UPDATE 1-State Street's investment portfolio losses narrow

* Investment portfolio's unrealized losses shrink

* TCE ratio has risen above target rate

* TCE seen rising further

* Evaluating possible acquisitions, especially in Europe

BOSTON, Nov 10 (Reuters) - State Street Corp's (STT.N) top three executives said on Tuesday that the world's biggest institutional money manager is making good progress on cleaning up unrealized losses on its investment portfolio.

The Boston-based company also said that its ability to withstand financial shocks has improved as its TCE (tangible common equity) ratio has risen above the company's target rate and is expected to climb still further before year's end.

At the end of the fourth quarter the TCE ratio is expected to be around 6 percent, Chief Executive Officer Ronald Logue said. That marks a dramatic improvement from 1.2 percent when calculated as a percentage of total assets at the end of the fourth quarter of 2008.

The low TCE ratio and State Street's heavy unrealized losses on its investment portfolio worried investors so much that they sent State Street's shares tumbling roughly 20 percent in the first four months of the year.

Speaking at the Bank of America Merrill Lynch Banking and Financial Services Conference in New York, Logue, Chief Financial Officer Ed Resch and President Joseph Hooley -- who will replace Logue as CEO next year -- also highlighted the narrowing of the unrealized losses.