<PAGE>
Lord Abbett
- - --------------------------------------------------------------------------------
AFFILIATED FUND
- - --------------------------------------------------------------------------------
Semi-Annual Report for the Six Months Ended April 30, 1995
A mutual fund with the goal of providing you with long-term growth of capital
and income without excessive price fluctuations.
[PHOTO - Father, son and grandson returning from fishing]
<PAGE>
- - --------------------------------------------------------------------------------
AFFILIATED FUND Building Investor Confidence Since 1934
Shareholder Satisfaction:
Affiliated investors, on average, have owned their shares for over 18 1/2 years
A Tradition of Value Investing
Affiliated's history highlights the concept of value investing: buying quality
companies when they are "on sale" and selling them when they reach their
potential. Through the years, this method of investing has helped Affiliated
Fund achieve competitive returns with relatively moderate fluctuations in price.
[PHOTO - Father, son and grandfather sitting by lake]
Competitive Total Returns...
AVERAGE ANNUAL RATES OF TOTAL RETURN AS OF 4/30/95
11.4% yearly for the past 40 years
11.1% yearly for the past 30 years
14.2% yearly for the past 20 years
13.5% yearly for the past 10 years
18.1% for the past year
...With Consistency
The Fund has increased in value 33 out of the last 40 fiscal years.
Large and Growing Dividends
Shareholders taking dividends in cash saw their dividend checks increase 32 out
of the last 40 fiscal years(1).
(1) Capital gains were reinvested. Period ends 10/31/94.
The Fund's fiscal year-end is 10/31. Results quoted above (unless stated
otherwise) are shown at net asset value with all distributions reinvested.
See Important Information on page 7.
SEC RETURNS
Average annual compound returns for periods ended 3/31/95 at the 5.75% maximum
sales charge, with all distributions reinvested:
1 year: +10.00%
5 years: + 9.70%
10 years: +12.68%
The Fund's SEC yield for the 30 days ended 4/30/95 was 2.53%.
This past performance is no indication of future results. The investment return
and principal value of an investment in the Fund will fluctuate so that shares,
on any given day or when redeemed, may be worth more or less than their original
cost.
<PAGE>
[PHOTO - Ronald P. Lynch]
- - -------------------------
Ronald P. Lynch, Chairman
May 18, 1995
- - --------------------------------------------------------------------------------
REPORT TO SHAREHOLDERS For the Six Months Ended April 30, 1995
Affiliated Fund's results for the first six months of fiscal 1995 were
gratifying. The Fund ended the period on April 30 with a net asset value of
$11.00, 7.2% higher than the $10.26 price recorded at the close of fiscal 1994
(after adjustment for a capital gain distribution of $.77 per share paid last
December). Assuming the reinvestment of two quarterly dividends (that totaled
$.15) and the capital gain distribution, Affiliated produced a total return (the
percent change in net asset value) of 9.2% over the six-month period. The S&P
500, an unmanaged index of common stocks, produced a return of 10.5% over the
same period. Over the one-year period ended April 30, 1995, Affiliated Fund
produced an 18.1% total return versus 17.4% for the S&P 500.
Our Board of Directors recently declared a quarterly dividend of $.075 per
share, payable May 16, 1995 to shareholders of record on May 10, 1995.
After a relatively flat 1994, the stock market rose impressively during the
Spring of 1995. This strength reflected a confluence of positive events. First,
the upswing in corporate earnings, that has been underway since early 1992,
gained momentum. Second, the bond market, which had been weak throughout most of
1994, rebounded in response to a slowing of the economy's growth and the
associated persistence of low inflation. The resultant drop in interest rates
encouraged stock investors to pay more for a given level of dividends. Finally,
U.S. investors developed a greater preference for domestic securities in the
wake of a steep decline in the dollar (which made foreign investments generally
more expensive) and the sudden collapse of the Mexican market.
Stock prices should continue to be supported by some very positive forces in the
months to come. We share the widely held view that the recent slowing of
economic growth, induced by the Federal Reserve's sharp interest-rate increases
over the past year, is a positive development which should prolong the ultimate
duration of the economy's expansion. Consequently, we believe the credit
environment in 1995 will prove much kinder to the stock market than was the case
last year. Corporate earnings, though likely to be dampened by the economic
slowdown, should rise with the help of further benefits from cost reduction,
continuing
- - --------------------------------------------------------------------------------
"...the portfolio's holdings are...the best available values based on our
assessment of earnings prospects for the next several years."
- - --------------------------------------------------------------------------------
strength in overseas business and improved pricing.
The stock market's recent advance, nevertheless, has extended to a level in May
that generously appraises the earnings prospects we project through 1995. And,
coming months could bring some surprises. Because our nation has become heavily
dependent on foreign credit, a renewed weakening of the dollar could necessitate
higher interest rates to prevent large withdrawals of capital. It is possible,
moreover, that interest rates may have been pushed high enough already to stall
the economy into recession.
Against this backdrop, we have structured Affiliated Fund conservatively for the
near term. The Fund remains close to 95% invested, but we have further reduced
its holdings of issues sensitive to the economy. As always, the portfolio's
holdings are, what we consider, the best available values based on our
assessment of earnings prospects for the next several years. We are confident
that this emphasis on long-term value will continue to serve our shareholders
well.
We are pleased to welcome new Affiliated Fund shareholders and, once again, we
want to thank all of you for your continued trust and confidence.
1
<PAGE>
- - --------------------------------------------------------------------------------
The Income Perspective
- - --------------------------------------------------------------------------------
The Affiliated Advantage: A history of increasing dividends vs. fluctuating
income from guaranteed CDs
Information About the Following Investment
- - --------------------------------------------------------------------------------
Investment Period: 11/1/69 to 4/30/95
Amount Invested: $100,000
Sales Charge: 3.75% (for investments of $100,000)(1)
Distributions: Dividends in cash, capital gains reinvested
<TABLE>
<CAPTION>
Year Six-Month Affiliated
Ended CD(2) Fund
Oct. 31 Interest Dividends
- - ------- --------- ----------
<S> <C> <C>
1970 $ 8,196 $ 3,823
1971 5,486 3,786
1972 4,900 3,795
1973 7,504 4,036
1974 9,921 4,410
1975 7,417 3,603
1976 6,000 4,635
1977 5,540 5,185
1978 7,779 5,740
1979 10,816 6,580
1980 12,771 7,906
1981 16,038 9,699
1982 13,467 10,359
1983 9,204 10,247
1984 10,711 10,816
1985 8,591 12,375
1986 6,898 13,347
1987 6,644 13,648
1988 7,652 14,661
1989 9,258 15,327
1990 8,263 14,564
1991 6,593 14,306
1992 4,077 14,551
1993 3,337 13,490 If capital
1994 4,323 13,078 gains and
4/30/95 (6 months) 3,214 6,460 dividends
had been
Interest/Dividend Total $204,600 $240,427 reinvested,
======== ======== the Fund's
25 1/2 Years Later total value
Initial $100,000 Investment plus Growth $100,000 $491,707 would
-------- -------- have been
Total Value $304,600 $732,134 --- $1,673,089
-------- ========
The Real Cost of the CD Guarantee: $427,534
========
</TABLE>
Unlike the Fund, a CD is insured, and its rate and principal are guaranteed if
held until maturity. The FDIC insures CDs up to $100,000. The CD rate is subject
to change when the CD is renewed. Although CDs may offer safety on the downside,
they sacrifice capital growth on the up side.
(1) See Important Information on page 7.
(2) Average of six-month CD rates available each period. Source: Salomon
Brothers.
2
<PAGE>
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Affiliated's Growth Record
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RESULTS BASED ON FISCAL YEAR-END OCTOBER 31
---------------------------------------------------------------------------------
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 4/30/95
(6 months
only)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Growth of Capital(1) +12.5% +30.2% -2.1% + 6.9% +12.8% -12.0% +23.1% + 6.3% +14.3% +3.7% +7.8%
Dividend Return(1) + 6.5 + 6.2 +4.9 + 5.3 + 5.2 + 4.4 + 4.9 + 4.1 + 3.5 +3.0 +1.4
----- ----- ---- ----- ----- ----- ----- ----- ----- ---- ----
Total Return(2) +19.0 +36.4 +2.8 +12.2 +18.0 - 7.6 +28.0 +10.4 +17.8 +6.7 +9.2
===== ===== ==== ===== ===== ===== ===== ===== ===== ==== ====
</TABLE>
(1)Growth of capital and dividend return reflect the reinvestment of capital
gains distributions and dividends.
(2)Total return is the percent change in value with both dividends and capital
gains distributions reinvested. These results are at net asset value. Net
asset value purchases are available to investors of $1 million or more. For
performance at the maximum sales charge, as well as other information,
please turn to the inside front cover and pages 4 and 7.
- - --------------------------------------------------------------------------------
Affiliated's Growth Exceeded Inflation
- - --------------------------------------------------------------------------------
In our illustration, 1984 and 1995 are actual costs -- then and now. "Affiliated
1995" is what the 1984 amount would have grown to had it been invested in the
Fund.
Investments in Affiliated Fund (up 292.4%) surpassed increases in the cost of
living (up 44.3%) in these 10 1/2 years. Protection against the erosion caused
by inflation is one important way to maintain -- and enhance -- your lifestyle.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
[PHOTO - Books] [PHOTO - Framed needle point] [PHOTO - 29 cent stamp] [PHOTO - paycheck stub] [PHOTO - passport]
1984 $ 5,556 $ 85,400 $.20 $11,892 $ 42
1994 11,709 135,100 .29 19,153 65
Affiliated 1994 20,141 309,575 .73 43,109 152
One Year College One Family House First-Class Stamp Income Per Capita U.S. Passport
Private
</TABLE>
[PHOTO] [PHOTO] [PHOTO] [PHOTO] [PHOTO]
[CHART]
Affiliated's results reflect total return at net asset value, with all
distributions reinvested for the 10 1/2 years ended 4/30/95. See Important
Information on page 7.
(1) National average.
Sources: U.S. Department of Education, Statistics Bureau Section; College Board
Annual Survey of Colleges; National Association of Realtors, Research Division;
U.S. Postal Service; Department of Commerce, Bureau of Economic Analysis
Statistics; U.S. State Department.
3
<PAGE>
Who Owns the Fund?
INVESTOR PROFILE OF AFFILIATED FUND
Fiduciaries
- - ----------------------------------------------
Custodians for minors 15,538
Trusts 9,271
Pension & profit-sharing plans 6,798
Estates 639
Institutions
- - ----------------------------------------------
Corporate organizations 1,753
Religious, charitable & welfare
organizations 330
Clubs & fraternal organizations 90
Cemeteries 64
Nursing homes & hospitals 36
Colleges & universities 37
Individuals
- - ----------------------------------------------
Single & joint
accounts & IRAs 121,497
Other 41,310
- - ----------------------------------------------
Total Accounts
in Affiliated on 4/30/95 197,363
- - ----------------------------------------------
[PHOTO - Grandfather and grandson]
- - --------------------------------------------------------------------------------
The Total Return Perspective
- - --------------------------------------------------------------------------------
A History of Consistent Performance
- - --------------------------------------------------------------------------------
The Fund is managed to anticipate change, to find good value and to maintain a
low level of risk in relation to expected returns. The Fund's average
shareholder ownership of over 18-1/2 years reflects the success of this
strategy.
Information About the Following Investment
- - --------------------------------------------------------------------------------
Investment Period: 11/1/69 to 4/30/95
Amount Invested: $10,000
Sales Charge: 5.75% (for investments under $50,000)(1)
Distributions: Capital gains and dividends reinvested
<TABLE>
<CAPTION>
Cumulative
Value of
Value of Capital Gains Cumulative How
Year Shares Distributions Value of $ 10,000
Ended Initially Taken Reinvested Grew
Oct. 31 Acquired in Shares Dividends Total Value
- - ------- --------- ------------- ---------- -----------
<S> <C> <C> <C> <C>
1970 $ 7,408 $ 393 $ 372 $ 8,173
1971 7,741 611 754 9,106
1972 8,154 998 1,208 10,360
1973 8,268 1,306 1,701 11,275
1974 6,284 1,202 1,770 9,256
1975 7,787 1,553 2,687 12,027
1976 9,300 2,114 3,853 15,267
1977 8,395 2,292 4,130 14,817
1978 8,165 2,520 4,797 15,482
1979 9,151 3,604 6,424 19,179
1980 10,447 5,385 8,720 24,552
1981 9,300 6,514 9,283 25,097
1982 9,839 8,608 11,988 30,435
1983 11,537 11,519 16,228 39,284
1984 10,573 13,671 17,158 41,402
1985 11,250 16,968 21,054 49,272
1986 13,429 25,312 28,458 67,199
1987 11,972 28,914 28,220 69,106
1988 11,055 36,482 29,997 77,534
1989 11,961 42,782 36,775 91,518
1990 10,218 39,334 35,039 84,591
1991 11,800 51,453 45,022 108,275
1992 12,099 56,642 50,748 119,489
1993 12,913 69,135 58,668 140,716
1994 12,649 75,615 61,827 150,091
4/30/95 (6 months) $12,615 $87,230 $64,011 $163,856
</TABLE>
The dollar amounts of dividends and capital gains distributions reinvested in
shares were $54,559 and $73,859, respectively. The initial investment plus all
distributions reinvested amounted to $138,418. If dividends and capital gains
distributions had been withdrawn in cash, the amounts of these payments would
have been $12,190 and $13,978, respectively.
(1)See Important Information on page 7.
4
<PAGE>
- - --------------------------------------------------------------------------------
The Total Return Perspective
- - --------------------------------------------------------------------------------
The past 25 1/2 years have included several periods of economic, political and
stock market turmoil. By focusing on value investing, Affiliated reduced
downside volatility in periods of stock market weakness and produced returns
that outpaced the S&P 500 (an unmanaged index), guaranteed CDs and inflation.
Affiliated's average annual total return during this period was 11.6%(1), versus
11.1% for the S&P 500, 8.1% for CDs and 5.7% for inflation.
Using the Value Method of Investing, Affiliated Fund Reduced Volatility and
Produced Rewarding Gains.
1972-1974
The last protracted bear market; S&P 500 declined 28.8%. Affiliated Fund held
the decline to 10.6%.
1980-1982
Interest rates rose dramatically; prime rate hit 20%. Economy suffered a
recession. During these two years, Affiliated rose 24%.
1986-1991
Two corrections jolted the stock market, war and recession followed a year
later. Affiliated rose 61.1% over this period.
FUND S&P Cost of Living CDs
Nov 1, 1969 9421 10000 10000 10000
1970 8173 8891 10563 10820
1971 9106 10390 10965 11413
1972 10360 12668 11340 11972
1973 11275 12670 12225 12871
1974 9256 9022 13700 14148
1975 12027 11367 14718 15197
1976 15267 13658 15523 16109
1977 14817 12833 16515 17001
1978 15482 13647 17989 18324
1979 19179 15755 20161 20306
1980 24552 20806 22735 22899
1981 25097 20925 25040 26571
1982 30435 24333 26327 30150
1983 39284 31134 27078 32925
1984 41402 33116 28231 36451
1985 49272 39527 29142 39582
1986 67199 52642 29571 42313
1987 69106 56011 30912 45124
1988 77534 64360 32225 48577
1989 91518 81275 33673 53074
1990 84591 75215 35791 57459
1991 108275 100379 36836 61248
1992 119489 110360 38016 63745
1993 140716 126683 39062 65872
1994 150091 131571 40161 68720
4/30/95 163856 145329 40724 70928
<PAGE>
Total Returns(2) over 25 1/2 years
Affiliated: 1,538.6%
S&P 500: 1,353.3% [GRAPH]
CDs: 609.3%
Inflation: 307.2%
An investor cannot invest directly in an index, such as the S&P 500. For more
information on CDs, see page 2.
(1)Average annual total return at maximum offering price from 11/1/69 through
4/30/95.
(2)Cumulative total returns at maximum offering price from 11/1/69 through
4/30/95.
(3)Average of six-month CD rates available each period. Source: Salomon
Brothers.
See Important Information on page 7.
5
<PAGE>
- - --------------------------------------------------------------------------------
The Impact of a Disciplined Investment Plan
- - --------------------------------------------------------------------------------
Your financial adviser can help you discipline your investing and set up a
systematic plan you are comfortable with
Unless you have a crystal ball, perfectly timing the market is impossible. Often
times opportunity can only be identified after it has already passed.
For long-term investors in Lord Abbett's Affiliated Fund, the key to one
successful strategy has focused on following a disciplined investment plan --
not timing the market. Let's compare two hypothetical investments made over the
last 20 calendar years ending December 31, 1994, whereupon $5,000 was invested
in the Fund every year. Shares were purchased for Investment A (with the benefit
of hindsight) when the Dow Jones Industrial Average was at the low for each
given year. Shares were purchased for Investment B on the first business day of
every year.
Here's What Happened...
<TABLE>
<CAPTION>
Investment A: Timing
- - --------------------------------------------------------------
Account
Date of Cumulative Value
Investments Investments at Year-End
- - ----------- ----------- -----------
<S> <C> <C>
1/2/75 $ 5,000 $ 6,424
1/2/76 10,000 14,948
11/2/77 15,000 18,951
2/28/78 20,000 24,902
11/7/79 25,000 37,430
4/21/80 30,000 52,995
9/25/81 35,000 58,327
8/12/82 40,000 78,773
1/3/83 45,000 104,951
7/24/84 50,000 117,847
1/4/85 55,000 155,738
1/22/86 60,000 197,522
10/19/87 65,000 209,207
1/20/88 70,000 241,527
1/3/89 75,000 304,413
10/11/90 80,000 293,912
1/9/91 85,000 364,759
10/9/92 90,000 415,243
1/20/93 95,000 475,638
4/4/94 100,000 500,249
Account Value on 12/31/94 $500,249
Average Annual Total Return: 14.1%
<CAPTION>
Investment B: Systematic Investing
- - --------------------------------------------------------------
Account
Date of Cumulative Value
Investments Investments at Year-End
- - ----------- ----------- -----------
<S> <C> <C>
1/2/75 $ 5,000 $ 6,424
1/2/76 10,000 14,948
1/3/77 15,000 18,363
1/2/78 20,000 23,940
1/2/79 25,000 37,028
1/2/80 30,000 52,112
1/2/81 35,000 57,029
1/4/82 40,000 76,579
1/3/83 45,000 102,196
1/2/84 50,000 114,335
1/2/85 55,000 151,221
1/2/86 60,000 191,863
1/2/87 65,000 202,877
1/4/88 70,000 234,121
1/2/89 75,000 295,265
1/2/90 80,000 284,353
1/2/91 85,000 352,895
1/2/92 90,000 402,097
1/4/93 95,000 460,734
1/3/94 100,000 484,521
Account Value on 12/31/94 $484,521
Average Annual Total Return: 13.5%
</TABLE>
The disciplined investment plan (B) provided an average annual total return
almost the same as the "perfect" investment scenario (A). Since determining the
"perfect" time to invest without the benefit of hindsight is impossible, why not
sit down with your financial adviser and set up a disciplined investment plan
today?
The above illustrations assume the reinvestment of all dividends and
distributions. All investments were made at the applicable sales charge of 5.75%
for account values up to $50,000 and at the applicable reduced sales charges
thereafter under rights of accumulation. Making periodic investments in the Fund
does not guarantee against a loss of principal. If held until 3/31/95 (with no
additional investments made) Investment A and Investment B would have been worth
$541,625 and $524,597, respectively.
For performance at the maximum sales charge, please turn to the inside front
cover.
6
<PAGE>
- - --------------------------------------------------------------------------------
Portfolio Diversification
- - --------------------------------------------------------------------------------
AFFILIATED FUND'S TOP TEN EQUITY HOLDINGS
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Percent of Total Net Assets
- - ---------------------------
<S> <C>
Exxon Corp. - A leading international oil company. 3.10%
AMP Incorporated - Global leader in manufacture of connectors and terminals for
electronic and electrical circuitry. 3.05%
Chevron Corp. - A leading worldwide oil company. 3.04%
Minnesota Mining & Mfg. Co. - An innovative world leader in specialty adhesives,
abrasives, magnetic media and reflective materials. 2.99%
Emerson Electric Co. - A leading factor in world markets for a wide array of
electrical components and systems. 2.77%
Archer-Daniels-Midland Co. - World's largest factor in the processing, storage,
transportation and trading of grain commodities. 2.64%
Boeing Co. - Dominant supplier to the world market for commercial aircraft. 2.45%
General Motors Corp. - Nation's largest automobile manufacturer. 2.41%
Merck & Co., Inc. - One of the world's largest pharmaceutical companies. 2.39%
SmithKline Beecham plc ADR - United Kingdom-based producer of pharmaceutical
and clinical laboratory services. 2.38%
-----
Total 27.22%
=====
</TABLE>
Data as of 4/30/95.
- - --------------------------------------------------------------------------------
Important Information
- - --------------------------------------------------------------------------------
Bonds purchased by the Fund are subject to market fluctuations upward and
downward inversely to the rise and fall of interest rates. Common stocks are
also subject to market fluctuations, providing the potential for gains and the
risk of loss. The performance results quoted herein reflect past performance,
current sales charges and appropriate Rule 12b-1 Plan expenses from commencement
of the Plan. Past performance is no indication of future results. Tax
consequences are not reflected. The Fund's sales charge structure has changed in
the past. The investment return and principal value of an investment will
fluctuate so that shares, on any given day or when redeemed, may be worth more
or less than their original cost. If used as sales material after 6/30/95, this
report must be accompanied by Lord Abbett's Performance Quarterly for the most
recently completed calendar quarter.
- - --------------------------------------------------------------------------------
Statement of Net Assets April 30, 1995
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Number Value
Security of Shares (Note 1a)
-------- --------- --------------
<S> <C> <C> <C>
INVESTMENTS IN SECURITIES 94.68%
COMMON STOCKS AND
CONVERTIBLE SECURITIES 92.60%
Aerospace 2.45% Boeing Co. 2,000,000 $110,000,000
==============
Agricultural Deere & Co. 1,000,000 82,000,000
Equipment/ Pioneer Hi-Bred
Supplies International, Inc. 750,000 28,125,000
2.46% --------------
Total 110,125,000
==============
Airlines .58% British Airways plc ADR 400,000 25,850,000
Auto Parts 3.41% Genuine Parts Co. 1,250,000 48,437,500
TRW Inc. 1,405,000 104,496,875
--------------
Total 152,934,375
==============
Automobiles 3.88% Ford Motor Co.
$4.20 Cum. Conv. Pfd. A 750,000 66,093,750
General Motors Corp. 2,400,000 108,300,000
--------------
Total 174,393,750
==============
Banks: First Chicago Corp. 750,000 41,437,500
Money Center First Chicago Corp.
1.25% $2.875 Conv. Pfd. 270,000 14,782,500
--------------
Total 56,220,000
==============
<CAPTION>
Market
Number Value
Security of Shares (Note 1a)
-------- --------- --------------
<S> <C> <C> <C>
Banks:
Regional .77% BankAmerica Corp. 700,000 $ 34,650,000
==============
Beverages 2.11% Anheuser-Busch
Companies Inc. 1,625,500 94,482,188
==============
Chemicals 4.39% Atlantic Richfield
(Lyondell Petrochemical)
$2.23 Conv. Pfd. 800,000 20,600,000
Dow Chemical Co. 1,500,000 104,250,000
Union Carbide Corp. 2,250,000 72,000,000
--------------
Total 196,850,000
==============
Data Processing
Equipment 1.99% Hewlett-Packard Co. 1,350,000 89,268,750
==============
Data Processing General Motors Corp.
Services 1.45% (Electronic Data Systems)
$3.25 Conv. Pfd. 350,000 21,918,750
General Motors Corp.
(Electronic Data Systems)
Class E 1,000,000 43,250,000
--------------
Total 65,168,750
==============
Drugs/Health Baxter International Inc. 1,750,000 60,812,500
Care Products Bristol-Myers Squibb
7.00% Company 600,000 39,075,000
</TABLE>
7
<PAGE>
- - --------------------------------------------------------------------------------
Statement of Net Assets April 30, 1995
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Number Value
Security of Shares (Note 1a)
-------- --------- --------------
<S> <C> <C> <C>
Merck & Co., Inc. 2,500,000 $107,187,500
SmithKline Beecham
plc ADR 2,750,000 106,906,250
--------------
Total 313,981,250
==============
Electric Power Allegheny Power
7.00% Systems, Inc. 1,500,000 35,250,000
American Electric
Power Inc. 1,500,000 49,125,000
Carolina Power &
Light Co. 2,500,000 68,750,000
Detroit Edison 1,450,000 40,962,500
Florida Progress Corp. 1,768,900 53,951,450
Public Service
Enterprises Group Inc. 2,400,000 66,000,000
--------------
Total 314,038,950
==============
Electrical
Equipment 2.77% Emerson Electric Co. 1,850,000 124,412,500
==============
Electronics:
Components
3.05% AMP Incorporated 3,200,000 136,800,000
==============
Financial: American Express Co. 750,000 26,062,500
Miscellaneous 2.38% Transamerica Corp. 1,427,600 80,837,850
--------------
Total 106,900,350
==============
Food 4.99% Archer-Daniels-
Midland Co. 6,500,000 118,625,000
Conagra Inc.
$1.6875 Conv. Pfd. E 1,250,000 42,656,250
Sara Lee Corp. 2,250,000 62,718,750
--------------
Total 224,000,000
==============
Furniture and
Appliances .15% Whirlpool Corp. 120,000 6,570,000
==============
Insurance 8.07% Aetna Life & Casualty
Company 750,000 42,750,000
Chubb Corp. 650,000 52,000,000
Cigna Corp. 1,250,000 90,781,250
General Re Corp. 450,000 57,318,750
Lincoln National Corp. 1,750,000 71,312,500
St. Paul Companies Inc. 1,000,000 48,125,000
--------------
Total 362,287,500
==============
Miscellaneous 4.07% Minnesota Mining
& Mfg. Co. 2,250,000 134,156,250
Textron, Inc. 850,000 48,450,000
--------------
Total 182,606,250
==============
Natural Gas Consolidated
Distribution .61% Natural Gas Co. 700,000 27,562,500
==============
Office Equipment/
Supplies .55% Xerox Corp. 200,000 24,625,000
==============
Oil: Chevron Corp. 2,875,000 136,203,125
International 7.89% Exxon Corp. 2,000,000 139,250,000
<CAPTION>
Market
Number Value
Security of Shares (Note 1a)
-------- --------- --------------
<S> <C> <C> <C>
Total S.A.
Sponsored ADR 2,500,000 $ 78,437,500
--------------
Total 353,890,625
==============
Paper and Champion
Forest Products International Corp. 308,700 13,582,800
3.10% Federal Paper Board Inc. 1,000,000 29,625,000
International Paper Co. 1,244,500 95,826,500
--------------
Total 139,034,300
==============
Printing and Donnelley, R.R.
Publishing 1.33% & Sons Co. 1,750,000 59,500,000
==============
Retail 2.41% Dayton Hudson Corp. 600,000 40,275,000
Sears, Roebuck & Co. 1,250,000 67,812,500
--------------
Total 108,087,500
==============
Savings and Loan Ahmanson, H.F. & Co. 1,618,000 33,978,000
1.86%
Great Western
Financial Corp. 2,350,000 49,643,750
--------------
Total 83,621,750
==============
Telecommunications MCI Communications
.97% Corp. 2,000,000 43,500,000
==============
Textiles:
Apparel 1.41% V.F. Corp. 1,250,000 63,125,000
==============
Tobacco 1.35% American Brands Inc. 1,500,000 60,750,000
==============
Transportation:
Miscellaneous
1.48% Ryder Systems Inc. 2,850,000 66,618,750
==============
Waste Disposal Browning Ferris
3.42% Industries Inc. 3,000,000 99,000,000
WMX Technologies Inc. 2,000,000 54,500,000
--------------
Total 153,500,000
==============
Other 2.00% 89,684,975
==============
Total Investments in Common
Stocks and Convertible Securities
(Cost $3,443,248,421) 4,155,040,013
==============
U.S. GOVERNMENT OBLIGATIONS 2.08%
Federal Home Loan
Mortgage Corporation
12% due 3/13/1996 50,000M 51,593,750
Student Loan
Marketing Association
15% due 10/13/1995 40,000M 41,637,500
Total Investments in U.S. Government
Securities (Cost $95,975,600) 93,231,250
--------------
Total Investments in Securities
(Cost $3,539,224,021) 4,248,271,263
==============
OTHER ASSETS, LESS LIABILITIES 5.32%
Short-Term Investments, At Cost
U.S. Government Federal Home Loan
Obligations Banks
5.90% due 5/18/1995 22,000M 21,924,668
Federal National
Mortgage Association
5.85% due 5/2/1995 40,000M 39,863,500
</TABLE>
8
<PAGE>
- - --------------------------------------------------------------------------------
Statement of Net Assets April 30, 1995
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Principal Value
Security Amount (Note 1a)
-------- --------- --------------
<S> <C> <C> <C>
5.82% due 5/3/1995 $25,000M $ 24,947,459
5.83% due 5/4/1995 24,000M 23,949,473
5.82% due 5/5/1995 20,000M 19,964,433
5.84% due 5/19/1995 25,000M 24,878,334
--------------
Total 155,527,867
==============
Corporate Ford Motor Credit Co.
Obligations 5.95% due 5/8/1995 35,000M 35,000,000
==============
Total Short-Term Investments 190,527,867
<CAPTION>
Market
Value
(Note 1a)
--------------
<S> <C> <C>
Cash and Receivables, Net of Liabilities $ 48,111,580
--------------
Total Other Assets, Less Liabilities 238,639,447
==============
Net Assets (equivalent to $11.00 a share on
100.00% 407,865,529 shares of $1.25 par
value capital stock outstanding;
authorized, 500,000,000 shares) $4,486,910,710
==============
See Notes to Financial Statements.
</TABLE>
- - --------------------------------------------------------------------------------
Portfolio Changes
- - --------------------------------------------------------------------------------
Issues added to or eliminated from the portfolio (exclusive of U.S. Government
obligations and short-term investments) during the six months ended April 30,
1995
Additions+ Aetna Life & Casualty Company
Allegheny Power Systems, Inc.
Atlantic Richfield
(Lyondell Petrochemical)
$2.23 Conv. Pfd.
Baxter International Inc.
Chubb Corp.
Consolidated Natural Gas Co.
Cooper Tire & Rubber Company
Detroit Edison
Federal Paper Board, Inc.
General Mills, Inc.
General Motors Corp.
Genuine Parts Co.
Hershey Foods Corp.
MCI Communications Corp.
Pioneer Hi-Bred International, Inc.
Public Service Enterprises Group Inc.
WMX Technologies Inc.
Eliminations+ American General Corp.
British Petroleum Ltd.
Chemical Banking Corp.
Cooper Tire & Rubber Company
Dow Jones & Co., Inc.
Dun & Bradstreet Corp.
Eastman Kodak Co.
First Bank Systems Inc.
Fleet Financial Group, Inc.
GATX Corp.
General Electric Company
General Mills, Inc.
Georgia-Pacific Corp.
Hershey Foods Corp.
Jefferson-Pilot Corp.
Johnson & Johnson
Kmart Corporation
Lockheed Corp.
McGraw-Hill, Inc.
Raytheon Co.
Union Pacific Corp.
+Includes securities previously classified in the Investment Portfolio under
"Other".
- - --------------------------------------------------------------------------------
Statement of Operations For the Six Months Ended April 30, 1995
- - --------------------------------------------------------------------------------
<TABLE>
Investment Income
<S> <C> <C> <C>
Income Dividends $ 63,298,842
Interest 12,884,374
Total income $ 76,183,216
Expenses Management fee (Note 5) 6,695,000
12b-1 distribution plan (Note 5) 3,978,781
Shareholder servicing 2,111,546
Reports to shareholders 211,040
Legal and audit 67,694
Directors' fees 46,776
Other 121,030
Total expenses 13,231,867
Net investment income 62,951,349
Realized and Unrealized Gain on Investments (Note 4)
Realized gain from security transactions (excluding short-term securities)
Proceeds from sales 1,275,557,814
Cost of securities sold 1,017,682,700
Net realized gain 257,875,114
Unrealized appreciation of investments
Beginning of period 655,247,887
End of period 709,047,242
Net increase in unrealized appreciation 53,799,355
Net realized and unrealized gain on investments 311,674,469
------------
Net Increase in Net Assets Resulting from Operations $374,625,818
============
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
- - --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
April 30, October 31,
Increase (Decrease) in Net Assets 1995 1994
- - --------------------------------- -------------- --------------
<S> <C> <C>
Operations Net investment income $ 62,951,349 $ 119,525,270
Net realized gain from security transactions 257,875,114 296,760,098
Net increase (decrease) in unrealized appreciation of investments 53,799,355 (149,915,037)
Net increase in net assets resulting from operations 374,625,818 266,370,331
Undistributed net investment income included in price of shares reacquired (Note 1d) (36,560) (208,561)
Distributions to shareholders from (Note 2)
Net investment income (59,335,897) (122,118,161)
Net realized gain from security transactions (295,155,646) (222,409,905)
Total distributions (354,491,543) (344,528,066)
Capital share transactions
Net proceeds from sales of 13,197,554 and 18,972,145 shares, respectively 136,553,070 202,120,967
Net asset value of 27,825,751 and 23,766,084 shares, respectively,
issued to shareholders in reinvestment of net investment income and realized
gain from security transactions 272,101,313 250,501,482
Total 408,654,383 452,622,449
Cost of 16,611,295 and 29,946,629 shares reacquired, respectively (171,427,225) (318,702,989)
Increase in net assets derived from capital share transactions
(net increase of 24,412,010 and 12,791,600 shares, respectively) 237,227,158 133,919,460
Increase in net assets 257,324,873 55,553,164
Net Assets
Beginning of period 4,229,585,837 4,174,032,673
End of period (including undistributed net investment income of
$21,239,163 and $5,637,421, respectively) $4,486,910,710 $4,229,585,837
</TABLE>
See Notes to Financial Statements.
- - --------------------------------------------------------------------------------
Financial Highlights
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended Year Ended October 31,
April 30, --------------------------------------------------------------------
Per Share Operating Performance: 1995 1994 1993 1992 1991 1990
- - -------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 11.03 $ 11.26 $ 10.55 $ 10.29 $ 8.91 $ 10.43
Income from investment operations
Net investment income .16 .31 .31 .38 .40 .44
Net realized and unrealized gain (loss)
on investments .73 .38 1.43 .61 1.92 (1.16)
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations .89 .69 1.74 .99 2.32 (.72)
========== ========== ========== ========== ========== ==========
Distributions
Dividends from net investment income (.15) (.32) (.35) (.40) (.41) (.44)
Distributions from net realized gain (.77) (.60) (.68) (.33) (.53) (.36)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 11.00 $ 11.03 $ 11.26 $ 10.55 $ 10.29 $ 18.91
========== ========== ========== ========== ========== ==========
Total Return* 9.17%+ 6.66% 17.76% 10.36% 28.00% (7.57)%
========== ========== ========== ========== ========== ==========
Ratios/Supplemental Data:
Net assets, end of period (000) $4,486,911 $4,229,586 $4,174,033 $3,680,332 $3,565,230 $3,032,954
Ratios to Average Net Assets:
Expenses 0.32%+ 0.63% 0.63% 0.60% 0.58% 0.50%
Net investment income 1.50%+ 2.91% 2.95% 3.73% 4.22% 4.37%
Portfolio turnover rate 25.47% 51.48% 45.15% 42.00% 56.38% 31.78%
</TABLE>
*Total return does not consider the effects of sales loads.
+Not annualized.
*See Notes to Financial Statements.
10
<PAGE>
- - --------------------------------------------------------------------------------
Notes to Financial Statements
- - --------------------------------------------------------------------------------
1. Significant Accounting Policies
The Company is registered under the Investment Company Act of 1940 as a
diversified, open-end management investment company. The following is a summary
of significant accounting policies consistently followed by the Company. The
policies are in conformity with generally accepted accounting principles.
(a) Market value is determined as follows: Securities listed or admitted to
trading 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 Company'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 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 securities. Securities for which market
quotations are not available are valued at fair value under procedures approved
by the Board of Directors.
(b) It is the policy of the Company to meet the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its taxable income in taxable distributions. 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). Dividend income and distributions to
shareholders are recorded on the ex-dividend date.
(d) A portion of the proceeds from sales and costs of repurchases of capital
shares, equivalent to the amount of distributable net investment income on the
date of the transaction, is credited or charged to undistributed income.
Undistributed net investment income per share thus is unaffected by sales or
repurchases of shares.
2. Distributions
Net realized gain from security transactions is distributed to shareholders in
the succeeding year. Accumulated undistributed net realized gain at April 30,
1995 for financial reporting purposes, which is substantially the same as for
federal income tax purposes, aggregated $260,690,967.
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 gains amounts in accordance with generally
accepted accounting principles.
A dividend of $.075 a share from net investment income aggregating $30,578,374
was declared on May 10, 1995 and was paid on May 16, 1995 to shareholders of
record on May 10, 1995.
3. Capital Paid In
At April 30, 1995, capital paid in aggregated $3,495,933,338.
4. Portfolio Securities
The Company loans its portfolio securities to brokers. As of April 30, 1995 the
Company had no loans outstanding.
Purchases and sales of investment securities (other than U.S. Government
obligations and short-term securities) aggregated $961,021,318 and
$1,171,690,626, respectively. Security gains and losses are computed on the
identified cost basis.
As of April 30, 1995, unrealized appreciation based on cost for federal income
tax purposes aggregated $709,047,242 of which $724,739,991 related to
appreciated securities and $15,692,749 related to depreciated securities. The
cost of investments for federal income tax purposes is substantially the same
as that used for financial reporting purposes.
5. Management Fee and Other Transactions with Affiliates
Lord, Abbett & Co. received a management fee of $6,695,000 for which it supplied
investment management, research, statistical and advisory services and paid
officers' remuneration and certain other expenses of the Company. The management
fee is based on average daily net assets at the following annual rates: 1/2 of
1% on the first $200 million; 2/5 of 1% on the next $300 million; 3/8 of 1% on
the next $200 million; 7/20 of 1% on the next $200 million and 3/10 of 1% on the
excess over $900 million. Lord, Abbett & Co. also received $559,431 representing
payment of commissions on sales of capital stock of the Company after deducting
$3,530,362 allowed to authorized distributors as concessions. The Company
adopted a Rule 12b-1 Plan which provides for the payment of (1) an annual fee
for services (payable quarterly) of .15% of the average daily net asset value of
the Company's shares sold by dealers prior to the Plan's effective date and .25%
of the average daily net asset value of such shares sold on and after that date
and (2) a one-time 1% sales distribution fee, at the time of sale, on such
shares sold at net asset value of $1 million or more. Certain of the Company's
officers and directors have an interest in Lord, Abbett & Co.
6. Directors' Remuneration
The Directors of the Company associated with Lord, Abbett & Co. and all officers
of the Company receive no compensation from the Company for acting as such.
Outside Directors' fees, including attendance fees for board and committee
meetings, and outside Directors' retirement costs, are allocated among all funds
in the Lord Abbett group based on net assets of each fund. The direct
remuneration accrued during the period for outside Directors of the Company as a
group was $41,276 (exclusive of expenses), which has been deemed invested in
shares of the Company under a deferred compensation plan contemplating future
payment of the value of those shares. As of April 30, 1995, the aggregate amount
in Directors' accounts maintained under the Plan was $946,196. Retirement costs
accrued during the period amounted to $25,741.
11
<PAGE>
- - --------------------------------------------------------------------------------
Independent Auditors' Report
- - --------------------------------------------------------------------------------
The Board of Directors and Shareholders,
Affiliated Fund, Inc.:
We have audited the accompanying statement of net assets of Affiliated Fund,
Inc. as of April 30, 1995, the related statements of operations for the six
months then ended and of changes in net assets for the six months then ended and
the year ended October 31, 1994, and the financial highlights for the six months
ended April 30, 1995 and each of the years in the five-year period ended October
31, 1994. These financial statements and the financial highlights are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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 April
30, 1995 by correspondence with the custodian and brokers; where replies were
not received from brokers, we performed other auditing procedures. 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 audits provide 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 Affiliated Fund,
Inc. at April 30, 1995, the results of its operations, the changes in its net
assets and the financial highlights for the above-stated periods, in conformity
with generally accepted accounting principles.
Deloitte & Touche LLP
New York, New York
June 2, 1995
Copyright (C) 1995 by Affiliated Fund, Inc., 767 Fifth Avenue, New York, NY
10153-0203
This publication, when not used for the general information of shareholders of
Affiliated Fund, Inc., is to be distributed only if preceded or accompanied by a
current prospectus which includes information concerning the Fund's investment
objective and policies, sales charges and other matters.
All rights reserved. Printed in the U.S.A.
- - --------------------------------------------------------------------------------
Our Management
- - --------------------------------------------------------------------------------
Board of Directors
Ronald P. Lynch
Thomas S. Henderson
E. Thayer Bigelow*
Stewart S. Dixon*
John C. Jansing*+
C. Alan MacDonald*+
Hansel B. Millican, Jr.*+
Thomas J. Neff*
* Outside Director
+ Audit Committee
Officers
Ronald P. Lynch, Chairman and President
Thomas S. Henderson, Executive Vice President and Portfolio Manager
Kenneth B. Cutler, Vice President and Secretary
Daniel E. Carper, Vice President
Robert S. Dow, Vice President
E. Wayne Nordberg, Vice President
John J. Walsh, Vice President
John J. Gargana, Jr., Vice President
Thomas F. Konop, Vice President and Assistant Secretary
Victor W. Pizzolato, Vice President
Keith F. O'Connor, Treasurer
Joseph Van Dyke, Assistant Treasurer
Lydia Guzman, Assistant Secretary
Robert M. Hickey, Assistant Secretary
A. Edward Oberhaus III, Assistant Secretary
Investment Manager and Underwriter
Lord, Abbett & Co.
The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203
212-848-1800
Custodian
Morgan Guaranty Trust Company of New York
Transfer Agent
United Missouri Bank of Kansas City, N.A.
Shareholder Servicing Agent
DST Systems, Inc.
P.O. Box 419100
Kansas City, MO 64141
800-821-5129
Auditors
Deloitte & Touche LLP
New York, NY
Counsel
Debevoise & Plimpton
New York, NY
12
<PAGE>
Searching for value often dictates moving away from the crowd.
"Affiliated Fund's competitive, long-term performance can be attributed to its
unwavering focus on value."
Thomas S. Henderson
Partner and Portfolio Manager
Value investing -- the strategy of investing in undervalued securities with
potential -- has guided Lord, Abbett & Co.'s investment decisions for decades.
A staff of investment professionals, averaging 19 years of experience and 9
years of tenure with Lord, Abbett & Co., performs research aimed at finding the
best value in relation to risk.
Searching for Value By:
. Conducting fundamental analysis on an evolving universe of undervalued stocks;
. Attempting to determine how global economic and political changes will affect
the relative performance of different industries; and
. Trying to identify those undervalued securities that are best positioned to
benefit from these changes
[PHOTO - Lord Abbett & Co. personnel described below]
(from left to right)
Thomas S. Henderson is a partner of Lord, Abbett & Co. and serves as
portfolio manager for Affiliated Fund. Mr. Henderson, who earned his MBA at
Harvard University, has been with the Firm since 1979. He serves as Vice
President for all Lord Abbett funds and is a member of the Executive Office of
Investments.
John J. Walsh, a partner of Lord, Abbett & Co., joined the Firm in 1960. In
addition to managing institutional equity portfolios, he serves as Vice
President for all Lord Abbett funds and is a member of the Executive Office of
Investments. Mr. Walsh received his MBA from New York University .
Robert G. Morris, our director of equity investments, manages a department of 14
professionals who are responsible for recommendations to portfolio managers
regarding sector weightings and individual securities. Mr. Morris earned his MA
at Northeastern University.
<PAGE>
- - --------------------------------------------------------------------------------
THE LORD ABBETT FAMILY Meeting Investor Needs Since 1929
- - --------------------------------------------------------------------------------
Lord, Abbett & Co. manages a spectrum of mutual funds to meet the investment
goals of its shareholders. Assets may be allocated or transferred among these
funds as described in the relevant prospectus. The exchange privilege may be
modified or terminated. For more information about a Lord Abbett fund, including
charges and expenses, please call us at 800-874-3733 for a prospectus. Please
read the prospectus carefully before investing.
- - --------------------------------------------------------------------------------
Equity Portfolios
- - --------------------------------------------------------------------------------
Affiliated Fund
Established 1934
Seeks long-term growth of capital and income without excessive fluctuations in
market value. Portfolio emphasis: The stocks of large, well-seasoned companies.
Lord Abbett Developing Growth Fund
Established 1973
Seeks aggressive, long-term capital appreciation. Price volatility is not
uncommon. Portfolio emphasis: The stocks of small growth companies mostly traded
over the counter.
Lord Abbett Fundamental Value Fund
Established 1986
Seeks growth of capital and growth of income consistent with reasonable risk.
Portfolio emphasis: The stocks of large and midsized companies with strong
underlying fundamentals.
Lord Abbett Global Fund
Equity Series
Established 1988
Seeks long-term growth of capital and, secondarily, production of current
income. Portfolio: A diversified portfolio of stocks from around the world.
Lord Abbett Value Appreciation Fund
Established 1983
Seeks capital appreciation. Portfolio emphasis: The stocks of midsized
companies.
- - --------------------------------------------------------------------------------
Balanced Portfolio
- - --------------------------------------------------------------------------------
Lord Abbett Balanced Series
Established 1994
Seeks current income and capital growth. Portfolio: A blend of stocks and fixed-
income securities.
- - --------------------------------------------------------------------------------
Fixed-Income Portfolios
- - --------------------------------------------------------------------------------
Lord Abbett Bond-Debenture Fund
Established 1971
Seeks high current income and capital growth to produce a high total return.
Portfolio emphasis: Convertible issues and lower rated debt.
Lord Abbett Global Fund
Income Series
Established 1988
Seeks high current income and, secondarily, capital appreciation. Portfolio:
High-quality international and U.S. debt.
Lord Abbett Limited Duration U.S. Government Securities Series
Established 1993
Seeks a high level of income, relative to money market instruments, with less
fluctuations in principal than long-term U.S. Government securities. Portfolio
emphasis: Limited duration fixed-income securities (primarily U.S. Government
securities).
Lord Abbett U.S. Government Securities Fund
Established 1932
Seeks high current income. Portfolio: Since 1985, U.S. Government securities
exclusively.
- - --------------------------------------------------------------------------------
Tax-Free Portfolios
- - --------------------------------------------------------------------------------
Lord Abbett Tax-Free Income Funds
- - --------------------------------------------------------------------------------
National and New York Series Established 1984
- - --------------------------------------------------------------------------------
California Fund Established 1985
- - --------------------------------------------------------------------------------
Texas Series Established 1987
- - --------------------------------------------------------------------------------
New Jersey, Connecticut, Missouri, Hawaii, Florida and Pennsylvania Series
Established 1991
- - --------------------------------------------------------------------------------
Washington and Michigan Series Established 1992
- - --------------------------------------------------------------------------------
Georgia and Minnesota Series Established 1994
- - --------------------------------------------------------------------------------
Seek high tax-free income. Portfolios' emphasis: High-quality municipal bonds.
- - --------------------------------------------------------------------------------
Money Market Portfolio
- - --------------------------------------------------------------------------------
Lord Abbett U.S. Government Securities
Money Market Fund
Established 1979
Seeks high current income and preservation of capital. Portfolio: U.S.
Government money market instruments.
An investment in this Fund is neither insured nor guaranteed by the U.S.
Government and there can be no assurance that this Fund will be able to maintain
a stable net asset value of $1.00 per share. This Fund is managed to maintain,
and has maintained, its stable $1.00 per share price.
[PHOTO]
LOGO Lord, Abbett & Co.
Investment Management
A Tradition of Performance Through Disciplined Investing
The GM Building . 767 Fifth Avenue . New York, NY 10153-0203
