State Street Research Unveils Innovative New Prospectus.

BOSTON--(BUSINESS WIRE)--Nov. 11, 1997--

Document Is An Industry First:

A Prospectus Created To Serve As A Core Marketing Piece

State Street Research & Management Company today introduced the first of its new simplified and redesigned mutual fund prospectuses. The introduction marks the first time in the mutual fund industry that a prospectus has been developed to serve as the foundation of a marketing program.

"State Street Research launched one of the first mutual funds nearly three-quarters of a century ago, and we are breaking new ground again with our new simplified prospectus," said C. Troy Shaver Jr., executive vice president of State Street Research. "We've shown that you can meet the regulatory and disclosure requirements of the full prospectus and still have a document that functions as a marketing piece."

Simpler language, more sophisticated graphics

The new prospectus, which is written in plain English and features an attractive three-color graphic design, was developed over a six-month period by a team of State Street Research employees working with outside consultants. Once a prototype prospectus was completed, the firm developed a full complement of other marketing materials using the look and language of the prospectus as the model.

"It was exactly the opposite of how the process has traditionally been done," commented Shaver. "Instead of developing a kit and then adding the prospectus at the end, we began with the prospectus and made it the centerpiece. The fact that we were able to make a prospectus that is this user-friendly and appealing shows how far we've come in the area of prospectus reform."

The prospectus unveiled today describes State Street Research Equity Income Fund. The remaining 15 State Street Research funds will be converted to the new format during 1998, and translated into Chinese and Spanish to reach non-English-speaking U.S. residents.

Don Phillips, president, Morningstar Inc., stated, "This prospectus conveys information that investors need to know in an informative, not simplistic way. It demonstrates that fund complexes can communicate sophisticated information in a manner that is shareholder-friendly."

In addition, the firm will be rolling out new marketing materials over the next three months, including a streamlined application, a sales guide for brokers, a "family of funds" brochure for investors, a CD-ROM featuring portfolio manager interviews, a welcome kit for new investors, a newly designed consolidated statement for private clients and a series of abbreviated prospectus wrappers. The firm's Internet Web site located at www.ssrm.com will be accessible later this week.

A forward looking prospectus

The new State Street Research prospectus comes at a time when major changes for prospectuses are in the wings. In early 1997, the Securities and Exchange Commission under Chairman Arthur Levitt announced initiatives to simplify the language in prospectuses and to remove extraneous information, making it easier for investors to understand investment risks and to compare funds.

The SEC is expected to issue new rules stemming from these proposals in the near future, including a revised version of Form N-1A, the document that spells out the requirements for mutual fund prospectuses.

The new State Street Research prospectus incorporates numerous features of the proposed N-1A, most notably a description of the fund's principal investment strategy and risks of the portfolio as a whole rather than the traditional "laundry list" of permissible securities and investment techniques.

"We decided not to wait for the new SEC rules for several reasons," said Shaver. "For one thing, there are many features of the proposal that are clear improvements and that can be adopted right now under the current rules. By acting now, we are able to control our schedule rather than being driven by filing deadlines, and as a result we have a document that we anticipate should comply with the new rules with very few changes. Of course, if the final rules are different, we'll make the appropriate adjustments."

Shaver emphasized the new prospectus as an example of the firm's commitment to simplifying the investment process for shareholders and financial intermediaries.

"We are extremely excited about the SEC's initiatives, but we're equally excited about the spirit of investor education that has brought them about. For us, the goal of prospectus simplification is more than regulatory compliance. It's getting crucial information across to investors," he said.

State Street Research & Management Company, with a history dating back to 1924, is one of the nation's oldest investment management organizations. A subsidiary of Metropolitan Life Insurance Co., the Boston-based firm has offices in London and San Francisco. As of Sept. 30, 1997, State Street Research managed $48 billion in assets, of which $15 billion represented retail investors and $33 billion represented institutional clients. State Street Research manages money for nine of the ten largest U.S. corporate pension plans, public employee pensions plans, mutual funds for over 500,000 shareholder accounts and individually managed accounts for affluent investors.

CONTACT: State Street Research

Joan Miller, 617-357-1131

or

Robyn Tice, 617-357-1133