Lord Abbett Large-cap Growth Fund
ANNUAL REPORT FOR THE PERIOD ENDED JULY 31, 2000
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<PAGE>
Report to Shareholders
For the Period Ended July 31, 2000
[PHOTO]
Robert S. Dow
Chairman
August 15, 2000
"...we will continue to search for companies that we believe will dominate their
respective industries over the long term..."
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| DALBAR Lord, Abbett & Co. is proud to |
| HONORS COMMITMENT TO announce we have received a DALBAR |
| INVESTORS award for providing consistently |
| 1999 good service to shareholders, the |
| 1999 Key Honors Award for Mutual |
| Fund Service. DALBAR, Inc., an |
| independent research firm and |
| evaluator of mutual fund service, |
| presents the award to financial |
| services firms that provide |
| consistently solid service to |
| clients. |
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The period under review was characterized by the continued volatility in the
stock market. Investors closely monitored each new piece of economic data,
seeking signs of the future direction of Federal Reserve action. In February and
March, large growth stocks (as measured by the Russell 1000 Growth Index*)
outperformed their value peers (as measured by the Russell 1000 Value Index*) by
a substantial margin. However, as we moved into April and May, large growth
stocks experienced a severe correction, induced by a flurry of investor profit
taking, particularly in technology stocks. As May ended, various economic
indicators hinted at a slowdown in economic growth and showed moderate signs of
inflation, and the performance of many large growth stocks surged once again. As
the period ended, economic indicators continued to show signs of inflation and
large growth stocks again outpaced large value names in June and July, and for
the overall six-month period.
The stocks of healthcare and energy companies were standout performers for the
Fund during the period. Encouraged by rising energy prices and a more benign
political environment surrounding healthcare issues, we increased the Fund's
holdings in both sectors and we anticipate the environment for both sectors will
continue to improve.
Despite a challenging environment for the stocks of many technology companies
early in the period, we continued to maintain a strong position in this sector.
The stock prices of many technology companies reached high levels, and as a
result, investors took profits in April and May, causing the prices of many
technology company stocks to decline significantly. However, we maintained our
position in this sector because we remained focused on the long-term growth
potential of these companies. This view was supported as we moved into June and
July, and the stocks of many technology companies began to rebound. We intend to
maintain the Fund's strong position in the stocks of growing technology
companies that we believe will benefit from an environment in which many
companies continue to focus on improving productivity, through the use of
technology.
Also of note during the period; on May 31, 2000, Lord Abbett Equity Fund -- 1990
Series merged with the Large-Cap Growth Fund. As a result of this merger, the
Fund's assets increased by over $49 million.
As we move into the latter half of 2000, we will keep a close watch on investor
expectations for the stock market. We believe that future expectations play an
important role in determining near- and medium-term stock prices. As always, we
will continue to search for companies that we believe will dominate their
respective industries over the long term, use proven management "visionaries" to
keep their companies on the leading edge and have clear and understandable
business strategies. We thank you for entrusting your investment dollars to Lord
Abbett and look forward to helping you meet your financial goals.
RISK: The Fund is subject to the general risks and considerations associated
with equity investing, as well as the particular risks associated with growth
stocks. The value of your investment will fluctuate in response to movements in
the stock market in general and to the changing prospects of individual
companies in which the Fund invests. Growth stocks may grow faster than other
stocks and may be more volatile.
* The Russell Indices cited are unmanaged and are not available for direct
investment. The Russell 1000(R) Growth Index measures the performance of those
Russell 1000 companies with higher price-to-book ratios and higher forecasted
growth values. The Russell 1000(R) Value Index measures the performance of those
Russell 1000 companies with lower price-to-book ratios and lower forecasted
growth values.
<PAGE>
Statement of Net Assets
July 31, 2000
Investments Shares Value
--------------------------------------------------------------------------------
Common Stocks 99.68%
--------------------------------------------------------------------------------
Aerospace/Defense
1.07% Boeing Co. 20,500 $ 1,004,500
------------------------------------------------------------------==============
Auto Parts:Original
Equipment .54% Eaton Corp. 7,500 508,594
------------------------------------------------------------------==============
Automotive .73% General Motors Corp. 10,217 581,730
* General Motors Corp. Class H 4,098 106,036
Total 687,766
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Banks:Money Center Bank of New York Co., Inc. 8,025 375,670
1.69% Chase Manhattan Corp. 16,500 819,844
Citigroup, Inc. 5,500 388,094
Total 1,583,608
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Banks:Regional Mellon Financial Corp. 25,000 942,187
2.11% Wells Fargo &Co. 25,000 1,032,813
Total 1,975,000
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Beverages .85% The Coca-Cola Co. 13,000 797,063
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Biotechnology .89% * Amgen, Inc. 9,200 597,425
* Biogen, Inc. 1,200 63,600
* Celera Genomics 300 26,063
* Genentech, Inc. 1,000 152,125
Total 839,213
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Broadcasting .14% *Clear Channel
Communications, Inc. 1,736 132,262
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Brokers 1.47% Lehman Brothers
Holdings, Inc. 1,500 168,562
Morgan Stanley Dean Witter
&Co. 9,287 847,439
The Charles Schwab Corp. 10,044 362,840
Total 1,378,841
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Cable Services .81% * Comcast Corp. Class A 200 6,803
Time Warner, Inc. 9,822 753,225
Total 760,028
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Communications Corning, Inc. 18,750 4,386,328
Technology 7.58% * Corvis Corp. 400 32,931
* Exodus Communications, Inc. 3,000 133,313
* JDSUniphase Corp. 5,900 696,938
* Juniper Networks, Inc. 1,850 263,509
Lucent Technologies, Inc. 22,500 984,375
Motorola, Inc. 13,250 438,078
* QUALCOMM, Inc. 2,725 176,955
Total 7,112,427
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Computer * Ceridian Corp. 25,000 568,750
Services 2.07% * Citrix Systems, Inc. 500 7,625
* Computer Sciences Corp. 6,000 375,000
First Data Corp. 21,550 992,647
Total 1,944,022
------------------------------------------------------------------==============
Computer: * Apple Computer, Inc. 6,000 $ 304,875
Hardware 19.93% Compaq Computer Corp. 29,550 829,246
* Dell Computer Corp. 30,750 1,351,078
* EMCCorp. 51,275 4,364,784
Hewlett-Packard Co. 8,200 895,338
Intel Corp. 86,300 5,760,525
International Business
Machines Corp. 14,200 1,596,613
* Lexmark International, Inc.
Class A 1,750 78,859
* Network Appliance, Inc. 6,025 519,280
* Palm, Inc. 4,006 156,234
* Solectron Corp. 4,250 171,328
* Sun Microsystems, Inc. 25,350 2,672,841
Total 18,701,001
------------------------------------------------------------------==============
Computer: * America Online, Inc. 13,000 693,062
Software 8.06% * Ariba, Inc. 1,878 217,730
Automatic Data Processing, Inc. 1,500 74,344
* Cadence Design Systems, Inc. 15,000 313,125
Computer Associates
International, Inc. 1,650 40,941
* Comverse Technology, Inc. 2,975 261,056
* DoubleClick, Inc. 2,235 80,320
Electronic Data Systems Corp. 500 21,500
* Microsoft Corp. 47,000 3,281,188
* Oracle Corp. 30,500 2,293,219
* VERITASSoftware Corp. 1,850 188,584
* VeriSign, Inc. 600 95,213
Total 7,560,282
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Conglomerates Honeywell International, Inc. 14,000 470,750
3.68% Minnesota Mining &
Manufacturing Co. 10,000 900,625
Tyco International Ltd. 38,850 2,078,475
Total 3,449,850
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Consumer
Discretionary .55% * Yahoo!Inc. 4,000 514,750
------------------------------------------------------------------==============
Drugs 9.10% American Home Products
Corp. 17,000 902,062
Bristol-Myers Squibb Co. 8,700 431,738
Eli Lilly &Co. 3,600 373,950
Johnson &Johnson 7,500 697,969
Merck &Co., Inc. 22,250 1,595,047
Pfizer, Inc. 78,230 3,373,669
Pharmacia Corp. 20,000 1,095,000
Schering-Plough Corp. 1,500 64,781
Total 8,534,216
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Electronics .18% * Flextronics International Ltd. 1,575 111,505
* Jabil Circuit, Inc. 1,073 53,717
Total 165,222
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Electronics: * Agilent Technologies, Inc. 4,000 163,000
Semiconductors * Applied Materials, Inc. 7,650 580,444
1.93% * Conexant Systems, Inc. 895 28,640
* Rambus, Inc. 2,000 146,625
Texas Instruments, Inc. 15,250 894,984
Total 1,813,693
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1
<PAGE>
Statement of Net Assets (continued)
July 31, 2000
Investments Shares Value
--------------------------------------------------------------------------------
Energy Equipment & Baker Hughes, Inc. 20,000 $ 692,500
Services 1.37% Schlumberger Ltd. 8,000 591,500
Total 1,284,000
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Entertainment .67% Seagram Co. Ltd. 6,000 336,375
The Walt Disney Co. 2,500 96,719
* Viacom, Inc. 3,000 198,937
Total 632,031
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Financial
Services .47% American Express Co. 7,850 444,997
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Financial:
Miscellaneous .03% Freddie Mac 600 23,663
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Food 1.81% Bestfoods 15,000 1,044,374
H.J. Heinz Co. 15,000 599,063
Sysco Corp. 1,500 59,063
Total 1,702,500
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Health Care
Products .11% Medtronic, Inc. 2,000 102,125
------------------------------------------------------------------==============
Health Care CIGNACorp. 10,000 998,750
Services 1.79% HCA-The Healthcare Co. 20,000 680,000
Total 1,678,750
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Insurance 2.28% ACE Ltd. 25,000 900,000
American General Corp. 8,500 566,844
American International
Group, Inc. 7,650 670,809
Total 2,137,653
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Leisure .04% Carnival Corp. 2,000 37,375
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Multi-Sector
Company 6.06% General Electric Co. 110,500 5,683,844
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Natural Gas .89% Coastal Corp. 10,000 577,500
Enron Corp. 3,500 257,688
Total 835,188
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Office Supplies .01% * Staples, Inc. 750 10,359
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Oil:Integrated BPAmoco plc ADR 11,000 575,438
International 3.09% Chevron Corp. 7,000 553,000
Exxon Mobil Corp. 19,025 1,522,000
Texaco, Inc. 5,000 247,188
Total 2,897,626
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Paper and Forest
Products .18% International Paper Co. 4,951 168,334
------------------------------------------------------------------==============
Publishing 1.08% Dow Jones &Co., Inc. 9,000 593,438
Gannett Co., Inc. 5,400 290,925
Tribune Co. 4,063 132,048
Total 1,016,411
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Restaurants .05% * Starbucks Corp. 1,211 45,413
------------------------------------------------------------------==============
Retail 1.36% * Amazon.Com, Inc. 1,100 33,138
* Best Buy Co., Inc. 1,400 101,850
* Federated Department
Stores, Inc. 12,300 295,969
Wal-Mart Stores, Inc. 13,175 723,802
Walgreen Co. 3,858 120,321
Total 1,275,080
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Retail: Home Depot, Inc. 12,150 $ 628,763
Specialty .94% * eBay, Inc. 5,000 250,000
Total 878,763
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Soaps & House
Chemicals .18% Procter &Gamble Co. 3,000 170,625
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Supermarkets .08% * Safeway, Inc. 1,600 72,100
------------------------------------------------------------------==============
Telecommunication * 3Com Corp. 2,700 36,619
Equipment 9.73% * Ciena Corp. 1,150 163,444
* Cisco Systems, Inc. 94,250 6,167,484
Nokia Corp. ADR 30,289 1,342,181
Nortel Networks Corp. 5,490 408,319
*SDL, Inc. 1,350 468,534
*Tycom Ltd. 15,800 538,188
Total 9,124,769
------------------------------------------------------------------==============
Telecommunications AT&TCorp. 34,427 1,065,085
3.71% * AT&T Wireless Group 1,500 41,250
Alltel Corp. 7,500 462,188
* Nextel Communications, Inc. 5,100 285,281
* Qwest Communications
International, Inc. 1,500 70,406
SBCCommunications, Inc. 600 25,538
Verizon Communications 15,000 705,000
Vodafone Group plc ADR 6,970 301,017
* Worldcom, Inc. 13,500 527,344
Total 3,483,109
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Transportation:
Miscellaneous .37% United Parcel Service, Inc.
Class B 6,000 352,500
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Total Common Stocks
(Cost $87,990,919) 93,519,553
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Principal
Short-Term Investment .96% Amount
--------------------------------------------------------------------------------
Prudential Funding Corp.
6.60% due 8/1/2000
(Cost $896,000) $896,000 896,000
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Total Investments 100.64%
(Cost $88,886,919) 94,415,553
------------------------------------------------------------------==============
Other Assets, Less Liabilities (.64)% (598,962)
------------------------------------------------------------------==============
Net Assets 100.00% $93,816,591
================================================================================
Class A Shares-Net asset value ($83,702,866/7,921,516 shares outstanding)$10.57
Maximum offering price (net asset value plus sales
charge of 5.75% of the offering price) $11.21
Class B Shares-Net asset value ($8,045,720/765,543 shares outstanding) $10.51
Class C Shares-Net asset value ($2,065,629/196,452 shares outstanding) $10.51
Class P Shares-Net asset value ($1,188.85/112.866 shares outstanding) $10.53
Class Y Shares-Net asset value ($1,187.02/112.620 shares outstanding) $10.54
*Non-income producing security.
ADR American Depositary Receipt.
See Notes to Financial Statements.
2
<PAGE>
Statement of Operations
<TABLE>
<CAPTION>
Investment Income 12/15/1999* to 7/31/2000
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Income Dividends (net of foreign tax withholding of $528) $ 108,160
Interest 28,453
Total income 136,613
-----------------------------------------------------------------------------------------------------------------------------------
Expenses Management fee 168,449
Management fee waived (50,186)
12b-1 distribution plan-Class A 71,377
12b-1 distribution plan-Class B 20,752
12b-1 distribution plan-Class C 6,793
12b-1 distribution plan-Class P 5
Registration 55,110
Shareholder servicing 35,849
Professional 23,596
Reports to shareholders 11,247
Trustees' fees 554
Other 27,212
Total expenses before reimbursements 370,758
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Expense reimbursements (67,352)
-----------------------------------------------------------------------------------------------------------------------------------
Net expenses 303,406
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Net investment loss (166,793)
-----------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments
-----------------------------------------------------------------------------------------------------------------------------------
Net realized loss from investment transactions (148,434)
-----------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 1,583,606
-----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments 1,435,172
-----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $ 1,268,379
===================================================================================================================================
</TABLE>
* Commencement of operations.
See Notes to Financial Statements.
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
12/15/1999*
Increase in Net Assets to 7/31/2000
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Operations Net investment loss $ (166,793)
Net realized loss from investment transactions (148,434)
Net unrealized appreciation of investments 1,583,606
Net increasein net assets resulting from operations 1,268,379
-----------------------------------------------------------------------------------------------------------------------------------
Capital share transactions:
Net proceeds from sales of shares 46,833,147
Net asset value of shares issued in connection with the reorganization of Equity Fund (see Notes 4 and 7) 49,668,844
Total 96,501,991
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Cost of shares reacquired (3,953,779)
-----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets derived from capital share transactions 92,548,212
-----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets 93,816,591
-----------------------------------------------------------------------------------------------------------------------------------
Net Assets:
Beginning of period -
-----------------------------------------------------------------------------------------------------------------------------------
End of period (including net investment loss of $35,561) $93,816,591
====================================================================================================================================
</TABLE>
* Commencement of operations.
See Notes to Financial Statements.
3
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Class AShares Class B Shares Class C Shares Class P Shares Class Y Shares
------------------------------------------------------------------------------------------------------------------------------------
12/15/1999* 12/15/1999* 12/15/1999* 12/15/1999* 12/15/1999*
Per Share Operating Performance: to 7/31/2000 to 7/31/2000 to 7/31/2000 to 7/31/2000 to 7/31/2000
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.00 $10.00 $10.00 $10.00 $10.00
------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment loss(a) (.05) (.07) (.07) (.05) (.01)
Net realized and unrealized gain on investments .62 .58 .58 .58 .55
Total from investment operations .57 .51 .51 .53 .54
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Net asset value, end of period $10.57 $10.51 $10.51 $10.53 $10.54
------------------------------------------------------------------------------------------------------------------------------------
Total Return(b)(c) 5.70% 5.20% 5.20% 5.30% 5.40%
====================================================================================================================================
Ratios to Average Net Assets(c):
Expenses, including waiver and reimbursements .82% 1.07% 1.01% .87% .59%
Expenses, excluding waiver and reimbursements 1.12% 1.53% 1.53% 1.19% .90%
Net investment loss (.44)% (.68)% (.61)% (.43)% (.11)%
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
12/15/1999*
Supplemental Data For All Classes: to 7/31/2000
------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Net assets, end of period (000) $93,817
Portfolio turnover rate 14.66%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations.
(a) Calculated using average shares outstanding during the period.
(b) Total return does not consider the effect of sales loads.
(c) Not annualized.
See Notes to Financial Statements.
4
<PAGE>
Notes to Financial Statements (unaudited)
1. Significant Accounting Policies
Lord Abbett Large-Cap Growth Fund, (the "Fund") was organized as a Delaware
business trust on September 29, 1999, and is registered under the Investment
Company Act of 1940 as a diversified, open-end management investment company.
The financial statements have been prepared in conform ity with accounting
principles generally accepted in the United States of America, which permit
management to make certain estimates and assumptions at the date of the
financial statements. The following is a summary of the significant accounting
policies followed by the Fund:
(a) Security valuation is determined as follows: Portfolio securities listed or
admitted to trad ing privileges on any national securities exchange are valued
at the last sales price on the principal securities exchange on which such
securities are traded, or, if there is no sale, at the mean between the last bid
and asked prices on such exchange, or, in the case of bonds, in the
over-the-counter market if, in the judgment of the Fund's officers, that market
more accurately reflects the market value of the bonds. Securities traded only
in the over-the-counter market are valued at the mean between the last bid and
asked prices, except that securities admitted to trading on the NASDAQ National
Market System are valued at the last sales price if it is determined that such
price more accurately reflects the value of such securi ties. Short-term
securities are valued at amortized cost (which approximates market value) if the
maturity is 60 days or less at the time of purchase, or market value if the
maturity is greater than 60 days. Securities for which market quotations are not
available are valued at fair value under procedures approved by the Board of
Trustees.
(b) It is the policy of the Fund to meet the requirements of the Internal
Revenue Code appli cable to regulated investment companies and to distribute all
of its taxable income. Therefore, no federal income tax provision is required.
(c) Security transactions are accounted for on the date that the securities are
purchased or sold (trade date). Realized gains and losses from investment
transactions are calculated on the identified cost basis. Dividend income and
distributions to shareholders are recorded on the ex-dividend date. Interest
income is recorded on the accrual basis. Net investment income (other than
distribution and service fees) and realized and unrealized gains or losses are
allocated to each class of shares based upon the relative proportion of net
assets at the beginning of the day.
2. Management Fee and Other Transactions with Affiliates
The Fund has a management agreement with Lord, Abbett & Co. ("Lord Abbett")
pursuant to which Lord Abbett supplies the Fund with investment management
services and executive and other personnel, pays the remuneration of officers,
provides office space and pays for ordinary and necessary office and clerical
expenses relating to research, statistical work and the supervision of the
Fund's investment portfolio. The management fee is based on average daily net
assets for each month at the annual rate of 0.75% of average daily net assets.
Lord Abbett waived a portion of its management fee during the period ended July
31, 2000. At July 31, 2000, the management fee payable was $62,231. In addition,
Lord Abbett reimbursed $67,352 of the Fund's other expenses during the period
ended July 31, 2000.
The Fund has Rule 12b-1 plans and agreements (the "Class A, Class B, Class C and
Class P Plans") with Lord Abbett Distributor LLC ("Distributor"), an affiliate
of Lord Abbett. The Fund makes payments to Distributor which uses or passes on
such payments to authorized institutions. Pursuant to the Class A Plan, the Fund
pays Distributor (1) an annual service fee of 0.25% of average daily net assets,
(2) a one-time distribution fee of up to 1% on certain qualifying purchases and
(3) an annual distribution fee of 0.10% of the average daily net asset value of
Class A shares. Pursuant to the Class B and Class C Plans, the Fund pays
Distributor an annual service and distribution fee of 0.25% and 0.75%,
respectively, of the average daily net asset value of the shares outstanding.
Pursuant to the Class P Plan, the Fund pays Distributor an annual service and
distribution fee of 0.20% and 0.25%, respectively, of the average daily net
asset value of the Class P shares. Class Y does not have a plan. At July 31,
2000, the 12b-1 fees payable with respect to all classes of shares aggregated
$64,762.
Distributor received $134,007, representing payment of commissions on sales of
Class A shares, after deducting $760,423 allowed to authorized distributors as
concessions.
Certain of the Fund's officers and trustees have an interest in Lord Abbett.
3. Distributions
Distributions from net investment income and net realized gains from investment
transactions are declared annually. Accumulated net realized loss at July 31,
2000 for financial reporting purposes aggregated $148,434. Income and capital
gains distributions are determined in accordance with income tax regulations,
which may differ from methods used to determine the corresponding income and
capital gain amounts in accordance with accounting principles generally accepted
in the United States of America.
At July 31, 2000, the Fund had a capital loss carryforward of $148,434 which
will expire in 2008.
4. Capital
Transactions in shares of beneficial interest were as follows:
December 15, 1999* to July 31, 2000
--------------------------------------------------------------------------------
Class A Shares Amount
--------------------------------------------------------------------------------
Sales of shares 3,379,737 $ 36,260,423
Shares issued in connection with the
reorganization of Equity Fund (see Note 7) 4,878,365 49,668,844
Total 8,258,102 8
--------------------------------------------------------------------------------
5,929,267
Shares reacquired (336,586) (3,678,472)
Increase 7,921,516 $ 82,250,795
--------------------------------------------------------------------------------
December 15, 1999* to July 31, 2000
--------------------------------------------------------------------------------
Class B Shares Amount
--------------------------------------------------------------------------------
Sales of shares 781,002 $ 8,371,104
Shares reacquired (15,459) (173,738)
--------------------------------------------------------------------------------
Increase 765,543 $ 8,197,366
December 15, 1999* to July 31, 2000
--------------------------------------------------------------------------------
Class C Shares Amount
--------------------------------------------------------------------------------
Sales of shares 206,156 $ 2,199,345
Shares reacquired (9,704) (101,569)
--------------------------------------------------------------------------------
Increase 196,452 $ 2,097,776
December 15, 1999* to July 31, 2000
--------------------------------------------------------------------------------
Class P Shares Amount
--------------------------------------------------------------------------------
Sales of shares 112.866 $ 1,138.87
Shares reacquired - -
--------------------------------------------------------------------------------
Increase 112.866 $ 1,138.87
December 15, 1999* to July 31, 2000
--------------------------------------------------------------------------------
Class Y Shares Amount
--------------------------------------------------------------------------------
Sales of shares 112.620 $ 1,136.21
Shares reacquired - -
--------------------------------------------------------------------------------
Increase 112.620 $ 1,136.21
Paid in capital amounted to $88,471,952 at July 31, 2000.
*Commencement of operations
5. Purchases and Sales of Securities
Purchases and sales of investment securities (other than U.S. Government
obligations and short-term securities) aggregated $60,944,697 and $5,157,696,
respectively, during the period ended July 31, 2000.
As of July 31, 2000, net unrealized appreciation for federal income tax purposes
aggregated $5,528,634, of which $9,782,534 related to appreciated securities and
$4,253,900 related to depreciated securities.
The cost of investments for federal income tax purposes is substantially the
same as that used for financial reporting purposes.
6. Trustees' Remuneration
The Trustees of the Fund associated with Lord Abbett and all officers of the
Fund receive no compensation from the Fund for acting as such. Outside Trustees'
fees and retirement costs are allocated among all funds in the Lord Abbett group
based on the net assets of each fund. Trustees' fees payable at July 31, 2000,
under a deferred compensation plan, were $33,606.
7. Reorganization
On May 31, 2000, the Fund acquired all the net assets of Lord Abbett Equity Fund
(the "Equity Fund") pursuant to a plan of reorganization approved by Equity Fund
shareholders on May 26, 2000. The reorganization was accomplished by a tax-free
exchange of 4,878,365 Class A shares of the Fund valued at $49,668,844 for the
1,843,157 shares of Equity Fund outstanding on May 31, 2000. Equity Fund's net
assets at that date, including $3,945,028 of unrealized appreciation, were
combined with those of the Fund. The aggregate net assets of the Fund and the
Equity Fund immediately before the acquisition were $32,632,618 and $49,668,844,
respectively. Other expenses include approximately $25,000 accrued pursuant to
the reorganization.
Copyright(C)2000 by Lord Abbett Large-Cap Growth Fund, 90 Hudson Street, Jersey
City, NJ 07302-3973
This publication, when not used for the general information of shareholders of
Lord Abbett Large-Cap Growth Fund, is to be distributed only if preceded or
accompanied by a current prospectus which includes information concerning the
Series' Investment objective and policies, sales charges and other matters.
There is no guarantee that the forecasts contained in this publication will come
to pass. All rights reserved. Printed in the U.S.A .
<PAGE>
Independent Auditors' Report
The Board of Directors and Shareholders,
Lord Abbett Large-Cap Growth Fund
We have audited the accompanying statement of net assets of Lord Abbett
Large-Cap Growth Fund (the "Fund") as of July 31, 2000, and the related
statements of operations and of changes in net assets and the financial
highlights for the period from December 15, 1999 (commencement of operations)
through July 31, 2000. These financial statements and the financial highlights
are the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and the financial highlights
based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned at July 31, 2000 by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Lord Abbett
Large-Cap Growth Fund at July 31, 2000, the results of its operations, the
changes in its net assets, and the financial highlights for the period then
ended in conformity with accounting principles generally accepted in the United
States of America.
[GRAPHIC OMITTED]
New York, New York
September 15, 2000
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Lord Abbett mutual fund shares are distributed by:
LORD ABBETT DISTRIBUTOR LLC LALCG-2-700
90 Hudson Street o Jersey City, New Jersey 07302-3973 (9/00)
