
Accumulated net realized gain 9,030,555
Unrealized depreciation on investments (2,292,721)
Undistributed net investment income 3,995,741
------------
Total $279,869,694
============
NET ASSETS
Class B $279,869,694
============
CAPITAL SHARES OUTSTANDING
Class B 25,954,247
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class B $ 10.78
============
- --------------------------------------------------------------------------------------
* Investments at cost $282,275,372
See notes to financial statements
5
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
STRATEGIC GROWTH AND INCOME PORTFOLIO
INVESTMENT INCOME:
Dividends from underlying Portfolios $ 4,452,967
-----------
Total investment income 4,452,967
-----------
EXPENSES:
Investment advisory fee (Note 3) 170,261
Administration fees 11,901
Custody and accounting fees 12,346
Distribution fee - Class B 285,769
Transfer agent fees 2,027
Audit 7,404
Legal 12,976
Trustee fees and expenses 6,134
Insurance 7,529
Other 1,281
-----------
Total expenses 517,628
Less fees waived and expenses reimbursed by the Manager (60,402)
-----------
Net expenses 457,226
-----------
Net investment income 3,995,741
-----------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
CAPITAL GAINS DISTRIBUTIONS FROM UNDERLYING PORTFOLIOS:
Net realized gain on:
Investments 530,202
Capital gain distributions from underlying Portfolios 8,500,384
-----------
Net realized gain on investments and capital gains distributions
from underlying Portfolios 9,030,586
-----------
Net change in unrealized depreciation on:
Investments (2,568,777)
-----------
Net change in unrealized depreciation on investments (2,568,777)
-----------
Net realized and change in unrealized gain on investments 6,461,809
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $10,457,550
===========
See notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
STRATEGIC GROWTH AND INCOME PORTFOLIO
Period Ended Period Ended
June 30, 2007 December 31,
(Unaudited) 2006*
------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 3,995,741 $ 90,771
Net realized gain on investments and capital gain distributions
from underlying Portfolios 9,030,586 13,116
Net change in unrealized appreciation (depreciation) on investments (2,568,777) 276,056
------------ ------------
Net increase in net assets resulting from operations 10,457,550 379,943
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class B (14) (106,224)
From net realized gains
Class B (13,147) --
------------ ------------
Net decrease in net assets resulting from distributions (13,161) (106,224)
------------ ------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class B 172,326,762 104,118,501
Net asset value of shares issued through dividend reinvestment
Class B 13,161 106,224
Cost of shares repurchased
Class B (7,393,561) (19,501)
------------ ------------
Net increase in net assets from capital share transactions 164,946,362 104,205,224
------------ ------------
TOTAL INCREASE IN NET ASSETS 175,390,751 104,478,943
Net assets at beginning of period 104,478,943 --
------------ ------------
Net assets at end of period $279,869,694 $104,478,943
============ ============
Net assets at end of period includes undistributed net investment
income $ 3,995,741 $ 14
============ ============
* For the period November 1, 2006 (Commencement of Operations) through
December 31, 2006.
See notes to financial statements
7
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE PERIOD ENDED:
CLASS B
STRATEGIC GROWTH AND INCOME PORTFOLIO -------------------------------
FOR THE PERIOD
ENDED FOR THE PERIOD
JUNE 30, 2007 ENDED
(UNAUDITED) DECEMBER 31, 2006(B)
-------------- --------------------
NET ASSET VALUE, BEGINNING OF PERIOD.................................. $10.27 $10.00
------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................. 0.18 (a) 0.03 (a)
Net Realized/Unrealized Gain on Investments........................... 0.33 0.25
------ ------
Total from Investment Operations...................................... 0.51 0.28
------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................. (0.00)+ (0.01)
Distributions from Net Realized Capital Gains......................... (0.00)+ --
------ ------
Total Distributions................................................... (0.00)+ (0.01)
------ ------
NET ASSET VALUE, END OF PERIOD........................................ $10.78 $10.27
====== ======
TOTAL RETURN 4.97% 2.81%
Ratio of Expenses to Average Net Assets............................... 0.40%* 0.40%*
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates............................................................. 0.45%* 0.99%*
Ratio of Net Investment Income to Average Net Assets.................. 3.50%* 1.47%*
Portfolio Turnover Rate............................................... 9.5% 0.0%
Net Assets, End of Period (in millions)............................... $279.9 $104.5
* Annualized
+ Rounds to less than $0.005 per share
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--11/01/2006.
See notes to financial statements
8
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is Strategic Growth and Income Portfolio,
which is non-diversified. Shares in the Trust are not offered directly to the
general public and are currently available only to separate accounts
established by certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class B Shares are offered
by the Portfolio. Class A and E Shares are not currently offered by the
Portfolio included in this report. Shares of each Class of the Portfolio
represent an equal pro rata interest in the Portfolio and generally give the
shareholder the same voting, dividend, liquidation, and other rights.
Investment income, realized and unrealized capital gains and losses, the common
expenses of the Portfolio and certain Portfolio-level expense reductions, if
any, are allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the Portfolio. Each class of
shares differs in its respective distribution expenses and certain other
class-specific expense reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date.
9
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The value of the security so purchased is subject to market fluctuations during
this period. The Portfolio segregates assets having an aggregate value at least
equal to the amount of the when issued or delayed delivery purchase commitments
until payment is made.
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with Gallatin Asset Management, Inc., (the "Adviser") for investment advisory
services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- ----------------------------
Strategic Growth and Income Portfolio $170,261 0.15% First $250 Million
0.125% $250 Million to $500 Million
0.10% Over $500 Million
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
10
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with generally accepted accounting
principles, other extraordinary expenses not incurred in the ordinary course of
the Portfolio's business, but including amounts payable pursuant to a plan
adopted in accordance with Rule 12b-1 under the 1940 Act are limited to the
following respective expense ratios as a percentage of the Portfolio's average
daily net assets:
Maximum Expense Ratio Expenses Deferred in
under current Expense --------------------
Limitation Agreement 2006 2007
- - --------------------- ------- -------
Subject to repayment
until December 31,
------- ------- ------- --------------------
Portfolio Class A Class B Class E 2011 2012
- --------- ------- ------- ------- ------- -------
Strategic Growth and Income Portfolio 0.15%* 0.40% 0.30%* $36,665 $60,402
* Classes not offered during the period.
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratio as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
The amount waived and expenses reimbursed for the period ended June 30, 2007 is
shown as investment advisory fee waiver in the Statement of Operations of the
Portfolio.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued
Through Net Increase
Beginning Shares Dividend Shares in Shares Ending
Shares Sold Reinvestment Repurchased Outstanding Shares
- - ---------- ---------- ------------- ----------- ------------ ----------
Strategic Growth and Income Portfolio
Class B
06/30/2007 10,173,921 16,465,700 1,224 (686,598) 15,780,326 25,954,247
11/01/2006-12/31/2006 -- 10,165,485 10,333 (1,897) 10,173,921 10,173,921
11
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
Strategic Growth and Income Portfolio $-- $199,226,238 $-- $21,715,204
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Cost Appreciation (Depreciation) (Depreciation)
- - ------------ ------------ -------------- --------------
Strategic Growth and Income Portfolio $282,275,372 $4,691,713 $(6,984,434) $(2,292,721)
6. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the period ended December 31, 2006
was as follows:
Ordinary Long-Term
Income Capital Gain Total
-------- ------------ --------
2006 2006 2006
-------- ------------ --------
Strategic Growth and Income Portfolio $106,224 $-- $106,224
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
------------- ------------- ------------ ------------------ --------
Strategic Growth and Income Portfolio $220 $12,910 $276,056 $-- $289,186
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
7. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
8. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
9. OTHER MATTERS
The Portfolio does not invest in the Underlying Portfolios for the purpose of
exercising management or control; however, investments by the Portfolio within
its principal investment strategies may represent a significant portion of the
Underlying Portfolio's net assets. Transactions in the Underlying Portfolios
during the period ended June 30, 2007 in which the Portfolio had ownership of
at least 5% of the outstanding voting securities at the end of the period are
as follows:
Number of shares
held at December 31, Shares purchased Shares sold during
Security Description 2006 during the period the period
- -------------------- --------------------- ------------------ --------------------
Franklin Templeton Small Cap Growth Portfolio - Class A 474,553 817,605 (30,441)
Net Realized Gain
(Loss) on Capital
Net Realized Gain Gain Distributions Income earned from
(Loss) on Investments from Affiliates affiliate during the
Security Description during the period during the period period
- -------------------- --------------------- ------------------ --------------------
Franklin Templeton Small Cap Growth Portfolio - Class A $ 9,715 $884,074 $ --
Number of
shares held at
Security Description June 30, 2007
- -------------------- --------------
Franklin Templeton Small Cap Growth Portfolio - Class A 1,261,717
Security Description Ending Value
- -------------------- --------------
Franklin Templeton Small Cap Growth Portfolio - Class A $14,206,939
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
13
MET INVESTORS SERIES TRUST
Strategic
Growth Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
STRATEGIC GROWTH PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY GALLATIN ASSET MANAGEMENT, INC.
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
MARKET OVERVIEW
Continuing the general trend of the past four years, financial markets
progressed markedly during the first half of 2007. Volatility returned to the
markets with episodic appearances over the past six months. Global markets
dropped sharply in February on fears of a slowdown in U.S. economic growth from
a subprime lending meltdown. Despite significant declines, markets recovered
sharply and ended the first quarter on a positive note. The advancement
continued during the second quarter as markets remained resilient and the Dow
and S&P 500 reached all-time highs. Year-to-date through June 30, the S&P
500(R) Index returned 6.9%, the S&P MidCap 400(R) Index returned 11.9%, and the
S&P SmallCap 600(R) Index returned 8.6%. Energy was the best performing sector
across large-cap and mid-cap stocks, while materials dominated in small-caps.
Financials were the biggest laggard across all market capitalizations. Foreign
stocks, as measured by the MSCI EAFE(R) Index, returned 10.7% in light of
continued strong economic growth abroad. Bonds underperformed equities with the
Lehman Brothers Aggregate Bond Index returning 0.98%.
PORTFOLIO OVERVIEW
For the six-month period ended June 30, 2007, the Portfolio (Class B) returned
8.27%, underperforming its blended benchmark which returned 8.63%. Most of the
underperformance was attributed to the Portfolio's mid-cap holdings as the
mid-cap value portion of the model, Neuberger Berman Mid Cap Value Portfolio*,
lagged the broad S&P MidCap 400(R) Index. The Portfolio's large-cap segment
also detracted, with Jennison Growth Portfolio and Van Kampen Comstock
Portfolio holding back returns as both lagged the broad S&P 500(R) Index.
Sources of strength for the period included the Portfolio's small-cap and
foreign holdings. Within small-cap, Franklin Templeton Small Cap Growth
Portfolio gained 10.18% during the period, outperforming the S&P SmallCap
600(R) Index. Within the foreign sleeve of the Portfolio, exposure to emerging
market equities had the greatest impact, with MFS(R) Emerging Markets Equity
Portfolio returning 14.58% during the period.
We made one change to the underlying portfolios in the Strategic Growth
Portfolio during the period, replacing Pioneer Mid-Cap Value Portfolio with
Neuberger Berman Partners Mid Cap Value Portfolio.
OUTLOOK
The rate of economic growth in the U.S. has slowed in recent quarters. We
believe we are moving through the low point of the cycle and expect growth to
gradually improve in coming quarters. This positive growth is expected to fuel
corporate profits, capital spending, and employment, thus supporting further
economic expansion. Within domestic equities, we favor large-cap stocks based
on relative valuations. As a group, large-caps have shown improved fundamentals
over the past several years which have not been reflected in valuations.
Continued exposure to domestic mid-cap and small-cap stocks, as well as foreign
equities, provides additional growth opportunities and portfolio
diversification.
- --------
*Neuberger Berman Partners Mid Cap Value Portfolio was added to the Portfolio
during February 2007. Therefore, it was not held in the Portfolio for the full
six-month period.
MARK A. KELLER
Chief Investment Officer
GREGORY W. ELLSTON
MATTHEW R. EMBLETON
DANIEL T. WINTER
Portfolio Managers
GALLATIN ASSET MANAGEMENT, INC.
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
- --------------------------------------------------------------------------------
HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
----------------------------------------------------------------------
MFS(R) Research International Portfolio (Class A) 15.21%
----------------------------------------------------------------------
Davis Venture Value Portfolio (Class A) 14.00%
----------------------------------------------------------------------
T. Rowe Price Large Cap Growth Portfolio (Class A) 13.99%
----------------------------------------------------------------------
Jennison Growth Portfolio (Class A) 13.93%
----------------------------------------------------------------------
Van Kampen Comstock Portfolio (Class A) 12.81%
----------------------------------------------------------------------
Neuberger Berman Partners Mid Cap Value Portfolio (Class A) 7.82%
----------------------------------------------------------------------
Van Kampen Mid-Cap Growth Portfolio (Class A) 7.02%
----------------------------------------------------------------------
MFS(R) Emerging Markets Equity Portfolio (Class A) 5.18%
----------------------------------------------------------------------
Dreman Small-Cap Value Portfolio (Class A) 5.09%
----------------------------------------------------------------------
Franklin Templeton Small Cap Growth Portfolio (Class A) 5.01%
----------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
STRATEGIC GROWTH PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY GALLATIN ASSET MANAGEMENT, INC.
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
STRATEGIC GROWTH PORTFOLIO MANAGED BY
GALLATIN ASSET MANAGEMENT, INC. VS. WILSHIRE 5000 EQUITY INDEX/1/ AND BLENDED
BENCHMARK/2/
Growth Based on $10,000+
[CHART]
Strategic Wilshire 5000 Blended
Growth Portfolio Equity Index/1/ Benchmark/2/
---------------- --------------- ------------
11/1/2006 $10,000 $10,000 $10,000
12/31/2006 10,427 10,345 10,377
6/30/2007 11,289 11,127 11,279
------------------------------------------------------------------
Cumulative Return/3/
(for the period ended 6/30/07)
------------------------------------------------------------------
Since Inception/4/
------------------------------------------------------------------
- -- Strategic Growth Portfolio--Class B 12.89%
------------------------------------------------------------------
- - - Wilshire 5000 Equity Index/1/ 11.27%
------------------------------------------------------------------
- -- Blended Benchmark/2/ 12.78%
------------------------------------------------------------------
+The chart reflects the performance of Class B shares of the Portfolio. This is
currently the only active Class in the Portfolio.
/1/The Wilshire 5000 Equity Index measures the performance of all U.S.
headquartered equity securities with readily available price data. The market
capitalized weighted index is compromised of approximately 82% New York Stock
Exchange, 2% American Stock Exchange and 16% OTC (1995). The Index was created
in 1974 and backdated to 1971, with a base index of December 1980 (base index
equals 1,044.596). Dividends are reinvested on the "ex" dividend date and the
rebalancing of share weights is done on a monthly basis. No attempt has been
made to adjust the market capitalization of the index to take into account
cross holding between corporations. The Index does not include fees or expenses
and is not available for direct investment.
/2/The blended benchmark is comprised of 55% S&P 500(R) Index, 15% S&P MidCap
400(R) Index, 10% S&P SmallCap 600(R) Index, and 20% MSCI EAFE(R) Index.
The S&P 500(R) Index is an unmanaged index consisting of 500 stocks chosen for
market size, liquidity, and industry group representation. It is a market-value
weighted index (stock price times number of shares outstanding), with each
stock's weight in the Index proportionate to its market value. The Index does
not include fees or expenses and is not available for direct investment.
The S&P MidCap 400(R) Index is a capitalization-weighted index which measures
the performance of the mid-range sector of the U.S. stock market. The Index
does not include fees or expenses and is not available for direct investment.
The S&P SmallCap 600(R) Index is a capitalization-weighted index which measures
the performance of the small-cap range of the U.S. stock market. The Index does
not include fees or expenses and is not available for direct investment.
The Morgan Stanley Capital International Europe, Australasia and Far East Index
("MSCI EAFE(R) Index") is an unmanaged free float-adjusted market
capitalization index that is designed to measure developed market equity
performance excluding the US & Canada. The Index does not include fees or
expenses and is not available for direct investment.
/3/"Cumulative Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/4/Inception of Class B shares is 11/1/06. Index returns are based on an
inception date of 10/31/06.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
2
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
STRATEGIC GROWTH PORTFOLIO ------------- ------------- --------------
Class B
Actual $1,000.00 $1,082.70 $2.07
Hypothetical (5% return before expenses) 1,000.00 1,022.81 2.01
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.40%
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period).
3
MET INVESTORS SERIES TRUST
STRATEGIC GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
- ------------------------------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
- ------------------------------------------------------------------------------------------
INVESTMENT COMPANY SECURITIES - 100.0%
Davis Venture Value Portfolio (Class A)*......................... 620,412 $ 23,172,393
Dreman Small-Cap Value Portfolio (Class A)....................... 566,512 8,424,027
Franklin Templeton Small Cap Growth Portfolio (Class A)*......... 736,343 8,291,226
Jennison Growth Portfolio (Class A)*............................. 1,802,702 23,056,561
MFS(R) Emerging Markets Equity Portfolio (Class A)............... 711,508 8,573,675
MFS(R) Research International Portfolio (Class A)................ 1,793,394 25,179,255
Neuberger Berman Partners Mid Cap Value Portfolio (Class A)*..... 575,901 12,952,002
T. Rowe Price Large Cap Growth Portfolio (Class A)*.............. 1,416,559 23,160,739
Van Kampen Comstock Portfolio (Class A).......................... 1,733,756 21,203,829
Van Kampen Mid-Cap Growth Portfolio (Class A).................... 1,075,434 11,614,689
-------------
Total Investment Company Securities
(Cost $161,897,059) 165,628,396
-------------
TOTAL INVESTMENTS - 100.0% (Cost $161,897,059) 165,628,396
-------------
Other Assets and Liabilities (net) - 0.0% (75,285)
-------------
TOTAL NET ASSETS - 100.0% $ 165,553,111
=============
PORTFOLIO FOOTNOTES:
* A Portfolio of Metropolitan Series Fund, Inc.
See notes to financial statements
4
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
STRATEGIC GROWTH PORTFOLIO
ASSETS
Investments, at value (Note 2)* $165,628,396
Receivable for investments sold 521,252
Receivable for Trust shares sold 152,169
Receivable from investment manager (Note 3) 9,735
------------
Total assets 166,311,552
------------
LIABILITIES
Payables for:
Trust shares redeemed 673,421
Distribution and services fees - Class B 34,319
Investment advisory fee payable (Note 3) 20,591
Administration fee payable 1,901
Custodian and accounting fees payable 7,490
Accrued expenses 20,719
------------
Total liabilities 758,441
------------
NET ASSETS $165,553,111
============
NET ASSETS REPRESENTED BY:
Paid in surplus $153,508,640
Accumulated net realized gain 7,451,690
Unrealized appreciation on investments 3,731,337
Undistributed net investment income 861,444
------------
Total $165,553,111
============
NET ASSETS
Class B $165,553,111
============
CAPITAL SHARES OUTSTANDING
Class B 14,687,471
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class B $ 11.27
============
- -------------------------------------------------------------------------------------
* Investments at cost $161,897,059
See notes to financial statements
5
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
STRATEGIC GROWTH PORTFOLIO
INVESTMENT INCOME:
Dividends from underlying Portfolios $ 1,150,196
-----------
Total investment income 1,150,196
-----------
EXPENSES:
Investment advisory fee (Note 3) 108,298
Administration fees 11,901
Custody and accounting fees 12,342
Distribution fee - Class B 180,496
Transfer agent fees 1,989
Audit 7,404
Legal 12,976
Trustee fees and expenses 6,134
Insurance 6,021
Other 1,238
-----------
Total expenses 348,799
Less fees waived and expenses reimbursed by the Manager (60,047)
-----------
Net expenses 288,752
-----------
Net investment income 861,444
-----------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
CAPITAL GAINS DISTRIBUTIONS FROM UNDERLYING PORTFOLIOS:
Net realized gain on:
Investments 494,862
Capital gain distributions from underlying Portfolios 6,956,841
-----------
Net realized gain on investments and capital gains distributions
from underlying Portfolios 7,451,703
-----------
Net change in unrealized appreciation on:
Investments 3,353,117
-----------
Net change in unrealized appreciation on investments 3,353,117
-----------
Net realized and change in unrealized gain on investments 10,804,820
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $11,666,264
===========
See notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
STRATEGIC GROWTH PORTFOLIO
Period Ended Period Ended
June 30, 2007 December 31,
(Unaudited) 2006*
------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 861,444 $ 110,535
Net realized gain on investments and capital gain distributions
from underlying Portfolios 7,451,703 12,093
Net change in unrealized appreciation on investments 3,353,117 378,220
------------ -----------
Net increase in net assets resulting from operations 11,666,264 500,848
------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class B -- (121,181)
From net realized gains
Class B (12,008) --
------------ -----------
Net decrease in net assets resulting from distributions (12,008) (121,181)
------------ -----------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class B 81,673,421 81,444,914
Net asset value of shares issued through dividend reinvestment
Class B 12,008 121,181
Cost of shares repurchased
Class B (9,725,114) (7,222)
------------ -----------
Net increase in net assets from capital share transactions 71,960,315 81,558,873
------------ -----------
TOTAL INCREASE IN NET ASSETS 83,614,571 81,938,540
Net assets at beginning of period 81,938,540 --
------------ -----------
Net assets at end of period $165,553,111 $81,938,540
============ ===========
Net assets at end of period includes undistributed net investment
income $ 861,444 $ --
============ ===========
* For the period 11/01/2006 (Commencement of Operations) through 12/31/2006.
See notes to financial statements
7
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE PERIOD ENDED:
CLASS B
STRATEGIC GROWTH PORTFOLIO -------------------------
FOR THE PERIOD FOR THE PERIOD
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
(UNAUDITED) 2006(B)
-------------- --------------
NET ASSET VALUE, BEGINNING OF PERIOD............................. $ 10.41 $10.00
------- ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income............................................ 0.06 (a) 0.05 (a)
Net Realized/Unrealized Gain on Investments...................... 0.80 0.38
------- ------
Total from Investment Operations................................. 0.86 0.43
------- ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income............................. -- (0.02)
Distributions from Net Realized Capital Gains.................... (0.00)+ --
------- ------
Total Distributions.............................................. (0.00)+ (0.02)
------- ------
NET ASSET VALUE, END OF PERIOD................................... $ 11.27 $10.41
======= ======
TOTAL RETURN 8.27% 4.27%
Ratio of Expenses to Average Net Assets.......................... 0.40%* 0.40%*
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates........................................................ 0.48%* 1.27%*
Ratio of Net Investment Income to Average Net Assets............. 1.19%* 2.62%*
Portfolio Turnover Rate.......................................... 12.6% 0.0%(c)
Net Assets, End of Period (in millions).......................... $165.6 $81.9
* Annualized
+ Rounds to less than $0.005 per share
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--11/01/2006.
(c) For the period ended 12/31/06, the portfolio turnover calculation is zero,
due to no sales activity.
See notes to financial statements
8
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is Strategic Growth Portfolio, which is
non-diversified. Shares in the Trust are not offered directly to the general
public and are currently available only to separate accounts established by
certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class B Shares are offered
by the Portfolio. Class A and E Shares are not currently offered by the
Portfolio included in this report. Shares of each Class of the Portfolio
represent an equal pro rata interest in the Portfolio and generally give the
shareholder the same voting, dividend, liquidation, and other rights.
Investment income, realized and unrealized capital gains and losses, the common
expenses of the Portfolio and certain Portfolio-level expense reductions, if
any, are allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the Portfolio. Each class of
shares differs in its respective distribution expenses and certain other
class-specific expense reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date.
9
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The value of the security so purchased is subject to market fluctuations during
this period. The Portfolio segregates assets having an aggregate value at least
equal to the amount of the when issued or delayed delivery purchase commitments
until payment is made.
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with Gallatin Asset Management, Inc., (the "Adviser") for investment advisory
services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- ----------------------------
Strategic Growth Portfolio $108,298 0.15% First $250 Million
0.125% $250 Million to $500 Million
0.10% Over $500 Million
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Expenses Deferred in
--------------------
2006 2007
- Maximum Expense Ratio ------- -------
under current Expense Subject to repayment
Limitation Agreement until December 31,
--------------------- --------------------
Portfolio Class A Class B Class E 2011 2012
--------- ------- ------- ------- ------- -------
Strategic Growth Portfolio 0.15%* 0.40% 0.30%* $36,665 $60,047
* Classes not offered during the period.
10
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratio as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
The amount waived and expenses reimbursed for the period ended December 31,
2006 is shown as investment advisory fee waiver in the Statement of Operations
of the Portfolio.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued
Through Net Increase
Beginning Shares Dividend Shares in Shares Ending
Shares Sold Reinvestment Repurchased Outstanding Shares
- - --------- --------- ------------- ----------- ------------ ----------
Strategic Growth Portfolio
Class B
06/30/2007 7,870,173 7,693,366 1,091 (877,159) 6,817,298 14,687,471
11/01/2006-12/31/2006 -- 7,859,271 11,596 (694) 7,870,173 7,870,173
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
Strategic Growth Portfolio $-- $97,859,827 $-- $18,042,153
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
- --------- ------------ ------------ -------------- --------------
Strategic Growth Portfolio $161,897,059 $5,215,728 $(1,484,391) $3,731,337
11
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
6. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the period ended December 31, 2006
was as follows:
Ordinary Income Long-Term Capital Gain Total
--------------- ---------------------- --------
2006 2006 2006
--------------- ---------------------- --------
Strategic Growth Portfolio $121,083 $98 $121,181
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
------------- ------------- ------------ ------------------ --------
Strategic Growth Portfolio $-- $11,995 $378,220 $-- $390,215
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
7. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
8. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
9. OTHER MATTERS
The Portfolio does not invest in the Underlying Portfolios for the purpose of
exercising management or control; however, investments by the Portfolio within
its principal investment strategies may represent a significant portion of the
Underlying Portfolio's net assets. Transactions in the Underlying Portfolios
during the period ended June 30, 2007 in which the Portfolio had ownership of
at least 5% of the outstanding voting securities at the end of the period are
as follows:
Number of shares Number of
held at December 31, Shares purchased Shares sold shares held at
Security Description 2006 during the period during the period June 30, 2007
- -------------------- -------------------- ----------------- ----------------- --------------
Franklin Templeton Small Cap Growth Portfolio - Class A 370,996 398,953 (33,606) 736,343
Van Kampen Mid-Cap Growth Portfolio - Class A 544,777 588,551 (57,894) 1,075,434
Net Realized Gain
(Loss) on Capital
Net Realized Gain Gain Distributions Income earned from
(Loss) on Investments from Affiliates affiliates during the
Security Description during the period during the period period
- -------------------- --------------------- ------------------ ---------------------
Franklin Templeton Small Cap Growth Portfolio - Class A $ 7,084 $553,558 $--
Van Kampen Mid-Cap Growth Portfolio - Class A 21,127 978,234 --
Security Description Ending Value
- -------------------- ------------
Franklin Templeton Small Cap Growth Portfolio - Class A $ 8,291,226
Van Kampen Mid-Cap Growth Portfolio - Class A 11,614,689
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
9. OTHER MATTERS - CONTINUED
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
13
MET INVESTORS SERIES TRUST
T. Rowe Price Mid-Cap
Growth Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
T. ROWE PRICE MID-CAP GROWTH PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY T. ROWE PRICE ASSOCIATES, INC.
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
PERFORMANCE
The Portfolio outperformed the Russell Midcap(R) Growth Index in the six-month
period ended June 30, 2007. Stock selection decisions in the information
technology, financials and consumer discretionary sectors were sources of
outperformance. An underweighting of the materials sector and stock selection
decisions in the industrials and business service sector detracted from
relative returns.
MARKET ENVIRONMENT
Within the mid-cap universe, growth stocks have lagged value stocks for the
trailing 12 months. However, in the most recent quarter growth stocks
significantly outperformed value across the capitalization range. Energy,
materials, and industrials and business service stocks have paced mid-cap
growth returns within the benchmark. On average, stocks in the financials,
consumer staples and consumer discretionary sectors lagged benchmark returns.
PORTFOLIO REVIEW
Outperformance by the portfolio's information technology holdings represents a
significant turnaround, as portfolio exposure to the sector had been a major
detractor in recent reporting periods.
The portfolio's position in aQuantive benefited relative returns when Microsoft
agreed to acquire the digital marketing company at an 85% premium. The deal is
expected to close in the second half of the year. Additionally, shares of
VeriSign, a provider of security software for online transactions, increased
significantly with the resignation of its CEO. The rally in VeriSign shares
marked a turnaround from last summer's panic-driven woes when the stock
weakened under criticism of the company's practices in issuing options. Stock
selection in electronic equipment and instruments and in alternative energy
companies also performed well. Shares of First Solar, a component manufacturer,
have performed well over the last two quarters on strong demand.
Outperformance in financials was driven by stock selection in capital markets
companies and lack of exposure to real estate investment trusts (REITs) where
jittery investor sentiment has hurt performance. In general, financials have
been under pressure as a result of weakness in the sub-prime mortgage market.
Asset manager Eaton Vance continues to benefit from strong net flows, good use
of capital, and solid management.
An underweight in the materials sector detracted from relative results.
Increasing commodity prices and on-going merger and acquisition activity have
fueled growth in the materials sector.
Selections in the industrials and business service sector detracted. Freight
logistics provider UTi Worldwide posted disappointing fourth quarter results
due to a large expense ramp-up in anticipation of accelerated growth. Shares
have rebounded slightly after the firm met street expectations for the first
quarter. Southwest Airlines has performed well relative to other airlines;
however, compared to other industrial and business services companies, results
have been sub par. Most airlines have suffered due to increases in jet-fuel
prices and passenger resistance to higher ticket prices.
OUTLOOK
While our outlook remains generally favorable, we continue to expect that some
of the contradictions in the economy will be resolved as it enters a seventh
year of expansion. In particular, consumers are likely to feel a greater pinch
as the housing sector continues the process of unwinding from its largest
expansion cycle since World War II. We believe the developing environment could
continue to bode well for growth stocks.
BRIAN W. H. BERGHUIS
Portfolio Manager
T. ROWE PRICE ASSOCIATES, INC.
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
------------------------------------------------
Amazon.com, Inc. 1.80%
------------------------------------------------
Roper Industries, Inc. 1.70%
------------------------------------------------
Harman International Industries, Inc. 1.62%
------------------------------------------------
Rockwell Collins, Inc. 1.52%
------------------------------------------------
Smith International, Inc. 1.51%
------------------------------------------------
Manor Care, Inc. 1.44%
------------------------------------------------
VeriSign, Inc. 1.40%
------------------------------------------------
Cephalon, Inc. 1.40%
------------------------------------------------
DST Systems, Inc. 1.39%
------------------------------------------------
AMETEK, Inc. 1.33%
------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
[CHART]
Non-Cyclical 21.8%
Communications 20.5%
Technology 14.4%
Cyclical 14.0%
Energy 11.9%
Industrials 11.3%
Financials 5.1%
Basic Materials 1.0%
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
T. ROWE PRICE MID-CAP GROWTH PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY T. ROWE PRICE ASSOCIATES, INC.
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
T. ROWE PRICE MID-CAP GROWTH PORTFOLIO MANAGED BY
T. ROWE PRICE ASSOCIATES, INC. VS. RUSSELL MIDCAP(R) GROWTH INDEX/1/
Growth Based on $10,000+
[CHART]
T. Rowe Price Russell Midcap(R)
Mid-Cap Growth Portfolio Growth Index/1/
------------------------ -------------------
2/12/2001 $10,000 $10,000
12/31/2001 8,340 8,238
12/31/2002 4,668 5,981
12/31/2003 6,378 8,535
12/31/2004 7,515 9,855
12/31/2005 8,613 11,047
12/31/2006 9,145 12,225
6/30/2007 10,525 13,567
-------------------------------------------------------------------
Average Annual Return/2/
(for the period ended 6/30/07)
-------------------------------------------------------------------
Since
1 year 3 Year 5 Year Inception/3/
-------------------------------------------------------------------
T. Rowe Price Mid-Cap Growth
Portfolio--Class A 21.46% 15.67% 14.85% 1.52%
- -- Class B 21.13% 15.38% 14.53% 0.80%
Class E 21.23% 15.47% 14.64% 6.49%
-------------------------------------------------------------------
- - - Russell Midcap(R) Growth Index/1/ 19.73% 14.48% 15.45% 3.46%
-------------------------------------------------------------------
+The chart reflects the performance of Class B shares of the Portfolio. The
performance of Class B shares will differ from that of the other Classes
because of the difference in expenses paid by policyholders investing in the
different share classes.
/1/The Russell Midcap(R) Growth Index is an unmanaged index which measures the
performance of those Russell Midcap companies with higher price-to-book ratios
and higher forecasted growth values. The stocks are also members of the Russell
1000 Growth Index. The Index does not include fees or expenses and is not
available for direct investment.
/2/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/3/Inception of the Class A shares is 5/1/01. Inception of the Class B shares
is 2/12/01. Inception of the Class E shares is 10/31/01. Index returns are
based on an inception date of 2/12/01.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
2
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
T. ROWE PRICE MID-CAP GROWTH PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,152.20 $4.06
Hypothetical (5% return before expenses) 1,000.00 1,021.03 3.81
- ------------------------------------------ ------------- ------------- --------------
Class B
Actual $1,000.00 $1,150.80 $5.39
Hypothetical (5% return before expenses) 1,000.00 1,019.79 5.06
- ------------------------------------------ ------------- ------------- --------------
Class E
Actual $1,000.00 $1,150.80 $4.85
Hypothetical (5% return before expenses) 1,000.00 1,020.28 4.56
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.76%,
1.01%, and 0.91% for the Class A, Class B, and Class E, respectively,
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period).
3
MET INVESTORS SERIES TRUST
T. ROWE PRICE MID-CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-----------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
-----------------------------------------------------------
COMMON STOCKS - 94.9%
AEROSPACE & DEFENSE - 2.5%
Alliant Techsystems, Inc.*(a)........ 102,000 $ 10,113,300
Rockwell Collins, Inc................ 212,000 14,975,680
-------------
25,088,980
-------------
AIRLINES - 0.9%
Southwest Airlines Co................ 589,000 8,781,990
-------------
AUTOMOTIVE - 0.6%
CarMax, Inc.*(a)..................... 224,000 5,712,000
-------------
BANKS - 0.2%
SVB Financial Group*(a).............. 33,000 1,752,630
-------------
BEVERAGES - 0.3%
Cott Corp.*(a)....................... 227,000 3,266,530
-------------
BIOTECHNOLOGY - 1.3%
Gilead Sciences, Inc.*............... 56,000 2,171,120
Illumina, Inc.*(a)................... 84,000 3,409,560
Medarex, Inc.*(a).................... 101,000 1,443,290
PDL BioPharma, Inc.*(a).............. 123,000 2,865,900
Qiagen N.V.*(a)...................... 189,000 3,362,310
-------------
13,252,180
-------------
BUILDING PRODUCTS - 0.8%
American Standard Cos., Inc.......... 136,000 8,021,280
-------------
COMMERCIAL SERVICES & SUPPLIES - 5.4%
ChoicePoint, Inc.*................... 104,000 4,414,800
Cogent, Inc.*(a)..................... 182,000 2,673,580
Corporate Executive Board Co.(a)..... 42,000 2,726,220
Global Payments, Inc................. 193,000 7,652,450
Iron Mountain, Inc.*(a).............. 253,000 6,610,890
Manpower, Inc........................ 116,000 10,699,840
MoneyGram International, Inc......... 124,000 3,465,800
Quanta Services, Inc.*(a)............ 138,000 4,232,460
Resources Connection, Inc.*.......... 49,000 1,625,820
Robert Half International, Inc....... 131,000 4,781,500
United Rentals, Inc.*................ 124,000 4,034,960
-------------
52,918,320
-------------
COMMUNICATIONS EQUIPMENT & SERVICES - 1.6%
Ciena Corp.*(a)...................... 112,000 4,046,560
Comverse Technology, Inc.*(a)........ 113,000 2,356,050
Harris Corp.......................... 170,000 9,273,500
-------------
15,676,110
-------------
COMPUTER SOFTWARE & PROCESSING - 0.5%
Jack Henry & Associates, Inc......... 174,000 4,480,500
-------------
COMPUTERS & PERIPHERALS - 1.0%
Network Appliance, Inc.*............. 56,000 1,635,200
Seagate Technology................... 386,000 8,403,220
-------------
10,038,420
-------------
EDUCATION - 0.5%
Laureate Education, Inc.*............ 81,000 4,994,460
-------------
------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 5.0%
Danaher Corp................................ 56,000 $ 4,228,000
Dolby Laboratories, Inc.*................... 169,000 5,984,290
FLIR Systems, Inc.*(a)...................... 204,000 9,435,000
Harman International Industries, Inc........ 137,000 16,001,600
Jabil Circuit, Inc.(a)...................... 197,000 4,347,790
Spansion, Inc.*(a).......................... 157,000 1,742,700
Xilinx, Inc.(a)............................. 266,000 7,120,820
-------------
48,860,200
-------------
ENERGY EQUIPMENT & SERVICES - 2.6%
Cameron International Corp.*................ 108,000 7,718,760
FMC Technologies, Inc.*..................... 112,000 8,872,640
Sunpower Corp., - Class A*(a)............... 72,000 4,539,600
TETRA Technologies, Inc.*................... 162,000 4,568,400
-------------
25,699,400
-------------
FINANCIAL - DIVERSIFIED - 2.8%
E*TRADE Financial Corp.*.................... 281,000 6,207,290
Eaton Vance Corp............................ 218,000 9,631,240
Interactive Brokers Group Inc.*(a).......... 99,000 2,685,870
Legg Mason, Inc.(a)......................... 14,000 1,377,320
Nuveen Investments, Inc. - Class A(a)....... 127,000 7,893,050
-------------
27,794,770
-------------
FOOD & DRUG RETAILING - 0.9%
Shoppers Drug Mart Corp..................... 99,000 4,592,788
Whole Foods Market, Inc.(a)................. 112,000 4,289,600
-------------
8,882,388
-------------
HEALTH CARE EQUIPMENT & SUPPLIES - 2.4%
C.R. Bard, Inc.............................. 58,000 4,792,540
Edwards Lifesciences Corp.*(a).............. 168,000 8,289,120
Gen-Probe, Inc.*............................ 101,000 6,102,420
Henry Schein, Inc.*......................... 40,000 2,137,200
ResMed, Inc.*(a)............................ 58,000 2,393,080
-------------
23,714,360
-------------
HEALTH CARE PROVIDERS & SERVICES - 4.0%
Community Health Systems, Inc.*............. 160,000 6,472,000
Coventry Health Care, Inc.*................. 56,000 3,228,400
DaVita, Inc.*............................... 52,000 2,801,760
Health Management Associates, Inc. - Class A 224,000 2,544,640
Health Net, Inc.*........................... 110,000 5,808,000
Humana, Inc.*............................... 29,000 1,766,390
Manor Care, Inc............................. 218,000 14,233,220
Omnicare, Inc.(a)........................... 76,000 2,740,560
-------------
39,594,970
-------------
HOTELS, RESTAURANTS & LEISURE - 3.7%
Cheesecake Factory, Inc. (The)*(a).......... 147,000 3,604,440
Chipotle Mexican Grill, Inc.*(a)............ 84,000 6,604,920
Gaylord Entertainment Co.*(a)............... 71,000 3,808,440
International Game Technology............... 224,000 8,892,800
See notes to financial statements
4
MET INVESTORS SERIES TRUST
T. ROWE PRICE MID-CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
---------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
---------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE - CONTINUED
P.F. Chang's China Bistro, Inc.*(a)...... 67,000 $ 2,358,400
Panera Bread Co.*(a)..................... 29,000 1,335,740
Pinnacle Entertainment, Inc.*(a)......... 118,000 3,321,700
Tim Hortons, Inc.(a)..................... 137,000 4,212,750
Wynn Resorts, Ltd.(a).................... 28,000 2,511,320
-------------
36,650,510
-------------
INDUSTRIAL CONGLOMERATES - 2.4%
ITT Industries, Inc...................... 108,000 7,374,240
Roper Industries, Inc.(a)................ 294,000 16,787,400
-------------
24,161,640
-------------
INSURANCE - 1.8%
Assurant, Inc............................ 114,000 6,716,880
Axis Capital Holdings, Ltd............... 182,000 7,398,300
Principal Financial Group, Inc........... 68,000 3,963,720
-------------
18,078,900
-------------
INTERNET & CATALOG RETAIL - 0.2%
MSC Industrial Direct Co., Inc. - Class A 28,000 1,540,000
-------------
INTERNET SOFTWARE & SERVICES - 5.8%
Amazon.com, Inc.*(a)..................... 260,000 17,786,600
CheckFree Corp.*(a)...................... 171,000 6,874,200
CNET Networks, Inc.*(a).................. 479,000 3,923,010
Digital River, Inc.*..................... 57,000 2,579,250
Juniper Networks, Inc.*.................. 505,000 12,710,850
McAfee, Inc.*............................ 126,000 4,435,200
Monster Worldwide, Inc.*................. 211,000 8,672,100
-------------
56,981,210
-------------
IT CONSULTING & SERVICES - 1.9%
DST Systems, Inc.*....................... 173,000 13,703,330
IHS, Inc. - Class A*..................... 71,000 3,266,000
SAIC, Inc.*(a)........................... 91,000 1,644,370
-------------
18,613,700
-------------
MACHINERY - 1.0%
IDEX Corp................................ 15,000 578,100
Oshkosh Truck Corp....................... 147,000 9,249,240
-------------
9,827,340
-------------
MANUFACTURING - 1.3%
AMETEK, Inc.............................. 330,000 13,094,400
-------------
MEDIA - 5.4%
Cablevision Systems Corp.*............... 141,000 5,102,790
Catalina Marketing Corp.(a).............. 189,000 5,953,500
Clear Channel Outdoor Holdings, Inc.*(a). 236,000 6,688,240
Discovery Holding Co.*................... 335,000 7,701,650
Dreamworks Animation SKG, Inc. - Class A* 121,000 3,489,640
Lamar Advertising Co. - Class A(a)....... 201,000 12,614,760
Rogers Communications, Inc. - Class B.... 280,000 11,897,200
-------------
53,447,780
-------------
------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
------------------------------------------------------------------
METALS & MINING - 2.9%
Agnico-Eagle Mines, Ltd..................... 128,000 $ 4,672,000
CONSOL Energy, Inc.......................... 259,000 11,942,490
Foundation Coal Holdings, Inc.(a)........... 83,000 3,373,120
Peabody Energy Corp......................... 68,000 3,289,840
Teck Cominco, Ltd........................... 114,000 4,845,000
-------------
28,122,450
-------------
OIL & GAS - 6.1%
BJ Services Co.............................. 355,000 10,096,200
CNX Gas Corp.*(a)........................... 177,000 5,416,200
EOG Resources, Inc.......................... 174,000 12,712,440
Murphy Oil Corp............................. 116,000 6,895,040
Smith International, Inc.(a)................ 255,000 14,953,200
XTO Energy, Inc............................. 174,000 10,457,400
-------------
60,530,480
-------------
PHARMACEUTICALS - 6.6%
Alkermes, Inc.*(a).......................... 211,000 3,080,600
Amylin Pharmaceuticals, Inc.*(a)............ 98,000 4,033,680
Barr Pharmaceuticals, Inc.*................. 197,000 9,895,310
Cephalon, Inc.*(a).......................... 172,000 13,827,080
Elan Corp. Plc (ADR)*(a).................... 457,000 10,022,010
Human Genome Sciences, Inc.*(a)............. 203,000 1,810,760
Medicis Pharmaceutical Corp. - Class A(a)... 84,000 2,565,360
Mylan Laboratories, Inc..................... 139,000 2,528,410
OSI Pharmaceuticals, Inc.*(a)............... 69,000 2,498,490
Sepracor, Inc.*............................. 85,000 3,486,700
Theravance, Inc.*(a)........................ 96,000 3,072,000
Valeant Pharmaceuticals International(a).... 254,000 4,239,260
Vertex Pharmaceuticals, Inc.*............... 153,000 4,369,680
-------------
65,429,340
-------------
RETAIL - SPECIALTY - 3.8%
Advance Auto Parts, Inc..................... 154,000 6,241,620
Bed Bath & Beyond, Inc.*.................... 168,000 6,046,320
Best Buy Co., Inc........................... 112,000 5,227,040
O' Reilly Automotive, Inc.*................. 199,000 7,273,450
PetSmart, Inc............................... 295,000 9,572,750
Williams-Sonoma, Inc.(a).................... 108,000 3,410,640
-------------
37,771,820
-------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS - 5.6%
Altera Corp................................. 281,000 6,218,530
Fairchild Semiconductor International, Inc.* 169,000 3,265,080
First Solar, Inc.*(a)....................... 70,000 6,250,300
Intersil Corp. - Class A.................... 280,000 8,808,800
Marvell Technology Group, Ltd.*............. 449,000 8,176,290
Microchip Technology, Inc.(a)............... 177,000 6,556,080
ON Semiconductor Corp.*(a).................. 437,000 4,684,640
PMC-Sierra, Inc.*(a)........................ 571,000 4,413,830
Teradyne, Inc.*............................. 383,000 6,733,140
-------------
55,106,690
-------------
See notes to financial statements
5
MET INVESTORS SERIES TRUST
T. ROWE PRICE MID-CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
--------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
--------------------------------------------------------------------
SOFTWARE - 4.9%
Autodesk, Inc.*............................... 147,000 $ 6,920,760
Avid Technology, Inc.*(a)..................... 129,000 4,560,150
Cerner Corp.*(a).............................. 74,000 4,104,780
Intuit, Inc.*................................. 118,000 3,549,440
NAVTEQ Corp.*(a).............................. 171,000 7,240,140
Red Hat, Inc.*(a)............................. 276,000 6,149,280
Salesforce.com, Inc.*(a)...................... 42,000 1,800,120
VeriSign, Inc.*............................... 436,000 13,834,280
-------------
48,158,950
-------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 2.4%
ADTRAN, Inc.(a)............................... 74,000 1,921,780
Amdocs, Ltd.*................................. 247,000 9,835,540
Garmin, Ltd.(a)............................... 34,000 2,514,980
Time Warner Telecom, Inc.- Class A *(a)....... 197,000 3,959,700
XM Satellite Radio Holdings, Inc.- Class A*(a) 456,000 5,367,120
-------------
23,599,120
-------------
TELECOMMUNICATION SERVICES - WIRELESS - 4.4%
American Tower Corp. - Class A*(a)............ 272,000 11,424,000
Crown Castle International Corp.*(a).......... 354,000 12,839,580
Leap Wireless International, Inc.*............ 126,000 10,647,000
Metropcs Communications, Inc.*................ 169,000 5,583,760
SBA Communications Corp.*(a).................. 82,000 2,754,380
-------------
43,248,720
-------------
TEXTILES, APPAREL & LUXURY GOODS - 0.2%
Under Armour, Inc. - Class A*(a).............. 42,000 1,917,300
-------------
TRADING COMPANIES & DISTRIBUTORS - 0.6%
Fastenal Co.(a)............................... 135,000 5,651,100
-------------
TRANSPORTATION - 0.6%
UTI Worldwide, Inc.(a)........................ 224,000 6,000,961
-------------
Total Common Stocks
(Cost $708,738,621) 936,461,899
-------------
----------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
----------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 6.4%
T. Rowe Price Government Reserve
Investment Fund**
(Cost $63,459,880)....................... $63,459,880 $ 63,459,880
-------------
TOTAL INVESTMENTS - 101.3%
(Cost $772,198,501) 999,921,779
Other Assets and Liabilities (net) - (1.3)% (12,624,409)
-------------
TOTAL NET ASSETS - 100.0% $ 987,297,370
=============
PORTFOLIO FOOTNOTES:
* Non-income producing security.
** Affiliated issuer (see Note 10).
(a) A portion or all of the security was held on loan. As of June 30, 2007, the
market value of the securities loaned was $229,551,909 and the collateral
received consisted of cash in the amount of $226,070,441 and securities in
the amount of $9,046,453.
ADR - American Depositary Receipt
See notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
T. ROWE PRICE MID-CAP GROWTH PORTFOLIO
ASSETS
Investments, at value (Note 2)* $ 999,921,779
Collateral for securities on loan 235,116,894
Receivable for investments sold 3,605,217
Receivable for Trust shares sold 960,783
Dividends receivable 224,095
Interest receivable 214,459
--------------
Total assets 1,240,043,227
--------------
LIABILITIES
Payables for:
Investments purchased 15,573,463
Trust shares redeemed 1,138,299
Distribution and services fees - Class B 100,613
Distribution and services fees - Class E 3,440
Collateral for securities on loan 235,116,894
Investment advisory fee payable (Note 3) 591,018
Administration fee payable 10,550
Custodian and accounting fees payable 116,008
Accrued expenses 95,572
--------------
Total liabilities 252,745,857
==============
NET ASSETS $ 987,297,370
==============
NET ASSETS REPRESENTED BY:
Paid in surplus $ 703,708,925
Accumulated net realized gain 53,881,067
Unrealized appreciation on investments and foreign currency 227,723,497
Undistributed net investment income 1,983,881
--------------
Total $ 987,297,370
==============
NET ASSETS
Class A $ 467,275,965
==============
Class B 491,985,474
==============
Class E 28,035,931
==============
CAPITAL SHARES OUTSTANDING
Class A 48,647,334
==============
Class B 52,051,132
==============
Class E 2,947,097
==============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 9.61
==============
Class B 9.45
==============
Class E 9.51
==============
- ---------------------------------------------------------------------------------------
* Investments at cost $ 772,198,501
See notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
T. ROWE PRICE MID-CAP GROWTH PORTFOLIO
INVESTMENT INCOME:
Dividends (1) $ 4,434,445
Interest (2) 163,054
Income earned from affiliated transactions 870,204
------------
Total investment income 5,467,703
------------
EXPENSES:
Investment advisory fee (Note 3) 3,385,972
Administration fees 33,162
Custody and accounting fees 27,491
Distribution fee - Class B 575,628
Distribution fee - Class E 19,312
Transfer agent fees 13,642
Audit 12,048
Legal 7,460
Trustee fees and expenses 7,193
Shareholder reporting 41,802
Insurance 6,824
Other 2,197
------------
Total expenses 4,132,731
Less fees waived and expenses reimbursed by the Manager (72,458)
Less broker commission recapture (24,008)
------------
Net expenses 4,036,265
------------
Net investment income 1,431,438
------------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY:
Net realized gain on:
Investments 54,246,664
Foreign currency 3,862
------------
Net realized gain on investments and foreign currency 54,250,526
------------
Net change in unrealized appreciation (depreciation) on:
Investments 72,797,656
Foreign currency (1,125)
------------
Net change in unrealized appreciation on investments and foreign
currency 72,796,531
------------
Net realized and change in unrealized gain on investments and
foreign currency 127,047,057
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $128,478,495
============
- ---------------------------------------------------------------------------------------
(1)Dividend income is net withholding taxes of: $ 18,828
(2)Interest income includes securities lending income of: 166,367
See notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
T. ROWE PRICE MID-CAP GROWTH PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 1,431,438 $ 1,628,001
Net realized gain on investments and foreign currency 54,250,526 42,527,357
Net change in unrealized appreciation on investments and foreign
currency 72,796,531 5,413,703
------------ ------------
Net increase in net assets resulting from operations 128,478,495 49,569,061
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (1,028,494) --
Class B (4,747) --
Class E (23,661) --
From net realized gains
Class A (19,616,047) (9,673,087)
Class B (21,687,725) (15,221,389)
Class E (1,207,133) (915,496)
------------ ------------
Net decrease in net assets resulting from distributions (43,567,807) (25,809,972)
------------ ------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class A 56,106,086 155,626,079
Class B 39,172,124 69,550,080
Class E 3,272,253 5,686,840
Net asset value of shares issued through dividend reinvestment
Class A 20,644,541 9,673,087
Class B 21,692,472 15,221,389
Class E 1,230,794 915,496
Cost of shares repurchased
Class A (35,248,468) (48,106,132)
Class B (65,971,745) (65,964,263)
Class E (3,898,989) (7,545,503)
------------ ------------
Net increase in net assets from capital share transactions 36,999,068 135,057,073
------------ ------------
TOTAL INCREASE IN NET ASSETS 121,909,756 158,816,162
Net assets at beginning of period 865,387,614 706,571,452
------------ ------------
Net assets at end of period $987,297,370 $865,387,614
============ ============
Net assets at end of period includes undistributed net investment
income $ 1,983,881 $ 1,609,345
============ ============
See notes to financial statements
9
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS A
T. ROWE PRICE MID-CAP GROWTH PORTFOLIO ------------------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 ---------------------------------------------
(UNAUDITED) 2006 2005 2004 2003
-------------- ------ ------ ------ ------
NET ASSET VALUE, BEGINNING OF PERIOD.......................... $ 8.76 $ 8.49 $ 7.55 $ 6.39 $ 4.66
------ ------ ------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss).................................. 0.02 (a) 0.03 (a) (0.01)(a) (0.03)(a) (0.02)(a)
Net Realized/Unrealized Gain (Loss) on Investments............ 1.28 0.53 1.13 1.19 1.75
------ ------ ------ ------ ------
Total from Investment Operations.............................. 1.30 0.56 1.12 1.16 1.73
------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income.......................... (0.02) -- -- -- --
Distributions from Net Realized Capital Gains................. (0.43) (0.29) (0.18) -- --
------ ------ ------ ------ ------
Total Distributions........................................... (0.45) (0.29) (0.18) -- --
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD................................ $ 9.61 $ 8.76 $ 8.49 $ 7.55 $ 6.39
====== ====== ====== ====== ======
TOTAL RETURN 15.22% 6.56% 14.87 % 18.15 % 37.12 %
Ratio of Expenses to Average Net Assets**..................... 0.76%* 0.81% 0.80 % 0.90 % 0.91 %
Ratio of Expenses to Average Net Assets After Broker Rebates** N/A N/A N/A N/A 0.83 %
Ratio of Expenses to Average Net Assets Before Reimbursement
and Rebates................................................. 0.77%* 0.81% 0.81 % 0.83 %(b) 0.92 %(b)
Ratio of Net Investment Income (Loss) to Average Net Assets... 0.45%* 0.32% (0.08)% (0.41)% (0.37)%
Portfolio Turnover Rate....................................... 15.1% 33.7% 23.0 % 51.7 % 56.5 %
Net Assets, End of Period (in millions)....................... $467.3 $386.8 $258.6 $145.7 $34.8
CLASS B
------------------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 ---------------------------------------------
(UNAUDITED) 2006 2005 2004 2003
-------------- ------ ------ ------ ------
NET ASSET VALUE, BEGINNING OF PERIOD.......................... $ 8.62 $ 8.38 $ 7.47 $ 6.34 $ 4.64
------ ------ ------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss).................................. 0.01 (a) 0.01 (a) (0.03)(a) (0.05)(a) (0.04)(a)
Net Realized/Unrealized Gain (Loss) on Investments............ 1.25 0.52 1.12 1.18 1.74
------ ------ ------ ------ ------
Total from Investment Operations.............................. 1.26 0.53 1.09 1.13 1.70
------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income.......................... -- -- -- -- --
Distributions from Net Realized Capital Gains................. (0.43) (0.29) (0.18) -- --
------ ------ ------ ------ ------
Total Distributions........................................... (0.43) (0.29) (0.18) -- --
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD................................ $ 9.45 $ 8.62 $ 8.38 $ 7.47 $ 6.34
====== ====== ====== ====== ======
TOTAL RETURN 15.08% 6.16% 14.63 % 17.82 % 36.64 %
Ratio of Expenses to Average Net Assets**..................... 1.01%* 1.05% 1.05 % 1.16 % 1.18 %
Ratio of Expenses to Average Net Assets After Broker Rebates** N/A N/A N/A N/A 1.12 %
Ratio of Expenses to Average Net Assets Before Reimbursement
and Rebates................................................. 1.02%* 1.06% 1.06 % 1.07 %(b) 1.16 %(b)
Ratio of Net Investment Income (Loss) to Average Net Assets... 0.20%* 0.12% (0.34)% (0.69)% (0.64)%
Portfolio Turnover Rate....................................... 15.1% 33.7% 23.0 % 51.7 % 56.5 %
Net Assets, End of Period (in millions)....................... $492.0 $453.6 $422.6 $345.0 $307.7
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
T. ROWE PRICE MID-CAP GROWTH PORTFOLIO --------
--------
2002
-------
NET ASSET VALUE, BEGINNING OF PERIOD.......................... $ 8.37
-------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss).................................. (0.02)(a)
Net Realized/Unrealized Gain (Loss) on Investments............ (3.66)
-------
Total from Investment Operations.............................. (3.68)
-------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income.......................... --
Distributions from Net Realized Capital Gains................. (0.03)
-------
Total Distributions........................................... (0.03)
-------
NET ASSET VALUE, END OF PERIOD................................ $ 4.66
=======
TOTAL RETURN (44.00)%
Ratio of Expenses to Average Net Assets**..................... 0.80 %
Ratio of Expenses to Average Net Assets After Broker Rebates** 0.73 %
Ratio of Expenses to Average Net Assets Before Reimbursement
and Rebates................................................. 1.10 %
Ratio of Net Investment Income (Loss) to Average Net Assets... (0.34)%
Portfolio Turnover Rate....................................... 157.2 %
Net Assets, End of Period (in millions)....................... $16.0
--------
--------
2002
-------
NET ASSET VALUE, BEGINNING OF PERIOD.......................... $ 8.34
-------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss).................................. (0.03)(a)
Net Realized/Unrealized Gain (Loss) on Investments............ (3.64)
-------
Total from Investment Operations.............................. (3.67)
-------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income.......................... --
Distributions from Net Realized Capital Gains................. (0.03)
-------
Total Distributions........................................... (0.03)
-------
NET ASSET VALUE, END OF PERIOD................................ $ 4.64
=======
TOTAL RETURN (44.04)%
Ratio of Expenses to Average Net Assets**..................... 1.05 %
Ratio of Expenses to Average Net Assets After Broker Rebates** 0.96 %
Ratio of Expenses to Average Net Assets Before Reimbursement
and Rebates................................................. 1.41 %
Ratio of Net Investment Income (Loss) to Average Net Assets... (0.54)%
Portfolio Turnover Rate....................................... 157.2 %
Net Assets, End of Period (in millions)....................... $62.6
* Annualized
** Prior to 05/01/2003, broker rebates were excluded from the calculation of
the expense limitation.
N/A Not Applicable
(a) Per share amounts based on average shares outstanding during the period.
(b) Excludes effect of Deferred Expense Reimbursement.
See notes to financial statements
10
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS E
T. ROWE PRICE MID-CAP GROWTH PORTFOLIO ------------------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 ---------------------------------------------
(UNAUDITED) 2006 2005 2004 2003
-------------- ------ ------ ------ ------
NET ASSET VALUE, BEGINNING OF PERIOD.......................... $ 8.67 $ 8.42 $ 7.50 $ 6.36 $ 4.65
------ ------ ------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income (Loss).................................. 0.01 (a) 0.02 (a) (0.02)(a) (0.04)(a) (0.03)(a)
Net Realized/Unrealized Gain (Loss) on Investments............ 1.27 0.52 1.12 1.18 1.74
------ ------ ------ ------ ------
Total from Investment Operations.............................. 1.28 0.54 1.10 1.14 1.71
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.......................... (0.01) -- -- -- --
Distributions from Net Realized Capital Gains................. (0.43) (0.29) (0.18) -- --
------ ------ ------ ------ ------
Total Distributions........................................... (0.44) (0.29) (0.18) -- --
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD................................ $ 9.51 $ 8.67 $ 8.42 $ 7.50 $ 6.36
====== ====== ====== ====== ======
TOTAL RETURN 15.08% 6.38% 14.70 % 17.92 % 36.77 %
Ratio of Expenses to Average Net Assets**..................... 0.91% * 0.95% 0.95 % 1.05 % 1.08 %
Ratio of Expenses to Average Net Assets After Broker Rebates** N/A N/A N/A N/A 1.01 %
Ratio of Expenses to Average Net Assets Before Reimbursement
and Rebates................................................. 0.92% * 0.96% 0.96 % 0.97 %(b) 1.06 %(b)
Ratio of Net Investment Income (Loss) to Average Net Assets... 0.30% * 0.22% (0.24)% (0.57)% (0.54)%
Portfolio Turnover Rate....................................... 15.1 % 33.7% 23.0 % 51.7 % 56.5 %
Net Assets, End of Period (in millions)....................... $ 28.0 $25.0 $25.4 $21.5 $10.8
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
T. ROWE PRICE MID-CAP GROWTH PORTFOLIO --------
--------
2002
-------
NET ASSET VALUE, BEGINNING OF PERIOD.......................... $ 8.36
-------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income (Loss).................................. (0.02)(a)
Net Realized/Unrealized Gain (Loss) on Investments............ (3.66)
-------
Total from Investment Operations.............................. (3.68)
-------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.......................... --
Distributions from Net Realized Capital Gains................. (0.03)
-------
Total Distributions........................................... (0.03)
-------
NET ASSET VALUE, END OF PERIOD................................ $ 4.65
=======
TOTAL RETURN (44.05)%
Ratio of Expenses to Average Net Assets**..................... 0.95 %
Ratio of Expenses to Average Net Assets After Broker Rebates** 0.84 %
Ratio of Expenses to Average Net Assets Before Reimbursement
and Rebates................................................. 1.34 %
Ratio of Net Investment Income (Loss) to Average Net Assets... (0.38)%
Portfolio Turnover Rate....................................... 157.2 %
Net Assets, End of Period (in millions)....................... $2.1
* Annualized
** Prior to 05/01/2003, broker rebates were excluded from the calculation of
the expense limitation.
N/A Not Applicable
(a) Per share amounts based on average shares outstanding during the period.
(b) Excludes effect of Deferred Expense Reimbursement
See notes to financial statements
11
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is T. Rowe Price Mid-Cap Growth Portfolio,
which is non-diversified. Shares in the Trust are not offered directly to the
general public and are currently available only to separate accounts
established by certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A, B and E Shares are
offered by the Portfolio. Shares of each Class of the Portfolio represent an
equal pro rata interest in the Portfolio and generally give the shareholder the
same voting, dividend, liquidation, and other rights. Investment income,
realized and unrealized capital gains and losses, the common expenses of the
Portfolio and certain Portfolio-level expense reductions, if any, are allocated
on a pro rata basis to each class based on the relative net assets of each
class to the total net assets of the Portfolio. Each class of shares differs in
its respective distribution expenses and certain other class-specific expense
reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date.
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The value of the security so purchased is subject to market fluctuations during
this period. The Portfolio segregates assets having an aggregate value at least
equal to the amount of the when issued or delayed delivery purchase commitments
until payment is made.
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. SECURITIES LENDING - The Portfolio may lend its securities to certain
qualified brokers who borrow securities in order to complete certain
transactions. By lending its investment securities, the Portfolio attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term of the loan would
accrue to the account of the Portfolio. Risks of delay in recovery of the
securities or even loss of rights in the collateral may occur should the
borrower of the securities fail financially. Risks may also arise to the extent
that the value of the collateral decreases below the value of the securities
loaned.
Upon entering into a securities lending transaction, the Portfolio receives
cash or other securities as collateral in an amount equal to or exceeding 102%
of the current market value of the loaned securities. Any cash received as
collateral is generally invested by State Street Bank and Trust Company ("State
Street"), acting in its capacity as securities lending agent (the "Agent"), in
the State Street Navigator Securities Lending Prime Portfolio which is a money
market fund registered under the 1940 Act. A portion of the dividends received
on the collateral is rebated to the borrower of the securities and the
remainder is split between the Agent and the Portfolio. On loans collateralized
by cash, the cash collateral is invested in a money market fund or short term
securities. A portion of the income generated upon investment of the collateral
is remitted to the Borrowers and the remainder is allocated between the fund
and the lending agent. On loans collateralized by U.S. Treasuries, a fee is
received from the Borrower and is allocated between the fund and the lending
agent.
G. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
H. DIRECTED BROKERAGE AGREEMENT - The Trust has entered into a directed
brokerage arrangement with State Street Global Markets ("SSGM"). Under this
arrangement, the Portfolio directs certain trades to SSGM in return for a
recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to
each Portfolio are shown separately as an expense reduction on the Statement of
Operations of the Portfolio.
I. FOREIGN CURRENCY TRANSLATION - The books and records of the Portfolio are
maintained in U.S. dollars. Foreign currencies, investments and other assets
and liabilities are translated into U.S. dollars on a daily basis using
prevailing exchange rates. Purchases and sales of securities are translated at
the rates of exchange prevailing when such securities were acquired or sold.
Income is translated at rates of exchange prevailing when interest is accrued
or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in
forward foreign currency contracts, sales of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities
transactions, and the difference between the amounts of
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
dividends, interest, and foreign withholding taxes recorded on the Portfolio's
books, and the U.S. dollar equivalent of the amounts actually received or paid.
Net unrealized foreign exchange gains and losses arise from changes in the
value of assets and liabilities other than investments in securities at fiscal
year end, from changes in the exchange rates of foreign currency held, and from
changes in the contract value of forward foreign currency contracts.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with T. Rowe Price Associates, Inc., (the "Adviser") for investment advisory
services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- --------------------
T. Rowe Price Mid-Cap Growth Portfolio $3,385,972 0.75% All
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Maximum Expense Ratio
under current Expense
Limitation Agreement
----------------------
Portfolio Class A Class B Class E
--------- ------- ------- -------
T. Rowe Price Mid-Cap Growth Portfolio 0.90% 1.15% 1.05%
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratio as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
Effective February 17, 2005, T. Rowe Price Associates, Inc. ("T. Rowe Price")
has agreed to a voluntary subadvisory fee waiver that applies if (i) assets
under management by T. Rowe Price for the Trust and Metropolitan Series Fund,
Inc. ("MSF") in the aggregate exceed $750,000,000, (ii) T. Rowe Price
subadvises three or more portfolios of the Trust and MSF in the aggregate and
(iii) at least one of those portfolios is a large cap domestic equity
portfolio. The Manager has voluntarily agreed to reduce its advisory fee for T.
Rowe Price Mid-Cap Growth Portfolio by the amount waived (if any) by T. Rowe
Price for the Portfolio pursuant to this voluntary subadvisory fee waiver.
14
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
The waiver schedule for the period January 1 through December 31, 2006 was:
Percentage Fee Waiver Combined Assets
--------------------- --------------------------
0.0% First $750,000,000
5.0% Next $750,000,000
7.5% Next $1,500,000,000
10.0% Excess over $3,000,000,000
The amount waived for the period ended June 30, 2007 is shown as investment
advisory fee waiver in the Statement of Operations of the Portfolio.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements,
payments to the Distributor for activities pursuant to the Class B Distribution
Plan and Class E Distribution Plan are currently limited to payments at an
annual rate equal to 0.25% and 0.15% of average daily net assets of the
Portfolio attributable to its Class B and Class E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued Net Increase
Through (Decrease)
Beginning Shares Dividend Shares in Shares Ending
Shares Sold Reinvestment Repurchased Outstanding Shares
- - ---------- ---------- ------------- ----------- ------------ ----------
T. Rowe Price Mid-Cap Growth Portfolio
Class A
06/30/2007 44,154,207 6,034,668 2,271,127 (3,812,668) 4,493,127 48,647,334
12/31/2006 30,457,763 18,178,947 1,100,465 (5,582,968) 13,696,443 44,154,207
Class B
06/30/2007 52,647,327 4,280,783 2,423,740 (7,300,718) (596,195) 52,051,132
12/31/2006 50,437,152 8,257,663 1,757,666 (7,805,154) 2,210,175 52,647,327
Class E
06/30/2007 2,883,542 353,060 136,603 (426,108) 63,555 2,947,097
12/31/2006 3,014,778 660,484 105,109 (896,829) (131,236) 2,883,542
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
T. Rowe Price Mid-Cap Growth Portfolio $-- $132,951,766 $-- $165,041,219
15
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
5. INVESTMENT TRANSACTIONS - CONTINUED
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
- --------- ------------ ------------ -------------- --------------
T. Rowe Price Mid-Cap Growth Portfolio $772,198,501 $246,118,526 $(18,395,248) $227,723,278
6. SECURITY LENDING
As of June 30, 2007, the Portfolio had loaned securities which were
collateralized by short-term investments. The value of securities on loan and
the value of the related collateral were as follows:
Value of Value of
Securities Collateral
------------ ------------
T. Rowe Price Mid-Cap Growth Portfolio $229,551,909 $235,116,894
7. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
--------------- ----------------------- -----------------------
2006 2005 2006 2005 2006 2005
---------- ---- ----------- ----------- ----------- -----------
T. Rowe Price Mid-Cap Growth Portfolio $2,981,342 $-- $22,828,630 $15,056,102 $25,809,972 $15,056,102
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
------------- ------------- ------------ ------------------ ------------
T. Rowe Price Mid-Cap Growth Portfolio $5,753,453 $38,272,490 $154,651,814 $-- $198,677,757
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
8. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
9. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
16
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
10. OTHER MATTERS
The Portfolio does not invest in the Underlying Portfolios for the purpose of
exercising management or control; however, investments by the Portfolio within
its principal investment strategies may represent a significant portion of an
Underlying Portfolio's net assets. At the end of the period, the Portfolio was
the owner of record of 5% or more of the total outstanding shares of the
following Underlying Portfolios:
Number of Number of
shares held at Shares purchased Shares sold shares held at
Security Description December 31, 2006 during the period during the period June 30, 2007
- -------------------- ----------------- ----------------- ----------------- --------------
T. Rowe Price Government Reserve Investment
Fund 23,138,429 100,375,499 (60,054,048) 63,459,880
Income earned from
affiliates during the
Security Description period
- -------------------- ---------------------
T. Rowe Price Government Reserve Investment
Fund $870,204
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
17
MET INVESTORS SERIES TRUST
Third Avenue Small Cap
Value Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
THIRD AVENUE SMALL CAP VALUE PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY THIRD AVENUE MANAGEMENT LLC
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
For the half year ended June 30, 2007, the Third Avenue Small Cap Value
Portfolio ("the Portfolio") appreciated by 6.90% for Class A, compared to
returns of 6.96%, 6.45%, and 3.80% for the S&P 500(R) Index/1/, Russell 2000(R)
Index/2/ and Russell 2000(R) Value Index, respectively. The positive absolute
performance during the period was driven by meaningful appreciation from
various holdings, including Commscope, Inc. (up 91%), Tidewater, Inc. (up 47%),
Agrium, Inc. (up 39%), Fording Canadian Coal Trust (up 63%) and Canfor
Corporation (up 37%). These positive contributions were partially offset by
declines in other holdings, including Lexmark International (down 33%), The St.
Joe Company (down 13%), Skyline Corporation (down 25%), MDC Holdings (down 14%)
and Haverty Furniture Companies (down 20%).
During the first half of the year, the Portfolio acquired thirteen new common
stock positions, increased its position in forty holdings, reduced its position
in five holdings, and eliminated eleven positions. Comments on several of these
changes are provided below.
One position acquired during the period was Bristow Group. Bristow Group is the
largest contractor of helicopter services to the global oil and gas industry. A
majority of Bristow's work comes from offshore production activity, a less
volatile source of revenue than that derived from exploration activities.
Competitive forces in the next two years or so ought to be relatively tame as
demand for helicopter services seems to be outpacing supply, a supply that is
constrained as helicopter manufacturers are fully booked for a number of years.
Bristow Common was purchased at a modest discount to Management's conservative
estimate of Net Asset Value, a value that is likely to grow should the
company's ambitious fleet expansion capitalize on the attractive growth
prospects offered by opportunities in the Middle East and Southeast Asia. A
liquid market for helicopters exists outside the energy industry underpinning
the company's asset values, and lending significant downside protection to this
investment.
During the first half, we also purchased shares in Glatfelter. Founded in 1864,
Glatfelter produces specialty papers and owns a modest tract of timberlands
that it is in the process of monetizing. Specialty papers include paper used in
the production of high quality hardbound books and envelopes as well as other
highly technical customized products. Additionally, the company produces other
specialized items such as tea
- --------
/1/ The S&P 500(R) Index is an unmanaged index consisting of 500 stocks chosen
for market size, liquidity, and industry group representation. It is a
market-value weighted index (stock price times number of shares outstanding),
with each stock's weight in the Index proportionate to its market value. The
Index does not include fees or expenses and is not available for direct
investment.
/2/ Russell 2000(R) Index is an unmanaged index which measures the performance
of the 2,000 smallest companies in the Russell 3000 Index, which represents
approximately 8% of the total market capitalization of the Russell 3000 Index.
As of the latest reconstitution, the average market capitalization was
approximately $898.3 million; the median market capitalization was
approximately $705.4 million. The largest company in the index had an
approximate market capitalization of $2.5 billion. The Index does not include
fees or expenses and is not available for direct investment.
bags, coffee filters and metallized products for bottle labels. The company
boasts leading shares of its served markets--markets that have benefited from
consolidation and rationalization of producer capacity--and low cost production
based on its vertically integrated operations. The company's cyclically
depressed current earnings profile ought to improve as recent acquisitions
start to contribute, and as debt reduction occurs over the next 12-24 months.
American Power Conversion Corp. was eliminated as a result of a "resource
conversion" (E.G., selling to a strategic buyer) in the first quarter.
Schneider Electric S.A. completed its acquisition (originally announced during
the fourth quarter of 2006) of American Power Conversion Corp. for $31 per
share in cash. The offer price represented roughly a 30% premium over the
market price at the time of the announcement. This resource conversion produced
a very significant return on our investment.
We also eliminated our position in Comverse Technology, during the first
quarter, following the announcement of an acquisition by Verint (a majority
owned subsidiary of Comverse Technology) at a price that we considered to be
excessive. Our sale decision was also influenced by considerable management
turnover related primarily to options backdating.
During the second quarter, Bridgestone Corporation completed its all cash
acquisition of Bandag, Inc. at $50.75 per share, representing a 13% premium to
the market price of the stock prior to the acquisition announcement, and a
significant premium to the Portfolio's cost basis in Bandag.
We appreciate your continued support and look forward to writing you again in
the future.
CURTIS JENSEN
IAN LAPEY
Portfolio Managers
THIRD AVENUE MANAGEMENT LLC
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
THIRD AVENUE SMALL CAP VALUE PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY THIRD AVENUE MANAGEMENT LLC
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
--------------------------------------------------
Cimarex Energy Co. 3.61%
--------------------------------------------------
Pogo Producing Co. 2.98%
--------------------------------------------------
Comstock Resources, Inc. 2.14%
--------------------------------------------------
Superior Industries International, Inc. 2.06%
--------------------------------------------------
Sycamore Networks, Inc. 1.95%
--------------------------------------------------
NewAlliance Bancshares, Inc. 1.91%
--------------------------------------------------
St. Joe Co. (The) 1.64%
--------------------------------------------------
Bristow Group, Inc. 1.58%
--------------------------------------------------
Glatfelter 1.58%
--------------------------------------------------
K-Swiss, Inc. - Class A 1.55%
--------------------------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
LOGO
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
THIRD AVENUE SMALL CAP VALUE PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY THIRD AVENUE MANAGEMENT LLC
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
THIRD AVENUE SMALL CAP VALUE PORTFOLIO MANAGED BY THIRD AVENUE MANAGEMENT LLC
VS. RUSSELL 2000(R) VALUE INDEX/1/
Growth Based on $10,000+
[CHART]
Third Avenue Dow Jones S&P
Small Cap Russell 2000(R) Wilshire Small Small Cap
Value Portfolio Value Index/3/ Cap Index/2/ 600(R) Index/1/
--------------- --------------- -------------- ---------------
5/01/2002 $10,000 $10,000 $10,000 $10,000
12/31/2002 8,322 7,808 7,906 7,762
12/31/2003 11,777 11,430 11,782 10,773
12/31/2004 14,933 13,940 14,074 13,213
12/31/2005 17,295 14,595 15,111 14,228
12/31/2006 19,609 18,024 17,677 16,379
6/30/2007 20,963 18,708 19,401 17,781
----------------------------------------------------------------
Average Annual Return/2/
(for the period ended 6/30/07)
----------------------------------------------------------------
Since
1 Year 3 Year 5 Year Inception/3/
----------------------------------------------------------------
Third Avenue Small Cap
- -- Value Portfolio--Class A 14.56% 16.71% 17.81% 15.40%
Class B 14.36% 16.45% 17.56% 15.17%
----------------------------------------------------------------
- - - Russell 2000(R) Value Index/1/ 16.05% 15.01% 14.62% 12.89%
----------------------------------------------------------------
+The chart reflects the performance of Class A shares of the Portfolio. The
performance of Class A shares will differ from that of the Class B shares
because of the difference in expenses paid by policyholders investing in the
different share class.
/1/The Russell 2000(R) Value Index is an unmanaged index which measures the
performance of those Russell 2000 companies with lower price-to-book ratios and
lower forecasted growth values. The Index does not include fees or expenses and
is not available for direct investment.
/2/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/3/Inception of the Class A and Class B shares is 5/1/02. Index returns are
based on an inception date of 5/1/02.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
3
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
THIRD AVENUE SMALL CAP VALUE PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,069.00 $3.90
Hypothetical (5% return before expenses) 1,000.00 1,021.03 3.81
- ------------------------------------------ ------------- ------------- --------------
Class B
Actual $1,000.00 $1,068.10 $5.18
Hypothetical (5% return before expenses) 1,000.00 1,019.79 5.06
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.76% and
1.01% for the Class A and Class B, respectively, multiplied by the average
account value over the period, multiplied by 181/365 (to reflect the one-half
year period).
4
MET INVESTORS SERIES TRUST
THIRD AVENUE SMALL CAP VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
-------------------------------------------------------------------
COMMON STOCKS - 78.9%
AEROSPACE & DEFENSE - 1.0%
Herley Industries, Inc.*................. 1,204,981 $ 19,725,539
---------------
AUTO COMPONENTS - 2.1%
Superior Industries International,
Inc.(a)................................ 1,857,826 40,426,294
---------------
BANKS - 3.1%
Brookline Bancorp, Inc.(a)............... 1,083,998 12,476,817
Kearny Financial Corp.(a)................ 531,825 7,169,001
NewAlliance Bancshares, Inc.(a).......... 2,547,062 37,492,753
Rockville Financial, Inc.(a)............. 264,314 3,991,141
---------------
61,129,712
---------------
BEVERAGES - 0.6%
Sapporo Holdings, Ltd.................... 1,954,500 12,385,466
---------------
BUILDING PRODUCTS - 0.9%
USG Corp.*............................... 370,000 18,144,800
---------------
CHEMICALS - 2.4%
Agrium, Inc.............................. 644,800 28,210,000
Westlake Chemical Corp................... 649,000 18,249,880
---------------
46,459,880
---------------
COMMUNICATIONS EQUIPMENT & SERVICES - 4.6%
Bel Fuse, Inc. - Class A................. 117,817 4,356,872
Bel Fuse, Inc. - Class B(a).............. 59,277 2,017,196
CommScope, Inc.*(a)...................... 393,600 22,966,560
Sycamore Networks, Inc.*................. 9,491,937 38,157,587
Tellabs, Inc.*........................... 2,187,601 23,538,587
---------------
91,036,802
---------------
COMPUTERS & PERIPHERALS - 2.2%
Electronics for Imaging, Inc.*........... 421,098 11,883,386
Ingram Micro, Inc. - Class A*............ 465,450 10,104,919
Lexmark International, Inc. - Class A*(a) 433,231 21,362,621
---------------
43,350,926
---------------
CONTAINERS & PACKAGING - 0.7%
TimberWest Forest Corp................... 772,200 13,069,061
---------------
ELECTRICAL EQUIPMENT & SERVICES - 0.4%
Encore Wire Corp.(a)..................... 276,803 8,149,080
---------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 3.5%
AVX Corp.(a)............................. 1,263,510 21,151,157
Coherent, Inc.*(a)....................... 368,983 11,257,671
Electro Scientific Industries, Inc.*(a).. 1,027,483 21,371,647
Park Electrochemical Corp.(a)............ 502,155 14,150,728
---------------
67,931,203
---------------
ENERGY EQUIPMENT & SERVICES - 4.4%
Bristow Group, Inc.*(a).................. 625,242 30,980,741
Bronco Drilling Co., Inc.*(a)............ 1,677,904 27,534,405
Tidewater, Inc.(a)....................... 404,915 28,700,375
---------------
87,215,521
---------------
---------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
---------------------------------------------------------------
FINANCIAL - DIVERSIFIED - 1.8%
Ichiyoshi Securities Co., Ltd........ 481,700 $ 6,934,619
Nuveen Investments, Inc. - Class A... 271,900 16,898,585
Wauwatosa Holdings, Inc.*(a)......... 118,600 1,961,644
Westwood Holdings Group, Inc......... 278,425 9,510,998
---------------
35,305,846
---------------
FINANCIAL SERVICES - 0.7%
Leucadia National Corp.(a)........... 389,100 13,715,775
---------------
FOOD PRODUCTS - 0.7%
Industrias Bachoco, S.A. (ADR)....... 353,700 11,488,176
Sanderson Farms, Inc.(a)............. 61,064 2,749,101
---------------
14,237,277
---------------
HEALTH CARE PROVIDERS & SERVICES - 0.7%
Cross Country Healthcare, Inc.*...... 467,700 7,801,236
Pharmaceutical Product Development,
Inc................................ 172,350 6,595,834
---------------
14,397,070
---------------
HOMEBUILDERS - 3.2%
Cavco Industries, Inc.*.............. 330,809 12,411,954
Coachmen Industries, Inc.(a)......... 1,478,192 14,279,335
M.D.C. Holdings, Inc.(a)............. 380,106 18,381,926
Skyline Corp......................... 608,345 18,256,433
---------------
63,329,648
---------------
HOTELS, RESTAURANTS & LEISURE - 0.8%
Vail Resorts, Inc.*(a)............... 264,000 16,069,680
---------------
HOUSEHOLD DURABLES - 1.6%
Haverty Furniture Cos., Inc.(a)...... 1,598,880 18,658,930
Stanley Furniture Co., Inc.(a)....... 622,773 12,791,757
---------------
31,450,687
---------------
INDUSTRIAL - DIVERSIFIED - 0.8%
Trinity Industries, Inc.(a).......... 338,400 14,733,936
---------------
INSURANCE - 5.3%
Arch Capital Group, Ltd.*............ 180,974 13,127,854
Brit Insurance Holdings Plc.......... 1,343,039 9,250,931
E-L Financial Corp................... 24,255 15,051,761
FBL Financial Group, Inc. - Class A.. 322,700 12,688,564
Montpelier Re Holdings, Ltd.(a)...... 1,513,100 28,052,874
National Western Life Insurance Co. -
Class A(a)......................... 59,906 15,151,425
Phoenix Cos., Inc. (The)............. 639,300 9,595,893
---------------
102,919,302
---------------
LEISURE EQUIPMENT & PRODUCTS - 2.4%
JAKKS Pacific, Inc.*(a).............. 591,937 16,657,107
Leapfrog Enterprises, Inc.*.......... 2,294,411 23,517,713
Russ Berrie & Co., Inc.*(a).......... 336,290 6,265,083
---------------
46,439,903
---------------
See notes to financial statements
5
MET INVESTORS SERIES TRUST
THIRD AVENUE SMALL CAP VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
------------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
------------------------------------------------------------------------
MACHINERY - 2.9%
Alamo Group, Inc.(a)...................... 467,858 $ 11,790,022
Alexander & Baldwin, Inc.(a).............. 533,255 28,321,173
Insteel Industries, Inc................... 907,049 16,326,882
---------------
56,438,077
---------------
MEDIA - 0.7%
Journal Communications, Inc. - Class A.... 1,096,859 14,270,136
---------------
METALS & MINING - 1.4%
Fording Canadian Coal Trust............... 812,819 26,676,720
---------------
OIL & GAS - 11.7%
Cimarex Energy Co.(a)..................... 1,795,248 70,750,724
Comstock Resources, Inc.*................. 1,400,567 41,974,993
Pioneer Drilling Co.*..................... 1,301,193 19,400,788
Pogo Producing Co......................... 1,152,033 58,511,756
St. Mary Land & Exploration Co............ 611,252 22,384,048
Whiting Petroleum Corp.*.................. 423,573 17,163,178
---------------
230,185,487
---------------
PAPER & FOREST PRODUCTS - 4.0%
Deltic Timber Corp.(a).................... 377,042 20,669,442
Glatfelter................................ 2,277,617 30,952,815
Louisiana-Pacific Corp.................... 1,421,864 26,901,667
---------------
78,523,924
---------------
PHARMACEUTICALS - 0.7%
Watson Pharmaceuticals, Inc.*............. 449,755 14,630,530
---------------
REAL ESTATE - 5.0%
BIL International, Ltd.................... 10,327,000 10,594,634
Brookfield Asset Management, Inc. -
Class A................................. 551,250 21,994,875
Forest City Enterprises, Inc. - Class A(a) 403,000 24,776,440
Origen Financial, Inc. (REIT)............. 1,202,243 7,934,804
St. Joe Co. (The)(a)...................... 695,350 32,222,519
---------------
97,523,272
---------------
RETAIL - MULTILINE - 1.0%
Circle K Sunkus Co., Ltd.................. 709,400 12,353,935
Parco Co., Ltd............................ 572,000 7,230,017
---------------
19,583,952
---------------
RETAIL - SPECIALTY - 0.6%
Buckle, Inc. (The)(a)..................... 284,549 11,211,231
---------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS - 0.7%
GSI Group, Inc.*.......................... 1,497,949 14,664,921
---------------
SOFTWARE - 2.4%
Borland Software Corp.*(a)................ 3,820,560 22,694,126
Sybase, Inc.*............................. 637,976 15,241,247
Synopsys, Inc.*........................... 332,436 8,786,283
---------------
46,721,656
---------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 0.5%
IDT Corp. - Class B(a).................... 965,600 9,964,992
---------------
-------------------------------------------------------------
SECURITY SHARES/PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS - 1.6%
K-Swiss, Inc. - Class A(a)...... 1,074,510 $ 30,440,868
---------------
TRADING COMPANIES & DISTRIBUTORS - 0.7%
Handleman Co.(a)................ 2,149,940 13,394,126
---------------
TRANSPORTATION - 1.1%
BW Gas ASA...................... 1,655,700 21,600,431
---------------
Total Common Stocks
(Cost $1,278,475,735) 1,547,453,731
---------------
SHORT-TERM INVESTMENT - 22.3%
State Street Bank & Trust Co.,
Repurchase Agreement dated
06/29/07 at 3.400% to be
repurchased at $50,121,366 on
07/02/07 collateralized by
$48,850,000 FFCB 6.125% due
12/29/15 with a value of
$51,109,313................... $ 50,107,169 50,107,169
State Street Bank & Trust Co.,
Repurchase Agreement dated
06/29/07 at 3.400% to be
repurchased at $17,873,592 on
07/02/07 collateralized by
$18,410,000 FHLB 5.700% due
06/18/14 with a value of
$18,225,900................... 17,868,529 17,868,529
State Street Bank & Trust Co.,
Repurchase Agreement dated
06/29/07 at 3.400% to be
repurchased at $13,540,815 on
07/02/07 collateralized by
$13,825,000 FHLB 5.750% due
06/07/12 with a value of
$13,807,719................... 13,536,979 13,536,979
State Street Bank & Trust Co.,
Repurchase Agreement dated
06/29/07 at 3.400% to be
repurchased at $82,347,308 on
07/02/07 collateralized by
$84,605,000 FHLB 5.375% due
06/13/14 with a value of
$83,970,463................... 82,323,983 82,323,983
State Street Bank & Trust Co.,
Repurchase Agreement dated
06/29/07 at 3.400% to be
repurchased at $108,101,815 on
07/02/07 collateralized by
$110,095,000 FHLB 5.375% due
06/08/12 with a value of
$110,232,619.................. 108,071,195 108,071,195
See notes to financial statements
6
MET INVESTORS SERIES TRUST
THIRD AVENUE SMALL CAP VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-------------------------------------------------------------------
SECURITY PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
-------------------------------------------------------------------
SHORT-TERM INVESTMENT - CONTINUED
State Street Bank & Trust Co.,
Repurchase Agreement dated
06/29/07 at 3.400% to be repurchased
at $68,401,912 on 07/02/07
collateralized by $69,925,000 FNMA
5.990% due 04/18/17 with a value of
$69,750,188......................... $68,382,537 $ 68,382,537
State Street Bank & Trust Co.,
Repurchase Agreement dated
06/29/07 at 3.400% to be repurchased
at $47,501,200 on 07/02/07
collateralized by $50,000,000 FNMA
4.625% due 10/15/13 with a value of
$48,437,500......................... 47,487,745 47,487,745
State Street Bank & Trust Co.,
Repurchase Agreement dated
06/29/07 at 3.400% to be repurchased
at $48,908,716 on 07/02/07
collateralized by $50,000,000 FHLMC
5.250% due 04/18/16 with a value of
$49,875,000......................... 48,894,863 48,894,863
---------------
Total Short-Term Investments
(Cost $436,673,000) 436,673,000
---------------
TOTAL INVESTMENTS - 101.2%
(Cost $1,715,148,735) 1,984,126,731
---------------
Other Assets and Liabilities (net) - (1.2)% (23,377,946)
---------------
TOTAL NET ASSETS - 100.0% $ 1,960,748,785
===============
PORTFOLIO FOOTNOTES:
* Non-income producing security.
(a) A portion or all of the security was held on loan. As of June 30, 2007, the
market value of the securities loaned was $143,198,135 and the collateral
received consisted of cash in the amount of $147,141,944.
ADR - American Depositary Receipt
FFCB - Federal Farm Credit Bank
FHLB - Federal Home Loan Bank
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
REIT - Real Estate Investment Trust
See notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
THIRD AVENUE SMALL CAP VALUE PORTFOLIO
ASSETS
Investments, at value (Note 2)* $1,547,453,731
Repurchase Agreement 436,673,000
Cash 526
Cash denominated in foreign currencies** 1,954,463
Collateral for securities on loan 147,141,944
Receivable for investments sold 3,497,812
Receivable for Trust shares sold 1,612,205
Dividends receivable 1,365,345
Interest receivable 41,241
--------------
Total assets 2,139,740,267
--------------
LIABILITIES
Payables for:
Investments purchased 29,158,295
Trust shares redeemed 1,078,206
Distribution and services fees--Class B 186,291
Collateral for securities on loan 147,141,944
Investment advisory fee payable (Note 3) 1,176,207
Administration fee payable 20,673
Custodian and accounting fees payable 77,061
Accrued expenses 152,805
--------------
Total liabilities 178,991,482
--------------
NET ASSETS $1,960,748,785
==============
NET ASSETS REPRESENTED BY:
Paid in surplus $1,635,150,841
Accumulated net realized gain 47,367,086
Unrealized appreciation on investments and foreign currency 269,000,465
Undistributed net investment income 9,230,393
--------------
Total $1,960,748,785
==============
NET ASSETS
Class A $1,071,492,979
==============
Class B 889,255,806
==============
CAPITAL SHARES OUTSTANDING
Class A 61,856,711
==============
Class B 51,498,028
==============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 17.32
==============
Class B 17.27
==============
- ---------------------------------------------------------------------------------------
* Investments at cost, excluding Repurchase Agreements $1,278,475,735
**Cost of cash denominated in foreign currencies 1,937,659
See notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
THIRD AVENUE SMALL CAP VALUE PORTFOLIO
INVESTMENT INCOME:
Dividends (1) $ 8,210,268
Interest (2) 7,870,908
------------
Total investment income 16,081,176
------------
EXPENSES:
Investment advisory fee (Note 3) 5,985,025
Administration fees 58,302
Custody and accounting fees 57,218
Distribution fee - Class B 850,287
Transfer agent fees 8,637
Audit 12,048
Legal 5,075
Trustee fees and expenses 7,193
Shareholder reporting 68,350
Insurance 9,891
Other 2,259
------------
Total expenses 7,064,285
------------
Net investment income 9,016,891
------------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY:
Net realized gain on:
Investments 47,167,380
Foreign currency 108,508
------------
Net realized gain on investments and foreign currency 47,275,888
------------
Net change in unrealized appreciation on:
Investments 47,008,757
Foreign currency 22,054
------------
Net change in unrealized appreciation on investments and foreign
currency 47,030,811
------------
Net realized and change in unrealized gain on investments and
foreign currency 94,306,699
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $103,323,590
============
- --------------------------------------------------------------------------------------
(1)Dividend income is net withholding taxes of: $ 465,596
(2)Interest income includes securities lending income of: 1,501,225
See notes to financial statements
9
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
THIRD AVENUE SMALL CAP VALUE PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 9,016,891 $ 17,421,195
Net realized gain on investments and foreign currency 47,275,888 98,576,523
Net change in unrealized appreciation on investments and foreign
currency 47,030,811 25,492,748
-------------- --------------
Net increase in net assets resulting from operations 103,323,590 141,490,466
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (11,546,013) (3,530,186)
Class B (5,580,332) (2,105,383)
From net realized gains
Class A (62,023,727) (36,415,883)
Class B (36,653,035) (31,848,347)
-------------- --------------
Net decrease in net assets resulting from distributions (115,803,107) (73,899,799)
-------------- --------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class A 140,207,173 361,866,880
Class B 358,487,743 129,308,180
Net asset value of shares issued through dividend reinvestment
Class A 73,569,740 39,946,069
Class B 42,233,367 33,953,730
Cost of shares repurchased
Class A (16,947,091) (36,991,631)
Class B (81,726,596) (57,520,977)
-------------- --------------
Net increase in net assets from capital share transactions 515,824,336 470,562,251
-------------- --------------
TOTAL INCREASE IN NET ASSETS 503,344,819 538,152,918
Net assets at beginning of period 1,457,403,966 919,251,048
-------------- --------------
Net assets at end of period $1,960,748,785 $1,457,403,966
============== ==============
Net assets at end of period includes undistributed net investment
income $ 9,230,393 $ 17,339,847
============== ==============
See notes to financial statements
10
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR
THE YEAR OR PERIOD ENDED:
THIRD AVENUE SMALL CAP VALUE CLASS A
PORTFOLIO -------------------------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 ---------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002(B)
-------------- ------ ------ ------ ------ -------
NET ASSET VALUE, BEGINNING OF
PERIOD........................ $ 17.48 $16.61 $14.38 $11.62 $ 8.29 $ 10.00
-------- ------ ------ ------ ------ -------
INCOME (LOSS) FROM INVESTMENT
OPERATIONS
Net Investment Income......... 0.10 (a) 0.27 (a) 0.14 (a) 0.16 (a) 0.05 (a) 0.04 (a)
Net Realized/Unrealized Gain
(Loss) on Investments....... 1.10 1.89 2.13 2.96 3.39 (1.72)
-------- ------ ------ ------ ------ -------
Total from Investment
Operations.................. 1.20 2.16 2.27 3.12 3.44 (1.68)
-------- ------ ------ ------ ------ -------
LESS DISTRIBUTIONS
Dividends from Net Investment
Income...................... (0.21) (0.11) -- (0.08) (0.04) (0.02)
Distributions from Net
Realized Capital Gains...... (1.15) (1.18) (0.04) (0.28) (0.07) (0.01)
-------- ------ ------ ------ ------ -------
Total Distributions........... (1.36) (1.29) (0.04) (0.36) (0.11) (0.03)
-------- ------ ------ ------ ------ -------
NET ASSET VALUE, END OF PERIOD $ 17.32 $17.48 $16.61 $14.38 $11.62 $ 8.29
======== ====== ====== ====== ====== =======
TOTAL RETURN.................. 6.90% 13.38% 15.82% 26.81% 41.52% (16.78)%
Ratio of Expenses to Average
Net Assets**................ 0.76%* 0.80% 0.81% 0.87% 0.93% 0.95 %*
Ratio of Expenses to Average
Net Assets Before
Reimbursement and Rebates... 0.76%* 0.80% 0.81% N/A 0.92%(c) 2.07 %*
Ratio of Net Investment
Income to Average Net Assets 1.19%* 1.64% 0.94% 1.12% 0.54% 0.75 %*
Portfolio Turnover Rate....... 30.4% 12.1% 19.6% 11.3% 14.6% 8.0 %
Net Assets, End of Period (in
millions)................... $1,071.5 $883.6 $476.8 $206.3 $ 6.2 $ 4.2
CLASS B
------------------------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 ---------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002(B)
-------------- ------ ------ ------ ------ -------
NET ASSET VALUE, BEGINNING OF
PERIOD........................ $17.41 $16.55 $14.37 $11.61 $ 8.28 $ 10.00
------ ------ ------ ------ ------ -------
INCOME (LOSS) FROM INVESTMENT
OPERATIONS
Net Investment Income......... 0.08 (a) 0.21 (a) 0.10 (a) 0.06 (a) 0.05 (a) 0.04 (a)
Net Realized/Unrealized Gain
(Loss) on Investments....... 1.10 1.91 2.12 3.02 3.38 (1.73)
------ ------ ------ ------ ------ -------
Total from Investment
Operations.................. 1.18 2.12 2.22 3.08 3.43 (1.69)
------ ------ ------ ------ ------ -------
LESS DISTRIBUTIONS
Dividends from Net Investment
Income...................... (0.17) (0.08) -- (0.04) (0.03) (0.02)
Distributions from Net
Realized Capital Gains...... (1.15) (1.18) (0.04) (0.28) (0.07) (0.01)
------ ------ ------ ------ ------ -------
Total Distributions........... (1.32) (1.26) (0.04) (0.32) (0.10) (0.03)
------ ------ ------ ------ ------ -------
NET ASSET VALUE, END OF PERIOD $17.27 $17.41 $16.55 $14.37 $11.61 $ 8.28
====== ====== ====== ====== ====== =======
TOTAL RETURN.................. 6.81% 13.13% 15.48% 26.50% 41.41% (16.90)%
Ratio of Expenses to Average
Net Assets**................ 1.01%* 1.05% 1.05% 1.07% 1.18% 1.20 %*
Ratio of Expenses to Average
Net Assets Before
Reimbursement and Rebates... 1.01%* 1.05% 1.05% N/A 1.13%(c) 1.69 %*
Ratio of Net Investment
Income to Average Net Assets 0.98%* 1.28% 0.64% 0.46% 0.49% 0.80 %*
Portfolio Turnover Rate....... 30.4% 12.1% 19.6% 11.3% 14.6% 8.0 %
Net Assets, End of Period (in
millions)................... $889.3 $573.8 $442.4 $435.5 $307.9 $ 33.4
* Annualized
** Prior to 05/01/2003, broker rebates were excluded from the calculation of
the expense limitation.
N/A Not Applicable
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--05/01/2002.
(c) Excludes effect of Deferred Expense Reimbursement--See Note 3 of financial
statements.
See notes to financial statements
11
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is Third Avenue Small Cap Value Portfolio,
which is non-diversified. Shares in the Trust are not offered directly to the
general public and are currently available only to separate accounts
established by certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A and B Shares are
offered by the Portfolio. Class E Shares are not currently offered by the
Portfolio included in this report. Shares of each Class of the Portfolio
represent an equal pro rata interest in the Portfolio and generally give the
shareholder the same voting, dividend, liquidation, and other rights.
Investment income, realized and unrealized capital gains and losses, the common
expenses of the Portfolio and certain Portfolio-level expense reductions, if
any, are allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the Portfolio. Each class of
shares differs in its respective distribution expenses and certain other
class-specific expense reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date. The value of the
security so purchased is subject to market fluctuations during this period. The
Portfolio segregates assets having an aggregate value at least equal to the
amount of the when issued or delayed delivery purchase commitments until
payment is made.
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. SECURITIES LENDING - The Portfolio may lend its securities to certain
qualified brokers who borrow securities in order to complete certain
transactions. By lending its investment securities, the Portfolio attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term of the loan would
accrue to the account of the Portfolio. Risks of delay in recovery of the
securities or even loss of rights in the collateral may occur should the
borrower of the securities fail financially. Risks may also arise to the extent
that the value of the collateral decreases below the value of the securities
loaned.
Upon entering into a securities lending transaction, the Portfolio receives
cash or other securities as collateral in an amount equal to or exceeding 102%
of the current market value of the loaned securities. Any cash received as
collateral is generally invested by State Street Bank and Trust Company ("State
Street"), acting in its capacity as securities lending agent (the "Agent"), in
the State Street Navigator Securities Lending Prime Portfolio which is a money
market fund registered under the 1940 Act. A portion of the dividends received
on the collateral is rebated to the borrower of the securities and the
remainder is split between the Agent and the Portfolio. On loans collateralized
by cash, the cash collateral is invested in a money market fund or short term
securities. A portion of the income generated upon investment of the collateral
is remitted to the Borrowers and the remainder is allocated between the fund
and the lending agent. On loans collateralized by U.S. Treasuries, a fee is
received from the Borrower and is allocated between the fund and the lending
agent.
G. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
H. FOREIGN CURRENCY TRANSLATION - The books and records of the Portfolio are
maintained in U.S. dollars. Foreign currencies, investments and other assets
and liabilities are translated into U.S. dollars on a daily basis using
prevailing exchange rates. Purchases and sales of securities are translated at
the rates of exchange prevailing when such securities were acquired or sold.
Income is translated at rates of exchange prevailing when interest is accrued
or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in
forward foreign currency contracts, sales of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities
transactions, and the difference between the amounts of dividends, interest,
and foreign withholding taxes recorded on the Portfolio's books, and the U.S.
dollar equivalent of the amounts actually
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
received or paid. Net unrealized foreign exchange gains and losses arise from
changes in the value of assets and liabilities other than investments in
securities at fiscal year end, from changes in the exchange rates of foreign
currency held, and from changes in the contract value of forward foreign
currency contracts.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with Third Avenue Management LLC, (the "Adviser") for investment advisory
services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- --------------------
Third Avenue Small Cap Value Portfolio $5,985,025 0.75% First $1 Billion
0.70% Over $1 Billion
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Maximum Expense Ratio
under current Expense
Limitation Agreement
---------------------
Portfolio Class A Class B Class E
--------- ------- ------- -------
Third Avenue Small Cap Value Portfolio 0.95% 1.20% 1.10%*
* Class not offered during the period.
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratio as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
14
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
During the period ended June 30, 2007 the Portfolio paid brokerage commissions
to affiliated brokers/dealers:
Portfolio Affiliate Commission
--------- --------- ----------
Third Avenue Small Cap Value Portfolio M.J. Whitman LLC $785,853
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued
Through Net Increase
Beginning Shares Dividend Shares in Shares Ending
Shares Sold Reinvestment Repurchased Outstanding Shares
- - ---------- ---------- ------------- ----------- ------------ ----------
Third Avenue Small Cap Value Portfolio
Class A
06/30/2007 50,548,544 7,972,866 4,297,298 (961,997) 11,308,167 61,856,711
12/31/2006 28,710,205 21,597,205 2,373,504 (2,132,370) 21,838,339 50,548,544
Class B
06/30/2007 32,950,376 20,769,126 2,474,128 (4,695,602) 18,547,652 51,498,028
12/31/2006 26,725,478 7,661,596 2,022,259 (3,458,957) 6,224,898 32,950,376
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
Third Avenue Small Cap Value Portfolio $-- $493,972,845 $-- $403,643,748
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
- --------- -------------- ------------ -------------- --------------
Third Avenue Small Cap Value Portfolio $1,715,148,735 $297,998,801 $(29,020,805) $268,977,996
6. SECURITY LENDING
As of June 30, 2007, the Portfolio had loaned securities which were
collateralized by short term investments. The value of securities on loan and
the value of the related collateral were as follows:
Value of Value of
Securities Collateral
------------ ------------
Third Avenue Small Cap Value Portfolio $143,198,135 $147,141,944
15
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
7. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
-------------------- ---------------------- ----------------------
2006 2005 2006 2005 2006 2005
----------- -------- ----------- ---------- ----------- ----------
Third Avenue Small Cap Value Portfolio $10,727,388 $906,001 $63,172,411 $1,550,917 $73,899,799 $2,456,918
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
- - ------------- ------------- ------------ ------------------ ------------
Third Avenue Small Cap Value Portfolio $21,728,438 $94,260,245 $222,089,853 $-- $338,078,536
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
8. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
9. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
16
MET INVESTORS SERIES TRUST
Turner Mid-Cap
Growth Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
TURNER MID-CAP GROWTH PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY TURNER INVESTMENT PARTNERS, INC.
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
MARKET REVIEW
In a reversal to a trend that has prevailed for most of the decade, the stock
market favored growth stocks in the first six months of 2007; it was powered
generally by the shares of companies with the greatest earnings power. The
Turner Mid-Cap Growth Portfolio, which emphasizes growth stocks, performed
well, up 13.86% for Class A, producing a solid gain that handily outperformed
its benchmark, the Russell Midcap(R) Growth Index, which had a return of 10.97%.
PORTFOLIO REVIEW
Adding the most value to results for the six month period ending June 30, 2007
were financials, consumer-discretionary, and energy, a 44% weighting. In
financials, overweighted positions in IntercontinentalExchange Inc. and
Affiliated Managers Group Inc. contributed to performance. In the consumer
discretionary sector, aQuantive Inc. and Guess? Inc. were strong performers.
National Oilwell Varco and First Solar Inc. had strong absolute and relative
returns in the energy sector. Overall, seven of the Portfolio's ten sector
positions beat their corresponding index sectors.
Subpar returns in the technology and healthcare sectors impaired results the
most. In technology, Isilon Systems Inc., Akamai Technologies and NVIDIA Corp.
were the biggest relative detractors. In healthcare, Sepracor, Inc., Medicis
Pharmaceutical Corp., and Psychiatric Solutions, Inc. were impediments.
In managing the Portfolio, our focus remains on owning stocks that we think
have superior earnings prospects. We currently favor shares of companies in the
Internet, gaming, luxury-retailing, investment-exchange, oilfield services, oil
and gas production, biotechnology, semiconductor, and telecommunications
industries.
OUTLOOK
We continue to anticipate that 2007 will prove a year in which price/earnings
ratios expand--a circumstance that typically bodes well for growth stocks. We
think any multiple expansion (which would be the first since 2003) could help
to offset the decelerating rate of corporate earnings growth. So, although we
think the stock market should be higher at the end of the year than it is now,
a number of risks could confound that outlook: consumer spending, which
accounts for about 70% of the gross domestic product, is softening; petroleum
prices threaten to spike sharply higher; and a large loss in the suddenly
unsteady Chinese stock market could have an adverse impact on the U.S. market.
But we don't assign a high probability to any of those risks. In managing the
Portfolio, our focus remains always on owning stocks that we think have
superior earnings prospects.
TEAM MANAGED
THE PORTFOLIO'S SUBADVISOR IS TURNER INVESTMENT PARTNERS, INC. THE PORTFOLIO IS
MANAGED BY A TEAM OF INVESTMENT PROFESSIONALS WHO COLLABORATE TO DEVELOP AND
IMPLEMENT THE PORTFOLIOS' INVESTMENT STRATEGY. THE LEAD MANAGER ON THE TEAM HAS
AUTHORITY OVER ALL ASPECTS OF THE PORTFOLIO'S INVESTMENT PORTFOLIO'S, INCLUDING
BUT NOT LIMITED TO, PURCHASES AND SALES OF INDIVIDUAL SECURITIES, PORTFOLIO
CONSTRUCTION TECHNIQUES, PORTFOLIO RISK ASSESSMENT AND THE MANAGEMENT OF DAILY
CASH FLOWS IN ACCORDANCE WITH PORTFOLIO HOLDINGS.
THE PORTFOLIO MANAGERS ARE CHRISTOPHER K. MCHUGH (LEAD MANAGER), TARA R.
HEDLUND, CFA, CPA AND JASON D. SCHROTBERGER, CFA. MR. MCHUGH HAS MANAGED THE
PORTFOLIO SINCE INCEPTION. MS. HEDLUND AND MR. SCHROTBERGER JOINED THE
PORTFOLIO IN 2006. MR. MCHUGH BEGAN HIS INVESTMENT CAREER IN 1986 AND JOINED
THE SUBADVISOR WHEN IT WAS FOUNDED IN 1990. MR. MCHUGH IS A PRINCIPAL AT
TURNER. MS. HEDLUND BEGAN HER INVESTMENT CAREER IN 1995 AND JOINED TURNER IN
2000 AFTER SERVING AS AN AUDIT ENGAGEMENT SENIOR AT ARTHUR ANDERSON LLP. MR.
SCHROTBERGER STARTED HIS INVESTMENT CAREER IN 1994 AND JOINED TURNER IN 2001
FROM BLACKROCK FINANCIAL MANAGEMENT WHERE HE SERVED AS AN INVESTMENT ANALYST.
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
------------------------------------
NII Holdings, Inc. 2.66%
------------------------------------
Precision Castparts Corp. 1.94%
------------------------------------
F5 Networks, Inc. 1.94%
------------------------------------
T. Rowe Price Group, Inc. 1.84%
------------------------------------
VeriSign, Inc. 1.73%
------------------------------------
KLA-Tencor Corp. 1.66%
------------------------------------
Owens-Illinois, Inc. 1.64%
------------------------------------
Shire Plc (ADR) 1.56%
------------------------------------
Coach, Inc. 1.55%
------------------------------------
Fiserv, Inc. 1.46%
------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
LOGO
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
TURNER MID-CAP GROWTH PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY TURNER INVESTMENT PARTNERS, INC.
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
TURNER MID-CAP GROWTH PORTFOLIO MANAGED BY
TURNER INVESTMENT PARTNERS, INC. VS. RUSSELL MIDCAP(R) GROWTH INDEX/1/
Growth Based on $10,000+
[CHART]
Turner Mid-Cap Russell Midcap(R)
Growth Portfolio Growth Index/1/
---------------- ---------------
4/30/2004 $10,000 $10,000
12/31/2004 11,230 11,336
12/31/2005 12,535 12,706
12/31/2006 13,324 14,062
6/30/2007 15,171 15,604
---------------------------------------------------------
Average Annual Return/2/
(for the period ended 6/30/07)
---------------------------------------------------------
1 Year 3 Year Since Inception/3/
---------------------------------------------------------
Turner Mid-Cap Growth
- -- Portfolio--Class A 16.23% 13.37% 14.06%
Class B 15.80% 13.09% 13.79%
---------------------------------------------------------
Russell Midcap(R) Growth
- - - Index/1/ 19.73% 14.48% 15.08%
---------------------------------------------------------
+The chart reflects the performance of Class A shares of the Portfolio. The
performance of Class A shares will differ from that of the Class B shares
because of the difference in expenses paid by policyholders investing in the
different share class.
/1/The Russell Midcap(R) Growth Index is an unmanaged index which measures the
performance of those Russell Midcap companies with higher price-to-book ratios
and higher forecasted growth values. The stocks are also members of the Russell
1000 Growth index. The Index does not include fees or expenses and is not
available for direct investment.
/2/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/3/Inception of the Class A and Class B shares is 5/1/04. Index returns are
based on an inception date of 4/30/04.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
2
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
TURNER MID-CAP GROWTH PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,138.60 $4.24
Hypothetical (5% return before expenses) 1,000.00 1,020.83 4.01
- ------------------------------------------ ------------- ------------- --------------
Class B
Actual $1,000.00 $1,136.10 $5.51
Hypothetical (5% return before expenses) 1,000.00 1,019.64 5.21
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.80% and
1.04% for the Class A and Class B, respectively, multiplied by the average
account value over the period, multiplied by 181/365 (to reflect the one-half
year period).
3
MET INVESTORS SERIES TRUST
TURNER MID-CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
------------------------------------------------------------
COMMON STOCKS - 98.3%
AUTO COMPONENTS - 1.3%
Goodyear Tire & Rubber Co. (The)*..... 151,720 $ 5,273,787
-------------
BANKS - 1.2%
Northern Trust Corp................... 70,240 4,512,218
Synovus Financial Corp................ 15,770 484,139
-------------
4,996,357
-------------
BEVERAGES - 0.7%
Hansen Natural Corp.*(a).............. 68,740 2,954,445
-------------
BIOTECHNOLOGY - 0.8%
Alexion Pharmaceuticals, Inc.*(a)..... 69,510 3,132,121
-------------
CHEMICALS - 0.8%
Celanese Corp......................... 82,210 3,188,104
-------------
COMMERCIAL SERVICES & SUPPLIES - 1.2%
Quanta Services, Inc.*(a)............. 93,740 2,875,006
VistaPrint, Ltd.*(a).................. 54,520 2,085,390
-------------
4,960,396
-------------
COMMUNICATIONS EQUIPMENT & SERVICES - 2.3%
Atheros Communications, Inc.*(a)...... 149,270 4,603,487
Polycom, Inc.*........................ 79,650 2,676,240
Sonus Networks, Inc.*(a).............. 256,470 2,185,124
-------------
9,464,851
-------------
CONSTRUCTION & ENGINEERING - 0.2%
Shaw Group, Inc. (The)*............... 20,680 943,830
-------------
CONTAINERS & PACKAGING - 2.3%
Jarden Corp.*......................... 63,730 2,741,027
Owens-Illinois, Inc.*................. 190,050 6,651,750
-------------
9,392,777
-------------
ELECTRICAL EQUIPMENT & SERVICES - 1.1%
Baldor Electric Co.(a)................ 90,850 4,477,088
-------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 2.1%
General Cable Corp.*(a)............... 34,980 2,649,735
Riverbed Technology, Inc.*............ 49,360 2,162,955
Thermo Fisher Scientific, Inc.*....... 74,800 3,868,656
-------------
8,681,346
-------------
ENERGY EQUIPMENT & SERVICES - 3.1%
Cameron International Corp.*.......... 70,650 5,049,355
Diamond Offshore Drilling, Inc.(a).... 19,480 1,978,389
National-Oilwell Varco, Inc.*......... 52,540 5,476,770
-------------
12,504,514
-------------
FINANCIAL - DIVERSIFIED - 8.3%
Affiliated Managers Group, Inc.*(a)... 41,615 5,358,347
Greenhill & Co., Inc.(a).............. 64,410 4,425,611
IntercontinentalExchange, Inc.*....... 39,220 5,798,677
Lazard, Ltd. - Class A(a)............. 36,350 1,636,841
Nymex Holdings, Inc.(a)............... 39,466 4,958,114
T. Rowe Price Group, Inc.............. 144,160 7,480,462
TD Ameritrade Holding Corp.*(a)....... 201,274 4,025,480
-------------
33,683,532
-------------
-----------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
-----------------------------------------------------------------
FOOD PRODUCTS - 1.0%
Wm. Wrigley Jr. Co.(a)..................... 74,610 $ 4,126,679
-------------
HEALTH CARE EQUIPMENT & SUPPLIES - 3.9%
C.R. Bard, Inc............................. 23,800 1,966,594
DENTSPLY International, Inc................ 56,929 2,178,104
Hologic, Inc.*............................. 34,920 1,931,425
Intuitive Surgical, Inc.*(a)............... 15,730 2,182,852
Kyphon, Inc.*(a)........................... 55,410 2,667,991
St. Jude Medical, Inc.*.................... 121,890 5,057,216
-------------
15,984,182
-------------
HEALTH CARE PROVIDERS & SERVICES - 3.9%
Express Scripts, Inc.*..................... 59,600 2,980,596
Health Net, Inc.*.......................... 32,140 1,696,992
Henry Schein, Inc.*........................ 51,680 2,761,262
Manor Care, Inc............................ 50,420 3,291,922
Psychiatric Solutions, Inc.*(a)............ 54,982 1,993,647
Universal Health Services, Inc. - Class B.. 48,540 2,985,210
-------------
15,709,629
-------------
HOTELS, RESTAURANTS & LEISURE - 5.4%
Hilton Hotels Corp......................... 152,090 5,090,452
International Game Technology.............. 135,360 5,373,792
Starwood Hotels & Resorts Worldwide, Inc... 46,900 3,145,583
WMS Industries, Inc.*(a)................... 139,335 4,021,208
Wynn Resorts, Ltd.(a)...................... 46,890 4,205,564
-------------
21,836,599
-------------
INDUSTRIAL - DIVERSIFIED - 1.5%
Harsco Corp................................ 83,820 4,358,640
Sterlite Industries (India), Ltd. (ADR)*(a) 117,220 1,719,617
-------------
6,078,257
-------------
INDUSTRIAL CONGLOMERATES - 1.1%
Roper Industries, Inc.(a).................. 80,180 4,578,278
-------------
INTERNET & CATALOG RETAIL - 0.7%
Expedia, Inc.*(a).......................... 93,300 2,732,757
-------------
INTERNET SOFTWARE & SERVICES - 6.4%
Akamai Technologies, Inc.*(a).............. 114,650 5,576,576
Cogent Communications Group, Inc.*......... 81,754 2,441,992
F5 Networks, Inc.*......................... 97,808 7,883,325
Juniper Networks, Inc.*.................... 182,820 4,601,579
Monster Worldwide, Inc.*................... 66,200 2,720,820
SINA Corp.*................................ 68,510 2,867,829
-------------
26,092,121
-------------
IT CONSULTING & SERVICES - 1.5%
Fiserv, Inc.*.............................. 104,176 5,917,197
-------------
MACHINERY - 0.5%
Oshkosh Truck Corp......................... 31,780 1,999,598
-------------
MANUFACTURING - 1.1%
AMETEK, Inc................................ 106,990 4,245,363
-------------
See notes to financial statements
4
MET INVESTORS SERIES TRUST
TURNER MID-CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-----------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
-----------------------------------------------------------------
MEDIA - 1.3%
Bigband Networks, Inc.*(a)................. 58,460 $ 766,411
Focus Media Holding, Ltd.*(a).............. 87,124 4,399,762
-------------
5,166,173
-------------
METALS & MINING - 3.3%
Allegheny Technologies, Inc.(a)............ 31,040 3,255,475
Arch Coal, Inc.(a)......................... 61,810 2,150,988
Precision Castparts Corp................... 65,040 7,893,255
-------------
13,299,718
-------------
OIL & GAS - 4.8%
Frontier Oil Corp.......................... 56,010 2,451,558
Quicksilver Resources, Inc.*(a)............ 81,640 3,639,511
Range Resources Corp....................... 135,535 5,070,364
Southwestern Energy Co.*................... 68,710 3,057,595
Williams Cos., Inc. (The).................. 166,670 5,270,106
-------------
19,489,134
-------------
PERSONAL PRODUCTS - 1.1%
Avon Products, Inc......................... 115,590 4,247,932
-------------
PHARMACEUTICALS - 2.2%
Allergan, Inc.............................. 47,460 2,735,594
Shire Plc (ADR)(a)......................... 85,300 6,323,289
-------------
9,058,883
-------------
REAL ESTATE - 2.2%
CB Richard Ellis Group, Inc. - Class A *(a) 102,980 3,758,770
Corrections Corporation of America*........ 47,880 3,021,707
Digital Realty Trust, Inc. (REIT).......... 54,750 2,062,980
-------------
8,843,457
-------------
RETAIL - SPECIALTY - 3.3%
Bare Escentuals, Inc.*(a).................. 75,307 2,571,734
GameStop Corp., - Class A*................. 136,630 5,342,233
O' Reilly Automotive, Inc.*................ 80,020 2,924,731
Urban Outfitters, Inc.*.................... 97,650 2,346,530
-------------
13,185,228
-------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS - 9.6%
Altera Corp.(a)............................ 202,040 4,471,145
First Solar, Inc.*(a)...................... 43,950 3,924,295
Intersil Corp. - Class A................... 156,100 4,910,906
KLA-Tencor Corp.(a)........................ 122,420 6,726,979
Maxim Integrated Products, Inc............. 175,470 5,862,453
NVIDIA Corp.*.............................. 138,125 5,705,944
ON Semiconductor Corp.*(a)................. 241,830 2,592,418
Varian Semiconductor Equipment
Associates, Inc.*(a)..................... 121,410 4,863,684
-------------
39,057,824
-------------
SOFTWARE - 3.9%
Salesforce.com, Inc.*(a)................... 91,570 3,924,690
VeriFone Holdings, Inc.*(a)................ 142,220 5,013,255
VeriSign, Inc.*............................ 221,220 7,019,311
-------------
15,957,256
-------------
----------------------------------------------------------------------
SECURITY SHARES/PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
----------------------------------------------------------------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 0.7%
SAVVIS, Inc.*.............................. 59,330 $ 2,937,428
-------------
TELECOMMUNICATION SERVICES - WIRELESS - 7.0%
American Tower Corp. - Class A*(a)......... 113,060 4,748,520
Crown Castle International Corp.*(a)....... 80,010 2,901,963
Leap Wireless International, Inc.*......... 59,970 5,067,465
MetroPCS Communications, Inc.*............. 60,350 1,993,964
Millicom International Cellular S.A.*...... 32,720 2,998,461
NII Holdings, Inc.*........................ 133,960 10,815,930
-------------
28,526,303
-------------
TEXTILES, APPAREL & LUXURY GOODS - 5.2%
Coach, Inc.*............................... 133,010 6,303,344
Guess?, Inc.(a)............................ 112,850 5,421,314
Polo Ralph Lauren Corp.(a)................. 58,370 5,726,681
Under Armour, Inc. - Class A*(a)........... 82,540 3,767,951
-------------
21,219,290
-------------
TRANSPORTATION - 1.3%
C.H. Robinson Worldwide, Inc.(a)........... 98,440 5,170,069
-------------
Total Common Stocks
(Cost $334,100,467) 399,112,503
-------------
SHORT-TERM INVESTMENT - 5.4%
State Street Bank & Trust Co.,
Repurchase Agreement
dated 06/29/07 at 3.40% to be
repurchased at $21,830,183
on 07/02/07 collateralized by
$23,970,000 FHLMC at 5.300% due
05/12/20 with a value of $22,262,138.
(Cost - $21,824,000)..................... $21,824,000 21,824,000
-------------
TOTAL INVESTMENTS - 103.7%
(Cost $355,924,467) 420,936,503
Other Assets and Liabilities (net) - (3.7)% (14,942,821)
-------------
TOTAL NET ASSETS - 100.0% $ 405,993,682
=============
PORTFOLIO FOOTNOTES:
* Non-income producing security.
(a) A portion or all of the security was held on loan. As of June 30, 2007, the
market value of the securities loaned was $96,701,693 and the collateral
received consisted of cash in the amount of $98,865,700.
ADR - American Depositary Receipt
FHLMC - Federal Home Loan Mortgage Corporation
REIT - Real Estate Investment Trust
See notes to financial statements
5
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
TURNER MID-CAP GROWTH PORTFOLIO
ASSETS
Investments, at value (Note 2)* $399,112,503
Repurchase Agreement 21,824,000
Cash 872
Collateral for securities on loan 98,865,700
Receivable for investments sold 4,972,332
Receivable for Trust shares sold 377,472
Dividends receivable 105,320
Interest receivable 2,061
------------
Total assets 525,260,260
------------
LIABILITIES
Payables for:
Investments purchased 19,941,439
Trust shares redeemed 74,282
Distribution and services fees - Class B 15,251
Collateral for securities on loan 98,865,700
Investment advisory fee payable (Note 3) 255,971
Administration fee payable 4,660
Custodian and accounting fees payable 70,997
Accrued expenses 38,278
------------
Total liabilities 119,266,578
------------
NET ASSETS $405,993,682
============
NET ASSETS REPRESENTED BY:
Paid in surplus $320,792,263
Accumulated net realized gain 20,845,803
Unrealized appreciation on investments 65,012,036
Accumulated net investment loss (656,420)
------------
Total $405,993,682
============
NET ASSETS
Class A $332,363,773
============
Class B 73,629,909
============
CAPITAL SHARES OUTSTANDING
Class A 23,713,910
============
Class B 5,291,654
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 14.02
============
Class B 13.91
============
- --------------------------------------------------------------------------------------
* Investments at cost, excluding Repurchase Agreements $334,100,467
See notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
TURNER MID-CAP GROWTH PORTFOLIO
INVESTMENT INCOME:
Dividends $ 646,646
Interest (1) 240,336
-----------
Total investment income 886,982
-----------
EXPENSES:
Investment advisory fee (Note 3) 1,429,539
Administration fees 14,521
Custody and accounting fees 17,675
Distribution fee - Class B 87,700
Transfer agent fees 6,709
Audit 12,047
Legal 7,457
Trustee fees and expenses 4,915
Shareholder reporting 10,596
Insurance 2,296
Other 1,649
-----------
Total expenses 1,595,104
Less broker commission recapture (52,635)
-----------
Net expenses 1,542,469
-----------
Net investment loss (655,487)
-----------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on:
Investments 21,281,798
-----------
Net realized gain on investments 21,281,798
-----------
Net change in unrealized appreciation on:
Investments 27,305,160
-----------
Net change in unrealized appreciation on investments 27,305,160
-----------
Net realized and change in unrealized gain on investments 48,586,958
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $47,931,471
===========
- --------------------------------------------------------------------------------------
(1)Interest income includes securities lending income of: $ 65,086
See notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
TURNER MID-CAP GROWTH PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment loss $ (655,487) $ (87,814)
Net realized gain on investments 21,281,798 12,568,229
Net change in unrealized appreciation on investments 27,305,160 4,165,896
------------ ------------
Net increase in net assets resulting from operations 47,931,471 16,646,311
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net realized gains
Class A (10,493,795) (2,235,951)
Class B (2,427,402) (806,556)
------------ ------------
Net decrease in net assets resulting from distributions (12,921,197) (3,042,507)
------------ ------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class A 40,220,604 108,813,289
Class B 5,136,509 18,855,026
Net asset value of shares issued through dividend reinvestment
Class A 10,493,795 2,235,951
Class B 2,427,402 806,556
Cost of shares repurchased
Class A (21,521,017) (16,127,638)
Class B (9,557,516) (9,960,363)
------------ ------------
Net increase in net assets from capital share transactions 27,199,777 104,622,821
------------ ------------
TOTAL INCREASE IN NET ASSETS 62,210,051 118,226,625
Net assets at beginning of period 343,783,631 225,557,006
------------ ------------
Net assets at end of period $405,993,682 $343,783,631
============ ============
Net assets at end of period includes distributions in excess of
net investment income $ (656,420) $ (933)
============ ============
See notes to financial statements
8
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS A
TURNER MID-CAP GROWTH PORTFOLIO --------------------------------------------
FOR THE PERIOD FOR THE YEARS ENDED
ENDED DECEMBER 31,
JUNE 30, 2007 -----------------------------
(UNAUDITED) 2006 2005 2004(B)
-------------- ------ ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD....................................... $12.75 $12.13 $11.23 $10.00
------ ------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income (Loss)............................................... (0.02)(a) 0.00 +(a) (0.04)(a) (0.03)(a)
Net Realized/Unrealized Gain on Investments................................ 1.76 0.77 1.35 1.26
------ ------ ------ ------
Total from Investment Operations........................................... 1.74 0.77 1.31 1.23
------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income....................................... -- -- -- --
Distributions from Net Realized Capital Gains.............................. (0.47) (0.15) (0.41) --
------ ------ ------ ------
Total Distributions........................................................ (0.47) (0.15) (0.41) --
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD............................................. $14.02 $12.75 $12.13 $11.23
====== ====== ====== ======
TOTAL RETURN 13.86 % 6.30% 11.61 % 12.30 %
Ratio of Expenses to Average Net Assets.................................... 0.80 %* 0.87% 0.85 % 0.91 %*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates... 0.82 %* 0.92% 0.85 % 0.91 %*
Ratio of Net Investment Income (Loss) to Average Net Assets................ (0.31)%* 0.03% (0.30)% (0.42)%*
Portfolio Turnover Rate.................................................... 64.8 % 153.0% 156.4 % 101.7 %
Net Assets, End of Period (in millions).................................... $332.4 $274.8 $168.7 $ 76.5
CLASS B
-------------------------------------------
FOR THE PERIOD FOR THE YEARS ENDED
ENDED DECEMBER 31,
JUNE 30, 2007 ----------------------------
(UNAUDITED) 2006 2005 2004(B)
-------------- ------ ------ -------
NET ASSET VALUE, BEGINNING OF PERIOD....................................... $12.68 $12.09 $11.22 $10.00
------ ------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Loss........................................................ (0.04)(a) (0.03)(a) (0.07)(a) (0.05)(a)
Net Realized/Unrealized Gain on Investments................................ 1.74 0.77 1.35 1.27
------ ------ ------ ------
Total from Investment Operations........................................... 1.70 0.74 1.28 1.22
------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income....................................... -- -- -- --
Distributions from Net Realized Capital Gains.............................. (0.47) (0.15) (0.41) --
------ ------ ------ ------
Total Distributions........................................................ (0.47) (0.15) (0.41) --
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD............................................. $13.91 $12.68 $12.09 $11.22
====== ====== ====== ======
TOTAL RETURN............................................................... 13.61 % 6.07 % 11.36 % 12.20 %
Ratio of Expenses to Average Net Assets.................................... 1.04 %* 1.12 % 1.10 % 1.10 %*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates... 1.07 %* 1.17 % 1.10 % 1.10 %*
Ratio of Net Investment Loss to Average Net Assets......................... (0.56)%* (0.22)% (0.58)% (0.72)%*
Portfolio Turnover Rate.................................................... 64.8 % 153.0 % 156.4 % 101.7 %
Net Assets, End of Period (in millions).................................... $ 73.6 $ 69.0 $ 56.9 $ 79.7
* Annualized
+ Rounds to less than $0.005 per share.
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--05/01/2004.
See notes to financial statements
9
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is Turner Mid-Cap Growth Portfolio, which is
diversified. Shares in the Trust are not offered directly to the general public
and are currently available only to separate accounts established by certain
affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A and B Shares are
offered by the Portfolio. Class E Shares are not currently offered by the
Portfolio included in this report. Shares of each Class of the Portfolio
represent an equal pro rata interest in the Portfolio and generally give the
shareholder the same voting, dividend, liquidation, and other rights.
Investment income, realized and unrealized capital gains and losses, the common
expenses of the Portfolio and certain Portfolio-level expense reductions, if
any, are allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the Portfolio. Each class of
shares differs in its respective distribution expenses and certain other
class-specific expense reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date.
10
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The value of the security so purchased is subject to market fluctuations during
this period. The Portfolio segregates assets having an aggregate value at least
equal to the amount of the when issued or delayed delivery purchase commitments
until payment is made.
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. SECURITIES LENDING - The Portfolio may lend its securities to certain
qualified brokers who borrow securities in order to complete certain
transactions. By lending its investment securities, the Portfolio attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term of the loan would
accrue to the account of the Portfolio. Risks of delay in recovery of the
securities or even loss of rights in the collateral may occur should the
borrower of the securities fail financially. Risks may also arise to the extent
that the value of the collateral decreases below the value of the securities
loaned.
Upon entering into a securities lending transaction, the Portfolio receives
cash or other securities as collateral in an amount equal to or exceeding 102%
of the current market value of the loaned securities. Any cash received as
collateral is generally invested by State Street Bank and Trust Company ("State
Street"), acting in its capacity as securities lending agent (the "Agent"), in
the State Street Navigator Securities Lending Prime Portfolio which is a money
market fund registered under the 1940 Act. A portion of the dividends received
on the collateral is rebated to the borrower of the securities and the
remainder is split between the Agent and the Portfolio. On loans collateralized
by cash, the cash collateral is invested in a money market fund or short term
securities. A portion of the income generated upon investment of the collateral
is remitted to the Borrowers and the remainder is allocated between the fund
and the lending agent. On loans collateralized by U.S. Treasuries, a fee is
received from the Borrower and is allocated between the fund and the lending
agent.
G. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
H. DIRECTED BROKERAGE AGREEMENT - The Trust has entered into a directed
brokerage arrangement with State Street Global Markets ("SSGM"). Under this
arrangement, the Portfolio directs certain trades to SSGM in return for a
recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to
each Portfolio are shown separately as an expense reduction on the Statement of
Operations of the Portfolio.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with Turner Investment Partners, Inc., (the "Adviser") for investment advisory
services in connection with the investment management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
11
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- --------------------
Turner Mid-Cap Growth Portfolio $1,429,539 0.80% First $300 Million
0.70% Over $300 Million
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Maximum Expense Ratio
under current Expense
Limitation Agreement
---------------------
Portfolio Class A Class B Class E
--------- ------- ------- -------
Turner Mid-Cap Growth Portfolio 0.95% 1.20% 1.10%*
* Class not offered during the period.
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratio as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
The amount waived and expenses reimbursed for the period ended June 30, 2007 is
shown as investment advisory fee waiver in the Statement of Operations of the
Portfolio.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued Net Increase
Through (Decrease)
Beginning Shares Dividend Shares in Shares Ending
Shares Sold Reinvestment Repurchased Outstanding Shares
- - ---------- --------- ------------- ----------- ------------ ----------
Turner Mid-Cap Growth Portfolio
Class A
06/30/2007 21,548,182 2,975,393 786,641 (1,596,306) 2,165,728 23,713,910
12/31/2006 13,905,074 8,703,853 163,926 (1,224,671) 7,643,108 21,548,182
Class B
06/30/2007 5,440,992 382,969 183,200 (715,507) (149,338) 5,291,654
12/31/2006 4,704,761 1,482,867 59,393 (806,029) 736,231 5,440,992
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
Turner Mid-Cap Growth Portfolio $-- $255,721,064 $-- $233,453,626
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio was as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
- --------- ------------ ------------ -------------- --------------
Turner Mid-Cap Growth Portfolio $355,924,467 $67,783,433 $(2,771,397) $65,012,036
6. SECURITY LENDING
As of June 30, 2007, the Portfolio had loaned securities which were
collateralized by short-term investments. The value of securities on loan and
the value of the related collateral were as follows:
Value of Value of
Securities Collateral
----------- -----------
Turner Mid-Cap Growth Portfolio $96,701,693 $98,865,700
7. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
------------------- --------------------- ---------------------
2006 2005 2006 2005 2006 2005
-------- ---------- ---------- ---------- ---------- ----------
Turner Mid-Cap Growth Portfolio $120,405 $1,969,639 $2,922,103 $5,347,971 $3,042,508 $7,317,610
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
7. DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
------------- ------------- ------------ ------------------ -----------
Turner Mid-Cap Growth Portfolio $-- $12,770,607 $37,421,469 $-- $50,192,076
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
8. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
9. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
14
MET INVESTORS SERIES TRUST
Van Kampen
Comstock Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
VAN KAMPEN COMSTOCK PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY MORGAN STANLEY INVESTMENT MANAGEMENT, INC. (DBA VAN KAMPEN)
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
MARKET CONDITIONS
Although stocks generally rose over the six months ended June 30, 2007,
increased volatility tempered the market's gains. Weighing heavily on the
market were concerns about rising inflation and interest rates, which would
likely dampen consumer spending, corporate profits and the boom in corporate
buyouts--some of the chief factors driving the markets in the past few years.
Moreover, a higher interest rate environment would make bonds appear more
attractive than stocks, which would lead investors to rotate out of the stock
market. The weakening U.S. housing market was another source of heightened
anxieties. Lower home values are expected to remove a significant source of
consumer borrowing, home equity, which would trigger a slump in consumer
spending. Furthermore, several hedge funds invested in securities related to
subprime mortgages (loans made to less creditworthy consumers) were nearing
collapse at the end of the reporting period. Despite these overhangs, other
more positive news continued to bolster stock investors' enthusiasm. Wage
growth and steady employment trends helped support consumer spending, fueling a
slight uptick in economic growth from the first quarter to the second quarter
of 2007. Corporate earnings reported for the first quarter were reasonably
strong. But, given the recently more turbulent environment, investors tempered
their expectations for second quarter earnings, which were made available after
the close of this reporting period.
PERFORMANCE ANALYSIS
For the six-month period ended June 30, 2007, the Portfolio's Class A shares
returned 6.11 percent and class B shares returned 6.02 percent. In comparison,
the Portfolio's benchmark, the S&P 500(R) Index, returned 6.96 percent for the
same period.
The Portfolio's underperformance relative to the S&P 500(R) Index was primarily
driven by the Portfolio's lack of exposure to energy stocks. By our measures,
these stocks are overpriced relative to our assessment of fair value. Our stock
selection in the financials sector was also a detractor from relative
performance, as the Portfolio's diversified financial holdings did not perform
as well as those represented in the S&P 500(R) Index.
However, the Portfolio performed well relative to the S&P 500(R) Index in other
areas. The Portfolio's holdings in the health care sector, which are almost
entirely pharmaceutical stocks, were a source of strength for relative returns.
The pharmaceutical industry began to see a turnaround after waning investor
sentiment kept pharmaceutical companies' stock prices depressed for the past
several years. In the consumer staples sector, the Portfolio held a food
company and a diversified consumer goods company that contributed positively to
relative performance.
MANAGEMENT STRATEGY
Investors have continued to favor cyclical stocks (those stocks whose
performance is highly correlated to the economic cycle)--and in particular,
energy stocks--for what seems like a protracted period. However, the expensive
valuations in these areas of the market indicate to us that investors have
continued to overlook the considerable downside of these stocks in a
decelerating economic environment. Rather than chase such short-term,
unsustainable performance, we continue to seek stocks with reasonable
valuations relative to our assessment of fair value. As a result, all sector
weights are built from the bottom up, driven by the valuation opportunities
presented by individual companies and not by economic or market forecasts. On
that basis, the Portfolio continued to have greater exposure to those companies
whose earnings growth does not depend on the economic cycle, including notable
weights in health care, consumer discretionary and consumer staples stocks. In
contrast, the lack of compelling opportunities in cyclical stocks has resulted
in the Portfolio's very modest exposure to the industrials sector and its zero
weighting in energy stocks. Additionally, we recently trimmed selected
telecommunication services holdings based on company-specific fundamental and
valuation factors.
There is no guarantee that the sectors mentioned will continue to perform well
or be held by the portfolio in the future.
Data as of 6/30/07 and is subject to change at any time. The commentary is
provided for informational purposes only and should not be deemed a
recommendation to buy or sell securities in the sectors mentioned above.
PORTFOLIO MANAGEMENT
The Portfolio is managed by Van Kampen's Multi-Cap Value team which is made up
of established investment professionals. Current members of the team include B.
Robert Baker, Jr., Jason S. Leder and Kevin C. Holt. Mr. Baker is a Managing
Director with Van Kampen and has been employed by Van Kampen since 1991.
Mr. Leder and Mr. Holt are Executive Directors with Van Kampen and have been
employed by Van Kampen since 1995 and 1999, respectively.
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
VAN KAMPEN COMSTOCK PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY MORGAN STANLEY INVESTMENT MANAGEMENT, INC. (DBA VAN KAMPEN)
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
---------------------------------------
Citigroup, Inc. 4.06%
---------------------------------------
Coca-Cola Co. 3.13%
---------------------------------------
Wyeth 3.08%
---------------------------------------
Bank of America Corp. 3.04%
---------------------------------------
International Paper Co. 3.02%
---------------------------------------
Comcast Corp. - Class A 3.01%
---------------------------------------
Bristol-Myers Squibb Co. 2.94%
---------------------------------------
Time Warner, Inc. 2.76%
---------------------------------------
Verizon Communications, Inc. 2.75%
---------------------------------------
Viacom, Inc. - Class A 2.62%
---------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
[CHART]
Non-Cyclical 33.8%
Financials 26.6%
Communications 18.2%
Basic Materials 8.2%
Technology 5.9%
Cyclical 5.8%
Industrials 1.5%
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
VAN KAMPEN COMSTOCK PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY MORGAN STANLEY INVESTMENT MANAGEMENT, INC. (DBA VAN KAMPEN)
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
VAN KAMPEN COMSTOCK PORTFOLIO MANAGED BY
MORGAN STANLEY INVESTMENT MANAGEMENT, INC. (DBA VAN KAMPEN) VS. S&P 500(R)
INDEX/1/ AND RUSSELL 1000(R) VALUE INDEX/2/
Growth Based on $10,000+
[CHART]
Van Kampen S&P 500(R) Russell 1000(R)
Comstock Portfolio Index/1/ Value Index/2/
------------------ ---------- ---------------
4/30/2005 $10,000 $10,000 $10,000
12/31/2005 10,593 10,929 10,891
12/31/2006 12,325 12,656 13,313
6/30/2007 13,078 13,537 14,143
--------------------------------------------------------------
Average Annual Return/3/
(for the period ended 6/30/07)
--------------------------------------------------------------
1 Year Since Inception/4/
--------------------------------------------------------------
Van Kampen Comstock
- -- Portfolio--Class A 18.95% 13.18%
Class B 18.68% 12.92%
--------------------------------------------------------------
- - - S&P 500(R) Index/1/ 20.59% 15.00%
--------------------------------------------------------------
- -- Russell 1000(R) Value Index/2/ 21.87% 17.35%
--------------------------------------------------------------
+The chart reflects the performance of Class A shares of the Portfolio. The
performance of Class A shares will differ from that of the Class B shares
because of the difference in expenses paid by policyholders investing in the
different share class.
/1/The S&P 500(R) Index is an unmanaged index consisting of 500 stocks chosen
for market size, liquidity, and industry group representation. It is a
market-value weighted index (stock price times number of shares outstanding),
with each stock's weight in the Index proportionate to its market value. The
Index does not include fees or expenses and is not available for direct
investment.
/2/The Russell 1000(R) Value Index is an unmanaged index which measures the
performance of those Russell 1000(R) Index companies with lower price-to-book
ratios and lower forecasted growth values. The Index does not include fees and
expenses and is not available for direct investment.
/3/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/4/Inception of Class A and Class B shares is 5/2/05. Index returns are based
on an inception date of 4/30/05.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
3
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
VAN KAMPEN COMSTOCK PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,061.10 $3.07
Hypothetical (5% return before expenses) 1,000.00 1,021.82 3.01
- ------------------------------------------ ------------- ------------- --------------
Class B
Actual $1,000.00 $1,060.20 $4.29
Hypothetical (5% return before expenses) 1,000.00 1,020.63 4.21
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.60% and
0.84% for the Class A and Class B, respectively, multiplied by the average
account value over the period, multiplied by 181/365 (to reflect the one-half
year period).
4
MET INVESTORS SERIES TRUST
VAN KAMPEN COMSTOCK PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
------------------------------------------------------------------
COMMON STOCKS - 92.6%
AIRLINES - 0.7%
Southwest Airlines Co.(a)............... 800,400 $ 11,933,964
---------------
BANKS - 9.8%
Bank of America Corp.................... 1,128,400 55,167,476
Bank of New York Co., Inc............... 642,800 26,637,632
Barclays Plc (ADR)...................... 46,800 2,610,972
PNC Financial Services Group, Inc....... 170,100 12,175,758
U.S. Bancorp............................ 251,800 8,296,810
Wachovia Corp........................... 909,200 46,596,500
Wells Fargo & Co........................ 730,800 25,702,236
---------------
177,187,384
---------------
BEVERAGES - 3.8%
Anheuser-Busch Cos., Inc.(a)............ 252,900 13,191,264
Coca-Cola Co............................ 1,085,500 56,782,505
---------------
69,973,769
---------------
CHEMICALS - 2.9%
E.I. du Pont de Nemours & Co............ 781,500 39,731,460
Rohm & Haas Co.(a)...................... 227,800 12,456,104
---------------
52,187,564
---------------
COMMUNICATIONS EQUIPMENT & SERVICES - 0.3%
Cisco Systems, Inc.*.................... 167,000 4,650,950
---------------
COMPUTERS & PERIPHERALS - 2.9%
Dell, Inc.*............................. 947,400 27,048,270
Hewlett-Packard Co...................... 196,200 8,754,444
International Business Machines Corp.(a) 158,100 16,640,025
---------------
52,442,739
---------------
FINANCIAL - DIVERSIFIED - 9.2%
Bear Stearns Cos., Inc.................. 45,200 6,328,000
Citigroup, Inc.......................... 1,436,800 73,693,472
Fannie Mae.............................. 141,600 9,250,728
Freddie Mac............................. 396,300 24,055,410
JPMorgan Chase & Co..................... 527,000 25,533,150
Merrill Lynch & Co., Inc................ 264,700 22,123,626
Western Union Co........................ 301,800 6,286,494
---------------
167,270,880
---------------
FOOD & DRUG RETAILING - 1.8%
Kraft Foods, Inc. - Class A............. 920,910 32,462,078
---------------
FOOD PRODUCTS - 3.9%
Cadbury Schweppes Plc (ADR)(a).......... 641,500 34,833,450
Unilever NV............................. 1,143,500 35,471,370
---------------
70,304,820
---------------
HEALTH CARE EQUIPMENT & SUPPLIES - 0.6%
Boston Scientific Corp.*................ 671,400 10,299,276
---------------
---------------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
---------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES - 1.3%
Cardinal Health, Inc....................... 347,600 $ 24,554,464
---------------
HOUSEHOLD PRODUCTS - 2.1%
Kimberly-Clark Corp........................ 395,900 26,481,751
Procter & Gamble Co. (The)................. 190,300 11,644,457
---------------
38,126,208
---------------
INDUSTRIAL - DIVERSIFIED - 1.4%
General Electric Co........................ 649,400 24,859,032
---------------
INSURANCE - 6.0%
AFLAC, Inc................................. 214,000 10,999,600
American International Group, Inc.......... 268,500 18,803,055
Berkshire Hathaway, Inc. - Class B*........ 2,960 10,670,800
Chubb Corp. (The).......................... 678,020 36,708,003
Genworth Financial, Inc. - Class A......... 163,600 5,627,840
Hartford Financial Services Group,
Inc. (The)............................... 75,300 7,417,803
MBIA, Inc.................................. 16,900 1,051,518
Torchmark Corp............................. 103,600 6,941,200
Travelers Cos., Inc. (The)................. 206,600 11,053,100
---------------
109,272,919
---------------
INTERNET SOFTWARE & SERVICES - 0.0%
McAfee, Inc*............................... 3,800 133,760
---------------
IT CONSULTING & SERVICES - 0.3%
First Data Corp............................ 179,200 5,854,464
---------------
MEDIA - 12.0%
Clear Channel Communications, Inc.(a)...... 203,599 7,700,114
Comcast Corp. - Class A*................... 1,942,750 54,630,130
Gannett Co., Inc........................... 97,400 5,352,130
Liberty Media Holding Corp. - Class A*..... 150,935 17,762,031
Liberty Media Holding Corp. - Interactive -
Class A*................................. 851,675 19,017,903
News Corp. - Class B(a).................... 705,900 16,193,346
Time Warner, Inc........................... 2,382,102 50,119,426
Viacom, Inc. - Class A*.................... 1,143,850 47,618,475
---------------
218,393,555
---------------
METALS & MINING - 1.7%
Alcoa, Inc................................. 753,900 30,555,567
---------------
PAPER & FOREST PRODUCTS - 3.0%
International Paper Co.(a)................. 1,405,640 54,890,242
---------------
PHARMACEUTICALS - 16.0%
Abbott Laboratories........................ 496,500 26,587,575
Bristol-Myers Squibb Co.................... 1,691,300 53,377,428
See notes to financial statements
5
MET INVESTORS SERIES TRUST
VAN KAMPEN COMSTOCK PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
---------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
---------------------------------------------------------
PHARMACEUTICALS - CONTINUED
Eli Lilly & Co................ 680,400 $ 38,020,752
GlaxoSmithKline Plc (ADR)(a).. 539,100 28,232,667
Pfizer, Inc................... 1,193,700 30,522,909
Roche Holding AG (ADR)........ 183,500 16,294,800
Sanofi-Aventis (ADR).......... 259,500 10,450,065
Schering-Plough Corp.......... 1,046,600 31,858,504
Wyeth......................... 974,900 55,900,766
---------------
291,245,466
---------------
RETAIL - MULTILINE - 3.9%
CVS Caremark Corp............. 685,500 24,986,475
Wal-Mart Stores, Inc.......... 935,600 45,011,716
---------------
69,998,191
---------------
RETAIL - SPECIALTY - 0.8%
Home Depot, Inc. (The)........ 182,300 7,173,505
Lowe's Cos., Inc.............. 267,200 8,200,368
---------------
15,373,873
---------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS - 1.5%
ASML Holding N.V*(a).......... 45,800 1,257,210
Intel Corp.................... 562,400 13,362,624
KLA-Tencor Corp.(a)........... 91,000 5,000,450
Texas Instruments, Inc........ 215,500 8,109,265
---------------
27,729,549
---------------
SOFTWARE - 0.7%
Microsoft Corp................ 430,200 12,677,994
---------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 4.6%
AT&T, Inc..................... 642,800 26,676,200
Sprint Nextel Corp.(a)........ 37,900 784,909
Telefonaktiebolaget LM
Ericsson (ADR).............. 157,100 6,266,719
Verizon Communications, Inc... 1,212,700 49,926,859
---------------
83,654,687
---------------
------------------------------------------------------------
SECURITY SHARES/PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
------------------------------------------------------------
TOBACCO - 1.4%
Altria Group, Inc.............. 362,200 $ 25,404,708
---------------
Total Common Stocks
(Cost $1,504,610,565) 1,681,438,103
---------------
SHORT-TERM INVESTMENTS - 7.0%
REPURCHASE AGREEMENT - 0.0%
State Street Bank & Trust Co.,
Repurchase Agreement
dated 06/29/07 at 1.50% to be
repurchased at $109,014
on 07/02/07 collateralized by
$115,000 FHLB 4.375% due
09/17/10 with a value of
$113,533..................... $ 109,000 109,000
---------------
U.S. GOVERNMENT & AGENCY DISCOUNT NOTES - 7.0%
Federal Home Loan Bank
4.80%, due 07/02/07(b)....... 127,200,000 127,166,080
---------------
Total Short-Term Investments
(Cost $127,275,080) 127,275,080
---------------
TOTAL INVESTMENTS - 99.6%
(Cost $1,631,885,645) 1,808,713,183
Other Assets and Liabilities (net) - 0.4% 6,867,336
---------------
TOTAL NET ASSETS - 100.0% $ 1,815,580,519
===============
PORTFOLIO FOOTNOTES:
* Non-income producing security.
(a) A portion or all of the security was held on loan. As of June 30, 2007, the
market value of the securities loaned was $87,370,868 and the collateral
received consisted of cash in the amount of $88,539,838 and securities in
the amount of $805,375.
(b) Zero coupon bond - Interest rate represents current yield to maturity.
ADR - American Depositary Receipt
FHLB - Federal Home Loan Bank
See notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
VAN KAMPEN COMSTOCK PORTFOLIO
ASSETS
Investments, at value (Note 2)* $1,808,604,183
Repurchase Agreement 109,000
Cash 708
Collateral for securities on loan 89,345,213
Receivable for investments sold 4,920,222
Receivable for Trust shares sold 2,346,469
Dividends receivable 2,182,985
Interest receivable 5
--------------
Total assets 1,907,508,785
--------------
LIABILITIES
Payables for:
Investments purchased 1,401,004
Trust shares redeemed 168,809
Distribution and services fees - Class B 33,764
Collateral for securities on loan 89,345,213
Investment advisory fee payable (Note 3) 859,191
Administration fee payable 18,801
Custodian and accounting fees payable 82,362
Accrued expenses 19,122
--------------
Total liabilities 91,928,266
--------------
NET ASSETS $1,815,580,519
==============
NET ASSETS REPRESENTED BY:
Paid in surplus $1,591,428,149
Accumulated net realized gain 31,330,698
Unrealized appreciation on investments 176,827,538
Undistributed net investment income 15,994,134
--------------
Total $1,815,580,519
==============
NET ASSETS
Class A $1,650,662,444
==============
Class B 164,918,075
==============
CAPITAL SHARES OUTSTANDING
Class A 134,948,097
==============
Class B 13,520,921
==============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 12.23
==============
Class B 12.20
==============
- ---------------------------------------------------------------------------------------
* Investments at cost, excluding Repurchase Agreements $1,631,776,645
See notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
VAN KAMPEN COMSTOCK PORTFOLIO
INVESTMENT INCOME:
Dividends (1) $17,431,056
Interest (2) 3,320,331
-----------
Total investment income 20,751,387
-----------
EXPENSES:
Investment advisory fee (Note 3) 4,526,529
Administration fees 54,840
Custody and accounting fees 37,950
Distribution fee - Class B 189,463
Transfer agent fees 8,038
Audit 12,038
Legal 7,480
Trustee fees and expenses 9,212
Shareholder reporting 27,818
Insurance 8,438
Other 2,064
-----------
Total expenses 4,883,870
Less broker commission recapture (126,617)
-----------
Net expenses 4,757,253
-----------
Net investment income 15,994,134
-----------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FUTURES CONTRACTS:
Net realized gain on:
Investments 32,686,647
Futures contracts 178,180
-----------
Net realized gain on investments and futures contracts 32,864,827
-----------
Net change in unrealized appreciation on:
Investments 38,090,686
-----------
Net change in unrealized appreciation on investments 38,090,686
-----------
Net realized and change in unrealized gain on investments and
futures contracts 70,955,513
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $86,949,647
===========
- --------------------------------------------------------------------------------------
(1)Dividend income is net withholding taxes of: $ 205,417
(2)Interest income includes securities lending income of: 77,598
See notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
VAN KAMPEN COMSTOCK PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 15,994,134 $ 23,246,245
Net realized gain on investments and futures contracts 32,864,827 30,138,929
Net change in unrealized appreciation on investments 38,090,686 123,430,916
-------------- --------------
Net increase in net assets resulting from operations 86,949,647 176,816,090
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (21,133,447) (115,272)
Class B (2,112,889) --
From net realized gains
Class A (28,253,784) (12,670,822)
Class B (3,183,717) (1,086,600)
-------------- --------------
Net decrease in net assets resulting from distributions (54,683,837) (13,872,694)
-------------- --------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class A 378,675,492 369,018,258
Class B 28,848,747 83,035,683
Net asset value of shares issued through dividend reinvestment
Class A 49,387,231 12,786,094
Class B 5,296,606 1,086,600
Cost of shares repurchased
Class A (16,300,663) (198,585,356)
Class B (18,011,870) (14,069,551)
-------------- --------------
Net increase in net assets from capital share transactions 427,895,543 253,271,728
-------------- --------------
TOTAL INCREASE IN NET ASSETS 460,161,353 416,215,124
Net assets at beginning of period 1,355,419,166 939,204,042
-------------- --------------
Net assets at end of period $1,815,580,519 $1,355,419,166
============== ==============
Net assets at end of period includes undistributed net investment
income $ 15,994,134 $ 23,246,336
============== ==============
See notes to financial statements
9
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS A
VAN KAMPEN COMSTOCK PORTFOLIO -----------------------------------
FOR THE PERIOD FOR THE YEARS ENDED
ENDED DECEMBER 31,
JUNE 30, 2007 -------------------
(UNAUDITED) 2006 2005(B)
-------------- -------- -------
NET ASSET VALUE, BEGINNING OF PERIOD.................................... $ 11.95 $ 10.40 $10.00
-------- -------- ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................... 0.13 (a) 0.23 (a) 0.14 (a)
Net Realized/Unrealized Gain on Investments............................. 0.60 1.45 0.45
-------- -------- ------
Total from Investment Operations........................................ 0.73 1.68 0.59
-------- -------- ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................... (0.19) (0.00)+ (0.11)
Distributions from Net Realized Capital Gains........................... (0.26) (0.13) (0.08)
-------- -------- ------
Total Distributions..................................................... (0.45) (0.13) (0.19)
-------- -------- ------
NET ASSET VALUE, END OF PERIOD.......................................... $ 12.23 $ 11.95 $10.40
======== ======== ======
TOTAL RETURN............................................................ 6.11% 16.34% 5.93%
Ratio of Expenses to Average Net Assets................................. 0.60%* 0.67% 0.68%*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates 0.61%* 0.67% 0.68%*
Ratio of Net Investment Income to Average Net Assets.................... 2.11%* 2.11% 2.02%*
Portfolio Turnover Rate................................................. 12.0% 32.7% 75.7%
Net Assets, End of Period (in millions)................................. $1,650.7 $1,210.1 $880.4
CLASS B
-----------------------------------
FOR THE PERIOD FOR THE YEARS ENDED
ENDED DECEMBER 31,
JUNE 30, 2007 -------------------
(UNAUDITED) 2006 2005(B)
-------------- -------- -------
NET ASSET VALUE, BEGINNING OF PERIOD.................................... $ 11.91 $ 10.39 $10.00
-------- -------- ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income................................................... 0.11 (a) 0.20 (a) 0.12 (a)
Net Realized/Unrealized Gain on Investments............................. 0.61 1.45 0.46
-------- -------- ------
Total from Investment Operations........................................ 0.72 1.65 0.58
-------- -------- ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income.................................... (0.17) -- (0.11)
Distributions from Net Realized Capital Gains........................... (0.26) (0.13) (0.08)
-------- -------- ------
Total Distributions..................................................... (0.43) (0.13) (0.19)
-------- -------- ------
NET ASSET VALUE, END OF PERIOD.......................................... $ 12.20 $ 11.91 $10.39
======== ======== ======
TOTAL RETURN............................................................ 6.02% 16.05% 5.75%
Ratio of Expenses to Average Net Assets................................. 0.84%* 0.92% 0.93%*
Ratio of Expenses to Average Net Assets Before Reimbursement and Rebates 0.86%* 0.92% 0.93%*
Ratio of Net Investment Income to Average Net Assets.................... 1.86%* 1.85% 1.71%*
Portfolio Turnover Rate................................................. 12.0% 32.7% 75.7%
Net Assets, End of Period (in millions)................................. $164.9 $145.3 $58.8
* Annualized
+ Rounds to less than $0.005 per share
(a) Per share amounts based on average shares outstanding during the period.
(b) Commencement of operations--05/02/2005.
See notes to financial statements
10
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is Van Kampen Comstock Portfolio, which is
diversified. Shares in the Trust are not offered directly to the general public
and are currently available only to separate accounts established by certain
affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A and B Shares are
offered by the Portfolio. Class E Shares are not currently offered by the
Portfolio included in this report. Shares of each Class of the Portfolio
represent an equal pro rata interest in the Portfolio and generally give the
shareholder the same voting, dividend, liquidation, and other rights.
Investment income, realized and unrealized capital gains and losses, the common
expenses of the Portfolio and certain Portfolio-level expense reductions, if
any, are allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the Portfolio. Each class of
shares differs in its respective distribution expenses and certain other
class-specific expense reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date. The value of the
security so purchased is subject to market fluctuations during this period. The
Portfolio segregates assets having an aggregate value at least equal to the
amount of the when issued or delayed delivery purchase commitments until
payment is made.
11
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. SECURITIES LENDING - The Portfolio may lend its securities to certain
qualified brokers who borrow securities in order to complete certain
transactions. By lending its investment securities, the Portfolio attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term of the loan would
accrue to the account of the Portfolio. Risks of delay in recovery of the
securities or even loss of rights in the collateral may occur should the
borrower of the securities fail financially. Risks may also arise to the extent
that the value of the collateral decreases below the value of the securities
loaned.
Upon entering into a securities lending transaction, the Portfolio receives
cash or other securities as collateral in an amount equal to or exceeding 102%
of the current market value of the loaned securities. Any cash received as
collateral is generally invested by State Street Bank and Trust Company ("State
Street"), acting in its capacity as securities lending agent (the "Agent"), in
the State Street Navigator Securities Lending Prime Portfolio which is a money
market fund registered under the 1940 Act. A portion of the dividends received
on the collateral is rebated to the borrower of the securities and the
remainder is split between the Agent and the Portfolio. On loans collateralized
by cash, the cash collateral is invested in a money market fund or short term
securities. A portion of the income generated upon investment of the collateral
is remitted to the Borrowers and the remainder is allocated between the fund
and the lending agent. On loans collateralized by U.S. Treasuries, a fee is
received from the Borrower and is allocated between the fund and the lending
agent.
G. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with Morgan Stanley Investment Management, Inc., (dba Van Kampen), (the
"Adviser") for investment advisory services in connection with the investment
management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- --------------------------
Van Kampen Comstock Portfolio $4,526,529 0.65% First $500 Million
0.60% $500 Million to $1 Billion
0.525% Over $1 Billion
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the ordinary course of the Portfolio's business, but including
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act are limited to the following respective expense ratios as a
percentage of the Portfolio's average daily net assets:
Maximum Expense Ratio
under current Expense
Limitation Agreement
---------------------
Portfolio Class A Class B Class E
--------- ------- ------- -------
Van Kampen Comstock Portfolio 0.80% 1.05% 0.95%*
* Class not offered during the period.
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratio as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
The amount waived and expenses reimbursed for the period ended June 30, 2007 is
shown as investment advisory fee waiver in the Statement of Operations of the
Portfolio.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued Net
Through Increase
Beginning Shares Dividend Shares in Shares Ending
Shares Sold Reinvestment Repurchased Outstanding Shares
- - ----------- ---------- ------------- ----------- ----------- -----------
Van Kampen Comstock Portfolio
Class A
06/30/2007 101,295,416 30,917,708 4,071,495 (1,336,522) 33,652,681 134,948,097
12/31/2006 84,656,186 33,736,932 1,202,804 (18,300,506) 16,639,230 101,295,416
Class B
06/30/2007 12,203,533 2,365,554 437,375 (1,485,541) 1,317,388 13,520,921
12/31/2006 5,655,536 7,658,764 102,446 (1,213,213) 6,547,997 12,203,533
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchase Sales
- - ------------------------------ ------------------------------
Portfolio U.S. Government Non-Government U.S. Government Non-Government
- --------- --------------- -------------- --------------- --------------
Van Kampen Comstock Portfolio $-- $546,164,348 $-- $170,171,299
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
- --------- -------------- ------------ -------------- --------------
Van Kampen Comstock Portfolio $1,631,885,645 $185,226,296 $(8,398,758) $176,827,538
6. SECURITY LENDING
As of June 30, 2007, the Portfolio had loaned securities which were
collateralized by short-term investments. The value of securities on loan and
the value of the related collateral were as follows:
Value of Value of
Securities Collateral
- ----------- -----------
Van Kampen Comstock Portfolio $87,370,868 $89,345,213
7. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
----------------------- ---------------------- -----------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ---- ---- ----------- -----------
Van Kampen Comstock Portfolio $13,872,694 $17,136,862 $-- $-- $13,872,694 $17,136,862
14
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
7. DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
- - ------------- ------------- ------------ ------------------ ------------
Van Kampen Comstock Portfolio $34,621,599 $20,062,136 $137,202,826 $-- $191,886,561
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
8. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
9. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
15
MET INVESTORS SERIES TRUST
Van Kampen Mid-Cap
Growth Portfolio
SEMI-ANNUAL REPORT
JUNE 30, 2007
- --------------------------------------------------------------------------------
VAN KAMPEN MID-CAP GROWTH PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY MORGAN STANLEY INVESTMENT MANAGEMENT, INC. (DBA VAN KAMPEN)
LETTER TO POLICYHOLDERS
- --------------------------------------------------------------------------------
MARKET CONDITIONS
Although the U.S. equity market advanced in the six months ended June 30, 2007,
domestic economic growth slowed significantly compared to recent years. Gross
domestic product (GDP) reported in at 0.7 percent for the first quarter, which
was substantially lower than in prior periods. Interest rates rose during the
period, creating fears about the possibility of investors rotating out of the
stock market in favor of attractive yields on fixed income instruments.
Moreover, the ongoing deterioration of the sub-prime mortgage market (which
makes loans to less creditworthy borrowers) and its impact on the declining
housing and construction sectors created additional distress for investors.
These anxieties were further exacerbated in June when news broke that Bear
Stearns was offering more than $3 billion in financing to bail out two of its
troubled hedge funds, which invest primarily in mortgage-related securities.
However, despite these worrisome events, investors still retained their
enthusiasm for equities, as positive economic data on the wage growth and
employment fronts reported in the latter weeks of the period supported the
market's momentum. Additionally, relatively strong corporate profits reports
for the first quarter and continued frenetic merger and acquisition (M&A)
activity helped to sustain positive investor sentiment through the end of the
reporting period.
PERFORMANCE ANALYSIS
For the period from January 1, 2007 through June 30, 2007, the Portfolio's A
shares returned 13.15% and B shares returned 12.90%. In comparison, the
Portfolio's benchmark, the Russell Midcap(R) Growth Index, returned 10.97% for
the same period.
Many sectors provided strong positive returns for the Portfolio relative to the
Russell Midcap Growth Index for this period. Within the technology sector,
stock selection in computer software services had the most favorable impact on
overall performance, and an sector underweight also helped. The Portfolio's
holding of a wireless company in the utilities sector significantly added to
relative returns. In the heath care sector, both stock selection and an
underweight allocation were advantageous to performance. In particular, the
Portfolio's investment in medical and dental instruments and supplies and in
health care services turned out to be quite beneficial.
In contrast, the sectors that had the largest negative influence on the
Portfolio's return relative to the Russell Midcap(R) Growth Index were the
other energy, materials and processing, and the multi-industry sectors. In the
other energy sector, an avoidance of oil well equipment companies was a key
detractor to performance. Additionally, an underweight position in the
materials and processing sector diminished the Portfolio's relative returns. In
the multi-industry sector (which includes conglomerates), both stock selection
and an underweight allocation also hindered performance.
MANAGEMENT STRATEGY
We use intensive fundamental research to seek high-quality growth companies.
Our investment discipline favors companies that have sustainable competitive
advantages, business visibility, rising return on invested capital, free cash
flow and a favorable risk/reward profile. Because we emphasize secular growth,
short-term market events are not as meaningful in the stock selection process.
At the end of the period, consumer discretionary represented the largest sector
weight and overweight in the Portfolio, followed by the financial services and
health care sectors. Both the financial services and health care sectors were
underweight versus the Russell Midcap(R) Growth Index.
DENNIS LYNCH
DAVID COHEN
SAN CHAINARI
ALEXANDER NORTON
Portfolio Managers
MORGAN STANLEY INVESTMENT MANAGEMENT, INC.
The views expressed above are those of the investment subadvisory firm and are
subject to change based on market and other conditions, and no forecast can be
guaranteed. Information about the Portfolio's holdings, asset allocation,
industry allocation or country diversification is historical and is not an
indication of future portfolio composition which will vary.
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS BY MARKET VALUE
As of 6/30/07
Percent of
Description Net Assets
-------------------------------------------
Ultra Petroleum Corp. 4.20%
-------------------------------------------
NII Holdings, Inc. 3.26%
-------------------------------------------
Aeroplan Income Fund 3.09%
-------------------------------------------
C.H. Robinson Worldwide, Inc. 2.96%
-------------------------------------------
Dade Behring Holdings, Inc. 2.96%
-------------------------------------------
Grupo Televisa S.A. (ADR) 2.81%
-------------------------------------------
Corporate Executive Board Co. 2.76%
-------------------------------------------
Southwestern Energy Co. 2.60%
-------------------------------------------
Abercrombie & Fitch Co.--Class A 2.55%
-------------------------------------------
Nalco Holding Co. 2.44%
-------------------------------------------
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
VAN KAMPEN MID-CAP GROWTH PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY MORGAN STANLEY INVESTMENT MANAGEMENT, INC. (DBA VAN KAMPEN)
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION (% of portfolio market value)
As of 6/30/07
[CHART]
Communications 23.6%
Non-Cyclical 19.1%
Cyclical 17.4%
Industrials 12.5%
Financials 10.2%
Energy 7.9%
Technology 4.1%
Basic Materials 3.6%
Diversified 1.6%
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
VAN KAMPEN MID-CAP GROWTH PORTFOLIO FOR THE PERIOD ENDED 6/30/07
MANAGED BY MORGAN STANLEY INVESTMENT MANAGEMENT, INC. (DBA VAN KAMPEN)
LETTER TO POLICYHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
VAN KAMPEN MID-CAP GROWTH PORTFOLIO MANAGED BY
MORGAN STANLEY INVESTMENT MANAGEMENT, INC. (DBA VAN KAMPEN) VS. RUSSELL
MIDCAP(R) GROWTH INDEX/1/
Growth Based on $10,000+
[CHART]
Van Kampen Mid-Cap Russell Midcap/(R)/
Growth Portfolio bGrowth Index/1/
------------------ -----------------
2/12/2001 $10,000 $10,000
12/31/2001 8,791 7,553
12/31/2002 6,645 5,483
12/31/2003 9,017 7,824
12/31/2004 10,140 9,036
12/31/2005 10,604 10,129
12/31/2006 11,492 11,209
6/30/2007 12,974 12,438
-----------------------------------------------------------
Average Annual Return/2/
(for the period ended 6/30/07)
-----------------------------------------------------------
Since
1 Year 3 Year 5 Year Inception/3/
-----------------------------------------------------------
Van Kampen Mid-Cap Growth
Portfolio--Class A 19.80% 11.95% 11.39% 5.63%
- -- Class B 19.42% 11.65% 11.06% 4.42%
-----------------------------------------------------------
Russell Midcap(R) Growth
- - - Index/1/ 19.73% 14.48% 15.45% 3.46%
-----------------------------------------------------------
+The chart reflects the performance of Class B shares of the Portfolio. The
performance of Class B shares will differ from that of the Class A shares
because of the difference in expenses paid by policyholders investing in the
different share class.
/1/The Russell Midcap(R) Growth Index is an unmanaged index which measures the
performance of those Russell Midcap companies with higher price-to-book ratios
and higher forecasted growth values. The stocks are also members of the Russell
1000(R) Growth index. The Index does not include fees or expenses and is not
available for direct investment.
/2/"Average Annual Return" is calculated including reinvestment of all income
dividends and capital gain distributions.
/3/Inception of the Class A shares is 5/1/01. Inception of the Class B shares
is 2/12/01. Index returns are based on an inception date of 2/12/01.
Past performance does not guarantee future results. The investment return and
principal value of an investment in the Portfolio will fluctuate, so that
shares, on any given day or when redeemed, may be worth more or less than their
original cost. Performance numbers are net of all Portfolio expenses but do not
include any insurance, sales, or administration charges of variable annuity or
life insurance contracts. If these charges were included, the returns would be
lower.
- --------------------------------------------------------------------------------
3
MET INVESTORS SERIES TRUST
UNDERSTANDING YOUR PORTFOLIO'S EXPENSES
SHAREHOLDER EXPENSE EXAMPLE
As a mutual fund shareholder you may incur two types of costs: (1) TRANSACTION
COSTS, including sales charges (loads) on purchase payments and redemption fees
and (2) ONGOING COSTS, including management fees, distribution (12b-1) fees,
shareholder services fees and other Portfolio expenses. For Met Investors
Series Trust sales charges and redemption fees do not apply and Class A does
not charge a distribution (12b-1) fee. Costs are described in more detail in
the Portfolio's prospectus. The examples below are intended to help you
understand your ongoing costs of investing in the Portfolio and help you
compare these with the ongoing costs of investing in other mutual funds.
ACTUAL EXPENSES
The first line in the table for each Class of shares shows the ACTUAL account
values and ACTUAL Portfolio expenses you would have paid on a $1,000 investment
in the Portfolio from January 1, 2007 through June 30, 2007. It also shows how
much a $1,000 investment would be worth at the close of the period, assuming
ACTUAL Portfolio returns and expenses. To estimate the expenses you paid over
the period, simply divide your account by $1,000 (for example $8,600 account
value divided by $1,000 = 8.6) and multiply the result by the number in the
"Expenses Paid During Period" column as shown below for your Portfolio and
Class.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual
expense ratio and an ASSUMED rate of return of 5% per year before expenses,
which is not the Portfolio's actual return. Thus, you should NOT use the
hypothetical account values and expenses to estimate the actual ending account
balance or your expenses for the period. Rather, these figures are provided to
enable you to compare the ongoing costs of investing in the Portfolio and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds. Please note
that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative TOTAL costs of owning
different funds. In addition, if these transaction costs were included, your
costs would have been higher.
Please note that the expenses shown in the table are meant to highlight your
ongoing cost only. Therefore, the second line of the table is useful in the
comparing ongoing cost only, and will not help you determine the relative TOTAL
costs of owning different funds.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
12/31/06 6/30/07 1/1/07-6/30/07
VAN KAMPEN MID-CAP GROWTH PORTFOLIO ------------- ------------- --------------
Class A
Actual $1,000.00 $1,131.50 $4.39
Hypothetical (5% return before expenses) 1,000.00 1,020.68 4.16
- ------------------------------------------ ------------- ------------- --------------
Class B
Actual $1,000.00 $1,129.00 $5.70
Hypothetical (5% return before expenses) 1,000.00 1,019.44 5.41
- ------------------------------------------ ------------- ------------- --------------
* Expenses are equal to the Portfolio's annualized expense ratio of 0.83% and
1.08% for the Class A and Class B, respectively, multiplied by the average
account value over the period, multiplied by 181/365 (to reflect the one-half
year period).
4
MET INVESTORS SERIES TRUST
VAN KAMPEN MID-CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
-----------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
-----------------------------------------------------------------
COMMON STOCKS - 99.6%
AIR FREIGHT & LOGISTICS - 2.2%
Expeditors International of Washington, Inc. 48,242 $ 1,992,395
------------
BANKS - 1.3%
People's United Financial, Inc.............. 69,208 1,227,058
------------
BIOTECHNOLOGY - 2.1%
Techne Corp.*............................... 33,737 1,930,094
------------
CHEMICALS - 3.3%
Cabot Corp.................................. 17,573 837,881
Nalco Holding Co............................ 82,180 2,255,841
------------
3,093,722
------------
COMMERCIAL SERVICES & SUPPLIES - 17.6%
Apollo Group, Inc. - Class A*(a)............ 36,675 2,142,920
ChoicePoint, Inc.*(a)....................... 39,425 1,673,591
Corporate Executive Board Co.(a)............ 39,280 2,549,665
Discovery Holding Co.*...................... 59,079 1,358,226
Global Payments, Inc........................ 35,095 1,391,517
Iron Mountain, Inc.*(a)..................... 63,229 1,652,174
ITT Educational Services, Inc.*............. 8,196 962,046
Li & Fung, Ltd.............................. 514,000 1,862,358
Stericycle, Inc.*(a)........................ 40,375 1,795,073
Weight Watchers International, Inc.(a)...... 17,196 874,245
------------
16,261,815
------------
CONSTRUCTION MATERIALS - 1.3%
Texas Industries, Inc.(a)................... 15,871 1,244,445
------------
FINANCIAL - DIVERSIFIED - 2.4%
Fortress Investment Group LLC - Class A(a).. 3,620 86,228
Janus Capital Group, Inc.(a)................ 78,212 2,177,422
------------
2,263,650
------------
FINANCIAL SERVICES - 6.1%
Aeroplan Income Fund........................ 143,361 2,861,693
Calamos Asset Management, Inc. - Class A(a). 50,720 1,295,896
Leucadia National Corp.(a).................. 42,541 1,499,570
------------
5,657,159
------------
HEALTH CARE EQUIPMENT & SUPPLIES - 4.1%
Dade Behring Holdings, Inc.................. 51,499 2,735,627
Gen-Probe, Inc.*............................ 16,840 1,017,473
------------
3,753,100
------------
HOMEBUILDERS - 1.3%
NVR, Inc.*(a)............................... 1,712 1,163,732
------------
HOTELS, RESTAURANTS & LEISURE - 7.3%
Choice Hotels International, Inc............ 23,406 925,005
Hilton Hotels Corp.(a)...................... 25,051 838,457
InterContinental Hotels Group Plc (ADR)(a).. 56,400 1,397,586
Wendy's International, Inc.(a).............. 36,841 1,353,907
Wynn Resorts, Ltd.(a)....................... 25,054 2,247,093
------------
6,762,048
------------
---------------------------------------------------------------
SECURITY VALUE
DESCRIPTION SHARES (NOTE 2)
---------------------------------------------------------------
INSURANCE - 2.3%
Alleghany Corp.*(a)....................... 3,383 $ 1,375,189
Brown & Brown, Inc.(a).................... 28,984 728,658
------------
2,103,847
------------
INTERNET SOFTWARE & SERVICES - 9.9%
Amazon.com, Inc.*(a)...................... 13,082 894,940
Baidu.com (ADR)*(a)....................... 9,420 1,582,371
Equinix, Inc.*(a)......................... 20,915 1,913,095
Monster Worldwide, Inc.*.................. 50,690 2,083,359
NHN Corp.*................................ 7,392 1,347,000
Tencent Holdings, Ltd..................... 342,000 1,372,980
------------
9,193,745
------------
MACHINERY - 1.6%
Pentair, Inc.(a).......................... 38,293 1,476,961
------------
MEDIA - 5.1%
Focus Media Holding, Ltd.*(a)............. 24,311 1,227,706
Grupo Televisa S.A. (ADR)................. 94,246 2,602,132
Lamar Advertising Co. - Class A(a)........ 13,795 865,774
------------
4,695,612
------------
METALS & MINING - 1.7%
Chaparral Steel Co........................ 21,751 1,563,244
------------
OIL & GAS - 7.9%
Questar Corp.............................. 18,982 1,003,199
Southwestern Energy Co.*.................. 54,050 2,405,225
Ultra Petroleum Corp.*.................... 70,367 3,887,073
------------
7,295,497
------------
PAPER & FOREST PRODUCTS - 1.0%
MeadWestvaco Corp......................... 25,142 888,015
------------
REAL ESTATE - 4.1%
Desarrolladora Homex SA de CV (ADR)*(a)... 21,813 1,321,650
Forest City Enterprises, Inc. - Class A(a) 29,129 1,790,851
St. Joe Co. (The)(a)...................... 15,324 710,114
------------
3,822,615
------------
RETAIL - SPECIALTY - 5.3%
Abercrombie & Fitch Co. - Class A......... 32,366 2,362,071
AutoZone, Inc.*........................... 12,927 1,766,087
PetSmart, Inc............................. 23,897 775,457
------------
4,903,615
------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS - 1.1%
Tessera Technologies, Inc.*(a)............ 26,183 1,061,721
------------
SOFTWARE - 1.4%
Salesforce.com, Inc.*(a).................. 30,171 1,293,129
------------
TELECOMMUNICATION SERVICES - DIVERSIFIED - 1.0%
SAVVIS, Inc.*............................. 17,917 887,071
------------
See notes to financial statements
5
MET INVESTORS SERIES TRUST
VAN KAMPEN MID-CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS - CONTINUED
JUNE 30, 2007 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
----------------------------------------------------------------------
SECURITY SHARES/PAR VALUE
DESCRIPTION AMOUNT (NOTE 2)
----------------------------------------------------------------------
TELECOMMUNICATION SERVICES - WIRELESS - 5.2%
Crown Castle International Corp.*(a)....... 49,335 $ 1,789,380
NII Holdings, Inc.*........................ 37,315 3,012,813
------------
4,802,193
------------
TRANSPORTATION - 3.0%
C.H. Robinson Worldwide, Inc.(a)........... 52,184 2,740,704
------------
Total Common Stocks
(Cost $81,910,243) 92,077,187
------------
SHORT-TERM INVESTMENT - 0.7%
State Street Bank & Trust Co.,
Repurchase Agreement
dated 06/29/07 at 1.500% to be
repurchased at $655,082
on 07/02/07 collateralized by
$745,000 FNMA at 6.000% due 04/18/36
with a value of $671,431.
(Cost - $655,000)........................ $655,000 $ 655,000
------------
TOTAL INVESTMENTS - 100.3%
(Cost $82,565,243) 92,732,187
Other Assets and Liabilities (net) - (0.3)% (259,587)
------------
TOTAL NET ASSETS - 100.0% $ 92,472,600
============
PORTFOLIO FOOTNOTES:
* Non-income producing security.
(a) A portion or all of the security was held on loan. As of June 30, 2007, the
market value of the securities loaned was $22,944,156 and the collateral
received consisted of cash in the amount of $23,066,243 and securities in
the amount of $371,102.
ADR - American Depositary Receipt
FNMA - Federal National Mortgage Association
See notes to financial statements
6
MET INVESTORS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
VAN KAMPEN MID-CAP GROWTH PORTFOLIO
ASSETS
Investments, at value (Note 2)* $ 92,077,187
Repurchase Agreement 655,000
Cash 260
Cash denominated in foreign currencies** 73,000
Collateral for securities on loan 23,437,345
Receivable for investments sold 6,784
Receivable for Trust shares sold 170,004
Dividends receivable 23,340
Interest receivable 55
------------
Total assets 116,442,975
------------
LIABILITIES
Payables for:
Investments purchased 261,870
Trust shares redeemed 117,831
Distribution and services fees - Class B 12,925
Collateral for securities on loan 23,437,345
Investment advisory fee payable (Note 3) 53,617
Administration fee payable 1,586
Custodian and accounting fees payable 58,861
Accrued expenses 26,340
------------
Total liabilities 23,970,375
------------
NET ASSETS $ 92,472,600
============
NET ASSETS REPRESENTED BY:
Paid in surplus $ 80,343,289
Accumulated net realized gain 1,660,124
Unrealized appreciation on investments and foreign currency 10,167,304
Undistributed net investment income 301,883
------------
Total $ 92,472,600
============
NET ASSETS
Class A $ 29,633,910
============
Class B 62,838,690
============
CAPITAL SHARES OUTSTANDING
Class A 2,744,952
============
Class B 5,949,599
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Class A $ 10.80
============
Class B 10.56
============
- -------------------------------------------------------------------------------------
* Investments at cost, excluding Repurchase Agreements $ 81,910,243
**Cost of cash denominated in foreign currencies 72,701
See notes to financial statements
7
MET INVESTORS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
VAN KAMPEN MID-CAP GROWTH PORTFOLIO
INVESTMENT INCOME:
Dividends (1) $ 683,884
Interest (2) 52,071
-----------
Total investment income 735,955
-----------
EXPENSES:
Investment advisory fee (Note 3) 303,824
Administration fees 4,835
Custody and accounting fees 11,103
Distribution fee - Class B 72,954
Transfer agent fees 6,604
Audit 12,497
Legal 10,717
Trustee fees and expenses 7,190
Shareholder reporting 3,663
Insurance 579
Other 1,523
-----------
Total expenses 435,489
Less fees waived and expenses reimbursed by the manager (1,417)
-----------
Net expenses 434,072
-----------
Net investment income 301,883
-----------
NET REALIZED AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY:
Net realized gain on:
Investments 4,779,699
Foreign currency 1,263
-----------
Net realized gain on investments and foreign currency 4,780,962
-----------
Net change in unrealized appreciation on:
Investments 5,453,719
Foreign currency 195
-----------
Net change in unrealized appreciation on investments and foreign
currency 5,453,914
-----------
Net realized and change in unrealized gain on investments and
foreign currency 10,234,876
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $10,536,759
===========
- --------------------------------------------------------------------------------------
(1)Dividend income is net withholding taxes of: $ 7,685
(2)Interest income includes securities lending income of: 29,903
See notes to financial statements
8
MET INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2007 (UNAUDITED)
VAN KAMPEN MID-CAP GROWTH PORTFOLIO
Period Ended Year Ended
June 30, 2007 December 31,
(Unaudited) 2006
------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income (loss) $ 301,883 $ (165,492)
Net realized gain on investments and foreign currency 4,780,962 8,574,982
Net change in unrealized appreciation (depreciation) on
investments and foreign currency 5,453,914 (2,950,083)
----------- -----------
Net increase in net assets resulting from operations 10,536,759 5,459,407
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net realized gains
Class A (2,550,134) (1,243,681)
Class B (5,146,070) (2,891,195)
----------- -----------
Net decrease in net assets resulting from distributions (7,696,204 (4,134,876)
----------- -----------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Proceeds from shares sold
Class A 5,681,495 6,110,096
Class B 5,901,153 14,136,330
Net asset value of shares issued through dividend reinvestment
Class A 2,550,134 1,243,681
Class B 5,146,070 2,891,195
Cost of shares repurchased
Class A (3,527,762) (5,225,391)
Class B (4,977,695) (3,977,281)
----------- -----------
Net increase in net assets from capital share transactions 10,773,395 15,178,630
----------- -----------
TOTAL INCREASE IN NET ASSETS 13,613,950 16,503,161
Net assets at beginning of period 78,858,650 62,355,489
----------- -----------
Net assets at end of period $92,472,600 $78,858,650
=========== ===========
Net assets at end of period includes undistributed net investment
income $ 301,883 $ --
=========== ===========
See notes to financial statements
9
MET INVESTORS SERIES TRUST
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
CLASS A
VAN KAMPEN MID-CAP GROWTH PORTFOLIO ----------------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 -------------------------------------------
(UNAUDITED) 2006 2005 2004 2003
-------------- ------ ------ ------ ------
NET ASSET VALUE, BEGINNING OF PERIOD............................. $10.44 $10.19 $10.43 $ 9.24 $ 6.78
------ ------ ------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income (Loss)..................................... 0.05 (a) (0.01)(a) (0.04)(a) (0.04)(a) (0.05)(a)
Net Realized/Unrealized Gain (Loss) on Investments............... 1.27 0.90 0.54 1.23 2.51
------ ------ ------ ------ ------
Total from Investment Operations................................. 1.32 0.89 0.50 1.19 2.46
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income............................. -- -- -- -- --
Distributions from Net Realized Capital Gains.................... (0.96) (0.64) (0.74) -- --
------ ------ ------ ------ ------
Total Distributions.............................................. (0.96) (0.64) (0.74) -- --
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD................................... $10.80 $10.44 $10.19 $10.43 $ 9.24
====== ====== ====== ====== ======
TOTAL RETURN..................................................... 13.15 % 8.65 % 4.71 % 12.76 % 36.43 %
Ratio of Expenses to Average Net Assets**........................ 0.83 %* 0.90 % 0.90 % 0.90 % 0.90 %
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates........................................................ 0.83 %* 1.08 % 0.99 % 0.95 % 1.04 %
Ratio of Net Investment Income (Loss) to Average Net Assets...... 0.87 %* (0.08)% (0.35)% (0.43)% (0.57)%
Portfolio Turnover Rate.......................................... 23.5 % 226.6 % 103.9 % 99.5 % 119.0 %
Net Assets, End of Period (in millions).......................... $ 29.6 $ 24.0 $ 21.5 $ 26.5 $ 27.6
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
VAN KAMPEN MID-CAP GROWTH PORTFOLIO --------
--------
2002
-------
NET ASSET VALUE, BEGINNING OF PERIOD............................. $ 8.95
-------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income (Loss)..................................... (0.04)(a)
Net Realized/Unrealized Gain (Loss) on Investments............... (2.13)
-------
Total from Investment Operations................................. (2.17)
-------
LESS DISTRIBUTIONS
Dividends from Net Investment Income............................. --
Distributions from Net Realized Capital Gains.................... --
-------
Total Distributions.............................................. --
-------
NET ASSET VALUE, END OF PERIOD................................... $ 6.78
=======
TOTAL RETURN..................................................... (24.25)%
Ratio of Expenses to Average Net Assets**........................ 0.85 %
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates........................................................ 1.69 %
Ratio of Net Investment Income (Loss) to Average Net Assets...... (0.52)%
Portfolio Turnover Rate.......................................... 89.6 %
Net Assets, End of Period (in millions).......................... $ 3.8
CLASS B
----------------------------------------------------------
FOR THE PERIOD
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2007 -------------------------------------------
(UNAUDITED) 2006 2005 2004 2003
-------------- ------ ------ ------ ------
NET ASSET VALUE, BEGINNING OF PERIOD............................. $10.25 $10.04 $10.30 $ 9.16 $ 6.75
------ ------ ------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income (Loss)..................................... 0.03 (a) (0.03)(a) (0.06)(a) (0.06)(a) (0.07)(a)
Net Realized/Unrealized Gain (Loss) on Investments............... 1.24 0.88 0.54 1.20 2.48
------ ------ ------ ------ ------
Total from Investment Operations................................. 1.27 0.85 0.48 1.14 2.41
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income............................. -- -- -- -- --
Distributions from Net Realized Capital Gains.................... (0.96) (0.64) (0.74) -- --
------ ------ ------ ------ ------
Total Distributions.............................................. (0.96) (0.64) (0.74) -- --
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD................................... $10.56 $10.25 $10.04 $10.30 $ 9.16
====== ====== ====== ====== ======
TOTAL RETURN..................................................... 12.90 % 8.37 % 4.58 % 12.45 % 35.70 %
Ratio of Expenses to Average Net Assets**........................ 1.08 %* 1.15 % 1.15 % 1.15 % 1.14 %
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates........................................................ 1.09 %* 1.34 % 1.24 % 1.20 % 1.39 %
Ratio of Net Investment Income (Loss) to Average Net Assets...... 0.61 %* (0.30)% (0.58)% (0.66)% (0.83)%
Portfolio Turnover Rate.......................................... 23.5 % 226.6 % 103.9 % 99.5 % 119.0 %
Net Assets, End of Period (in millions).......................... $ 62.8 $ 54.8 $ 40.9 $ 36.0 $ 27.6
--------
--------
2002
-------
NET ASSET VALUE, BEGINNING OF PERIOD............................. $ 8.93
-------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income (Loss)..................................... (0.06)(a)
Net Realized/Unrealized Gain (Loss) on Investments............... (2.12)
-------
Total from Investment Operations................................. (2.18)
-------
LESS DISTRIBUTIONS
Dividends from Net Investment Income............................. --
Distributions from Net Realized Capital Gains.................... --
-------
Total Distributions.............................................. --
-------
NET ASSET VALUE, END OF PERIOD................................... $ 6.75
=======
TOTAL RETURN..................................................... (24.41)%
Ratio of Expenses to Average Net Assets**........................ 1.10 %
Ratio of Expenses to Average Net Assets Before Reimbursement and
Rebates........................................................ 1.98 %
Ratio of Net Investment Income (Loss) to Average Net Assets...... (0.77)%
Portfolio Turnover Rate.......................................... 89.6 %
Net Assets, End of Period (in millions).......................... $ 13.7
* Annualized
** Prior to 05/01/2003, broker rebates were excluded from the calculation of
the expense limitation.
(a) Per share amounts based on average shares outstanding during the period.
See notes to financial statements
10
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
1. ORGANIZATION
Met Investors Series Trust (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers forty-three portfolios
("Portfolios", collectively; "Portfolio", individually), each of which operates
as a distinct investment vehicle of the Trust. As of June 30, 2007, the
Portfolio included in this report is Van Kampen Mid-Cap Growth Portfolio, which
is diversified. Shares in the Trust are not offered directly to the general
public and are currently available only to separate accounts established by
certain affiliated life insurance companies.
The Trust currently offers three classes of shares: Class A and B Shares are
offered by the Portfolio. Class E Shares are not currently offered by the
Portfolio included in this report. Shares of each Class of the Portfolio
represent an equal pro rata interest in the Portfolio and generally give the
shareholder the same voting, dividend, liquidation, and other rights.
Investment income, realized and unrealized capital gains and losses, the common
expenses of the Portfolio and certain Portfolio-level expense reductions, if
any, are allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the Portfolio. Each class of
shares differs in its respective distribution expenses and certain other
class-specific expense reductions.
2. SIGNIFICANT ACCOUNTING POLICIES
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 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.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION - Portfolio securities for which the primary market is on
a domestic or foreign exchange (except the NASDAQ) will be valued at the last
sale price on the day of valuation or, if there was no sale that day, at the
last reported bid price, using prices as of the close of trading. Portfolio
securities traded over-the-counter and quoted on NASDAQ are valued at the
NASDAQ Official Closing Price ("NOCP"). The NOCP is a "normalized" price. At
4:00 pm EST the NOCP is calculated as follows: (i) if the last traded price of
a listed security reported by a NASDAQ member falls within the current best bid
and ask price, then the NOCP will be the last traded price; (ii) if the last
traded price falls outside of that range, however, the NOCP will be the last
bid price (if higher) or the last ask price (if lower). Portfolio securities
not quoted on NASDAQ that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, will be valued at the most recently quoted bid price provided
by the principal market makers. If market values are not readily available, or
if available market quotations are not reliable, securities are priced at their
fair value as determined by the Valuation Committee of the Trust's Board of
Trustees using procedures approved by the Board of Trustees (the "Board"). The
Portfolio may use fair value pricing if the value of a security has been
materially affected by events occurring before the Portfolio's calculation of
NAV but after the close of the primary markets on which the security is traded.
The Portfolio may also use fair value pricing if reliable market quotations are
unavailable due to infrequent trading or if trading in a particular security
was halted during the day and did not resume prior to the Portfolio's
calculation of NAV. Such fair value may be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Debt securities are valued at the mean between the bid and asked prices
provided by an independent pricing service that are based on transactions in
debt obligations, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value. The Portfolio may hold
securities traded in foreign markets. Foreign securities traded outside the
United States will be valued daily at their fair value according to procedures
decided upon in good faith by the Trust's Board. All securities and other
assets of the Portfolio initially expressed in foreign currencies will be
converted to U.S. dollar values at the mean of the bid and offer prices of such
currencies against U.S. dollars quoted as designated on the Price Source
Authorization Agreement between the Trust and its custodian on a valuation date
by any recognized dealer.
The Trust is managed by Met Investors Advisory, LLC (the "Manager"), a
wholly-owned subsidiary of MetLife Investors Group, Inc., which is a
wholly-owned subsidiary of MetLife, Inc. The Manager may, from time to time,
under the general supervision of the Board or the Valuation Committee, utilize
the services of one or more pricing services available in valuing the assets of
the Trust. The Manager will continuously monitor the performance of these
services. The Portfolio has retained a third party pricing service to
automatically fair value each of its investments that is traded principally on
a foreign exchange or market, subject to adjustment by the Valuation Committee
of the Trust's Board of Trustees. The Valuation Committee will regularly
monitor and review the services provided by the pricing service to the
Portfolios and periodically report to the Board on the pricing services'
performance.
Futures contracts and options are valued based upon their daily settlement
prices. Forward currency exchange contracts are valued daily at forward foreign
currency exchange rates. Investments in mutual funds are valued at the daily
net asset value of the mutual fund.
B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Portfolio may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date.
11
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The value of the security so purchased is subject to market fluctuations during
this period. The Portfolio segregates assets having an aggregate value at least
equal to the amount of the when issued or delayed delivery purchase commitments
until payment is made.
C. INVESTMENT INCOME AND EXPENSES - Interest income, adjusted for amortization
of premium and accretion of discount, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Foreign dividend income is
recorded on the ex-dividend date or as soon as practical after the Portfolio
has determined the existence of a dividend declaration after exercising
reasonable due diligence. Foreign income and foreign capital gains on some
foreign securities may be subject to foreign withholding taxes, which are
accrued as applicable.
D. FEDERAL INCOME TAXES - It is the Portfolio's policy to comply with the
federal income and excise tax requirements of the Internal Revenue Code of
1986, as amended (the "Code"), applicable to regulated investment companies.
Accordingly, the Portfolio intends to distribute substantially all of its
taxable income and net realized gains on investments, if any, to shareholders
each year. Therefore, no federal income tax provision is required in the
Portfolio's financial statements. It is also the Portfolio's policy to comply
with the diversification requirements of the Code so that variable annuity and
variable life contracts investing in a portfolio will not fail to qualify as
annuity and life insurance contracts for tax purposes.
Distributions from net investment income and capital gains are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. As a result,
distributions from net investment income and net realized capital gains may
differ from their ultimate characterization for federal income tax purposes due
to timing differences.
The Portfolio utilizes the provisions of the federal income tax laws that
provide for the carryforward of capital losses for eight years, offsetting such
losses against any future net realized capital gains. At December 31, 2006, the
accumulated capital loss carryforwards and expiration dates by the Portfolio
were as follows:
Expiring Expiring Expiring
Portfolio Total 12/31/2009 12/31/2010 12/31/2011
- --------- ----------- ---------- ---------- ----------
Van Kampen Mid-Cap Growth Portfolio $10,804,540 $564,339 $4,499,968 $5,740,233
Van Kampen Mid-Cap Growth Portfolio (formerly, Lord Abbett Growth Opportunities
Portfolio) acquired losses of $13,507,053 in the merger with Lord Abbett
Developing Growth Portfolio on April 28th 2003 which are subject to an annual
limitation of $771,861.
E. DISTRIBUTION OF INCOME AND GAINS - The Portfolio intends to distribute
substantially all of its net investment income and net realized capital gains,
if any, annually.
F. SECURITIES LENDING - The Portfolio may lend its securities to certain
qualified brokers who borrow securities in order to complete certain
transactions. By lending its investment securities, the Portfolio attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term of the loan would
accrue to the account of the Portfolio. Risks of delay in recovery of the
securities or even loss of rights in the collateral may occur should the
borrower of the securities fail financially. Risks may also arise to the extent
that the value of the collateral decreases below the value of the securities
loaned.
Upon entering into a securities lending transaction, the Portfolio receives
cash or other securities as collateral in an amount equal to or exceeding 102%
of the current market value of the loaned securities. Any cash received as
collateral is generally invested by State Street Bank and Trust Company ("State
Street"), acting in its capacity as securities lending agent (the "Agent"), in
the State Street Navigator Securities Lending Prime Portfolio which is a money
market fund registered under the 1940 Act. A portion of the dividends received
on the collateral is rebated to the borrower of the securities and the
remainder is split between the Agent and the Portfolio. On loans collateralized
by cash, the cash collateral is invested in a money market fund or short term
securities. A portion of the income generated upon investment of the collateral
is remitted to the Borrowers and the remainder is allocated between the fund
and the lending agent. On loans collateralized by U.S. Treasuries, a fee is
received from the Borrower and is allocated between the fund and the lending
agent.
G. REPURCHASE AGREEMENTS - The Portfolio may enter into repurchase agreements
with selected commercial banks and broker-dealers, under which the Portfolio
acquires securities as collateral and agrees to resell the securities at an
agreed upon time and at an agreed upon price. The Portfolio accrues interest
for the difference between the amount it pays for the securities and the amount
it receives upon resale. At the time the Portfolio enters into a repurchase
agreement, the value of the collateral securities including accrued interest
will be equal to or exceed the value of the repurchase agreement and, for
repurchase agreements that mature in more than one day, the seller will agree
that the value of the collateral securities including accrued interest will
continue to be at least equal to the value of the repurchase agreement.
H. DIRECTED BROKERAGE AGREEMENT - The Trust has entered into a directed
brokerage arrangement with State Street Global Markets ("SSGM"). Under this
arrangement, the Portfolio directs certain trades to SSGM in return for a
recapture credit. SSGM issues a cash rebate to the Portfolio. Amounts paid to
each Portfolio are shown separately as an expense reduction on the Statement of
Operations of the Portfolio.
12
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
I. FOREIGN CURRENCY TRANSLATION - The books and records of the Portfolio are
maintained in U.S. dollars. Foreign currencies, investments and other assets
and liabilities are translated into U.S. dollars on a daily basis using
prevailing exchange rates. Purchases and sales of securities are translated at
the rates of exchange prevailing when such securities were acquired or sold.
Income is translated at rates of exchange prevailing when interest is accrued
or dividends are recorded.
The Portfolio does not isolate that portion of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from activity in
forward foreign currency contracts, sales of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities
transactions, and the difference between the amounts of dividends, interest,
and foreign withholding taxes recorded on the Portfolio's books, and the U.S.
dollar equivalent of the amounts actually received or paid. Net unrealized
foreign exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at fiscal year end, from
changes in the exchange rates of foreign currency held, and from changes in the
contract value of forward foreign currency contracts.
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust is managed by Met Investors Advisory, LLC which is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Manager is subject to the supervision and direction of the
Board and has overall responsibility for the general management and
administration of the Trust. The Manager has entered into an advisory agreement
with Morgan Stanley Investment Management, Inc., dba Van Kampen, (the
"Adviser") for investment advisory services in connection with the investment
management of the Portfolio.
Subject to the supervision and direction of the Board, the Manager supervises
the Adviser and has full discretion with respect to the retention or renewal of
the advisory agreement. The Manager pays the Adviser a fee based on the
Portfolio's average daily net assets.
Under the terms of the Portfolio's investment advisory agreement, the Portfolio
pays the Manager a monthly fee based upon annual rates applied to the
Portfolio's average daily net assets as follows:
Management Fees
earned by Manager
for the period ended
Portfolio June 30, 2007 % per annum Average Daily Assets
- --------- -------------------- ----------- ----------------------------
Van Kampen Mid-Cap Growth Portfolio $303,824 0.70% First $200 Million
0.65% $200 Million to $500 Million
0.625% Over $500 Million
State Street Bank and Trust Company provides custodian and administration
services to the Trust. Effective April 30, 2007, Metropolitan Life Insurance
Company (MLIC) became the new transfer agent for the Trust. MLIC is an
affiliate of the Manager. MLIC receives no fees for its services to the Trust.
Prior to April 30, 2007, State Street Bank and Trust Company served as transfer
agent to the Trust.
The Manager has entered into an expense limitation agreement with the Trust
("Expense Limitation Agreement") in the interest of limiting expenses of the
Portfolio of the Trust. The Expense Limitation Agreement shall continue in
effect with respect to the Portfolio until April 30, 2008. Pursuant to that
Expense Limitation Agreement, the Manager has agreed to waive or limit its fees
and to assume other expenses so that the total annual operating expenses of the
Portfolio other than interest, taxes, brokerage commissions, other expenditures
which are capitalized in accordance with accounting principles generally
accepted in the United States of America, other extraordinary expenses not
incurred in the
13
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
ordinary course of the Portfolio's business, but including amounts payable
pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act are
limited to the following respective expense ratios as a percentage of the
Portfolio's average daily net assets:
Expenses Deferred in
-------------------------------------------------------------
2002 2003 2004 2005 2006 2007
Maximum Expense Ratio -------------------- -------- ------- ------- -------- ------
under current Expense Subject to repayment Subject to repayment
Limitation Agreement until December 31, until December 31,
--------------------- -------------------- ----------------------------------------
Portfolio Class A Class B Class E 2007 2008 2009 2010 2011 2012
- --------- ------- ------- ------- -------------------- -------- ------- ------- -------- ------
Lord Abbett Developing Growth
Portfolio** N/A N/A N/A $119,049 $ 54,030 $ -- $ -- $ -- $ --
Van Kampen Mid-Cap Growth Portfolio 0.90% 1.15% 1.05%* 124,154 102,238 29,476 33,406 127,383 1,417
* Class not offered during the period.
** Lord Abbett Developing Growth Portfolio merged into Lord Abbett Growth
Opportunities Portfolio. Any repayment will be paid from Van Kampen Mid-Cap
Growth Portfolio (formerly Lord Abbett Growth Opportunities Portfolio).
If in any year in which the Management Agreement is still in effect, the
estimated aggregate Portfolio Operating Expenses of the Portfolio for the
fiscal year are less than the Maximum Expense Ratio for that year, subject to
approval by the Trust's Board, the Manager shall be entitled to reimbursement
by the Portfolio to the extent that the charge does not cause the expenses in
such subsequent year to exceed the Maximum Expense Ratio as stated above. The
Portfolio is not obligated to repay any expense paid by the Manager more than
five years after the end of the fiscal year in which such expense was incurred.
The amount waived and expenses reimbursed for the period ended June 30, 2007 is
shown as investment advisory fee waiver in the Statement of Operations of the
Portfolio.
The Trust has distribution agreements with MetLife Investors Distribution
Company ("MIDC" or the "Distributor") in which MIDC serves as the Distributor
for the Trust's Class A, Class B and Class E shares. MIDC is a wholly-owned
subsidiary of MetLife Investors Group, Inc. which is a wholly-owned subsidiary
of MetLife, Inc. The Class B and Class E Distribution Plans provide that the
Trust, on behalf of the Portfolio, may pay annually up to 0.50% and 0.25%
respectively of the average net assets of the Portfolio attributable to its
Class B and Class E shares in respect to activities primarily intended to
result in the sale of Class B and Class E Shares. However, under Class B and
Class E Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan and Class E Distribution Plan are
currently limited to payments at an annual rate equal to 0.25% and 0.15% of
average daily net assets of the Portfolio attributable to its Class B and Class
E Shares, respectively.
Under terms of the Class B and Class E Distribution Plans and Distribution
Agreements, the Portfolio is authorized to make payments monthly to the
distributor that may be used to pay or reimburse entities providing
distribution and shareholder servicing with respect to the Class B and Class E
Shares for such entities' fees or expenses incurred or paid in that regard.
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest for the periods ended noted below
were as follows:
Shares Issued
Through Net Increase
Beginning Shares Dividend Shares in Shares Ending
Shares Sold Reinvestment Repurchased Outstanding Shares
- - --------- --------- ------------- ----------- ------------ ---------
Van Kampen Mid-Cap Growth Portfolio
Class A
06/30/2007 2,300,279 523,252 248,309 (326,888) 444,673 2,744,952
12/31/2006 2,109,137 584,401 117,996 (511,255) 191,142 2,300,279
Class B
06/30/2007 5,350,037 557,325 512,047 (469,810) 599,562 5,949,599
12/31/2006 4,069,791 1,401,253 279,073 (400,080) 1,280,246 5,350,037
14
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
5. INVESTMENT TRANSACTIONS
Aggregate cost of purchases and proceeds of sales of investment securities,
excluding short-term securities, for the period ended June 30, 2007 were as
follows:
Purchases Sales
------------------------------ ------------------------------
U.S. Government Non-Government U.S. Government Non-Government
--------------- -------------- --------------- --------------
Van Kampen Mid-Cap Growth Portfolio $-- $27,236,751 $-- $20,232,792
At June 30, 2007, the cost of securities for federal income tax purposes and
the unrealized appreciation (depreciation) of investments for federal income
tax purposes for the Portfolio were as follows:
Federal Gross Gross
Income Tax Unrealized Unrealized Net Unrealized
Portfolio Cost Appreciation (Depreciation) Appreciation
- --------- ----------- ------------ -------------- --------------
Van Kampen Mid-Cap Growth Portfolio $82,565,243 $12,232,162 $(2,065,218) $10,166,944
6. SECURITY LENDING
As of June 30, 2007, the Portfolio had loaned securities which were
collateralized by short-term investments. The value of securities on loan and
the value of the related collateral were as follows:
Value of Value of
Securities Collateral
----------- -----------
Van Kampen Mid-Cap Growth Portfolio $22,944,156 $23,437,345
7. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the periods ended December 31, 2006
and 2005 were as follows:
Ordinary Income Long-Term Capital Gain Total
--------------- --------------------- ---------------------
2006 2005 2006 2005 2006 2005
---- -------- ---------- ---------- ---------- ----------
Van Kampen Mid-Cap Growth Portfolio $-- $265,896 $4,134,876 $3,988,975 $4,134,876 $4,254,871
As of December 31, 2006, the components of distributable earnings (accumulated
losses) on a federal income tax basis were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized Loss Carryforwards
Income Gain Appreciation and Deferrals Total
------------- ------------- ------------ ------------------ ----------
Van Kampen Mid-Cap Growth Portfolio $-- $7,681,034 $4,695,166 $(3,087,444) $9,288,756
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
8. CONTRACTUAL OBLIGATIONS
The Trust has a variety of indemnification obligations under contracts with its
service providers. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
9. RECENT ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Portfolio's tax returns to determine whether the tax positions
are "more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Management has
evaluated the implication of FIN 48 and has determined that there is no impact
to the Portfolio's financial statements.
15
MET INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007 (UNAUDITED)
9. RECENT ACCOUNTING PRONOUNCEMENTS - CONTINUED
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157) was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Portfolio's financial statement disclosures.
QUARTERLY PORTFOLIO SCHEDULE
The Trust files Form N-Q for the first and third quarters of each fiscal year.
The Trust's Forms N-Q will be available on the Securities and Exchange
Commission's website at http://www.sec.gov. The Trust's Forms N-Q may be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330. Once filed,
the most recent Form N-Q will be available without charge, upon request, by
calling (800) 848-3854.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling (800) 848-3854 and on the Securities and
Exchange Commission's website at http://www.sec.gov.
PROXY VOTING RECORD
The Trust, on behalf of each of its series, has filed with the Securities and
Exchange Commission its proxy voting record for the 12-month period ending June
30 on Form N-PX. Form N-PX must be filed by the Trust each year by August 31.
Once filed, the most recent Form N-PX will be available without charge, upon
request, by calling (800) 848-3854 or on the Securities and Exchange
Commission's website at http://www.sec.gov.
16
ITEM 2. CODE OF ETHICS.
Item applicable only to annual report on Form N-CSR.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Item applicable only to annual report on Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Item applicable only to annual report on Form N-CSR.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Schedule of Investments is included as a part of the report to shareholders
filed under Item 1 of this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The registrant does not have procedures by which shareholders may recommend
nominees to the registrant's Board of Trustees.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Within 90 days of the filing date of this Form N-CSR, Elizabeth M. Forget,
the registrant's President and Jeffrey A. Tupper, the registrant's Chief
Financial Officer and Treasurer, reviewed the registrant's disclosure controls
and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of
1940, as amended (the "1940 Act")) (the
"Procedures") and evaluated their effectiveness. Based on their review,
Ms. Forget and Mr. Tupper determined that the Procedures adequately ensure that
information required to be disclosed by the registrant on Form N-CSR and Form
N-Q is recorded, processed, summarized and reported within the time periods
required by the Securities and Exchange Commission.
(b) There were no significant changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that
occurred during the registrant's second fiscal quarter of the period covered by
the report that has materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial reporting.
ITEM 12. EXHIBITS
(a)(1) Not applicable.
(a)(2) The certifications required by Rule 30a-2(a) of the 1940 Act are
attached hereto.
(a)(3) Not applicable.
(b) The certifications required by Rule 30a-2(b) of the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
MET INVESTORS SERIES TRUST
By: /s/ Elizabeth M. Forget
-------------------------
Elizabeth M. Forget
President
Date: August 30, 2007
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/ Elizabeth M. Forget
-------------------------
Elizabeth M. Forget
President
Date: August 30, 2007
By: /s/ Jeffrey A. Tupper
---------------------------------
Jeffrey A. Tupper
Chief Financial Officer and Treasurer
Date: August 30, 2007